Operations Management Supplement 10 Work Measurement Power

Operations Management Supplement 10 – Work Measurement Power. Point presentation to accompany Heizer/Render Principles of Operations Management, 7 e Operations Management, 9 e © 2008 Prentice Hall, Inc. S 10 –

Outline þ Labor Standards and Work Measurement þ Historical Experience þ Time Studies þ Predetermined Time Standards þ Work Sampling © 2008 Prentice Hall, Inc. S 10 – 2

Learning Objectives When you complete this supplement you should be able to: þ Identify four ways of establishing labor standards þ Compute the normal and standard times in a time study þ Find the proper sample size for a time study © 2008 Prentice Hall, Inc. S 10 – 3

Learning Objectives When you complete this supplement you should be able to: þ Explain how predetermined time standards and TMUs are used in work measurement þ Apply the five steps of work sampling © 2008 Prentice Hall, Inc. S 10 – 4

Labor Standards and Work Measurement þ Started early in the 20 th century þ Important to both manufacturing and service organizations þ Necessary for determining staffing requirements þ Important to labor incentive systems © 2008 Prentice Hall, Inc. S 10 – 5

Meaningful Standards Help Determine 1. Labor content of items produced 2. Staffing needs 3. Cost and time estimates 4. Crew size and work balance 5. Expected production 6. Basis of wage incentive plans 7. Efficiency of employees © 2008 Prentice Hall, Inc. S 10 – 6

Labor Standards May be set in four ways: 1. Historical experience 2. Time studies 3. Predetermined time standards 4. Work sampling © 2008 Prentice Hall, Inc. S 10 – 7

Historical Experience þ How the task was performed last time þ Easy and inexpensive þ Data available from production records or time cards þ Data is not objective and may be inaccurate þ Not recommended © 2008 Prentice Hall, Inc. S 10 – 8

Time Studies þ Involves timing a sample of a worker’s performance and using it to set a standard þ Requires trained and experienced observers þ Cannot be set before the work is performed © 2008 Prentice Hall, Inc. S 10 – 9

Time Studies 1. Define the task to be studied 2. Divide the task into precise elements 3. Decide how many times to measure the task 4. Time and record element times and rating of performance © 2008 Prentice Hall, Inc. S 10 – 10

Time Studies 5. Compute average observed time Average observed time = Sum of the times recorded to perform each element Number of observations 6. Determine performance rating and normal time Normal time = © 2008 Prentice Hall, Inc. Average observed time Performance x rating factor S 10 – 11

Time Studies 7. Add the normal times for each element to develop the total normal time for the task 8. Compute the standard time Total normal time Standard time = 1 - Allowance factor © 2008 Prentice Hall, Inc. S 10 – 12

Rest Allowances þ Personal time allowance þ 4% - 7% of total time for use of restroom, water fountain, etc. þ Delay allowance þ Based upon actual delays that occur þ Fatigue allowance þ Based on our knowledge of human energy expenditure © 2008 Prentice Hall, Inc. S 10 – 13

Rest Allowances 1. Constant allowance (A) Personal allowance ……………. . . (B) Basic fatigue allowance ………… 2. Variable allowances: (A) Standing allowance ……………… (B) Abnormal position (i) Awkward (bending) ………… (ii) Very awkward (lying, stretching) ………… 5 4 2 2 7 Figure S 10. 1 © 2008 Prentice Hall, Inc. S 10 – 14

Rest Allowances (C) Use of force or muscular energy in lifting, pulling, pushing (D) Weight lifted (pounds) (E) 20 ………………… 3 (F) 40…………………. 9 (G) 60…………………. 17 (D) Bad light: (i) Well below recommended…. 2 (ii) Quite inadequate……………. 5 Figure S 10. 1 © 2008 Prentice Hall, Inc. S 10 – 15

Rest Allowances (E) Atmospheric conditions (heat and humidity) …………… 0 -10 (F) Close attention: (G) (i) Fine or exacting………………. . 2 (H) (ii) Very fine or very exacting…… 5 (G) Noise level: (H) (i) Intermittent—loud……………. . 2 (I) (ii) Intermittent—very loud or high-pitched………………. . . 5 Figure S 10. 1 © 2008 Prentice Hall, Inc. S 10 – 16

