Williams Optical Inc. is considering a new just-in-time product cell. The presen

Question

Williams Optical 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 40 units. The process time for each step is as follows: The time required to move each batch between steps is 8 minutes. In addition, the time to move raw materials to Process Step 1 is also 8 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 8 minutes. The new just-in-time layout will allow the company to reduce the batch sizes from 40 units to 5 units. The time required to move each batch between steps and the inventory locations will be reduced to 2 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. Present Approach Proposed Approach Value-added time 30 min 30 min Non-value-added time min min Total lead time min min Value-added ratio (as a percent) % %

Explanation / Answer

Present Approach Value added time Non value added time Total Processing time 30 30 Within batch wait time(30 min x (40-1) units 1170 1170 Move time (5 x (8+8+8) 120 120 Total 30 1290 1320 Value-Added Time/Total Time = Value-Added Ratio = 30/1320 = 2.27% Proposed Approach Value added time Non value added time Total Processing time 30 30 Within batch wait time(30 min x(5-1) units 120 120 Move time 5 moves x 2 min 10 10 Total 30 130 160 Value-Added Time / Total Time = Value-Added Ratio = 30/160 18.75%

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