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 54 units. The process time for each step is as follows: The time required to move each batch between steps is 14 minutes. In addition, the time to move raw materials to Process Step 1 is also 14 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 14 minutes. The new just-in-time layout will allow the company to reduce the batch sizes from 54 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

Non-Valued Time:-

Present Proposed

70 Mins. 60 Mins.

Present would be 70 mins. because from raw materials to Step 1 it will take 14 mins. From Step 1 to 3 it will take 14 mins. each. From Step 4 to inventory will be 14 mins. so total will be 14+14+14+14+14 = 70 Mins.

Proposes would be 60 mins. because from raw materials to Step 1 it will take 12 mins. From Step 1 to 3 it will take 12 mins. each. From Step 4 to inventory will be 12 mins. so total will be 12+12+12+12+12 = 60 Mins.

Total Lead Time:-

Present Proposed

97 87

Total lead time will have addition of value added time and non value added time.

Value Added Ratio:-

Value Added Time/Total Lead Time

Present Proposed

27:70 27:60   

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