operational Excellence

sbadugula

ch11.ppt

Home >Computer Science homework help >operational Excellence

Chapter 11- Work System Design

Operations Management

6th Edition

R. Dan Reid & Nada R. Sanders

Learning Objectives

Discuss work system design.
Discuss job design.
Explain work measurement.
Describe compensation approaches.

Work System Design

Designing a work system is part of developing an operations strategy

Effective operations strategy provides structure for company productivity
The work system includes:
Job design
Work measurements
Worker compensation

Job Design

Job Design - specifies work activities of an individual or group
Jobs are designed by answering questions like:
What is the job’s description?
What is the purpose of the job?
Where is the job done?
Who does the job?
What background, training, or skills are required to do the job?

Job Design Factors

Technical feasibility:
The job must be physically and mentally doable
Economic feasibility:
Cost of performing the job is less than the value it adds
Behavioral feasibility:
Degree to which the job is intrinsically satisfying to the employee (e.g. Google)

Machines or People – Should the Job Be Automated?

Safety & risk of injury to workers
Repetitive nature of the task (monotonous?)
Degree of precision required
Complexity of the task
Need for empathy, compassion, or other emotional elements
Need for personal customer relationships

Levels of Labor Specialization

Level of labor specialization can:
Reduce the employee’s scope of expertise (higher levels of specialization)
Increase the employee’s scope of expertise (lower levels of specialization)
Work satisfaction helps define level of specialization
Specialization can result in employee boredom

Specialization: Management’s View

Advantages:

Readily available labor
Minimal training required
Reasonable wages costs
High productivity

Disadvantages:

Lack of flexibility
Worker dissatisfaction:
High absenteeism
High turnover rates
High scrap rates
Grievances filed

Specialization: Employee’s View

Advantages:

Minimal credentials required
Minimal responsibilities
Minimal mental effort needed
Reasonable wages

Disadvantages:

Boredom
Little growth opportunity
Little control over work
Little room for initiative
Little intrinsic satisfaction

Eliminating Employee Boredom

Job enlargement
Horizontal expansion of the job through increasing the scope of the work assigned; instill pride
Job enrichment
Vertical expansion of the job through increased worker responsibility; control & pride
Adding work planning or inspection to a routine assembly task
Job rotation
Shifting of cross trained workers to other tasks
Broadens understanding and can reduce fatigue

Team Approach to Job Design

Problem-solving teams:
Small groups, trained in problem-solving techniques. Used to identify, analyze, & propose solutions to workplace problems
Special-purpose teams:
Highly-focused, short-term teams with a focused agenda (often cross-functional)
Self-directed or self-managed teams:
Team members work through consensus to plan, manage, & control their assigned work flow
SD (goal defined by team); SM (goal defined by others)

The Alternative Workplace

Brings work to the worker rather than the worker to the workplace

Alternative workplaces are made possible by

technologies like email, e-networks, cell phones, & video conferencing.

A survey at IBM reveals that 87% of alternative workplace employees believe their effectiveness has increased significantly
Sun Microsystems gives many of its designers the option to work at home
AT&T provides flexible workstations so workers can rotate in and out as needed

The Work Environment

Working conditions can effect worker:
Productivity
Product quality
Worker safety
Temperature, ventilation, noise, and lighting are all factors in work system design
Congress passed OSHA in 1970 to mandate specific safety conditions that must be met

Methods Analysis

A detailed step-by-step analysis of how a given job is performed

Can distinguish between value-added & non-value-added steps
Gather all information and talk with employees who use the operation
Analysis can revise the procedure to improve productivity
After improvement, must revise the new standard operating procedure
Follow-up to insure that changes actually improve the operation

Methods Analysis - cont’d

Method Analysis consists of:

Identify the operation to be analyzed

Gather all relevant information

Talk with employees who use the operation

Chart the operation

Evaluate each step

Revise the existing or new operation as needed

Put the revised or new operation into effect, then follow up on the changes or new operation

Methods Analysis at FEAT Company: The methods analyst has been asked to review the transformer wiring operation because of past quality problems from poor solder joints. The solder operation sequence and the workstation layout are shown below.

Picks up wire in left hand and moves it to the terminal

Simultaneously picks up solder iron in right hand and moves to the terminal

Solders wire to terminal and replaces solder iron in holder

Solders terminal #1, then

#2 - #6, going right to left

Analyst’s Recommendations: A. Maize reviews the workplace layout and the present flow chart (below), and recommends reversing the solder sequence from #6-#1, which is less problematic for the right handed operator. He schedules a follow up to insure that the new method has fixed the quality problem.

