1. WORK STUDY WORK MEASUREMENT PART I DEFINITIONS, PURPOSE and USES

2. 2 WORK MEASUREMENT Until now, we kept saying that, work study involves two complementary topics namely “method study” and “work measurement”. We had also given the definitions for both of them. But before going into the discussion of work measurement, it worths to repeat its definition once more; DEFINITION OF WORK MEASUREMENT “Work Measurement is the application of techniques designed to establish the standard time for a qualified and well trained worker to complete a specified job at a defined level of normal pace/performance.” We have to note that in the above given definition there are several important points which we have to pay attention; a)The term “work measurement” itself does not refer to a single technique. Infact, it is used to describe a family of techniques any one of which can be used to measure work. b)There are several features in the definition such as; “a qualified and well trained worker” and “a defined level of normal pace/performance”. One should carefully think about the exact meanings of these terms.

3. 3 WORK MEASUREMENT Is a must for work measurement. Experience is usually what makes a qualified and well trained worker/operator. The time required to become qualified depends on both the nature of the job and skill of the person. For example, operating sewing machines, welding, upholstering, machining and many other high technology jobs require long learning periods. A QUALIFIED, WELL TRAINED WORKER It will be a great mistake to time-study someone too soon. A good way to start work measurement is to select a qualified worker on the job and give that person two weeks for practicing it prior to the time study. For new jobs or tasks, generally, “predetermined time study systems” are used. At first, such standards are tight and hard to achieve since they are developed for qualified and well thrained workers. NORMAL PACE/PERFORMANCE Normal pace is a pace which is comfortable for most people. In the development of normal pace concept, 100% will be the normal pace. The time standards which are commonly used for normal pace are as follows;  walking 80,5 m in 1 minute (4830 m/hr).  dealing 52 cards in four equal stacks in 0,5 minutes.  filling a 30-pin pinboard in 0,435 minutes (using two hands).

4. 4 WORK MEASUREMENT Is a detailed description of what must be accomplished. The description of the task must include; A SPECIFIED JOB  the prescribed work method,  the material specification,  the tools and equipment being used,  the positions of incoming and outgoing material,  additional requirements like, safety, quality, housekeeping and maintenance tasks. The associated time standard for a specified job is only good for the above indicated set of conditions. If anything is changed the time standard must change.

5. 5 WORK MEASUREMENT Work measurement, as the name suggests, provides the management with a means of measuring the time taken in the performance of an operation or series of operations in such a way that, ineffective time is shown up and can be seperated from effective time. In this way, the existence, nature and extent of ineffective time which are previously concealed within the total time become visible. The Purpose of Work Measurement Work measurement has also another role to play. Not only it can reveal the existence of ineffective time but also it is also used to set standard times for carrying out the work. Thus, if any length of ineffective time inflitrates into standard time during the execution of the job, it will be immediately shown up as an excess over the standard and the situation will be noticed by the management. Since the work measurement is more likely to show up both the behaviour of management itself and the behaviour of workers, it is more likely to meet with far greater resistance than method study. It is unfortunate that, work measurement and in particular its principal technique “time study” acquired a bad reputation especially among union circles. This is because of the fact that in many applications it is directed almost exclusively to the reduction of ineffective time within the control of the worker. Hence, although it is far more greater in size, the ineffective time within the control of management has been virtually ignored. Just as method study should precede work measurement, the elimination of ineffective time due to shortcomings of management must precede the elimination of ineffective time within the control of the worker.

