Question

Waymouth Manufacturing operates a contract manufacturing plant located in Dublin, Ireland. The plant provides a variety of electronics products and components to consumer goods manufacturers around the world. Cycle time is a critical success factor for Waymouth, which has developed a number of measures of manufacturing speed. Waymouth has studied the matter and found that competitive contract manufacturers have manufacturing cycle times (MCE) of about 40%. When last calculated, Waymouth's MCE was 35%. Key measures from the recent month's production, averaged over all the jobs during that period, are as follows: Average Time (hours) 30 Nom Activity New product development Materials handling Order setup Machine maintenance Order scheduling Inspection of completed order Pack and move to storage or ship Manufacturing assembly Order taking and checking Receiving and stocking raw materials Inspection of raw materials at start of production MON Required: Determine the manufacturing cycle efficiency (MCE) for the recent month. (Round your answer to 1 decimal place.)

Answer 1

Answer:

Waymouth
Manufacturing cycle efficiency measures the proportion of production time spent on value-added activities.
To calculate the measurement, divide value-added production time by total cycle time.
Total cycle time is the aggregate amount of all process time, inspection time, queue time, and move time.
Activity	Average Time (Hours)	Remarks	Reason
New Product Development	30.00	Not Relevant	Because it occur prior to start of the production.
Materials Handling	2.00	Non Value Added activity	It does not add any value to production.
Order Setup	6.00	Non Value Added activity	It does not add any value to production.
Machine Maintenance	3.00	Non Value Added activity	It does not add any value to production.
Order Scheduling	1.00	Not Relevant	Because it occur prior to start of the production.
Inspection of Completed Order	5.00	Non Value Added activity	It does not add any value to production.
Pack and move to storage or ship	2.00	Non Value Added activity	It does not add any value to production.
Manufacturing assembly	24.00	Value Added activity	It adds value to production.
Order taking and checking	3.00	Not Relevant	Because it occur prior to start of the production.
Receiving and stocking raw materials	6.00	Not Relevant	Because it occur prior to start of the production.
Inspection of raw materials at start of production	2.00	Non Value Added activity	It does not add any value to production.
Total Cycle Time	44.00
(Time taken by Value added and non Value added activities)
Total Processing Time	24.00
(Manufacturing assembly)
Manufacturing cycle efficiency	54.5%
(Total Processing Time/Total Cycle Time)
The level of MCE is best interpreted by reference to the prior MCE values for the firm or to an industry average. A number closer to one is better.
When comparing to an industry average, management should make sure that the measures are calculated in the same manner.
In this case, Waymouth has improved significantly on its MCE relative to the prior data, and is higher than the industry average.