Question

Sound Tek Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 50 printed circuit boards. Each board requires 4 minutes of board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 9 minutes to complete.

The final assembly for each stereo unit requires 22 minutes and is also done in batches of 50 units. A batch of 50 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30 minutes. The units wait while the setup is performed. In the final test, the 50-unit batch is tested one at a time. Each test requires 6 minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of 50 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and labeling requires 12 minutes per unit.

1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 50 units. Categorize the non-value-added time into wait and move time. Round the percentage to one decimal place.

Value-added lead time			min.
Non-value-added lead time:
	Wait time lead time	min.
	Move time lead time	min.
Total non-value-added lead time			min.
Total lead time			min.
Value-added ratio (as a percent)			%

2. Move time in this process could best be reduced by:

a. Doing nothing.

b. Changing the layout from a process orientation to a product orientation.

c. Increasing batch sizes.

d. Eliminating the testing step.

e. Hiring more workers.

b

Feedback

Answer 1

ANSWER:

Required 1)

Computation of value added lead time, non value added lead time and value added ratio:

Value added lead time (WN 1) (A)		44 min
Non-value added lead time
Wait time lead time (WN 2)	2,186 min
Move time lead time (WN 3)	29 min
Total non-value added lead time (B)		2,215 min
Total Lead time (C = A + B)		2,259 min
Value-added ratio (as a percent) [(A / C) * 100]		1.94%

Working Notes:

WN 1) Computation of value-added minutes

PC board assembly	4 min
Final Assembly	22 min
Testing	6 min
Packaging and Labelling	12 min
Total Value Added time	44 min

WN 2) Computation of wait time for non-value added

Wait time for non-added value
[44 min * (50 - 1) batches]	2,156 min
Add: Test set up time	30 min
Wait time minutes	2,186 min

Wait time= Total Time to Perform the Operations x (Batch Size – 1)

WN 3) Move lead time

From assembly board to final assembly = 9 min

Move to test building = 20 min

Thus move time = 20 min + 9 min = 29 min

Required 2)

Move time in this process could best be reduced by: Changing the layout from a process orientation to a product orientation.

A product oriented layout reduces the set up time and thus it has a shorter lead time whereas the process oriented is focused on process rather than on the product ,thus the longer the process , longer would be the lead time, so product oriented layout should be used to reduce the lead time.