Dont Bother Me, I Cant Cope

Rohit Kapoor

Case Background
Mrs. Santha Owner small assembly shop
New order for two types of sub-assemblies

Production Line A
Current production 315 units/day New order size of 420 units/day (% inc. 33.33%) Contribution Rs. 30/unit 7 workers Regular wage Rs. 18/hr/worker Overtime wage Rs. 30/hr/worker

Case Background contd.

16 different tasks Precedence relationship
6 3 9

10
1 7 4

11 13

5
2

14 12 15

16

Organization of Line A
Worker Activities Station Time 1 1, 3 70 1 2, 5 70 1 4, 8 70 1 6, 9, 13 70 1 7, 10, 11 70 1 14, 15 60 1 12, 16 70

t = 480 sec Time available = 7 * 60 * 60 = 25200 sec Actual cycle time = 25200/315 = 80 sec Production capacity = 25200/70 = 360 units/day Max OT = 2 hrs = 7200 sec Additional max production = 7200/70 = 102 (approx.) Max production = 360 + 102 = 462 units/day Max requirement = 420 units/day, implies feasible

Line A
OT required = (420 360) * 70/(60 * 60) = 1.167 Hrs OT Cost/Day = 1.167 (OT) * 7 (Workers) * (Rs. 30/hr/worker) = Rs. 245

Line A Option 1
CT Planned = 25200/420 = 60 sec Theoretical min. no. of workers reqd. = 480/60 = 8 Additional worker required = 8 7 = 1
Worker Activities Station Time 1 2 50 1 1, 5 50 1 3, 8 60 1 4, 6 60 1 9, 13 60 1 7, 14 60 1 10, 11 60 1 12, 15 40 1 16 40

Actual no. of workers reqd. = 9 CT achieved = 60 sec, implies; capacity = 420 units/day Training costs = Rs. 6000 * 2 = Rs. 12000 Regular wage = 2 * 18 * 7 = Rs. 252/day

Line A Option 2
Worker Activities Station Time 2 1, 2, 3 120 1 4, 6 60 1 5, 7, 8, 9 60 1 10, 11 60 1 14, 15 60 2 12, 13, 16 120

No. of workers required = 8 Cycle time = 60 sec Capacity = 420 units/day Balance eff. = 100% Training cost = Rs. 6000 Regular wage = 1 * 7 * 18 = Rs. 126

Line B
Mrs. Uma Two workers New order size = 210 units/day Current organization of line B
Worker 1 Activities a, b, c, d Station Time 180 1 e, f, g, h 180

Production capacity = 25200/180 = 140 units/day % inc. in reqt. = (210-140)/140 = 50% OT required/day = (210-140) * 180/(60 * 60) = 3.5 hrs Max OT available = 2 hrs

Line B Option 1
CT Planned = 25200/210 = 120 sec Theoretical min. no. of workers reqd. = 360/120 = 3 Additional worker required = 3 2 = 1
Worker Activities Station Time 1 a, b, d 110 1 c, e 120 1 f, g, h 130

CT achieved = 130 sec, implies; capacity = 193 units/day OT required = (210 193) * 130/(60 * 60) = 0.613 hrs OT required (1% rejection) = 0.613/0.99 = 0.62 hrs Training costs = Rs. 6000; Regular wage = 1 * 18 * 7 = Rs. 126/day; OT cost/day = 3 * 0.62 * 30 = Rs. 55.8; Rejection Cost/day = (210 193) * 0.01 * 420 = Rs. 71.4. Total cost/day = Rs. 253.21

Line B Option 2
Worker Activities Station Time 1 a, b 90 1 c, d 90 1 e, f 90 1 g, h 90

No. of workers required = 4 Cycle time = 90 sec Capacity = 280 units/day Balance eff. = 100% Training cost = 2 * 6000 = Rs. 12000 Regular wage/day = 2 * 7 * 18 = Rs. 252

Trade-off between Option 1 & Option 2

Let x be the no. of days to run the assembly line 6000 + 253.21 * x = 12000 + 252 * x X = 5000 days = 13 years (approx.) Option 1 is better!

Characteristics of Assembly Line

Make to stock environment. Large to medium volume/standard products. High processing turnover Predefined standard Bill of Materials (BOM) High degree of labor & equipment utilization. Routing & scheduling fixed System fairly inflexible Pace of assembly line can be automatic (Machine paced) or manual (Worker paced)

Assembly Line
Key Issues in Managing Assembly Lines
Time standards Assembly line balancing Rebalancing Material availability/Materials and Supplier relations. Worker incentives Capacity Planning Plant Loading/Production planning Product design Product Mix Sequencing (to maintain balance)