6. 6 WORK MEASUREMENT Work Measurement may start a chain reaction through out the organization Let’s take an example of excessive idle time of an expensive machine revealed by a study taken over several days. This machine is very productive when operating but takes a long time to set up. It is found that, a great deal of idle time is due to the fact that the batches of work being put on this machine are very small, so that half of the available time is spent on resetting it to do new operations. The chain of reactions resulting this discovery may be as follows; The Work Study Department Reports that the machine is idle for excessively long periods because of small orders coming from the planning office increasing the cost of manufacture. It suggests that planning office should either combine several orders into one or make more for stock. Planning Office Complains that it has to work on the instructions of the sales office which never seems to sell enough of any product to make up a descent sized batch and can not give any forecast of future orders. Sales Office Says that, it can not provide either forecasts or large orders of any product as long as the policy of top management is to accept every variation that the customers ask for. Already the catalogue is becoming too large: almost every job is now “special”. The Managing Director Is surprised when the effect of his marketing policy (or lack of it) on the production costs is brought to his attention. Says that, he never thought of it like that. All he was trying to do was prevent orders from going to his competitors.

7. 7 WORK MEASUREMENT The Uses of Work Measurement and Time Standards In the process of improving the existing way of doing any type (manufacturing or service) and size of work, work measurement and hence the time standards are used to develop answers for the following purposes; 1)To compare the efficiency of alternative methods. Other conditions being equal, the method which takes the least time will be the best method. 2)To determine the machine tools to buy. 3)To determine the number of production / service people to employ. 4)Sheduling the machines, operations, and people to do the job and deliver on time with less inventory. 5)To determine the assembly line balance, to determine the conveyor belt speed, loading the work cells with the correct amount of work and to balance the work cells. 6)To determine individual worker performance and to identify operations that are having problems and correct them. 7)To pay incentive wages for outstanding team or individual performance. 8)To evaluate new equipment purchases, to justify their expense. 9)To develop operation personnel budgets to measure management performance.

8. 8 WORK MEASUREMENT EXAMPLES ON USES OF WORK MEASUREMENT AND TIME STANDARDS 1.How Many Machines Do We Need? This question is one of the first questions when setting up a new operation or when preparing to start the production of a new product. The answer depends on two pieces of information; a)How many pieces do we need to manufacture per shift? b)How much time does it take to make one part? (this is the time standard) Let’s say that, 1.The marketing department wants us to make 2000 wagons per 8-hr shift. 2.It takes us 0,400 minutes to form the wagon body on a press. 3.There are 480 minutes per shift (8 hrs/shift x 60 minutes/hr). 4.-50 minutes downtime per shift (breaks, clean-up, etc). 5.Hence, the available time per shift is 430 minutes. 6.Performance based on history or expectation is 75%. 7.Thus, we have (0,75x430=) 322,5 effective minutes to make 2000 units. 8.Which means we have to produce; (322,5/2000=) 0,161 min/unit or 6,21units/min.

9. 9 WORK MEASUREMENT Here, 0,161 min/part or 6,21 parts/min is called the “takt time” (see related reading material on the web page of IE411) or “plant rate ”(*). This value tells us that every operation in the plant must produce a part every 0,161 minutes. Therefore how many machines do we need for this operation? Time standard = 0,400 minutes / unit Required Plant rate = 0,161 minutes / unit = 2,48 machines If other operations also require this kind of machine, we would add all machine requirements together and round up to the next whole number. (*) “Plant rate” (R value) is similar to German word “takt” time.If the customer demand is 120 units per day and we work 480 minutes in a day, takt time [(available working time per day)/(demand size)] is 4 minutes. That is we need to produce 1 part every 4 minutes. R value is similar, but with factoring to consider time standards, performance percentages, and allowances. So that, an R value of 0,250 minutes of cycle time means that “1 finished product must come off the assembly line every 0,250 minute or the plant will not produce enough product”.

10. 10 WORK MEASUREMENT 2.How Many People Should We Hire? Let’s assume that we have the operation chart for a water valve factory as shown on the left. In this chart we find the time standard for ever operation required to fabricate each part of the product and each assembly operation to assemble and pack the finished product. In the operation shown on the upper left of the chart (casting the handle) indicates the operation number. The 500 is the standard number of pieces per hour (at a normal pace). The 2,0 is the hours required to produce 1000 pieces (at a normal pace). Thus, at a rate of 500 pieces per hour, it would take us 2 hours to produce 1000 pieces. 05 The question is “how many people would be required to cast 2000 handles per shift?”. At standard (at a 100% performance level); we would require 4 standard hrs to produce 2000 units.

