Question

Lead Time 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 Soprinted 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 10 minutes to complete. The final assembly for each stereo unit requires 20 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 8 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 11 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 Non-value-added lead time: Wait time lead time min. Move time lead time min. Total non-value-added lead time Total lead time Value-added ratio (as a percent) 2. Move time in this process could best be reduced by:

Answer 1

a)
Value-added time:
Hand soldering of PC board	4	min
Stereo assembly	20	min
Time to inspect one unit	8	min.
Pack and label	11	min.
Total Value Added Time	43	min.
Non-value-added time:
Wait Time
Within-batch wait time—PC board soldering (50 x 4 Min.)	200	min
Within-batch wait time—final assembly (50 x 20 min)	1000	min
Within-batch wait time—testing (50 × 8 min.)	400	min
Within-batch wait time—shipping (50 × 11 min.)	550	min
Test setup	30	min
Total wait Time		2180	min
Move Time
Move from PC board assembly to final assembly	10	Min.
Move from final assembly to testing	20	Min.
Total Move Time		30	Min
Total Non-value -added time (2180 + 30 )min		2210	Min.
Total Lead Time = 43 + 2210 min.		2253	min.
Value Added Ratio = 43/2253 min.	1.91%
b)
by changing the layout from a process orientation to a product orientation