MedTech, Inc. manufactures diagnostic testing equipment used in hospitals. The company practices JIT production management and has a state-of-the-art manufacturing system, including an FMS and an AMHS. The following nonfinancial data were collected biweekly in the Harrisburg plant during the first quarter of the current year.
| Biweekly Measurement Period | |||||
| 1 | 2 | 3 | 4 | 5 | 6 |
Cycle time (days) | 1.5 | 1.3 | 1.3 | 1.2 | 1.2 | 1.1 |
Number of defective finished products | 4 | 4 | 3 | 4 | 3 | 3 |
Manufacturing-cycle efficiency | 94% | 94% | 96% | 96% | 97% | 96% |
Customer complaints | 6 | 7 | 6 | 5 | 7 | 8 |
Unresolved complaints | 2 | 1 | 0 | 0 | 0 | 0 |
Products returned | 3 | 3 | 2 | 2 | 1 | 1 |
Warranty claims | 2 | 2 | 2 | 0 | 1 | 0 |
In-process products rejected | 5 | 5 | 7 | 9 | 10 | 10 |
Aggregate productivity | 1.5 | 1.5 | 1.5 | 1.5 | 1.4 | 1.5 |
Number of units produced per day per employee | 410 | 405 | 412 | 415 | 415 | 420 |
Percentage of on-time deliveries | 94% | 95% | 95% | 97% | 100% | 100% |
Percentage of orders filled | 100% | 100% | 100% | 98% | 100% | 100% |
Inventory value/sales revenue | 2% | 2% | 2% | 1.5% | 2% | 1.5% |
Machine downtime (minutes) | 80 | 80 | 120 | 80 | 70 | 75 |
Bottleneck machine downtime (minutes) | 25 | 20 | 15 | 0 | 60 | 10 |
Overtime (minutes) per employee | 20 | 0 | 0 | 10 | 20 | 10 |
Average setup time (minutes) | 120 | 120 | 115 | 112 | 108 | 101 |
Required:
1. For each nonfinancial performance measure, indicate which of the following areas of manufacturing performance is involved: (a) production processing, (b) product quality, (c) customer acceptance, (d) in-process quality control, (e) productivity, (f) delivery performance, (g) raw material and scrap, (h) inventory, (i) machine maintenance. Some measures may relate to more than one area.
2. Write a memo to management commenting on the performance data collected for the Harrisburg plant. Be sure to note any trends or other important results you see in the data. Evaluate the Harrisburg plant in each of the areas listed in requirement (1).
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