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TIME STUDY Prof.Dr.Yasemin Claire ERENSAL. Time Study Time Study is a method used to determine the time required by a qualified person working at a normal.

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Presentation on theme: "TIME STUDY Prof.Dr.Yasemin Claire ERENSAL. Time Study Time Study is a method used to determine the time required by a qualified person working at a normal."— Presentation transcript:

1 TIME STUDY Prof.Dr.Yasemin Claire ERENSAL

2 Time Study Time Study is a method used to determine the time required by a qualified person working at a normal pace to do a specified task.

3 The Concept of a Labor Standard An average experienced operator Working with good skill and effort Using a predetermined and documented method To complete an operation At an acceptable quality level The standard represents the expected time for... –The standard does not include rework, repair, –scrap, repeated iteration of work, or any activity not directly related to task completion the “first time through.”

4 Some Uses for Standards Determine total labor cost of the product Determine the size of the work force Assess quantity of production machinery and equipment required Determine overall “throughput” time Assist in development of production schedules Set production goals and assess performance Determine pay policies Assess improvement possibilities Check efficiency of the individual/organization

5 Generally before a work measurement program is developed, employees must be convinced it has a need and will produce desirable results. Work Measurement Program

6 Time Study Definition: Time study is used to determine the time required by a qualified well trained person working at a normal pace to perform a specified task. Time Study results in a Time Standard. Standard includes –standardized method –normal pace –time standard includes considerations of personal time, rest to overcome fatigue and time for unavoidable delays

7 Labor standards are based on observing worker doing task –Observe only a sample of work –Use average time & pace & allowances in order to set standard Disadvantages –Requires a trained & experienced analyst –Standard cannot be set before task is performed Time Studies

8 Which jobs are suitable for Time Study ? Job performed by a single worker in a fixed location Job involves repetitive short cycles Job expected to continue unchanged for a long period Job produces large quantities of output Resulting time standard must be very accurate

9 Is also known as : Stopwatch Time Study Pioneered by Fredrich W. Taylor around Several types employed: –Snapback: in one hundredths of a minute –Continuous: in one hundredths of a minute –Three watches: continuous watches –Digital: in one thousandths of a minute –TMU (Time-measured units): in one hundred thousandths of an hour –Computer: in one thousandths of a minute

10 Equipment Stopwatch –Decimal minute watch – 100 divisions (.01 minute) Provides continuous or snapback timing –Electronic watch – accuracy of.001 second (600 times more accurate) Provides both continuous and snapback timing –Computer Assisted Electronic Stopwatch

11 Equipment (con’t) Video cameras Time study board Time study forms (TP) Time study Software Training equipment

12 Daywork Work in which pay is based on time rather than performance.

13 “Fair Days’ Work” Concept The amount of work which is expected daily from an employee. May be established solely by management, or through mutual agreement with employees or a bargaining entity. It is the expected attainment. In some companies, a Fair Day’s Work is the performance of an operator who effectively follows the specified method.

14 Basic Equipment 1) Stop watch - electronic, note: decimal minute as opposed to seconds, two modes: snap (fly) back - resets to zero on each press, continuous - the time still increments, (analog: more costly, breakdown, less accurate - time lost on mechanical snap back) 2) Time study board - holding watch and necessary time study forms, L and R-handed boards 3) Time study forms – a)special form for recording times in a certain way b) also a form to analyze and summarize times back in the Office R = rating W = watch time OT = observed time NT = normal time

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16 May use various stopwatches – read in decimal minutes (except TMU) Continuous time study – short-duration jobs Long-cycle time study – long jobs (31 minutes or more), 8 hour studies (determine poor performance), or when work elements out-of- sequence Time Study types

17 Components of a Labor Standard Observed “Watch” Time Normal Time Allowances

18 Observed Time (“Watch Time”) The observed and recorded time, as noted from a timing device, for a worker to perform a defined single element of an operation.

19 Normal Time Observed time (“Watch Time”), adjusted by a performance rating to obtain the time required by an average qualified worker to perform a single element of an operation while working at a normal pace.

