1 ISE Chapter 24: Determining Time/Job Uses for time/unit information  Cost allocation  Production and inventory control  Evaluation of alternatives  Determining acceptable day’s work  Determining incentive pay

2 ISE Establishing time standards Choice of time measurement technique depends on:  Cost of obtaining the information  Benefits of using the information  Inaccurate information leads to wrong decisions.  If the standard is set 5% too low, there is a 5% loss in productivity.

3 ISE Nonengineered (type 2) estimates “Did take” or “Should take” Used as a temporary measure, based on  Historical records  Expert opinion  Time logs  Occurrence sampling

4 ISE Engineered (type 1) estimates Provide accurate estimates Must be preceded by a methods and quality analysis Have few subjective and many objective characteristics May be found through stopwatch time study or standard data

5 ISE Time study: 3 levels Observed time: “raw” data Normal time = Observed time × Rating  Rating: Standard time = Normal time + Allowances  Standard time is normal time plus allowances. Shift allowances are a percentage of shift time. Work allowances are a percentage of work time.  Personal Allowances  Fatigue Allowances  Delay Allowances

6 ISE Standard data Are expressed in normal time Are set by analyst visualizing the work method Have three advantages:  Cost of determining the standard is low.  Consistency is high.  Standards can be calculated ahead of production.

7 ISE Learning Amount of time to perform a task depends on how much practice the person has. Learning occurs in both the individual and the organization. The primary cause for incorrect standard times is failure to adjust for learning.

8 ISE Individual learning Improvement in time/unit even though the product, tools, and equipment don’t change. Individual improvements come from:  Better eye–hand coordination  Fewer mistakes  Reduced decision time

9 ISE Organizational learning Improvement in time/unit due to changing product design, changing tools and equipment, or changing work methods. Organizational learning includes individual learning. Organization improvements come from:  Operator learning  New technology  Substitution of capital for labor

10 ISE Quantifying improvement Manufacturing progress curves are placed on a log–log scale.  On a log scale the physical distance between doubled quantities is a constant.  The progress curve becomes straight.

11 ISE Example learning curve Assembling a part This is an ____________ learning curve. Mathematically, ______________ # Cycles Log # Cycles Cycle Time, min. Log Cycle Time % Decrease

12 ISE Working with the curve Determining the learning factor, b, for the 80% curve log 10 y = log 10 a + b*log 10 x or, rearranging and solving for b: Solve for a using the cycle time for 1 cycle

13 ISE Using the learning curve 1.MTM-2 analysis shows a standard time of 2 min. How many cycles does it take to reach it? 2.How long will this take (in minutes)?

14 ISE Your turn … You have conducted a time study for an operation. At the 50 th cycle the cycle time is 20 minutes and at 100 th cycle the cycle time is 15 min. (i.e., (x 1,y 1 ) = (50,20) and (x 2,y 2 ) = (100,15)) 1.What is the learning curve? What are a and b? 2.How many cycles would be required to meet a standard time of 10 minutes? 3.How long will this take? What is the average cycle time?

15 ISE Organization progress Rate of improvement depends on amount that can be learned. Amount that can be learned depends on:  Amount of previous experience with the product  Extent of mechanization

16 ISE Individual learning Has two components:  Cognitive learning  Motor learning Motor learning is slower. Cognitive learning has greater improvement.

17 ISE Applications of learning Cost allocation Scheduling Evaluation of alternatives Acceptable day’s work

18 ISE Documenting, using, and maintaining standards Quantification of output Audits Feeding information back to workers