Operations Management Work Measurement Supplement 10 PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Outline Labor Standards and Work Measurement Historical Experience Time-Studies Predetermined Time Standards Work Sampling PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Learning Objectives When you complete this supplement, you should be able to : Identify or Define: Four ways of establishing labor standards Describe or Explain: Requirements for good labor standards Time study Predetermined time standards Work sampling PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Uses of Labor Standards Costing labor content of products Planning staffing needs Estimating time and cost for bids Planning production (crew size and work balance) Basing wage-incentive plans Determining employee efficiency You might note here that labor standards are of use both before production (planning, bidding, etc.) and during producing (wage-incentive, determining efficiency, etc.) PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Sources of Labor Standards Historical experience Time studies Predetermined time standards (MTM) Work sampling Most of these methodologies rely on the job actually being performed.. © 1995 Corel Corp. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Time Studies Labor standards are based on observing worker doing task Observe only a sample of work Use average time & pace to set standard Disadvantages Requires a trained & experienced analyst Standard cannot be set before task is performed Here it may be helpful to discuss why something, which often looks to students to be so simple, is really not. What problems does one encounter in doing a time study? Why factors make it more complex than it appears? PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

The Eight Steps to Conducting a Time Study Define the task to be studied (after a methods analysis) Break down the task into precise elements Decide how many times each element of the task must be measured Record the times and ratings of performance for the task elements Compute the average observed cycle time (element times adjusted for unusual influences) It is sometimes helpful to actually walk students through a time study in the classroom. The task does not have to be complex - perhaps as simple as sharpening a pencil. Ask them to consider sources of variance as the task is performed on different pencils by different people. Students should also be asked how one determines the appropriate adjustments for unusual influences. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

The Eight Steps to Conducting a Time Study - continued Compute the normal time for each task element: Normal time = (Average actual cycle time) x (Rating factor) Sum the normal times for each element to develop a total normal time for the task Compute the standard time: At this point in the process, students should be asked to determine the appropriate waiting factor and allowances. How does one determine the rating factor for a particular worker? What allowances are appropriate in a given situation, and how long should they be? Standard time = Total normal time 1- Allowance factor PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Allowances Personal time allowance - 4% - 7% of total time - use of restroom, water fountain, etc. Delay allowance - based upon actual delays that occur Fatigue allowance - to compensate for physical or mental strain, noise level, tediousness, heat and humidity, assumption of an abnormal position, etc. Some thoughts on allowances. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Time Studies - Sample Size 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 The need for calculation of the appropriate sample size was probably covered earlier. If not, one should at least introduce the equation and its use. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Considerations in Determining Sample Size How accurate do you want to be? What level of confidence do you want your measurements to have? How much variation exists within the job elements? PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Common z values PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Time Study Equations Nonwork time Allowance factor = Total time  Element times Average element time = Number of cycles Normal time = Average element time * Perf. Rating If you have actually conducted a time study in the classroom, you should demonstrate the use of these equations. Total normal time Standard time = 1 - Allowance factor PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Predetermined Time Standards Labor standards are set from times in published tables (e.g., MTM Table) Procedure Divide manual work into basic elements Look up basic element times in table; sum Advantages Times established in laboratory setting Useful for planning tasks Widely accepted by unions A useful exercise in applying predetermined time standards can be to have teams of three or four students each develop the time standard for a particular task as a homework assignment. Have them bring the completed standards to the next class and discuss the results. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

MTM Table for Reach Motion Hand in Time TMU Motion Distance A B C A B Moved (in) 3/4 or less 2.0 2.0 2.0 1.6 1.6 1 2.5 2.5 3.6 2.3 2.3 2 4.0 4.0 5.9 3.5 2.7 A Reach to object in fixed location. B Reach to object in variable locations. C Reach to object jumbled with others. 1 TMU = .0006 minutes PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Sample MTM Table for GET and PLACE Motions PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Work Sampling Labor standard is set using output and % of time worker spends on tasks Involves observing worker at random times over a long period Advantages Less expensive than time studies Observer requires little training Disadvantages Ineffective with short cycles Discussion of this methodology should emphasize its use in service organizations. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Work Sampling Used for Ratio delay studies Setting labor standards Measuring worker performance It would be helpful at this point to note the use of Work Sampling as a diagnostic tool. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

The Seven Step Work Sampling Procedure Take a preliminary sample to obtain an estimate of the parameter value Compute the sample size required Prepare a schedule for observing the worker at appropriate times Observe and record worker activities; rate worker performance One point to bring out here is that observations should be conducted at random intervals. Students could be asked to conduct a study of one of their classmates or a worker in the college or university community. One issue this might raise is that of the impact of the observer on the worker being observed. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Work Sampling Procedure - continued The Seven Step Work Sampling Procedure - continued Record the number of units produced during the applicable portion of the study Compute the normal time per part Compute the standard time per part PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Work Sampling - Sample Size p = estimated value of sample proportion (of time worker is observed busy or idle) h = accuracy level desired in percent, expressed as a decimal The issue to be raised here is that this calculation gives an estimate of sample size. If the sample proportion turns out to differ significantly from the estimate, the sample size must be recalculated. PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Work Sampling Equations (Total Time) (% of time working) (Rating) Normal Time = Number of units Produced Normal Time Standard Time = 1 - Allowance PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

Figure S10.3 PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458