Question

1. Compute Lead Time

   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 45 units. The process time for each step is as follows:

   Process Step 1	5 minutes
   Process Step 2	8 minutes
   Process Step 3	4 minutes
   Process Step 4	3 minutes

   The time required to move each batch between steps is 5 minutes. In addition, the time to move raw materials to Process Step 1 is also 5 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 5 minutes.

   The new lean layout will allow the company to reduce the batch sizes from 45 units to 3 units. The time required to move each batch between steps and the inventory locations will be reduced to 2 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

	Present Approach		Proposed Approach
Value-added time	20	min	20	min
Non-value-added time	905	min	50	min
Total lead time	925	min	70	min
Value-added ratio (as a percent)	2.2	%	28.6	%

Present Approach :-

Value added time = Total time of all steps

= 5 + 8 + 4 + 3 = 20 min

Non-value-added time = With in batch wait time + Move Time

With in batch wait time = Value added time * Remaining no of units after first unit start

                 = 20 min * 44 = 880 min

Move Time = 5 * 5 min = 25 min

Non-value-added time = 880 + 25 = 905 min

Value-added ratio (as a percent) = Value added time/Total lead time * 100

            = 20/925 * 100 = 2.2 %

Proposed Approach :-

Value added time = Total time of all steps

= 5 + 8 + 4 + 3 = 20 min

Non-value-added time = With in batch wait time + Move Time

With in batch wait time = Value added time * Remaining no of units after first unit start

                 = 20 min * 2 = 40 min

Move Time = 5 * 2 min = 10 min

Non-value-added time = 40 + 10 = 50 min

Value-added ratio (as a percent) = Value added time/Total lead time * 100

            = 20/70 * 100 = 28.6 %