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.

Explanation / Answer

Process Step 1 5 Minutes Process Step 2 8 Minutes Process Step 3 4 Minutes Procsee Step 4 3 Minutes Present Approach 5 Mminutes 5 Mminutes 5 Mminutes 8 minutes 5 Mminutes 4 minutes 5 Mminutes 3 Minutes 5 Mminutes Raw Material Process Step 1 Process Step 2 Process Step 3 Procsee Step 4 Finished Good Value Added Time 5+8+4+3 20 Non- Value Added Time 5+5+5+5+5 25 Total Lead Time 20+25 45 Value Added Ratio 20/45 0.444444444 Proposed Approach 2 Mminutes 5 Mminutes 2 Mminutes 8 minutes 2 Mminutes 4 minutes 2 Mminutes 3 Minutes 2 Mminutes Raw Material Process Step 1 Process Step 2 Process Step 3 Procsee Step 4 Finished Good Value Added Time 5+8+4+3 20 Non- Value Added Time 2+2+2+2+2 10 Total Lead Time 20+10 30 Value Added Ratio 20/30 0.666666667

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