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THE ASSUMPTION UNIVERSITYLIORARY

APPLICATION TECHNIQUE OF TAKT TIME AND TIME AND MOTION IN THE OPERATION OF A PRODUCTION LINE: A

CASE STUDY OF A PLASTIC SPOON MANUFACTURER

By

THANYALUCK DEEVONGKIJ

A Final Report of the Six-Credit Course SCM 2202 Graduate Project

Submitted in Partial Fulfillment of the Requirements for the Degree of

MASTER OF SCIENCE IN SUPPLY CHAIN MANAGEMENT

Martin de Tours School of Management Assumption University

Bangkok, Thailand

October, 2010

Application technique of Takt time and time and motion in the operation of a production line: A case study of a plastic spoon manufacturer

By

Thanyaluck Deevongkij

Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Science in Supply Chain Management

Assumption University

Examination Committee:

1. Asst. Prof. Dr. Nucharee Supatn (Chair)

2. A. Piyawan Puttibarncharoensri (Member)

3. Assoc. Prof. Dr. Sompong Sirisoponsilp (Advisor)

Approved for Graduation on: October 2, 2010

Martin de Tours School of Management Assumption University

Bangkok, Thailand

October, 2010

Assumption University

Martin de Tours School of Management

Master of Science in Supply Chain Management

Form signed by Proofreader of the Graduate Project

1, Asst. Prof. Brian Lawrence , have proofread this Graduate Project entitled

Application Technique of Takt Time and Time and Motion in the Operation

of a Production Line: A Case Study of a Plastic Spoon Manufacturer

Ms. Thanyaluck Deevongkij

and hereby certify that the verbiage, spelling and format is commensurate with the quality of

internationally acceptable writing standards for a master degree in supply chain management.

Signed ,

-

( Asst. Prof Brian Lawrence

Contact Number / Email address [email protected]

Date:

t 0

Assumption University Martin de Tours School of Management

Maste-- of Science in Supply Chain Management

Declaration of Authorship Form

I, Ms. Thanyaluck Deevongkij

declare that this thesis/project and the work presented in it are my own and has been generated by me as the result of my own original research.

APPLICATION TECHNIQUE OF TAKT TIME AND TIME AND MOTION IN THE OPERATION OF A PRODUCTION LINE: A CASE STUDY OF A PLASTIC SPOON MANUFACTURER

I confirm that:

I. This work was done wholly or mainly while in candidature for the M. Sc. degree at this University;

2. Where any part of this dissertation has previously been submitted for a degree or any other qualification at this University or any other institution, this has been clearly stated;

3. Where I have consulted the published work of others, this is always clearly attributed;

4. Where I have quoted from the work of others, the source is always given. With the exception of such quotations, this dissertation is entirely my own work;

5. I have acknowledged all main sources of help;

6. Where the thesis/project is based on work done by myself jointly with others, I have made clear exactly what was done by others and what I have contributed myself;

7. Either none of this work has been published before submission, or parts of this work have been published as: [please list references in separate page]:

SignedinUm P "pit' u

Date: October 2, 2010

Assumption University Martin de Tours School of Management

Master of Science in Supply Chain Management

Student Name: Ms. Thanyaluck Deevongkij

ID: 491-9622

ADVISOR'S STATEMENT

I confirm that this thesis/project has been carried out under my supervision and it represents the original work of the candidate.

Signed:

(Assoc.ifiro Advisor

Date

Sompong Sirisoponsilp)

October 2, 2010

ABSTRACT

Productivity improvement is very important for every industry because it is able to

increase capacity and reduce cost. This study aims to improve the efficiency of the

production of plastic products by a Plastic Spoon Manufacturer. The study employs

Takt time and time and motion technique.

From an investigation of the production process and interviews with supervisors, it

was found that the production line did not flow smoothly, and the labor used more or

less time than the production time schedule. Most production was at a slow rate,

whose effect was to increase working time and labor cost. As the layout of the

production line did not allow workers to move easily, workers soon felt tired, causing

them to work more slowly. As a consequence of this, production could not meet

customer demand. Hence, some potential customers decided to order the products

from other companies.