11. 11 WORK MEASUREMENT But, we have to keep in mind that, not many people, departments or plants work at 100% performance. How many hours would be required if we work at the rate of 60%, 85%, or 120%? For 60% performance : [4 hours / 60%] or [4 hours / 0,6] = 6,66 hrs per 2000 units. For 85% performance : [4 hours / 85%] or [4 hours / 0,85] = 4,7 hrs per 2000 units. For 120% performance : [4 hours / 120%] or [4 hours / 1,20] = 3,33 hrs per 2000 units. Since all the values are less than 8 hours (length of one shift) we can say that 1 person will be more than sufficient. Again, let’s say that the marketing department has forecasted a sales of 2500 water valves per day. How many people are needed in this case? In this case, we look at the bottom right side of the operations chart. There it says that, in our water valve factory, we need 138.94 hours at 100% performance to produce 1000 water valves. If this is a new product, we could expect 75% performance during the first year of production. Therefore; For 75% performance : [138,94 hours / 75%] or [138,94 hours / 0,75] = 185,25 hrs per 1000 units. Thus, for 2500 units we need; [185,25 x 2,5 =] 463,125 hours per day. Dividing this value by 8 hrs per worker per day, gives us that we need 58 people. If less than 2500 units are produced with 58 people, management will be over budget, and that is unforgivable. If it produces more than 2500 units per day, management is judged as being good.

12. 12 WORK MEASUREMENT 3.How Much Will Our Product Cost?  When starting a “new product development” project, one of the very first activities is to determine the anticipated cost of the product. Thus, a feasibility study will show the management the profitability of the new venture. Without proper, accurate costs, the profitability calculations would be nothing but a guess. First of all, let’s see the typical contents of a “product cost” which are given as  First of all, let’s see the typical contents of a “product cost” which are given as follows; follows; Typical cost breakdown for a new product Also note that, the overall manufacturing costs are divided into three classifications : Direct Labor Direct Material Overhead

13. 13 WORK MEASUREMENT Direct Labor Cost is the most difficult component of product cost to estimate. Time  Direct Labor Cost is the most difficult component of product cost to estimate. Time standards must be set prior to any equipment purchase or material availability standards must be set prior to any equipment purchase or material availability calculations. calculations.  Time standards are set using predetermined time standards or standard data from blueprints and work station sketches.  Time standards are collected on something like the operations chart shown on page 10 of this document. For the example case of the water valve (page 10 of this document) lets calculate  For the example case of the water valve (page 10 of this document) lets calculate the “direct labor cost” per unit of product; the “direct labor cost” per unit of product;  On the bottom right side of the respective operation sheet, we find the hours required to produce 1000 units which is equal to 138,94 hours at normal pace.  If we assume that the anticipated performance will be 85%, hours required to produce 1000 units will be 163,46 hours. [138,94 hours / 85%] or [138,94 hours / 0,85] = 163,46 hrs per 1000 units.  If our “hourly labor rate” is 6 YTL, then our direct labor cost per unit is; [(163,46 x 6)/1000] = 0,98 YTL each.

14. 14 WORK MEASUREMENT Direct material cost is the cost of materials that makes up the finished product and is  Direct material cost is the cost of materials that makes up the finished product and is estimated by calling vendors for a bid price. estimated by calling vendors for a bid price.  Direct material costs are typically 50% of the manufacturing cost (direct labor + direct material + factory overhead).  For our example of water valve, we will use 50%. On the respective operation chart (page 10), raw materials are introduced at the top of each line. Buyout parts are introduced at the assembly and packout stations. Factory overhead costs are all the expenses  Factory overhead costs are all the expenses of running a factory except for the previously of running a factory except for the previously discussed direct labor and direct material. discussed direct labor and direct material.  Overhead is calculated as a per cent of direct labor. This per cent is calculated by using last year’s actual costs. If all the actual manufacturing costs for last year are as follows; Direct Labor.........................1 000 000 YTL Direct Material.....................3 000 000 YTL Overhead..............................2 000 000 YTL The factory overhead for last year is; [(2000000 overhead)/(1000000 direct labor)]x 100= 200% overhead rate / labor YTL. Thus, each YTL of direct labor cost has a factory overhead cost of 2 YTL.

