Orion Devices Inc. is considering a new just-in-time product cell. The present m

Question

Orion Devices Inc. is considering a new just-in-time product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 80 units. The process time for each step is as follows:

The time required to move each batch between steps is 17 minutes. In addition, the time to move raw materials to Process Step 1 is also 17 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 17 minutes.

The new just-in-time layout will allow the company to reduce the batch sizes from 80 units to 5 units. The time required to move each batch between steps and the inventory locations will be reduced to 3 minutes. The processing time in each step will stay the same.

Determine the value-added, non-value-added, total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.

Process Step 1 6 minutes Process Step 2 9 minutes Process Step 3 4 minutes Process Step 4 8 minutes

Explanation / Answer

27 MIN

( 6 + 9 + 4 + 8)

27 MIN

( 6 + 9 + 4 + 8)

34 MIN

(17 + 17)

6 MIN

(3 + 3)

51 MIN

(17 + 17 + 17)

9 MIN

(3 + 3 + 3)

24.11%

(27MIN / 112 MIN)

64.29%

(27MIN / 42MIN)

VALUE ADDED RATIO = VALUE ADDED TIME / TOTAL TIME TO COMPLETE THE DELIVERY

DESCRIPTION PRESENT APPROACH PROPOSED APPROACH VALUE ADDED TIME

27 MIN

( 6 + 9 + 4 + 8)

27 MIN

( 6 + 9 + 4 + 8)

NON VALUE ADDED TIME

34 MIN

(17 + 17)

6 MIN

(3 + 3)

LEAD TIME

51 MIN

(17 + 17 + 17)

9 MIN

(3 + 3 + 3)

VALUE ADDED RATIO

24.11%

(27MIN / 112 MIN)

64.29%

(27MIN / 42MIN)

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