Orion Devices Inc. is considering a new just-in-time product cell. The present m

Question

Orion Devices Inc. is considering a new just-in-time product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 52 units. The process time for each step is as follows:

The time required to move each batch between steps is 17 minutes. In addition, the time to move raw materials to Process Step 1 is also 17 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 17 minutes.

The new just-in-time layout will allow the company to reduce the batch sizes from 52 units to 3 units. The time required to move each batch between steps and the inventory locations will be reduced to 3 minutes. The processing time in each step will stay the same.

Determine the value-added, non-value-added, total lead times, and the value-added ratio under the present and proposed production approaches. If required, round percentages to one decimal place.

Explanation / Answer

Present Approach Proposed Approach For 52 units Total batches reuired for 52 units is 17 Value-added time 25 25 25 Non-value-added time 51 9 153 Total lead time 76 34 178 Value-added ratio (as a percent) 32.9% 73.5% 14.0%

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