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	88	%	83	%	80	%	77	%
Total sales (units)	2830		2709		2570		2473

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	0.9		0.6		0.7		0.7
Process time per unit	3.8		3.6		3.4		3.2
Wait time per order before start of production	18.0		19.7		22.0		23.8
Queue time per unit	4.5		5.1		5.8		6.6
Inspection time per unit	0.8		1.0		1.0		0.8

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

	Data Span, Inc.
1)	Throughput time=Process Time+Inspection time+Move Time+Queue Time
		Month 1	Month 2	Month 3	Month 4
	Process Time	3.8	3.6	3.4	3.2	Days
	Inspection Time	0.8	1	1	0.8	Days
	Move Time	0.9	0.6	0.7	0.7	Days
	Queue Time	4.5	5.1	5.8	6.6	Days
	ThroughPut time	10	10.3	10.9	11.3	Days
1b)	Delivery Cycle Time=Wait Time+Throughput Time
		Month 1	Month 2	Month 3	Month 4
	Wait Time per order =(A)	18	19.7	22.0	23.8	Days
	Throughput Time=(B) (Calulated in A above)	10	10.3	10.9	11.3	Days
	Delivery Cycle Time=(A)+(B)	28	30	32.9	35.1	Days
1c )	Manufacturing Cycle Efficiency (MCE)=Process Time/Throughput Time
		Month 1	Month 2	Month 3	Month 4
	Process Time=(A)	3.8	3.6	3.4	3.2	Days
	Throughput Time=(B)=(Caluculated in (A) above	10	10.3	10.9	11.3	Days
	Manufacturing Cycle Efficiency=(A)/(B)	38.00%	34.95%	31.19%	28.32%	Days
2)	Month	Throughput Time(Days)	Delivery Cycle Time(Days)	Manufacturing Cycle Efficiency(MCE)(%)
	Month1	10	28	38.00%
	Month 2	10.3	30	34.95%
	Month 3	10.9	32.9	31.19%
	Month 4	11.3	35.1	28.32%
	In all the cases performance are not favourable due to :
		Trend	Favorable/Unfavorable
a)	The Throughput time measues displays	Increasing	Unfavorable
b)	Delivery Cycle time is also in increasing trend.	Increasing	Unfavorable
c )	Manufacturing Efficiency has declining trend.	Reducing	Unfavorable
3a)
		Month 5
	Process Time	3.2
	Inspection Time	0.8
	Move Time	0.7
	ThroughPut time	4.7
		Month 5
	Process Time=(A)	3.2
	ThroughPut time=(B)	4.7
	Manufacturing Cycle Efficiency=(A)/(B)	68.09%
3b)		Month 6
	Process Time	3.2
	Move Time	0.7
	ThroughPut time	3.9
		Month 6
	Process Time=(A)	3.2
	ThroughPut time=(B)	3.9
	Manufacturing Cycle Efficiency(A)/(B)	82.05%
		Month 5	Month 6
	Throughput Time(Days)	4.7	3.9
	Manufacturing Efficiency Time(%)	68.09%	82.05%