To improve the operation of the production line, the researcher uses Takt time to

balance the production line in the packing section. The Operator Balance Chart is

employed to show the improvement channel by visually showing the Takt time and

cycle time of each operation. Takt time and cycle time in each operation are

compared, and the target manpower is specified. The elimination of waste is used to

achieve line balancing. The researcher uses time and motion technique to improve

production efficiency by applying a wage incentive scheme. Performance and labor

cost are compared before and after the improvement to find the solution to the

problem.

ii

ACKNOWLEDGEMENTS

I would particularly like to express my deepest gratitude to Assoc. Prof. Dr. Sompong

Sirisoponsilp, my supervisor, for his valuable suggestions, constructive comments,

support, encouragement and kindness throughout the period of this dissertation.

I would sincerely like to thank all the interviewees for their suggestions, and for data

concerning the Plastic Spoon Manufacturer.

The concerns, warm friendship and cheerful encouragement of my friends and

colleagues are deeply appreciated and will always be remembered.

Last but not least, my special and sincere thanks to my parents for their assistance,

support and spiritual encouragement throughout the entire dissertation process.

Any mistakes in this study are my responsibility.

Ms. Thanyaluck Deevongkij

Assumption University

October, 2010

iii

MASSMPTION ITISTMRSITY LIBRARY

TABLE OF CONTENTS

Page

Committee's Approval Sheet ............................................................................

ABSTRACT ...........ii

ACKNOWLEDGEMENTS .............................................................................. iii

TABLE OF CONTENTS ..........iv

LIST OF TABLES ..........vi

LIST OF FIGURES ........ vii

CHAPTER I: GENERALITIES OF THE STUDY

1.1 Background of the Study ...........1

1.2 Statement of the Problem ...........4

1.3 Research Objectives ...........6

1.4 Scope of Research ...........6

CHAPTER II: REVIEW OF RELATED LITERATURE AND RESEARCH

FRAMEWORKS

2.1 Takt Time ...........7

2.2 Operator Balance Chart .........11

2.3 Time and Motion Study .........12

CHAPTER III: RESEARCH METHODOLOGY

3.1 Perform Takt Time and Line Balancing .........27

3.2 Improve Production Efficiency .........29

3.3 Improve Production Performance .........30

CHAPTER IV: PRESENTATION AND CRITICAL DISCUSSION OF

RESULTS

4.1 Data Set and Data Collection .........31

4.2 Draw current state Line Balance by using Operator Balance Chart 36

iv

4.3 Perform Line Balancing .........43

4.4 Improve Production Efficiency by using

Time and Motion Technique ......... 52

4.5 Improve Production Performance by applying

Wage Incentive Scheme ..........57

CHAPTER V: SUMMARY FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

5.1 Conclusions .........63

5.2 Limitations .........66

5.3 Recommendations .........66

BIBLIOGRAPHY ......................................................................................... 67

APPENDICES ................................................................................................. 70

Appendix A: Description of Packing Section

(before and after reallocation) .........70

Appendix B: Packing Section layout

(before improvement and reallocation) ............................................ 72

Appendix C: The description of Packing Section

(before improvement and reallocation ....................73

Appendix D: Packing Section layout

(after improvement and reallocation .............74

Appendix E: The description of Packing Section

(after improvement and reallocation) .............75

Appendix F: Labor motion of Packing Section ........... 76

Appendix G: Normal time in Process of Insert Plastic Spoon into

Packaging Bag ...........77

LIST OF TABLES

TABLE Page

2.1 Determining Operator Rating ........................................................... 20

4.1 Plastic Spoon demand (box) (year 2006-2008) ................................ 31

4.2 The labor cost of Packing Section (baht) (year 2008) ...................... 32

4.3 Takt Time (year 2008) ..................................................................... 38

4.4 The time and manpower of Packing Section (calculated from available

working regular time and overtime) ................................................ 40

4.5 The time and manpower of Packing Section (calculated from available

working regular time) ....................................................................... 41

