Manufacturing cycle efficiency delivery cycle time

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Manufacturing cycle efficiency ? ? ? ? Delivery cycle time ? ? ? ? Percentage of on-time deliveries 84% 87% 91% 95% The president has attended conferences at which the importance of throughput time, manufacturing cycle efficiency, and delivery cycle time were stressed, but no one at the company is sure how they are computed. The data to compute these measures have been gathered and appear below: Months 1 2 3 4 Wait time/order before production (in days) 16.7 15.2 12.3 9.6 Inspection time per unit (in days) 0.1 0.3 0.6 0.8 Process time per unit (in days) 0.6 0.6 0.6 0.6 Queue time per unit (in days) 5.6 5.7 5.6 5.7 Move time per unit (in days) 1.4 1.3 1.3 1.4 Required: 1. For each month, compute the following operating performance measures: a. Throughput time (manufacturing cycle time) Months 1 2 3 4 Process time 0.6 0.6 0.6 0.6 Inspection time 0.1 0.3 0.6 0.8 Move time 1.4 1.3 1.3 1.4 Queue time 5.6 5.7 5.6 5.7 Throughput time 7.7 7.9 8.1 8.5 b. Manufacturing cycle efficiency (MCE) = (Value-added time)/((Value-added time + Non-value added time) MCE = (Process time) / (Throughput time) Months 1 2 3 4 Process time 0.6 0.6 0.6 0.6 Throughput time 7.7 7.9 8.1 8.5 MCE = 7.79% 7.59% 7.41% 7.06% c. Delivery cycle time = Wait time + Throughput time Months 1 2 3 4 Wait time 16.7 15.2 12.3 9.6 Throughput time 7.7 7.9 8.1 8.5 Delivery cycle time = 24.40 23.10 20.40 18.10 2. Using the performance measures given in the problem and those you computed in (1) above, do the following: a. Identify areas where the company seems to be improving. The company seems to be improving mainly in the areas of quality control, material control, on-time delivery, and total delivery cycle time. Customer complaints, warranty claims, defects, and scrap are all down somewhat, which suggests that the company has been paying attention to quality in its improvement campaign. The fact that on-time delivery and delivery cycle time have both improved also suggests that the company is seeking to please the customer with improved service. b. Identify areas where the company seems to be deteriorating or stagnating. Inspection time has increased dramatically. "Use as % of availability" has deteriorated, and throughput time as well as manufacturing cycle efficiency (MCE) show negative trends. c. Explain why you think some specific areas are improving while others are not. While it is difficult to draw any definitive conclusions, it appears that the company has concentrated first on those areas of performance that are of most immediate concern to the customer -- quality and delivery performance. The lower scrap and defect statistics suggest that the company has been able to improve its processes to reduce the rate of defects; although, some of the improvement in quality apparently was due simply to increased inspections of the products before they were shipped to customers. 3. Refer to the move time, process time, and so forth, given above for month 4. a. Assume that in month 5 the move time, process time, and so forth, are the same as for month 4, except that through the implementation of lean production, the company is able to completely eliminate the queue time during production. Compute the new throughput time and manufacturing cycle efficiency (MCE).
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