20 Normal Time = Average Observed Time x Rating Factor

21 Allowance A percentage by which Normal Time is increased in calculation of the labor standard. It usually includes minor unavoidable delays and required personal activities. It may also include some provision for fatigue.

22 Standard Time Normal Time adjusted by an allowance factor to obtain the time required by an average qualified worker to perform a single element of an operation while working at a normal pace, and considering all normal job delays and personal needs.

23 Standard Time = Normal Time (OT=t i ) x Allowance Factor (R=L)

24 Typical Allowance - “PF & D” Personal Fatigue Delay

25 Personal Allowance An allowance in the labor standard to provide time for the personal needs of a worker during the workday.

26 Fatigue Allowance Time included in the labor standard calculation to allow for the effect of personal bodily fatigue in the performance of work.

27 Delay Allowance A time allowance in the labor standard which allows for contingencies and minor delays beyond the control of the operator.

28 Unavoidable Delay A time delay which is outside the control or responsibility of the worker.

29 Avoidable Delay A time delay not allowed in the labor standard because it is not necessary to completion of the job and caused by factors under worker control.

30 Making The Time Study 1. Request for time study 2. Ensure that the job is ready for time study 3. Secure and record information about the operation and operator being studied 4. Divide the operation into elements and record a complete description of the method 5. Observe and record the time taken by the operator 6. Determine the number of cycles to be timed 7. Rate the operator’s performance 8. Check to make certain that a sufficient number of cycles have been timed 9. Determine the allowances 10. Determine the standard time for the operation

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32 Making The Time Study- Step1&2 1 Select job to be studied: new one, method changes, complaints, 'bottleneck' operation, incentive scheme, excessive costs, want to compare jobs. 2. Select operator to be studied: qualified (has the necessary physical attributes, intelligence, education, skills and knowledge to carry out job in satisfactory manner, without undue fatigue) vs. representative (average) worker, slow workers = loose times, uneconomical for company; fast workers = tight times, unfair to workers 'above ground', no sneaking around, talk to supervisor, stand, businesslike attitude, no opinions

33 Making The Time Study- Step 3 3) record details about the job: sketch layout, info on operator, working conditions

34 Dividing the Operation into Elements and Recording a Description of the Method (Step 4) Timing an entire operation as one single element is seldom satisfactory, and an overall study is no substitute for a time study. Breaking the operation down into short elements and timing each of them separately are essential parts of time study, for the following reasons 1. Breaking job down into short meaningful elements with clearly defined beginnings and endings makes job easier to describe 2. Standard times can be determined for each element. Total standard time is sum of element standard times 3. Allows analyst to focus on parts of job where too much and too little time are being spent 4. Operator may not work at the same tempo throughout the cycle. Each element can be performance rated

35 Dividing the Operation into Elements and Recording a Description of the Method (Step 4) Three rules for dividing operation into elements –The elements should be as short in duration as can be accurately timed –Handling time should be separated from machine time –Constant elements should be separated from variable elements (the term constant refers to those elements that are independent of the size, weight, length and shape of the workpiece)

36 Dividing the Operation into Elements and Recording a Description of the Method (Step 4) Break down into elements (for convenience of analyst, better ratings) using breakpoints, sight and sound, relatively fine but not too small (>.04 min), types (separate within each group): a1) repetitive element: occurs every cycle (sequence of activities for one unit of production) a2) occasional element: not every cycle, at irregular intervals a3) foreign element: not necessary part of job b1) machine element: performed by machine, time so determined b2) manual element: performed by worker c) constant vs. variable: depends on process, leads to standard data

37 Breakpoint A point in a work cycle readily distinguished by sight or sound which is selected as the boundary between two elements in time study. Dividing the Operation into Elements and Recording a Description of the Method (Step 4)

38 Frequency The recurrence of a work element. If the element occurs once per cycle, the frequency is 1:1. As an example, if an element is done once every six pieces, then the frequency is 1:6, and the observed time must be divided by six when the study is summarized. Dividing the Operation into Elements and Recording a Description of the Method (Step 4)

39 Irregular (“Foreign”) Elements An element with a random, usually unpredictable, frequency of occurrence, not part of a normal method.