4.6 The time and target manpower of Packing Section .......................... 42

4.7 The time and target manpower of Packing Section (after rebalance) 49

4.8 The time (before improvement) (per 24 units) ................................. 54

4.9 Work hours (calculated from normal time) ...................................... 55

4.10 Labor cost (baht) (after reallocate and rebalance) ............................ 56

4.11 Work hours (before and after improvement) ................................... 58

4.12 The labor cost (before and after improvement) .............................. 60

4.13 Customer demand, Work hours, Labor cost (normal and new method) 62

vi

LIST OF FIGURES

FIGURES Page

1.1 Business Process of the Plastic Spoon Manufacturer ...................... 2

3.1 Methodology flow chart ................................................................... 26

4.1 Production process of Plastic Spoon Manufacturer ......................... 33

4.2 Illustration of the defined cycle time ............................................... 35

4.3 Packing Section process ................................................................... 38

4.4 Operator balance chart — Current state ............................................. 39

4.5 Standard work layout ....................................................................... 50

4.6 Operator balance chart (reallocate and rebalance) ........................... 51

vii

CHAPTER I

GENERALITIES OF THE STUDY

Nowadays, many producers are suffering from market change and high competition,

which needs responses to the high variety and rapidity of changes in customers.

Manufacturing industries find it necessary to plan new production abilities to be able

to respond to the customers' needs. A company must try to develop its

competitiveness in many facts, including cost, innovation, quality, and production

technique (Dangayach & Deshmukh, 2003; Laosirihongthong & Dangayach, 2005).

For many years, companies have been creating and using tools to identify and

eliminate waste during each process, and motivating operator's to improve quality

production time, performance, and productivity.

1.1 Background of the Study

The subject of this research is a Plastic Spoon Manufacturer which produces Ice-

cream plastic spoons and Yoghurt plastic spoons. Figure 1.1 shows the business

process of this manufacturer, separated into two production lines.

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ASSUMPTION UNIVERSITY LIBRARY

This company procures raw material (Plastic Resin) from the supplier in the country.

The company uses two types of plastic resin. The company's manufacturing line is

separated into two production lines.

In the first line (Line for Plastic Spoon), general purpose polystyrene (GPPS) and

white pigment color are used to produce the plastic spoon. When the company

receives raw material (GPPS, Color), the Raw Material Store Department checks the

raw material and then, the material will be kept in the Raw Material Store and sent to

the Mixing Section in accordance with the planning order. After the Mixing Section

has finished the process, the material will be kept in the Mixing Store and sent to the

Injection Section in accordance with the planning order. In the Injection Section, the

material will be injected to become a plastic spoon and then it will be kept in the

Plastic Spoon Store. As for the stem of plastic spoon, that will be taken for recycling

in the Milling room. The stem will be milled to be Recycled Plastic Resin. Recycled

Plastic Resin is part of the raw material which will be taken to the Mixing Section in

a suitable ratio.

In the second line (Line for Packaging Bag), High Density Polyethylene (HDPE) and

Color (according to the screen packaging bag) will be used to produce the packaging

bag in which to pack the plastic spoon. When the company receives raw material

(HDPE and Color), the Raw Material Store Department checks the raw material and

then the material will be kept in the Raw Material Store and sent to the Blow Section

in accordance with the planning order. After the Blow Section has finished, the

material will be kept in the Blow Store and sent to the Screen Section, kept in the

Screen Store, and sent to the Cut Section and kept in the Packaging Bag Store, in

accordance with the planning order.

Then, the Packing Section takes the plastic spoon and packaging bag from the Plastic

Spoon Store and the Packaging Bag Store to pack and patch, to make them finished

goods. Finally, they are kept in the Packing Store and sent to customers.

3

The customers demand changes all the time. Their ordering schedule is about one

month in advance. Then, the company can plan the production schedule. Each

section knows the weekly production plan. The company employs about 126 people

in the manufacturing line. In the first line, the Mixing Section has four people, two

people for Mix and two people for Mill. The Injection Section has 30 people. In the

second line, the Blow Section, Screen Section and Cut Sections have one person each.