15. 15 WORK MEASUREMENT  Accordingly for our product (water valve) unit cost is calculated as follows; Product : WATER VALVE Labor.............. 0,98 YTL (from time standards) Overhead........ 1,96 YTL (200% overhead rate) Material.......... 2,94 YTL (from our suppliers) TOTAL FACTORY COST..... 5,88 YTL PROFIT (20%)....................... 1,18 YTL SELLING PRICE.................... 7,06 YTL Cost estimating is an important part of any industrial management program and It should be a complete course covering operations, product, and project costing. Of course, Work Study should be a prerequisite.

16. 16 WORK MEASUREMENT Even the simplest manufacturing shop must know when to start an operation  Even the simplest manufacturing shop must know when to start an operation for the parts to be available on the assembly line. As the number of operations for the parts to be available on the assembly line. As the number of operations increase between raw material stage and assembly operations, the scheduling increase between raw material stage and assembly operations, the scheduling becomes more complicated. becomes more complicated. 4.How Do We Schedule and Load Machines, Work Centers, Departments and Plants?  Lets consider the “single machine work center” which operates at 90%, 16 hrs/day of the following example, where;  This work center (machine) works 16 hours per day, 5 days per week. There is an overall backlog of 294,4 hours. This says that we have (294,4/16=) 18,4 days of work in the backlog. Standard at 100% performance Hours at 90% performance

17. 17 WORK MEASUREMENT  Now think that what happens if another customer comes in with a job and wants it in 10 days? The job is estimated to take only 48 hours of machine time. Can you deliver? What about the other four jobs? When have you promised them?  One scheduling philosophy is that “operating departments are compared to buckets of time”. The size of the time bucket is the number of hours that each department can produce in a 24-hour day. An example of this case is given as below; 16 hrs/mach/dayTwo shift hrs x %performance

18. 18 WORK MEASUREMENT  In the above example case, the scheduler keeps adding work to any department for a specific day until the hour capacity is reached; then it spills over to the next day. Without good “work measurement plan” and good “time standards”, manufacturing management would have to carry great quantities of inventory to avoid running out of parts / materials. Knowledge of time standards will reduce inventory requirements, which will reduce cost. Production inventory control is an area of major importance in manufacturing, and work measurement / time study should be a prerequisite.

19. 19 WORK MEASUREMENT  It is of no value that one person or one cell has the ability to outrun the rest of the plant by 25%. This is because of the fact that, one person or cell can not produce more than the incoming amount or more than the subsequent operations can use. If there is such a resulting extra time, something is wrong with the line balance. 5.How Do We Determine the Assembly Line and Work Cell Balance? The objective of assembly line balancing is to give each operator as close to  The objective of assembly line balancing is to give each operator as close to the same amount of work as possible. Balancing work cells has the same the same amount of work as possible. Balancing work cells has the same objective. objective. Assembly line balancing or work center loading can only be accomplished by  Assembly line balancing or work center loading can only be accomplished by breaking the job down into smaller tasks that need to be performed and then breaking the job down into smaller tasks that need to be performed and then reassembling them into jobs each having almost the same lenght of time. reassembling them into jobs each having almost the same lenght of time.  There will always be a work station or cell that has more work than any other in the line. This station is defined as the 100% loaded station or the bottleneck and will limit the output of the whole production line.  If we want to improve the assembly line (reduce the cost), we have to concentrate on the above mentioned “100% loaded station”. When we reduce the load on this station, then some other station on the production line will become a new “100% station”.