40 Dividing the Operation into Elements and Recording a Description of the Method (Step 4) Irregular Elements (Method Deviations) Fumbles Part requires more work than usual Sticks in die Has to be tapped into fixture Excessive burrs Difficulty in fitting Part requires less work than usual No burrs Unusually good fit

41 Dividing the Operation into Elements and Recording a Description of the Method (Step 4) Irregular Elements(Interruptions, Stoppages) Operator responsible Blows nose Wipes perspiration Talks to others Operator not responsible Interference by others Tool breakage Power failure Parts shortage

42 Dividing the Operation into Elements and Recording a Description of the Method (Step 4) Handling Irregular Elements Discard observations with avoidable or unallowed delays. Include observation times with allowable delays in element averages. Subtract the element average time from the observed time containing the delay and prorate the delay time over an estimated quantity (frequency of occurrence).

43 Making The Time Study- Recording the Data (Timing) Step 5 Information is generally gathered by observing an operator directly or on video tape using a stopwatch Continuous Timing: starts the watch at the beginning of the first element and permits it to run continuously during the period of the study. Observer reading of the watch at the end of element. Timing is later determined by subtraction. Repetitive (Snap-back) Timing: With repetitive or snap-back timing, hands of watch are snapped back to zero at the end of each element. Provides direct time for each element.

44 Continuous Study A stopwatch technique in which the watch runs continuously throughout the study and readings are made accumulatively at the end of each element. Making The Time Study- Recording the Data (Timing) Step 5

45 continuous timing stopwatch runs continuously, read incremented time at each stop, watch is never reset, individual element times are obtained by successive subtraction after study is completed Note: 1) don't record decimal point 2) record only two digits, 105=05, except if long element covering several minutes Making The Time Study- Recording the Data (Timing) Step 5

46 Figure 9-7 Continuous Study

47 Making The Time Study- Recording the Data (Timing) Step 5 Continuous Study

48 Making The Time Study- Recording the Data (Timing) Step 5 Continuous Study-Advantages Presents a complete record for the entire observation period All delays and foreign elements are recorded Better adapted to record short element times Clerical work required

49 Making The Time Study- Recording the Data (Timing) Step 5 Snapback Study A stopwatch technique where a time value is read and recorded at each breakpoint and the watch is instantaneously reset to zero to time the next element.

50 Making The Time Study- Recording the Data (Timing) Step 5 snap-back timing the watch is read at the breakpoint as it is reset, next element increments from zero, thus the exact elemental time is always read directly from the watch Note: 1) record only OT

51 Making The Time Study- Recording the Data (Timing) Step 5 Snap-back Timing

52 Making The Time Study- Recording the Data (Timing) Step 5 Snapback Study Advantages No clerical time needed to subtract from the previous observations as in continuous (TP) Read and record Observed Time (OT) directly Short element times are difficult to time Possible cycle time lost during the snapback (N/A to electronic watch)

53 Snapback Method

54 Comparison of Time Study Modes

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56 Missed Breakpoints Immediately mark an “M” in the W column If operator omits an element, draw a dash (-) through the applicable space in the W column Making The Time Study- Recording the Data (Timing) Step 5

57 Foreign Elements Things that are external to the process that delay the work moving forward Include: Supervisor interruptions, power losses, defective parts, leaving workstation, tool breakage, etc… Occurring during an element, write A, B, C, etc…In the NT block (TP) Making The Time Study- Recording the Data (Timing) Step 5

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60 Making The Time Study- Step 6 Sample Size - Number of Cycles Needed for Study Considerations in Determining Sample Size 1.How accurate do you want to be? 2. What level of confidence do you want your measurements to have? 3. How much variation exists within the job elements?