There is only one supervisor in control of the Blow, Screen, and Cut Sections. The

Packing Section has 88 people.

1.2 Statement of Problem

The economic situation in Thailand has problems and uncertainty, which affects the

customers. Furthermore, it affects fluctuations in customer demand. From the

financial report for 2008, costs consist of the production cost, and sales and

administrative expenses. The production cost is about 95.64% and sale and

administrative expense is only about 4.36%. The production cost comprises of Raw

material (67.28%), Labor cost (17.86%), Utilities expense (5.98%), Packaging

(2.62%), Depreciation expense (4.18%), and other expense (2.08%). The profit

margin is about 3.37%. Although the raw material (Plastic Resin and Color) is the

main cost, the company finds it hard to control this cost because the Plastic Resin

price is changeable depending on the market. The second main cost is the Labor

Cost, with most of this cost coming from the Packing Section. Packing is done

manually by the operators. The Mixing, Injection, Blow, Screen, and Cut Sections

also operate manually, by operators using machines.

Labor costs fluctuate widely because the overtime cost has been rising. From data

checking of the production plan for 2006 to 2008, the plastic spoon demand in 2008

was the highest for these three years. In the case of production cost, the company

tries to use regular time efficiently because the regular time cost is cheaper than the

overtime cost. The production plan has been rising because the company tries to

respond to customers need. But the production capacity limitation in each production

line causes an increase in working time and that causes an increase in the labor cost.

4

The total labor cost for 2008 inlcuded the Packing section (73.01%) (Regular time

42.97% and Overtime 30.04%); Injection section (23.04%) (Regular time 14.74% and

Overtime 8.30%); Mix, Blow, Screen, and Cut sections (3.95%). The main labor cost

comes from the Packing section.

Takt time can be applied to do line balancing in the Packing Section. Takt time is

about standardizing the production cycle times. Takt time is the rate of production

which the company must produce in accordance with the customers demand.

Producing to takt time is about making the production rate according to the selling

rate.

The company has production time planning, and measures the cycle time in each

section. But the company does not use takt time to balance the production line (Line

Balancing) in each section. Job distribution is still not good, especially in thePacking

Section. Sometimes, the Packing Section production line does not flow well and the

labor uses more or less time than allowed for in the production time schedule. This

section has more overtime. Sometimes, there are defects and late deliveries. The

Packing store has safety stock to counter uncertainties in supply and demand. Safety

stock is defined as extra units of inventory carried as protection against possible

stock-outs (shortfall in raw material or packaging). That can create much waste in the

company. However, the company still does not know the real cause of the several

wastes. Therefore, the company management is looking for improvement

opportunities to reduce the cycle time down to the takt time level in this step of the

production process as well as some of the other production steps. Possible

improvement areas are identified, such as reducing the steps in some processes and

balancing the production line in problem sections. And the normal, allowance, and

working times are calculated to identify the standard time. The company tries to

improve the quality of the production time, increase the performance, and increase

productivity.

5

To deal with the customer demand fluctuation, the company is going to need to

eliminate waste during the process and motivate the operators to improve the quality

of production time, performance and productivity, in order to survive in this industry.

1.3 Research Objective

1. To investigate the current operation and performance of the production

line in the Packing Section

2. To apply the technique of "Takt Time" and "Time and Motion" to

analyze and improve the operation of the production line

3. To provide recommendations that the company can adopt to enhance

the efficiency and productivity of the production line

1.4 Scope of Research

This project starts with a study of the main product, its functions, components and

structure. The data for 2008 will be analysed because that year has the highest

demand of the three years 2006-2008. The researcher assumes a full capacity

situation. This research focuses on the use of concepts and tools of "Takt time and

Line balancing" seeking the improvement of the production line operation,

productivity and quality in the Packing Section in this plastic spoon manufacturer.

The researcher uses the technique of motion and time study because that deals mainly

with labor costs. This technique will be used to find the standard time and a financial

incentive scheme in seeking the improvement of performance, the quality of

production time, and productivity.