20. 20 WORK MEASUREMENT  If we reduce 100% station by 1%, we save an additional 1% for each station or person on the assembly line. This means that, now, they can go 1% faster.  For example if we have 200 stations or people on the assembly line and only one 100% station, we can save the equivalent of two stations or people by reducing the 100% station by just 1%. One can use this multiplier in justifying great sums of money to make small changes.  Now, let’s consider that we are dealing with the following “charcoal gas grill assembly line”. From the table given below, we can see that the bussiest station on this line is work station 2, with 0,300 minutes of work. So, work station 2 is the 100% station. Even though they could work faster, every work station is limited to 200 pcs per hour, because station 2 is limiting the output of whole assembly line. 0,020 is the total hours required to assemble one finished unit. If we multiply this total hours by the average assembly wage rate, we have the total assembly labor cost. A better line balance is lower total hours. 60min/0,3000,300/60min

21. 21 WORK MEASUREMENT  200 units per hour tells us that, marketing department says that we can sell 1600 units per day. Accordingly; Number of minutes per day = 60min x 8hrs = 480 minutes. Less 30 min for relaxation allowances = 480min – 30 min = 450 min Thus, our plant rate, R value = 450min / 1600 grills = 0,28 min / grill. This means that, we have to produce one grill in every 0,28 minutes or (1/0,28=) 3,58 grills per minute.  One of the first questions which we have to answer is “how many stations do we need along the assembly line to meet the daily demand?”. If the standard time for one grill is 1,2 minutes, the number of stations in our assembly line is; Number of stations = Time standard R value = [1,2 min / 0,28 min] = 4,29 stations In this case we have to roundup 4,29 to 5 stations, because we can not meet the demand of 1600 grills per day with 4 stations.

22. 22 WORK MEASUREMENT Since plant rate already includes allowances for personal fatigue and delays, let’s use the R value for our calculations instead of the takt time. R value for our example is 0,28 minutes per assembled grill. Also, the distance between unit centers on the conveyor is 1,10 m.  Assembly line balancing usually includes a conveyor of some kind. Thus, another question that needs to be answered is, “how fast should this conveyor run?”. Conveyor speed is measured in meters per minute, so if we know the “distance between units” on the assembly line, the “size of the assembly”, and the “number of units required per minute” we can determine the conveyor speed to attain 100% performance. Number of units per minute = 1 minute 0,28 min per unit = 3,58 grills per min Therefore; Conveyor speed = 3,58 grills per min x 1,10 m per grill = 3,94 m per min Without good “work measurement plan” in place and good “time standards”, how could we divide the work load equally and fairly?

23. 23 WORK MEASUREMENT 6.How Do We Measure Productivity? We have already discussed the topic of “PRODUCTIVITY” and its measurement.  We have already discussed the topic of “PRODUCTIVITY” and its measurement. Here we are going to give some more basic information about performance Here we are going to give some more basic information about performance control systems. control systems.  Industrial engineers improve productivity by reporting performances of every operation, operator, supervisor, and production manager every day, week, month and year.  Performance reports are mainly based on daily charges entered by the workers into the data collection system and extended within computer’s performance control system.  Basically a performance control system includes; 1. Goal setting (setting time standards), 2. Comparison of actual performances with the goals, 3. Tracking results (graphing), 4. Reporting variances larger than acceptable limits, 5. Taking corrective action to eliminate causes of poor performance. All five of these functions must be in place to have a functioning performance control system.

24. 24 WORK MEASUREMENT A performance control system will improve performance by an average of 42%  A performance control system will improve performance by an average of 42% over a performance with no control system. over a performance with no control system.  Companies without a performance control system typically operate on 60% of standard. Those companies with performance control systems will average 85% performance. This is accomplished by; 1. Identifying nonproductive time and eliminating it. 2. Identifying poorly maintained equipment and fixing it. 3. Identifying causes for downtime and eliminating them. 4. Planning ahead for the next job. In plants which do not have standards, the employees know that no one cares how much they produce. How can supervisors know who is producing and who is not if they don’t have standards? How would management know the magnitude of problems such as downtime and behind schedule cases and their cumulative anticipated effects on production if there are no standards?

