Question

Compute Lead Time Williams Optical Inc. is considering a new lean product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 45 units. The process time for each step is as follows: Process Step 1 5 minutes Process Step 2 8 minutes Process Step 3 4 minutes Process Step 4 3 minutes The time required to move each batch between steps is 5 minutes. In addition, the time to move raw materials to Process Step 1 is also 5 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 5 minutes. The new lean layout will allow the company to reduce the batch sizes from 45 units to 3 units. The time required to move each batch between steps and the inventory locations will be reduced to 2 minutes. The processing time in each step will stay the same. Determine the value-added, non-value-added, and total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place. Present Approach Proposed Approach Value-added time min min Non-value-added time min min Total lead time min min Value-added ratio (as a percent) % %

Answer 1

Answer:

PRESENT APPROACH

Value-added time 20min

Add Non-value-added time 905 min

Total lead time 925 min

Value-added ratio (as a percent) 2.2%

PROPOSED APPROACH

Value-added time 20min

Non-value-added time 50 min

Total lead time 70 min

Value-added ratio (as a percent) 28.6%

Explanation:

PRESENT APPROACH

Calculation for Value added time

Using this formula

Value added time = Total time of all steps

Value added time= 5 + 8 + 4 + 3 = 20 min

Calculation for Non-value-added time

Using this formula

Non-value-added time = Batch wait time + Move Time

Hence ,Batch wait time = Value added time * Remaining numbers of units after first unit start

Let plug in the formula

= 20 min * 44

= 880 min

Move Time = 5 * 5 min

= 25 min

Hence, Non-value-added time

= 880 + 25 = 905 min

Calculation for Value-added ratio (as a percent)

Using this formula

Value-added ratio (as a percent) = Value added time/Total lead time * 100

Let plug in the formula

Value-added ratio (as a percent) = 20/925 * 100 = 2.2 %

PROPOSED APPROACH :-

Calculation for Value added time

Using this formula

Value added time = Total time of all steps

= 5 + 8 + 4 + 3 = 20 min

Calculation fo Non-value-added time

Using this formula

Non-value-added time= Batch wait time + Move Time

Batch wait time = Value added time * Remaining no of units after first unit start

Let plug in the formula

Non-value-added time = 20 min * 2

Non-value-added time= 40 min

Move Time = 5 * 2 min

= 10 min

Non-value-added time = 40 + 10

Non-value-added time= 50 min

Calculation for Value-added ratio (as a percent)

Using this formula

Value-added ratio (as a percent) = Value added time/Total lead time * 100

Let plug in the formula

Value-added ratio (as a percent) = 20/70 * 100

Value-added ratio (as a percent) = 28.6 %

Therefore:

PRESENT APPROACH

Value-added time 20min

Add Non-value-added time 905 min

Total lead time 925 min

Value-added ratio (as a percent) 2.2%

PROPOSED APPROACH

Value-added time 20min

Non-value-added time 50 min

Total lead time 70 min

Value-added ratio (as a percent) 28.6%