Question

Tombro Industries is in the process of automating one of its plants and developing a flexible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory. In an effort to evaluate performance and determine where improvements can be made, management has gathered the following data relating to activities over the last four months:

	Month
	1		2		3		4
Quality control measures:
Number of defects	197		175		136		97
Number of warranty claims	58		51		42		39
Number of customer complaints	114		108		91		70
Material control measures:
Purchase order lead time	8 days		7 days		5 days		4 days
Scrap as a percent of total cost	2	%	2	%	3	%	6	%
Machine performance measures:
Machine downtime as a percentage of availability	5	%	6	%	6	%	10	%
Use as a percentage of availability	94	%	91	%	88	%	84	%
Setup time (hours)	8		10		11		12
Delivery performance measures:
Throughput time	?		?		?		?
Manufacturing cycle efficiency (MCE)	?		?		?		?
Delivery cycle time	?		?		?		?
Percentage of on-time deliveries	95	%	94	%	91	%	88	%

The president has read in industry journals that throughput time, MCE, and delivery cycle time are important measures of performance, but no one is sure how they are computed. You have been asked to assist the company, and you have gathered the following data relating to these measures:

	Average per Month (in days)
	1	2	3	4
Wait time per order before start of production	10.0	12.3	13.0	15.0
Inspection time per unit	0.8	0.7	0.7	0.7
Process time per unit	2.8	2.4	2.2	1.1
Queue time per unit	3.1	5.2	6.7	8.6
Move time per unit	0.3	0.4	0.4	0.6

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the manufacturing cycle efficiency (MCE) for each month.

1-c. Compute the delivery cycle time for each month.

Answer 1

1-a Throughput time

	1	2	3	4
Inspection time per unit	0.8	0.7	0.7	0.7
Process time per unit	2.8	2.4	2.2	1.1
Queue time per unit	3.1	5.2	6.7	8.6
Move time per unit	0.3	0.4	0.4	0.6
1-a Throughput time (Total)	7.0	8.7	10.0	11.0

1-c Delivery cycle time

	1	2	3	4
Throughput time	7.0	8.7	10.0	11.0
Wait time	10.0	12.3	13.0	15.0
1-c Delivery cycle time (Total)	17.0	21.0	23.0	26.0

1-b Manufacturing cycle efficiency (MCE)

Process Time*100/Throughput Time

	1	2	3	4
Process Time*100	280	240	220	110
Throughput Time (Divided by)	7.0	8.7	10.0	11.0
1-b Manufacturing cycle efficiency (MCE)	40%	27.59%	22%	10%