Question

Williams Optical Inc. is considering a new lean product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 54 units. The process time for each step is as follows:

Process Step 1	6	minutes
Process Step 2	9	minutes
Process Step 3	4	minutes
Process Step 4	8	minutes

The time required to move each batch between steps is 16 minutes. In addition, the time to move raw materials to Process Step 1 is also 16 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 16 minutes.

The new lean layout will allow the company to reduce the batch sizes from 54 units to 3 units. The time required to move each batch between steps and the inventory locations will be reduced to 3 minutes. The processing time in each step will stay the same.

Determine the value-added, non-value-added, and total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.

	Present Approach		Proposed Approach
Value-added time		min		min
Non-value-added time		min		min
Total lead time		min		min
Value-added ratio (as a percent)		%		%

Answer 1

Here we have to find various aspects under two approach -present Approach as well as under -Proposed Approach.

a) lets first we will find Value Added Time (i.e. time spent for the process to derive any outcomes)

- Under Present Approach :- Value Added Lead Time = (Process Step 1 time + Process Step 2 time + Process Step 3 time + Process Step 4 time) = (6+9+4+8) = 27 Minutes.

- Under Proposed Approach :- Value Added Lead Time (same way as above) = (Process Step 1 time + Process Step 2 time + Process Step 3 time + Process Step 4 time) = (6+9+4+8) = 27 Minutes.

(b) For the Non-Value Added Lead Time (It is equal to summation of Move time and wait time in particular batch)

- Under Present Approach :-  

Require Data are (i) Present Move Time = 16 Minute (ii) Value Added Time under Present Approach as per above in (a)= 27 Minutes (iii) production batch sizes = 54 units (iv) Wait Time within Batch = [Value Added Time*(production batch sizes - 1)] = 27*(54-1)=1431 Minutes

Therefore, Non-Value Added Lead Time = [Move Time] + [Wait Time within Batch] = 16+1431= 1447 Minutes.

- Under Proposed Approach :-  

Require Data are (i) Proposed Move Time = 3 Minute (ii) Value Added Time under Proposed Approach as per above in (a) = 27 Minutes (iii) Proposed production batch sizes = 3 units (iv) Wait Time within Batch = [Value Added Time*(production batch sizes - 1)] = 27*(3-1)=54 Minutes

Therefore, Non-Value Added Lead Time = [Move Time] + [Wait Time within Batch] = 3+54= 57 Minutes.

(c) Total lead time (= Value Added Lead Time + Non-Value Added Lead Time)

- Under Present Approach :- Total lead time = Value Added Lead Time as above in (a) + Non-Value Added Lead Time as above in (b) = 27 + 1447 = 1474 Minutes

- Under Proposed Approach :-Total lead time (= Proposed Value Added Lead Time as above in (a) + Proposed Non-Value Added Lead Time as above in (b) = 27 + 57 = 84 Minutes.

(d) Value-added ratio (as a percent)

- Under Present Approach :-

= (27 / 1474) * 100 = 1.83 %

- Under Proposed Approach :-

= (27 / 84) * 100 = 32.14 %

Final Conclusion is......

Particulars	Present Approach		Proposed Approach
Value-added time	27	min	27	min
Non-value-added time	1447	min	54	min
Total lead time	1474	min	84	min
Value-added ratio (as a percent)	1.83	%	32.14	%