Question

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

	Month
	1		2		3		4
Throughput time (days)	?		?		?		?
Delivery cycle time (days)	?		?		?		?
Manufacturing cycle efficiency (MCE)	?		?		?		?
Percentage of on-time deliveries	78	%	74	%	71	%	68	%
Total sales (units)	3780		3618		3433		3304

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

	Average per Month (in days)
	1		2		3		4
Move time per unit	0.7		0.5		0.6		0.6
Process time per unit	2.3		2.2		2.1		2.0
Wait time per order before start of production	25.0		27.4		30.0		32.4
Queue time per unit	4.9		5.6		6.4		7.3
Inspection time per unit	0.4		0.5		0.5		0.4

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

Answer 1

1) a)
Month	1	2	3	4
Throughput time in days:
Process time	2.3	2.2	2.1	2
Inspection time	0.4	0.5	0.5	0.4
Move time	0.7	0.5	0.6	0.6
Queue time during production	4.9	5.6	6.4	7.3
Total throughput time	8.3	8.8	9.6	10.3
b)
Manufacturing cycle efficiency (MCE): Process time ÷ Throughput time
Process time	2.3	2.2	2.1	2
Total throughput time	8.3	8.8	9.6	10.3	days
MAnufacturing cycle efficiency (MCE): Process time ÷ Throughput time	27.7%	25.0%	21.9%	19.4%
c)
Delivery cycle time in days:
Wait time to start of production	25	27.4	30	32.4
Throughput time	8.3	8.8	9.6	10.3	days
Total delivery cycle time	33.3	36.2	39.6	42.7
	Throughput time in days:		Delivery cycle time in days:		MAnufacturing cycle efficiency (MCE)
Month 1	8.3	Days	33.3	Days	27.7%
Month 2	8.8	Days	36.2	Days	25.0%
Month 3	9.6	Days	39.6	Days	21.9%
Month 4	10.3	Days	42.7	Days	19.4%
2)
Throughput time per unit	Increasing	Trends
Manufacturing cycle efficiency	Declining	Trends
Delivery cycle time	Increasing	Trends
3)
a.
	Month 5th
Throughput time in days:
Process time	2
Inspection time	0.4
Move time	0.6
Queue time during production	0
Total throughput time	3	days
Manufacturing cycle efficiency (MCE): Process time ÷ Throughput time	66.67%
b)
	Month 6 th
Throughput time in days:
Process time	2
Inspection time	0
Move time	0.6
Queue time during production	0
Total throughput time	2.6	days
Manufacturing cycle efficiency (MCE): Process time ÷ Throughput time	76.92%
	Month 5		Month 6
Total throughput time	3	days	2.6	days
Manufacturing cycle efficiency (MCE):	66.67%		76.92%