SECTION 2 STRATEGIC DESIGN Operations Management I Dirección de Operaciones I- English teaching Departamento de Organización de Empresas y Marketing Área de Organización de Empresas SECTION 2 STRATEGIC DESIGN 3º GADI- 5º DG-ADI-DER 2013-2014 Slide presentation Chapter 5

JOB DESIGN AND WORK MEASUREMENT CHAPTER 5 JOB DESIGN AND WORK MEASUREMENT 5.1. Job Design 5.2. Methods Analysis 5.3. Labor Standards and Work Measurement

5.1 Job Design Specifying the tasks that constitute a job for an individual or a group Job specialization Job expansion Psychological components Self-directed teams Motivation and incentive systems Ergonomics and work methods Visual workplace

1. Labor Specialization The division of labor into unique tasks First suggested by Adam Smith in 1776 Development of dexterity and faster learning Less loss of time Development of specialized tools Later Charles Babbage (1832) added another consideration Wages exactly fit the required skill

2. Job Expansion Adding more variety to jobs Intended to reduce boredom associated with labor specialization Job enlargement: The grouping of a variety of tasks about the same skill level; horizontal expansion Job rotation: A system in which an employee is moved from one specialized job to another Job enrichment: A method of giving an employee more responsibility that includes some of the planning and control necessary for job accomplishment; vertical expansion Employee empowerment: Enlarging employee jobs so that the added responsibility and authority is moved to the lowest level possible in the organization

Job Enlargement-Job Enrichment Task #3 (lock printed circuit board into fixture for next operation) Present job (manually insert and solder six resistors) Task #2 (adhere labels to printed circuit board) Enlarged job Enriched job Planning (participating in a cross-function quality-improvement team) Control (Test circuits after assembly)

3. Psychological Components of Job Design Human resource strategy requires consideration of the psychological components of job design. These components focus on how to design jobs that meet some minimum psychological requirements Hawthorne studies (late 1920’s-1930’s) introduced psychology to the workplace: The workplace social system and distinct roles played by individuals may be more important than physical factors

Core Job Characteristics Jobs should include the following characteristics Skill variety Job identity Job significance Autonomy Feedback

4. Self-Directed Teams Group of empowered individuals working together to reach a common goal May be organized for long-term or short-term objectives Effective because Provide employee empowerment Ensure core job characteristics Meet individual psychological needs

Job Design Continuum Self-directed teams Increasing reliance on employee’s contribution and increasing responsibility accepted by employee Specialization Enlargement Self-directed teams Empowerment Enrichment Job expansion

4. Self-Directed Teams To maximize effectiveness, managers should Ensure those who have legitimate contributions are on the team Provide management support Ensure the necessary training Endorse clear objectives and goals Financial and non-financial rewards Many teams have definite life cycles

Benefits of Teams and Expanded Job Designs Improved quality of work life Improved job satisfaction Increased motivation Allows employees to accept more responsibility Improved productivity and quality Reduced turnover and absenteeism Limitations of Job Expansion Higher capital cost Individuals may prefer simple jobs Higher wages rates for greater skills Smaller labor pool Increased accident rates Current technology may not lend itself to job expansion

5. Motivation and Incentive Systems Bonuses - cash or stock options Profit-sharing - profits for distribution to employees Gain sharing - rewards for improvements Incentive plans - typically based on production rates Knowledge-based systems - reward for knowledge or skills

6. Ergonomics and Work Methods Ergonomics is the study of the interface between man and machine Often called human factors Operator input to machines Feedback to operators The work environment Illumination Noise Temperature Humidity

7. The Visual Workplace Use low-cost visual devices to share information quickly and accurately Displays and graphs replace printouts and paperwork Able to provide timely information in a dynamic environment System should focus on improvement Visual systems can take many forms and serve many functions: Present the big picture Performance (kanbans, clocks, … ) Housekeeping (shadow boards and footprinting, labeling, color-coded signs and lights, … )

Examples: The Visual Workplace Visual utensil holder encourages housekeeping A “3-minute service” clock reminds employees of the goal

Examples: The Visual Workplace Visual signals at the machine notify support personnel Visual kanbans reduce inventory and foster JIT Andon Line/machine stoppage Parts/ maintenance needed All systems go Part A Part B Part C Reorder point

