Question

Management of Mittel Company would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported:

Inspection time: 0.5 days
Wait time (from order to start of production) 15.7days
Process time 2.8 days
Move time 0.7 days
Queue time 4.5 days

Required:
a. Compute the throughput time.
b. Compute the manufacturing cycle efficiency for the quarter.
c. What percentage of the throughput time was spent in non-value added activities?
d. Compute the cycle delivery time.
e. If by using Lean production all queue time during production is eliminated what will be the new MCE?

Answer 1

a) throughput time is the sum of inspection + process + move + queue = 0.5 + 2.8 + 0.7 + 4.5 = 8.5 days

b) manufacturing cycle efficiency = process time / throughput time = 2.8 / 8.5 = 33%

c) percentage of the throughput time for non-value added activities = 1 - 33% = 67%

d) new throughput time = 4 days

MCE = 2.8 / 4 = 70%