PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-1 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 S10-2 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 S10-3 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 S10-4  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 Uses of Labor Standards

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-5  Historical experience  Time studies  Predetermined time standards (MTM)  Work sampling © 1995 Corel Corp. Sources of Labor Standards

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-6  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 Time Studies

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-7 The Eight Steps to Conducting a Time Study Œ Define the task to be studied (after a methods analysis)  Break down the task into precise elements Ž 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)

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-8 ‘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: The Eight Steps to Conducting a Time Study - continued 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 S10-9 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.

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-10 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

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-11 Considerations in Determining Sample Size Œ How accurate do you want to be?  What level of confidence do you want your measurements to have? Ž 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 S10-12 Common z values

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-13 Allowance factor Nonwork time Total time Average element time  Element times Number of cycles Normal timeAverage element time * Perf. Rating Standard time Total normal time 1 - Allowance factor = = = = Time Study Equations

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-14  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 Predetermined Time Standards

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-15 Time TMU Hand in Motion Distance Moved (in) ABCAB 3/4 or less 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 MTM Table for Reach Motion

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-16 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 S10-17  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 Work Sampling

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-18  Used for  Ratio delay studies  Setting labor standards  Measuring worker performance Work Sampling

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-19 The Seven Step Work Sampling Procedure Œ Take a preliminary sample to obtain an estimate of the parameter value  Compute the sample size required Ž Prepare a schedule for observing the worker at appropriate times  Observe and record worker activities; rate worker performance

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-20 The Seven Step Work Sampling Procedure - continued 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 S10-21 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

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-22 Normal Time = (Total Time) (% of time working) (Rating) Number of units Produced Standard Time = Normal Time 1 - Allowance Work Sampling Equations

PowerPoint presentation to accompany Operations Management, 6E (Heizer & Render) © 2001 by Prentice Hall, Inc., Upper Saddle River, N.J S10-23 Figure S10.3