Calculate Lead Time Williams Optical Inc. is considering a new lean product cell

Question

Calculate Lead Time

Williams Optical Inc. is considering a new lean product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 45 units. The process time for each step is as follows:

The time required to move each batch between steps is 5 minutes. In addition, the time to move raw materials to Process Step 1 is also 5 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 5 minutes.

The new lean layout will allow the company to reduce the batch sizes from 45 units to 3 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.

Process Step 1 5 minutes Process Step 2 8 minutes Process Step 3 4 minutes Process Step 4 3 minutes

Explanation / Answer

Present Approach

Valued added time = 5+8+4+3 = 20 min

Non-Value Added time = 5*5 = 25 min

Total lead time = 20+25 = 45 min

Lead time per unit = 45/45 = 1 min

Value added ratio = Value added time / Total lead time = 20/45 = 44 %

Proposed Approach

Valued added time = 5+8+4+3 = 20 min

Non-Value Added time = 5*2 = 10 min

Total lead time = 20+10 = 30 min

Lead time per unit = 30/3 = 10 min

Value added ratio = Value added time / Total lead time = 20/30 = 67 %

Present Approach Proposed Approach Value-added time 20 min 20 min Non-value-added time 25 min 10 min Total lead time 45 min 30 min Value-added ratio (as a percent) 44 % 67 %

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