61 Making The Time Study- Step 6 Sample Size - Number of Cycles Needed for Study Any study is only a very small time “snapshot” of a much longer activity The less time variability between cycles, the more statistically valid the study will be The more the method is controlled, the less time will vary between cycles

62 Making The Time Study- Step 6 Sample Size - Number of Cycles Needed for Study h = accuracy level desired as percent of job element, expressed as a decimal (5% = 0.05) 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

63 Making The Time Study- Step 6 Sample Size - Number of Cycles Needed for Study Average cycle time =0.361 Computed standard deviation = 0.03 Company wants to be 95% confident that computed time is within 5% of true average time

64 where n is the required number of readings to predict the true time within  5% precision for 95% confidence level and n 1 is the number of readings in the preliminary study and x is the value of each reading For  10% the value of 40 is replaced by 20 ie the sample size would reduce by a factor 4. Making The Time Study- Step 6 Sample Size - Number of Cycles Needed for Study Special case for  5% the value of z=1,96 will give the constant of 40

65 An alternative approach Confidence interval based on the normal distribution is But as  is not known we use s the sample standard deviation and as the sample size is generally small (n<30) we use the t distribution where the sample standard deviation

66 Number of Cycles If we consider  term as an error term then k x=t s /  n where k is the acceptable % of x¯ If N is the number of observations for the actual time study then N={s t / k  x} 2 For the sample size for  x = 0.25 to be  5% of the population mean  and s = 0.08 then for a pilot study of 30 readings, t=2.045 (from tables) and N=172 observations

67 Common z values

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69 Making The Time Study- Step 7 Rate the operator’s performance Often a worker speeds up (or sometimes slows down) when they know they’re being observed Evaluate speed or tempo of the work Analyst must compare the speed of the process during the time study and analyst’s concept of normal performance Matter of judgement Performance rating factors are used to subjectively assess the worker’s performance –100% = an average work pace

70 Performance rating is usually based on the relative speed of the subject in performing work tasks. This is called “Speed Rating.” The time study observer must be practiced in making judgements of operator speed. Proficiency normally comes with experience and training. Most time study observers use videotape or film exercises to practice their performance rating skills. When doing a study, the observer should record a performance rating for each element of work before leaving the area. Rating factors are normally applied in 5% increments. The observer should avoid study of subjects where performance is outside the range of 70 to 125%. Making The Time Study- Step 7 Rate the operator’s performance

71 Some Benchmarks of Normal Performance (Speed) Walking 3 mph (264 feet in one minute) Dealing four hands of cards in 0.5 minutes Assembling 30 pegs to a pegboard in 0.41 minutes using two hands

72 Making The Time Study- Step 7 Rate the operator’s performance While the analyst is collecting the time data, he/she is also evaluating the “quality” of the operators performance relative to that jobs “normal” time This performance rating is somewhat subjective and is based on the complexity and difficulty of the task, and the operator’s skill, dexterity and speed

73 Making The Time Study- Step 7 Rate the operator’s performance Rating defined: Rating is an evaluation of the operator’s performance in comparison to observer’s own concept of normal performance.

74 Making The Time Study- Step 7 Rate the operator’s performance Standard ('normal') performance - rate of output achieved by a qualified worker, without overexertion, adhering to the correct method, over an entire day = a standard rating of 100

75 Making The Time Study- Step 7 Rate the operator’s performance However, recognize that this is an average performance. Have variations over time due to: 1) variations in quality of material 2) changes in efficiency of tools (wear) 3) minor changes in methods (with fatigue?) 4) changes in climate or working conditions

76 Making The Time Study- Step 7 Rate the operator’s performance Skill and Effort rating: Introduced by Charles Bedaux based on award of points. He used 60 points to represent standard performance and effort above standard was awarded more points. incentive pace was points. Westinghouse rating: Used a four factor system for rating the performance of the operator. The operator’s rating was 1.00 plus the sum of the positive and negative contributions in each factor area (skill, effort, conditions, consistency) Synthetic rating: This is a method of evaluating operators speed from predetermined values. R = Predetermined /Actual.

