Question

Lead Time

Audio Max Electronics Company manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 50 printed circuit boards. Each board requires 4 minutes of assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 12 minutes to complete.

The final assembly for each stereo unit requires 21 minutes and is also done in batches of 50 units. The batch of 50 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30 minutes. The units wait while the setup is performed. In the final test, the 50-unit batch is tested one at a time. Each test requires 8 minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of 50 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and labeling requires 6 minutes per unit.

1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 50 units. Categorize the non-value-added time into wait and move time. Round the percentage to one decimal place.

Value-added minutes			min
Non-value-added minutes:
	Wait time	min
	Move time	min
Total non-value-added time			min
Total lead time			min
Value-added ratio (as a percent)			%

2. Move time in this process could best be reduced by:

Doing nothing.

Changing the layout from a process orientation to a product orientation.

Increasing batch sizes.

Eliminating the testing step.

Hiring more workers.

b

Answer 1

First understand the trick here. Take the first process and consider only one circuit board unit (not one batch). The unit processing time for board assembly is 4 minutes. So, the entire batch takes 50*4 = 200 minutes. But for a single unit, the processing time is only 4 minutes. Since we can only move to the next stage when the entire batch is complete, a single part waits for the rest (200 - 4) minutes i.e. 196 minutes. Similar logic applies to all the processes.

So, for one unit, the flow diagram should look like:

1.

Value-added minutes		39
Non-value-added minutes:
Wait time	1941
Move time	32
Total non-value-added time	= 1941+32 =	1973
Total lead time	= 39+1973 =	2012
Value-added ratio (as a percent)	= 39/2012 =	1.94%

2.

Move time in this process could best be reduced by:

b. Changing the layout from a process orientation to a product orientation.