Required: 1. For each month, compute the following operating performance measure

Question

Required:

1. For each month, compute the following operating performance measures:

a. Throughput time.

b. Manufacturing cycle efficiency (MCE).

c. Delivery cycle time.

2. Using the performance measures given and those you computed in (1) above, do the following:

a. Identify areas where the company seems to be improving.

b. Identify areas where the company seems to be deteriorating or stagnating.

c. Explain why you think some specific areas are improving while others are not.

For any calculations, all work must be shown in order to receive full credit.

Explanation / Answer

Details Month 1 Month 2 Month 3 Month 4 Wait Time in days            17.0                 15.2                12.4                  9.0 Inspection Time /unit days              0.1                   0.1                  0.5                  0.6 Process Time/Unit in days              0.5                   0.5                  0.5                  0.5 Queue Time per unit in Days                5.4                   5.5                  5.4                  5.5 Move Time per unit in days              1.7                   1.6                  1.6                  1.7     1.0 a Throughput Time in Days =ProcessTime+Inspection Time +Queue Time +Move Time              7.7                   7.7                  8.0                  8.3 b MCE =Process Time/Throughput Time= 6.49% 6.49% 6.25% 6.02% c Delivery Cycle Time in days = Throughput Time+Wait Time            24.7                 22.9                20.4                17.3     2.0 a Based on the performance measure given , the parameters that are imrproving are :   1. Defects as % of sales 2. Wait Time 3. Scrap as a % of total cost b Areas where company is deteriorating or stagnating are ; 1.Customer complaint as % of units sold 2. Warranty claim as % of units sold 3. Machine availability and Use of % Machine availability 4. Avg set up time 5. % of on time deliveries 6.Inspection time/unit 7. Process time /unit 8. Queue time/unit 9. Move time per unit. c Some areas like wait time has improved by better production planning and   scheduling. Defects as % od sales has increased due to higher inspection time per unit. Same is the reason for lower scrap cost per unit. While the process time remaining stagnant due to no improvement in machine utilization and stagnant queue time and move time. No improvement in customer complaint % and warranty claim may be due to designing problem or material and process quality issues that can be improved, Huge scope of improvement is there to improve the process, the process flow   by may be modifying the flow or better sequencing and reducing non value added activities.

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