77 Making The Time Study- Step 7 Rate the operator’s performance Objective rating: Observer rates speed of movement or rate of activity, paying no attention to job difficulty. Later adjustments are added to rating to compensate for job difficulty. After judgment of pace, secondary factor assigned to job indicates its relative difficulty. Amount of the body used. Foot pedals. Bimanual ness. Eye-hand coordination. Handling or sensory requirements. Weight handled or resistance encountered. T = (P)(S)(O)

78 Making The Time Study- Step 7 Rate the operator’s performance Physiological Evaluation of Performance: This approach to rating monitors heart rate and oxygen consumption in calories per minute to measure work Appropriate for medium and heavy physical tasks Performance rating: This is the most widely used system of rating. The system is based on evaluating one single factor -- operator speed, pace or tempo

79 Making The Time Study- Step 7 Rate the operator’s performance

80 Normalize the readings to the “average operator” Can be for the entire element or individual cycles NT=OT x R/100

81 Making The Time Study- Step 7 Rate the operator’s performance - For long elements- Adjust observed Time (OT) by rating (as compared to standard rating) to yield normal time (NT) (the time it takes the operator to perform the element working at standard performance) OT * R/100 = NT.2 * 100/100 =.2.16 * 125/100 =.2.25 * 80/100 =.2 For short elements/study - rate overall study

82 Making The Time Study- Step 7 Rate the operator’s performance Sources of Error 1) Subjective rating - limited by human ability of absolute judgement 2) Standard ratings because of cultural norms - UK = 4 mph 3) Training is crucial - the more practice the better one gets a) tight rater- rates below actual, difficult for workers to achieve b) loose rater - rates above actual, times are easy to achieve c) conservative rater - tends to rate close to the mean, loose below 100% and tight above 100%, typical of beginners, afraid to deviate from standard performance

83 Making The Time Study- Step 8 Application of Allowances Normal time is standard time after allowances. Standard time calculations can be performed in two separate ways 1. Allowances expressed as a percentage of normal time Standard time = normal time + normal time * allowances in percent 2. Allowances expressed as a percentage of total work time Standard time = normal time * {100/ [ total allowance in % of workday ]} Note: The second approach is the more preferred approach and many would argue the correct approach to determining allowances

84 Making The Time Study- Step 8 Determine the allowances

85 Personal needs - personal necessities, leave workplace to go to rest room, get drink, etc. = 5% Basic fatigue - to account for energy expended during seated light work under good conditions = 4% Variable fatigue - are added to account for working conditions deviating from normal (in addition to the constant 9%), based on physiological human fatigue data Unavoidable allowances - to meet delays due to machine interference, material irregularities, etc. Avoidable allowances - due to socializing, idleness, etc. Extra allowances - to meet expected delays in work which because of their irregularity are uneconomical to measure, (usually use work sampling here), workstation cleaning, machine oiling, etc. Policy allowance - additional allowance decided by management (not IE) to even earnings level between different levels of performance, exceptional conditions, due to union negotiations, handicapped, etc.

86 Personal Needs Those interruptions necessary to the general well-being of the employee Trips to water fountain, restroom, etc… Can be a function of the working environment Typically 5% Making The Time Study- Step 8 Determine the allowances

87 Basic Fatigue Accounts for the energy expenditure to perform the given work Typically 4% under Normal Conditions Making The Time Study- Step 8 Determine the allowances

88 Variable Fatigue Lessening of the will to work Can be mental or physical, or a combined effect Factors include: Noise, heat, humidity, posture, muscular exertion, tediousness, general health of the worker Can be directly measured by declining output production over the course of the day Making The Time Study- Step 8 Determine the allowances

89 Variable Fatigue Primary Considerations Abnormal posture: sitting Vs..standing Vs. bending Vs Muscular force: time Vs. exertion level; recovery Atmospheric conditions Noise and Illumination levels Visual & mental strain Monotony and Tediousness Making The Time Study- Step 8 Determine the allowances

90 Unavoidable Delays Interruptions from: supervisor, dispatcher, time study technician, material faults, interference from servicing multiple machines Making The Time Study- Step 8 Determine the allowances

91 Avoidable Delays Social visits Day-dreaming Idleness Unnecessary work interruptions Making The Time Study- Step 8 Determine the allowances

92 Policy Allowances Different performance under exceptional circumstances ADA, new-employees, light duty, elderly, etc… Making The Time Study- Step 8 Determine the allowances

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94 Making The Time Study- Step 8 Methods for Determining Allowances Must be both accurate and correct Can be calculated by Production Study or Work Sampling