Rest Allowances (H) Mental strain: (I) (i) Complex or wide span of attention. …………. . 4 (J) (ii) Very complex…………………. . 8 (I) Tediousness: (II) (i) Tedious…………. . ……………… 2 (III) (ii) Very tedious. ………… 5 Figure S 10. 1 © 2008 Prentice Hall, Inc. S 10 – 17

Time Study Example S 1 Average observed time = 4. 0 minutes Worker rating = 85% Allowance factor = 13% Normal time = (Average observed time) x (Rating factor) = (4. 0)(. 85) = 3. 4 minutes 3. 4 Normal time Standard time = = = 1 -. 13 1 - Allowance factor 3. 4. 87 = 3. 9 minutes © 2008 Prentice Hall, Inc. S 10 – 18

Time Study Example S 2 Allowance factor = 15% Cycle Observed (in minutes) Performance Rating Job Element 1 2 3 4 5 (A) Compose and type letter (B) Type envelope address (C) Stuff, stamp, seal, and sort envelopes 8 10 9 21* 11 120% 2 3 2 1 3 105% 2 1 5* 2 1 110% 1. Delete unusual or nonrecurring observations (marked with *) 2. Compute average times for each element Average time for A = (8 + 10 + 9 + 11)/4 = 9. 5 minutes Average time for B = (2 + 3 + 2 + 1 + 3)/5 = 2. 2 minutes Average time for C = (2 + 1 + 2 + 1)/4 = 1. 5 minutes © 2008 Prentice Hall, Inc. S 10 – 19

Time Study Example S 2 3. Compute the normal time for each element Normal time = (Average observed time) x (Rating) Normal time for A = (9. 5)(1. 2) = 11. 4 minutes Normal time for B = (2. 2)(1. 05) = 2. 31 minutes Normal time for C = (1. 5)(1. 10) = 1. 65 minutes 4. Add the normal times to find the total normal time Total normal time = 11. 40 + 2. 31 + 1. 65 = 15. 36 minutes © 2008 Prentice Hall, Inc. S 10 – 20

Time Study Example S 2 5. Compute the standard time for the job Total normal time Standard time = 1 - Allowance factor = © 2008 Prentice Hall, Inc. 15. 36 = 18. 07 minutes 1 -. 15 S 10 – 21

Determine Sample Size þ How accurate we want to be þ The desired level of confidence þ How much variation exists within the job elements © 2008 Prentice Hall, Inc. S 10 – 22

Determine Sample Size zs Required sample size = n = hx where © 2008 Prentice Hall, Inc. 2 h = accuracy level desired in percent of the job element expressed as a decimal z = number of standard deviations required for the desired level of confidence s = standard deviation of the initial sample x = mean of the initial sample n = required sample size S 10 – 23

Determine Sample Size zs Required sample size = n = hx Desired z Value Common z Values where Confidence (standard deviation required for (%) desired level of confidence) h =90. 0 accuracy level desired in percent of the 1. 65 z s x n © 2008 Prentice Hall, Inc. 2 job element expressed as a decimal 95. 0 1. 96 = number of standard deviations required 95. 45 the desired level 2. 00 confidence for of 99. 0 2. 58 = standard deviation of the initial sample 99. 73 3. 00 = mean of the initial sample Table S 10. 1 = required sample size S 10 – 24

Time Study Example S 3 Desired accuracy with 5% Confidence level = 95% Sample standard deviation = 1. 0 Sample mean = 3. 00 h =. 05 x = 3. 00 s = 1. 0 z = 1. 96 (from Table S 10. 1 or Appendix I) zs n= hx 2 1. 96 x 1. 0 n=. 05 x 3 © 2008 Prentice Hall, Inc. 2 = 170. 74 ≈ 171 S 10 – 25