25. 25 WORK MEASUREMENT A basic rule of production management is that all expenditures must be cost justified.  A basic rule of production management is that all expenditures must be cost justified. Second, a basic rule of life is that everything changes. We must keep improving or Second, a basic rule of life is that everything changes. We must keep improving or become obsolete. become obsolete.  To justify all expenditures, the savings must be calculated. This is called the “return”. The cost of making the change is also calculated. This is called the “investment”. 7.How Can We Select the Best Method by Evaluating Cost Reduction?  When the “return” is divided by the “investment”, the resulting ratio indicates the desirability of the project. This ratio is called ROI or “return on investment”. Example : Method justification by evaluating the cost reduction We have been producing product A for several years. We are looking forward to produce product A for several years more with a sales rate of 500 000 units per year or 2 000 units per day (we assume we have 250 work days in a year). The present method of production requires a standard time of 2,0 minutes per unit or 30 pcs per hour. At this rate, it takes 33,33 hours to make 1 000 units. All production will run on the day shift. Our labor rate is 10 YTL/hour.

26. 26 WORK MEASUREMENT A. PRESENT METHOD AND COSTS With a labor rate of 10 YTL / hour, the labor cost will be 333,30 YTL to produce 1 000 units. The cost of 500 000 units per year would be [333,30 x 500 = ] 166 650 YTL in terms of direct labor. B. NEW METHOD AND COSTS We have a cost reduction idea. There is a machine attachment in the market which speeds up our available production rate. If we buy this new machine attachment for 1 000 YTL, the new time standard would be lowered to 1,5 minutes per unit. Will this investment be good for us?  First we have to know how many attachments we have to buy to produce 500 000 units per year; 1. We know that we have to produce 2 000 units/day [(500 000 units/year)/(250 days/year)]. 2. What plant rate (R value) should we have to meet daily output of 2 000 units? 480 minutes/shift -50 minutes/shift downtime 430 minutes/shift at 100% (normal) performance 80% expected efficiency 344 effective minutes available to produce 2 000 units/shift

27. 27 WORK MEASUREMENT 3. Now we can calculate the number of machine attachments which we will need; Therefore, R value = [344 minutes / 2 000 units] = 0,172 minutes/unit. This means, to produce 2 000 units per shift, we need a part every 0,172 minutes. Number of machines = Time standard R value = [1,5 min / 0,172 min] = 8,7 machines This means we will purchase 9 of those machine attachments at 1 000 YTL each. Thus, our investment will be (9 x 1 000) 9 000 YTL. 4. Second, what will be our direct labor cost with these 9 machine attachments? Number of pcs per hour = 60 min/hr 1,5 min/part = 40 parts/hour or 25 hours/1 000 pcs [25 hrs/ 1 000] x [10 YTL/hr wage rate] = 250 YTL/1 000 units. Therefore, 500 000 units will cost 500 x 250 = 125 000 YTL.

28. 28 WORK MEASUREMENT C. SAVINGS : Direct Labor YTL Direct labor cost of old method............ 166 650 YTL/year Direct labor cost of new method.......... 125 000 YTL/year Savigs................................................... 41 650 YTL/year x 100 = 463% Return (savings) 41 650 YTL/year Investment (cost) 9 000 YTL ROI = In our example case, 463% ROI means, {[(9 000 YTL) / (41 650 YTL per year)] x 100} = 0.216 years, or (12 months x 0,216) = 2,59 months to pay off.  Within well prepared cost reduction programmes, cost reduction calculations can be little more complicated than the above example. Because, we have to include some factors such as; taxes, depreciation, time value of money, surplus machinery (trade-in cases) and scrap value in real life calculations. Could we perform the above analysis without proper work measurement or proper time standards?