95 Making The Time Study- Step 8 Methods for Determining Allowances Production Study Requires complete observation over a long period of time Record specific instances of Non-Value Added Activity Data must be adjusted to the normal performance level Long, tedious (technician & operator), results may be biased

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97 Making The Time Study- Step 8 Methods for Determining Allowances Work Sampling Requires a large # of random observations Frees the technician to perform other duties No use of a stopwatch is necessary Technician simply records what each operator is doing Yields an approximation

98 Making The Time Study- Step 8 Methods for Determining Allowances Work Sampling Shortfalls Analyst should not anticipate observations Confine observations to predetermined subjects Study accuracy depends on both the number of observations and the sample scheduling

99 Making The Time Study- Step 9 Determine the standard time for the operation ObservedTimeObservedTimeNormalTimeNormalTimeStandardTimeStandardTime Performance PerformanceRating RatingAllowanceFractionAllowanceFraction

100 Example 1: What is the standard time for this process (4 work elements) if the allowance is 25%? ST = NT(1+Allowance) = 22.37(1.25)=27.97 minutes

101 Example 2: Time Study Example Problem You want to determine the standard time for a job. The employee selected for the time study has produced 20 units of product in an 8 hour day. Your observations made the employee nervous and you estimate that the employee worked about 10 percent faster than what is a normal pace for the job. Allowances for the job represent 25 percent of the normal time. Question: What are the normal and standard times for this job?

102 Example 2: Time Study Example Solution MOD If ST=ti*L(1+p) then ST/L=ti*(1+p) ST = Time worked (min) L Number of units produced = (480 minutes/20) x (1.10) = 26.4 minutes 10% faster is a 1.10 performance rating usually stated as 110% Standard time = NT (1+0,25) =26.4 NT = (26.4)/(1+0.25) = minutes

103 Example 3: Time Study Approach In a time study of a manufacturing operation, the average time observed to complete a product was 8.6 minutes. The performance rating applied to the observed worker was 0.95 and the allowance during an 8-hour shift was 12.5% or 60 minutes. Compute the labor standard.

104 Example 3: Time Study Approach Observed time = 8.6 minutes Performance rating = 0.95 Allowance fraction = Normal time = Observed time x Performance rating = 8.6 x 0.95 = 8.17 minutes Standard Time = Normal time / (1 - Allowance) = 8.17 / ( ) = 8.17 / (0.875) = minutes

105 Example 4: Time Study Example Job elements –Pick up piece and place in jig –Tighten set screw from jig –Clean out chips –Advance drill to work –Drill 1/4” hole –Raise drill from hole –Loose set screw –Remove piece

106 Example 4: Time Study Example

107 Normal Time –Total Average Observed Time = 1.12 min –Average Performance Rating = 1.10 –Normal Time = (1.12 min)(1.10) = 1.23 min Standard Time –Total allowances = 14% –Standard Time = (1.23 min)/( ) = 1.43 min

108 Example 5: Time Study Example A new hire finishes 8 complete units during her 480 minute shift. Assuming ST = and the allowance is 25%, how proficient is this worker? –We expect a typical worker to make 480 min/(52.1min/unit) or about 9.2 units in a shift. She made 8, which is less than the standard indicates. –Compared with a standard worker, her proficiency is 8/9.2 or about 86%. We need to build 125 more units this shift, which ends in 4 hours. How many workers are needed to achieve this objective? –If each unit takes 52.1 minutes of labor, we need a total of 125 x 52.1 = 6,512 minutes. –By the end of the shift, each worker will contribute 4 hours 240 minutes. Thus we need 6512/240 = workers.