Work Measurement

Work Measurement helps determine how long it should take to do a job

Involves determining Standard Time
The length of time a qualified worker, using appropriate processes and tools to complete a specific job, allowing time for personal fatigue, and unavoidable delays

Work Measurement – cont’d

Standard time is used in:
Costing the labor component of products
Tracking employee performance
Planning a production schedule

Procedure For a Time Study

How To Do a Time Study

When making a time study several decisions are made to assure desired results:
# of observations to make
Desired level of accuracy
Desired level of confidence for the estimated standard time
Desired accuracy level is typically expressed as a % of the mean observed times

Doing a Time Study

Need to determine how many observations are required
Involves determining the level of accuracy required and confidence level desired

n: number of observations of an element that are needed
z: the number of normal standard deviations needed for desired confidence
s: the standard deviation of the sample
a: desired accuracy or precision
x-bar: the mean of the sample observations

Pat’s Pizza Place: Pat hires an analyst to determine a standard time to prepare a large pepperoni and cheese pizza. He takes 10 observations of the 7 elements and calculates the mean time and the standard deviation per element. He must then calculate the # of observations to be within 5% of the true mean 95% of the time.

Calculate observations for each element to determine how many additional observations must be taken. The maximum number of 25 (in this case) for element #7 means that an additional 15 observations must be made; then the observed times are revised.

Other Time Factors Used in Calculating Standard Time

The normal time (NT) is the mean observed time multiplied by the performance rating factor (PRF)
The PRF is a subjective estimate of a worker’s pace relative to a normal work pace
The frequency of occurrence (F) is how often the element must be done each cycle.

Other Time Factors Used in Calculating Standard Time

The allowance factor (AF) is the amount of time allowed for personal, fatigue, and unavoidable delays

Standard Time = normal time x AF, where:

Calculating Normal Time and Standard Time at Pat’s Pizza

The standard time for preparing a large, hand-tossed cheese and pepperoni pizza is 2.313 minutes. This means that during an eight-hour day, our worker should be able to prepare 207 (480 minutes per eight-hour shift, divided by the standard time of 2.313 minutes) large, handtossed cheese and pepperoni pizzas.

Other Time Study Methods

Elemental time data establishes standards based on previously completed time studies, stored in an organization’s database.
Predetermined time data (e.g. MTM and MTS) is a published database element time data used for establishing standard times
Reach, grasp, move, engage, insert, turn, etc.
Work Sampling is a technique for estimating the proportion of time a worker spends on an activity

Work Sampling Procedures

Identify the worker or machine to be sampled

Define the activities to be observed

Estimate the sample size based on level of accuracy and confidence level

Develop the random observation schedule. Make observations over a time period that is representative of normal work conditions

Make you observations and record the data. Check to see whether the estimated sample size remains valid

Estimate the proportion of the time spent on the given activity

Work Sampling Example: We are interested in estimating the proportion of time spent by secretaries arranging and scheduling travel. We are considering the possibility of bringing an on site travel agency to free up secretaries from this time consuming task. We estimate that the proportion might be as high as .50.

Step 1 – We need to estimate the number of observations needed to provide an estimate with 97% confidence (z=2.17), and the resulting estimate will be within 5% of its true value. We use

Step 2 – Based on the first 30 observations the secretary was making travel reservations 6 times (6 out of 30 observations = 0.2). With this new estimate, recalculate the sample size needed .

Step 3 (final) – After making the 302 observations, the secretary was making reservations 60 times or 19.9%. This estimate can now be used to make the decision on savings that might result by consolidating this task with an in house travel agency

Learning Curves

Basis: Each subsequent time we do a task, it would take less time
Attributes:
It takes less time to complete a task each additional time it is done by the same employee
Time savings decrease with each additional time task is done
When number of times a task is completed doubles, the decrease in time per task affects rate of learning curve
Better estimate labor costs, schedule workload

Learning Curves – cont’d

When the number of times the task is repeated doubles, the time per task reduces as shown in the graph
With an 85% learning curve rate, the 2nd time a task is done will take 85% of the 1st time.
The 4th time will take 85% of the 2nd
If an employee took 12 hours to complete an initial task, how long will the 16th time take (4th doubling)?

