F O U R T H E D I T I O N Work Performance Measurement © The McGraw-Hill Companies, Inc., 2003 supplement 10 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie Cook

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–2 Supplement Objectives Introduce the more common types of work methods that are practiced in the workplace. Understand the fundamental issues involved in developing work measurements. Identify the basic elements associated with conducting a time study. Determine how to design a work sampling study and apply it to an actual operation.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–3 Work Methods Studying the production system to: –Identify non-valued-added time delays, transport distances, process and processing time requirements –Simplify the entire operation by eliminating any step that does not add value to the product.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–4 Work Methods and Design Aids Exhibit S10.1

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–5 Flow Diagram and Process Chart of an Office ProcedurePresent Method* Exhibit S10.2a Source: Ralph M. Barnes, Motion and Time Study, 8th ed. (New York: John Wiley & Sons, 1980), pp. 76–79. Reprinted by permission of John Wiley & Sons, Inc. *Requisition is written by supervisor, typed by secretary, approved by superintendent, and approved by purchasing agent; then order is prepared by a stenographer.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–6 Flow Diagram and Process Chart of an Office Procedure Present Method* Exhibit S10.2b Source: Ralph M. Barnes, Motion and Time Study, 8th ed. (New York: John Wiley & Sons, 1980), pp. 76–79. Reprinted by permission of John Wiley & Sons, Inc. *Requisition is written by supervisor, typed by secretary, approved by superintendent, and approved by purchasing agent; then order is prepared by a stenographer.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–7 Common Notation in Process Charting Exhibit S10.3

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–8 Gilbreths Principles of Motion Economy Exhibit S10.4a Source: Frank C. Barnes, Principles of Motion Economy: Revisited, Reviewed, and Restored, Proceedings of the Southern Management Association Annual Meeting, Atlanta, GA, 1983, p. 298.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–9 Gilbreths Principles of Motion Economy (contd) Exhibit S10.4b Source: Frank C. Barnes, Principles of Motion Economy: Revisited, Reviewed, and Restored, Proceedings of the Southern Management Association Annual Meeting, Atlanta, GA, 1983, p. 298.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–10 Worker- Machine Chart for a Gourmet Coffee House Exhibit S10.5a

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–11 Worker-Machine Chart for a Gourmet Coffee House (contd) Exhibit S10.5b The customer, the clerk, and the coffee grinder (machine) are involved in this operation. It required 1 minute and 10 seconds for the customer to purchase a pound of coffee in this particular store. During this time the customer spent 22 seconds, or 31% of the time giving the clerk his order. He was idle during the remaining 69% of the time. The clerk worked 49 seconds, or 30% of the time. The machine was in operation 21 seconds, or 30% of the time.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–12 Activity Chart of an Emergency Tracheotomy Exhibit S10.6 Source: Data taken from Harold E. Smalley and John Freeman, Hospital Industrial Engineering (New York: Reinhold, 1966), p. 490.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–13 Work Measurement –The methodology used for establishing time standards. Basic Industrial Engineering Methods –Time study –Elemental standard time data –Predetermined motion-time data –Work sampling

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–14 Types of Work Measurement Applied to Different Tasks Exhibit S10.7

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–15 Time Study –The determination, with the use of a stopwatch, of how long it takes to complete a task or set of tasks. –Normal time = Observed performance time per unit x Performance rating –Piece rate is the rate paid for work completed. –Break down tasks by: Defining each work element. Separating human work from machine work. Defining operator and machine delays separately.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–16 Elemental Standard-Time Data Time Standard –The established time for completing a job, used in determining labor costs associated with making a product. –Steps Breakdown the new job into its elements Match elements to the time for similar job-specific elements in the elemental table. Adjust elements for special characteristics of the new job. Add element times together and add delay and fatigue allowances.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–17 Predetermined Motion-Time Data Predetermined Motion-Time Tables –Create a time standard for a job or task based on standard times for basic motions (therbligs). –Can be applied to a wide-variety of tasks.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–18 Work Sampling –A statistical technique for estimating how workers allocate their time among various activities throughout a workday. –Issues involved: What level of statistical confidence is desired in the results? How many observations are necessary? When should the observations be made?

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–19 Work Sampling (contd) Determining the Required Number of Samples: N =Number of observations to be made Z =Number of standard deviations associated with a given confidence level p =Estimated proportion of time that the activity being measured occurs E =Absolute error that is desired

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–20 Work Sampling (contd) Steps in Conducting a Work Sampling Study: –Identify the activities for study. –Estimate the proportion of time of the activity of interest to the total time. –State the desired accuracy in the study results. –Determine the specific time when each observation is to be made. –If using an estimated time, recompute the required samples size at intervals during the study and adjust the number of observations.

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–21 Assignment of Numbers to Corresponding Minutes Exhibit S10.8

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–22 Determination of Observation Times Exhibit S10.9

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–23 Observation Schedule Exhibit S10.10

Fundamentals of Operations Management 4e© The McGraw-Hill Companies, Inc., 2003S10–24 Financial Incentive Plans Basic Compensation Systems –Hourly pay –Straight salary –Piece rate –Commissions Individual or Small-Group Plans Organizational Plans –Profit sharing –Gainsharing