109 Example 6 NT =.88 min, 3.5% extra for cleaning part Allowances = 4% + 5% + 3.5% (extra) = 12.5% Standard time = ×(.125) =.99 or more simply: =.88×(1.125) =.99 Discuss where do we get 4% and 5 % ! Relaxation allowances taken as rest breaks : 1) 30 min lunch 2) two 10-min breaks 3) Better to give a worker frequent, short micro-pauses

110 Performing a Time Study Figure 17.5

111 Performing a Time Study Example 17.3 Normal time = (Elemental average)(rating factor) Nt = ( t )(RF) = (0.053)(1.05) = Normal Cycle Time = NT =  Nt = ST = (NT) (1 + AF) = (0.387)(1+0.15) = min Average element time = t = = =  t

112 Performing a Time Study Example 17.3 Normal time = (Elemental average)(rating factor) Nt = ( t )(RF) = (0.053)(1.05) = Normal Cycle Time = NT =  Nt = ST = (NT) (1 + AF) = (0.387)(1+0.15) = min Average element time = t = = =  t How many sandwiches can be made in 2 hours? = or 270 sandwiches 120 min min/sandwich

113 Question Bowl Which of the following is the Normal Time for a job whose observed performance time is 10 minutes and whose performance rating is only 90%? a.90 minutes b.9 minutes c.1.10 minutes d minutes e.None of the above Answer: b. 9 minutes (10 x 0.90=9 minutes)

114 Question Bowl Which of the following is the Normal Time for a job whose observed performance time is 35 minutes and whose performance rating is 30% above normal time? a.40 minutes b.50 minutes c.60 minutes d minutes e.None of the above Answer: e. None of the above (NT=35x(1.3)=45.5 minutes)

115 Question Bowl Which of the following is the Standard Time for a job whose Normal Time is 20 minutes and whose Allowances are 5% of Normal Time? a minutes b.21 minutes c.400 minutes d.450 minutes e.None of the above Answer: b. 21 minutes (ST=NT(1+Allowances) or 20(1.05)=21 minutes)

116 Time Study Normal Time Formulas Normal time(NT)=Observed performance time per unit x (Performance rating)* *The Performance Rating is usually expressed in decimal form in these formulas. So a person working 10% faster than normal would have a Performance Rating of 1.10 or 110% of normal time. Working 10% slower, 0.90 or 90% of normal. NT= Time worked x (Performance rating)* Number of units produced Normal time(NT)=Observed performance time per unit x (Performance rating)* *The Performance Rating is usually expressed in decimal form in these formulas. So a person working 10% faster than normal would have a Performance Rating of 1.10 or 110% of normal time. Working 10% slower, 0.90 or 90% of normal. NT= Time worked x (Performance rating)* Number of units produced

117 Time Study Standard Time Formulas Standard time = Normal time + (Allowances x Normal times) Standard time = NT(1 + Allowances) Standard time = NT. 1 - Allowances Standard time = Normal time + (Allowances x Normal times) Standard time = NT(1 + Allowances) Standard time = NT. 1 - Allowances

118 The Standard Time The sum of elemental times gives the standard in minutes per piece, using a decimal minute watch, or hour per piece, using a decimal hour watch. Most of industrial operations have short cycles (< 5 min) Better express standard in hours per hundred pieces

119 Pay-for-Performance Paying employees based on their performance works--improvements in productivity and quality. Pay-for-performance will become increasingly common components of performance management strategies and systems.

120 Compensation Methods Some reasons a company might use a wage incentive plan –Increased pay for employees –Lower total cost to the company for each unit produced. Many jobs do not lend themselves to an individual incentive plan.

121 Wage Incentive Plans Piecework plans. Standard hour wage plans. Gain-sharing plans. Recommendations for developing and implementing successful wage incentive plans: –The plan should permit earnings about the base rate; good performance should pay at least a 30% bonus. –The plan should benefit both the company and the employees. –The plan should be simple and understandable. –The standards should be protected from capricious and indiscriminate rate cutting. –Earnings should not be affected by factors beyond the control of the worker.

122 Group Incentive Plans Direct-wage group. Profit-sharing and cost-reduction plans. The Scanlon plan. –Whenever a plant-s productivity exceeds a preestablished “normal” level, every employee gets a bonus - the higher the level of productivity, the bigger the bonus. –The plan also involves a style of management designed to give each worker some control over his or her job by encouraging participation in decision making affecting it. –Productivity is increased by a well-designed employee suggestion plan and through the use of special committee that constantly prod employees for ideas on how to improve productivity.


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