Time Study Example S 3 Variations If desired accuracy h is expressed as an absolute amount, substitute e for hx, where e is the absolute amount of acceptable error 2 zs n= e When the standard deviation s is not provided, it must be computed s= © 2008 Prentice Hall, Inc. ∑(xi - x)2 n-1 = ∑(Each sample observation - x)2 Number in sample - 1 S 10 – 26

New Tools þ With PDA software, you can study elements, time, performance rate, and statistical confidence intervals can be created, edited, managed, and logged þ Reduces or eliminates the need for data entry © 2008 Prentice Hall, Inc. S 10 – 27

Predetermined Time Standards þ Divide manual work into small basic elements that have established times þ Can be done in a laboratory away from the actual production operation þ Can be set before the work is actually performed þ No performance ratings are necessary © 2008 Prentice Hall, Inc. S 10 – 28

MTM Table Figure S 10. 2 © 2008 Prentice Hall, Inc. S 10 – 29

MTM Example Weight - less than 2 pounds Conditions of GET - easy Place accuracy - approximate Distance range - 8 to 20 inches Element Description Element Time Get tube from rack AA 2 35 Get stopper, place on counter AA 2 35 Get centrifuge tube, place at sample table AD 2 45 PT 83 PC 2 40 Pour (3 seconds) Place tubes in rack (simo) Total TMU 238 . 0006 x 238 = Total standard minutes =. 14 Table S 10. 2 © 2008 Prentice Hall, Inc. S 10 – 30

Work Sampling þ Estimates percent of time a worker spends on various tasks þ Requires random observations to record worker activity þ Determines how employees allocate their time þ Can be used to set staffing levels, reassign duties, estimate costs, and set delay allowances © 2008 Prentice Hall, Inc. S 10 – 31

Work Sampling þ Advantages of work sampling þ Less expensive than time study þ Observers need little training þ Studies can be delayed or interrupted with little impact on results þ Worker has little chance to affect results þ Less intrusive © 2008 Prentice Hall, Inc. S 10 – 32

Work Sampling þ Disadvantages of work sampling þ Does not divide work elements as completely as time study þ Can yield biased results if observer does not follow random pattern þ Less accurate, especially when job element times are short © 2008 Prentice Hall, Inc. S 10 – 33

Work Sampling 1. Take a preliminary sample to obtain estimates of parameter values 2. Compute the sample size required 3. Prepare a schedule for random observations at appropriate times 4. Observe and record worker activities 5. Determine how workers spend their time © 2008 Prentice Hall, Inc. S 10 – 34

Work Sampling Determining the sample size z 2 p(1 - p) n= h 2 where © 2008 Prentice Hall, Inc. n = required sample size z = standard normal deviate for desired confidence level p = estimated value of sample proportion h = acceptable error level in percent S 10 – 35

Work Sampling Example Wants employees idle 25% of the time Sample should be accurate within 3% Wants to have 95. 45% confidence in the results z 2 p(1 - p) n= h 2 where n z p h = = required sample size 2 for a 95. 45% confidence level estimate of idle proportion = 25% =. 25 acceptable error of 3% =. 03 (2)2 (. 25)(. 75) n= = 833 observations 2 (. 03) © 2008 Prentice Hall, Inc. S 10 – 36

Work Sampling Example No. of Observations Activity 485 On the phone or meeting with a welfare client 126 Idle 62 Personal time 23 Discussions with supervisor 137 Filing, meeting, and computer data entry 833 All but idle and personal time are work related. Percentage idle time = (126 + 62)/833 = 22. 6%. Since this is less than the target value of 25%, the workload needs to be adjusted. © 2008 Prentice Hall, Inc. S 10 – 37

Work Sampling Time Studies Salespeople Telephone sales 12% Telephone within firm 13% Figure S 10. 3 © 2008 Prentice Hall, Inc. Sales in Travel person 20% Paperwork 17% Lunch and personal 10% Meetings and other 8% S 10 – 38

Work Sampling Time Studies Startup/pep talk 3% Assembly-Line Employees Breaks and lunch 10% Dead time between tasks 13% Productive work 67% Unscheduled tasks and downtime 4% Cleanup 3% Figure S 10. 3 © 2008 Prentice Hall, Inc. S 10 – 39