T x Ln = time required to perform a task the nth time

T = the time required to perform the task the first time

L = the rate of learning

n = the number of times the task has doubled

Compensation

Third part of work system design
Time-based systems
pay based on the number of hours worked
Output-based systems
pay based on the number of units completed
Group incentive plans reward employees when company achieves certain performance objectives
Profit sharing – a employee bonus pool based on sharing of company’s profits
Gain sharing – focus on cost reduction vs. than profits

Worker Compensation Systems -cont'd

Consider
Plans put part of a worker’s salary at risk
Does the compensation system undermine teamwork?
Does plan prevent free-riders not doing their fair share?
Does the incentive plan encourage workers to support the long-term health of the organization?
Trends
Individual incentive systems undermine teamwork, short term focus
Study (20 SSA offices) showed no effect on worker performance
Group incentive systems outperform

Work System Design Within OM: How It All Fits Together

Work system design includes job design, methods analysis, and work measurement.
Job design determines exactly how the product or service will be done and is linked directly to product and process design. Based on the type of product (standard or custom) and its proposed process (mass-producing or producing one at a time), a company determines the skills set needed by its employees as well as the necessary equipment.
Method analysis provides a means for evaluating different processes and materials, thus allowing a company to focus on continuous improvement. This ties in directly with a company’s total quality management (TQM) focus.

WSD: How It All Fits Together – cont’d

Work measurement techniques allow a company to develop standards to use as a basis for evaluating the cost and effectiveness of different methods and materials for building a product or providing a service; detailed work schedules and for determining long-term staffing levels; making delivery or completion-time promises to customers.
Standard times are used to develop lead-time estimates, which are inputs for the MRP (material requirement planning) system as well as the MPS (master production schedule) process.
Work system design provides the means for setting standards against which to compare new methods, new materials, and new designs, assures that employees know how to do their job, and provides the information needed by the company to calculate its costs.

Work System Design Across The Organization

Accounting calculates the cost of products manufactured, variances between planned and actual costs as well as operational efficiency
Marketing uses work system design as the bases for determining led time
Information Systems uses estimates of job duration and resources in the software for scheduling and tracking operations
Human Resources uses work sampling to establish and validate hiring criteria

Chapter 11 Highlights

Work system design involves job design, methods or process analysis and work measurement. Job design specifies the work activities of an individual or group in support of organizational objectives
Relevant job design issues include design feasibility, the choice of human or machine, the use of teams, and the location where the work is to be done. Technical feasibility is the degree to which an individual or group of individuals is physically and mentally able to do the job. Economic feasibility is the degree to which the value of a job adds and the cost of have the job done are profitable for the company.

Chapter 11 Highlights – cont'd

Methods or process analysis is concerned with how the employee does the job. Methods analysis can also be used to improve the efficiency of an operation.
Work measurement is used to determine standard times. A standard time is how long it should take a qualified operator, using the appropriate process, material, and equipment, and working at a sustained pace, to do a particular job. Standard times are used for product costing, process and material evaluations, and for planning workloads and staffing. Standard times are usually based on time studies. Work sampling is used to estimate the proportion of time that should be spent on an activity.

Chapter 11 Highlights – cont'd

To do a time study, first identify the job then break job into work elements. Determine number of observations needed and perform the observation.

Work sampling involves random observations of a worker. Each time you observe the worker, you note what activity the worker is doing. After numerous observations, you can project the expected proportion of time the worker should spend on different activities.

Chapter 11 Highlights – cont'd

Standard times are developed with either time studies, elemental time data, or predetermined time data. You learned how to develop standard times using time studies. After conducting the time study, you compute the mean observed time for each work element. You compute the normal time for the work element by multiplying the mean observed time by the performance rating factor. You find the standard time for each work element by multiplying the normal time by the allowance factor.
Standard times are used to compare alternative processes, evaluate new materials or components, and evaluate individual worker performance. Standards also allow you to determine when a job should be completed or how many units can be done in a period of time.

Chapter 11 Highlights – cont'd

Worker compensation systems are either time-based or out-put based. Time-based systems pay the employee for the number of hours worked. Output-based systems pay the employee for the number of units completed. Compensation schemes can be based on either individual or group performance. and can be based on individual or group performance.

Learning curves show the rate of learning that occurs when an employee repeats the same task. Using learning curves, you can estimate how long a particular task will take. It allows the company to schedule better and calculate cost more accurately.
Environmental and social sustainability key in work system design

nsobservatio 25

0.24

0.03

0.05

1.96

7 













































































(NT)(AF)

117.6%

1.176

0.15

PFD

Worked

Tme

(

)

observatio

470.89

0.5

0.05

2.17

)

0.5

)

(

)

observatio

302

0.2

0.05

2.17

hours

6.26

(.85)

task

16th

for

Hours