Examples: The Visual Workplace Quantities in bins indicate ongoing daily requirements and clipboards provide information on schedule changes Process specifications and operating procedures are posted in each work area

5.2 Methods Analysis Focuses on how task is performed Used to analyze Movement of individuals or material Flow diagrams: drawings used to analyze movement of people or material Process charts: A graphic representation that depicts a sequence of steps for a process Activities of human and machine and crew activity Activity charts: A way of improving utilization of an operator and a machine or some combination of operators (a crew) and machines Body movement Operations or micro-motion charts: A chart depicting right and left hand motions

Flow Diagram Old method Storage bins Machine 1 Mach. 2 Mach. 3 Mach. 4 From press mach. Paint shop Welding Old method

Flow Diagram New method Machine 4 Welding Machine 3 Paint shop Storage bins Machine 1 Machine 2 Machine 3 Machine 4 From press mach. Paint shop Welding New method

Process Chart New method

Activity Chart

Operation Chart

5.3 Labor Standards and Work Measurement Started early in the 20th century (F. Taylor and F. and L. Gilbreth) Important to both manufacturing and service organizations Necessary for determining staffing requirements Important to labor incentive systems Meaningful standards help determine: Labor content of items produced Staffing needs Cost and time estimates Crew size and work balance Expected production Basis of wage incentive plans Efficiency of employees This slide provides some reasons that capacity is an issue. The following slides guide a discussion of capacity.

5.3 Labor Standards and Work Measurement Labor standards may be set in four ways: Historical experience Time studies Predetermined time standards Work sampling

1. Historical Experience How the task was performed last time Easy and inexpensive Data available from production records or time cards Data is not objective and may be inaccurate Not recommended

2. Time Studies Involves timing a sample of a worker’s performance and using it to set a standard Requires trained and experienced observers Cannot be set before the work is performed Eight steps: Define the task Divide the task into precise elements Decide how many times to measure the task Time and record element times and rating of performance

2. Time Studies Compute average cycle time = Average observed cycle time sum of the times recorded to perform each element number of cycles observed = Determine performance rating and normal time average observed cycle time performance rating factor Normal time = x Add all the normal times for each element to develop the total normal time for the task Compute the standard time Standard time = total normal time 1 - allowance factor

Rest Allowances Personal time allowance Delay allowance 4% - 7% of total time for use of restroom, water fountain, etc. Delay allowance Based upon actual delays that occur Fatigue allowance Based on our knowledge of human energy expenditure

Example 1 Normal time = (average observed time) x (rating factor) The time study of a work operation yielded an average observed time of 4.0 minutes. The analyst rated the observed worker at 85%. This means the worker performed at 85% of normal when the study was made. The firm uses a 13% allowance factor. We want to compute the standard time. SOLUTION: Normal time = (average observed time) x (rating factor) = (4.0)(.85) = 3.4 minutes Standard time = = = normal time 1 - allowance factor 3.4 1 - .13 .87 = 3.9 minutes

Example 2 Management Science Associates promotes its management development seminars by mailing thousands of individually composed and typed letters to various firms. A time study has been conducted on the task of preparing letters for mailing. ON the basis of the following observations, MSA wants to develop a time standard for this task. The firm’s personal, delay, and fatigue allowance factor is 15%. Performance Job Element 1 2 3 4 5 Rating Compose and type letter 8 10 9 21* 11 120% Type envelope address 2 3 2 1 3 105% Stuff, stamp, seal, and 2 1 5* 2 1 110% sort envelopes Cycle Observed (in minutes)

3. Predetermined Time Standards Divide manual work into small basic elements that have established times Can be done in a laboratory away from the actual production operation Can be set before the work is actually performed No performance ratings are necessary Methods Time Measurement (MTM) Therbligs (Gilbreth): basic motions (select, grasp, position, assemble, reach, hold, rest, and inspect) Time Measurement Unit (TMU): unit for very basic micromotions in which 1TMU = .0006 min or 100.000 TMUs = 1hr You might point out to students that this slide links capacity to work measurement (standard times).

MTM Table

4. Work Sampling Estimates percent of time a worker spends on various tasks Less expensive than time study Observers need little training Studies can be delayed or interrupted with little impact on results Worker has little chance to affect results Less intrusive Adv. Does not divide work elements as completely as time study Can yield biased results if observer does not follow random pattern Less accurate than time study, especially when job element times are short Disadv.