6

CHAPTER II

LITERATURE REVIEW

This chapter describes the meaning and details of Takt time, the operator balance

chart, and time and motion study.

2.1 Takt Time

Takt time was developed as a manufacturing flow tool in the 1930s. It was

thoroughly developed by Toyota internally as a manufacturing management tool in

the 1950s. By the late 1960s it was in widespread use throughout the Toyota supply

base and became a well-known concept by the mid-1980s, well before the term "lean"

was introduced (Rother & Shook, 1998).

Takt time is a fundamental part of the design of production systems. There are many

definitions of Takt time, all appropriate in concept but quite commonly

misunderstood. This results in bad designs being specified and also in some general

confusion about the term. Takt time relates customer demand to available production

time, with the purpose of determining capacity during the planning stage and of

pacing production during the operation stage. Takt time, then, impacts both the

design and the operation of a manufacturing system. Takt time considers that

capacity planning should be the fastest possible operational Takt time. In operation,

Takt time can be understood as the pace at which products should be produced, or the

average volume of sales over a specific time period, or the time available to produce

one part (Shingo, 1989).

The most significant source of Muda (waste) is overproduction, i.e. producing more,

sooner or faster than is required by the next process downstream (Rother & Shook,

1998). Over-production leads to buffer inventories which require resources that are

not directly devoted to production. Buffer inventories are often costly to store and

handle, hinder movement from one product design to another, and hide production

errors. Hence, by avoiding overproduction, Takt is fundamental to Lean production.

7

The term "Takt" was first introduced in the German aircraft industry in the1930s, and

was subsequently taken to Japan by the German engineers training Japanese aircraft

producers pre-Second World War, and became an integral element of lean production

(Wada, 1995). Implementation of a "Takt system" was one of the first attempts

towards world class manufacturing in Japan, Germany and the USA (Wada, 1995;

Ohno, 1988; Kidder, 1995; Hounshell, 1984).

2.1.1 Calculation of Takt Time

Takt time is calculated by dividing the customer demand into available working time

per shift. The calculation for takt time is as follow:

Takt time = Available working time during the period

Customer demand during the period

(Production time available is total production time minus breaks, downtime, etc. It

includes changeover time, sometimes regarded as operational availability. Customer

demand is the average customer demand over a certain period.)

2.1.2 Implications of producing to Takt Time

The simplicity of the Takt time concept belies its astonishing effects. Here are some

main features of a Takt system.

2.1.2.1 Stabilized production flow. In lean production, work-in-progress

continuously flows through the processing steps. The production flow can have a

constant or a variable rate. For example, a production line with variable flow rate

may run between 0.75 and 1.25 units per minute on different occasions within any

particular hour; but average 60 per hour. By contrast, a constant rate line runs at 1

unit per minute throughout the hour. Operating to a takt time means all workstations

operate a constant rate synchronized to the customer demand. Takt system describes

a constant rate of flow. By eliminating variability at each step, Takt time prevents

8

build-ups of inventory between workstations and the stops and starts that occur at a

variable flow rate.

Flow production dates back to 1913, when Ford Motor Company sets up the first flow

assembly line for the Magneto assembly process (Hounshell, 1984). This was a major

breakthrough in the static mode of assembly and was later transformed by Toyota into

the Toyota Production System and eventually lean production (Womack et al., 1990;

Shiomi & Wada, 1995). However, a problem soon occurred in this method of

production: the rate of the work flow is not constant. Before long, Ford engineers

found that by moving magnetos at a set rate with a motorized chain, they could set the

pace of work. This resulted in a four-fold increase of productivity: five man-minutes

compared to the original 20 (Hounshell, 1984). Clearly, the Takt concept evolved

alongside the concept of "flow". It has been understood that smoothness and

harmony in flows are fundamental to productivity and efficiency (also see the case of

aircraft industry Kidder, 1995; Wada, 1995).

2.1.2.2 Work balance. Work balance refers to a situation where all the

operators along the production line require the same length of time to perform their

tasks. Operating a line to Takt time is a prerequisite to effective work balance. In an

ideal production line, the work content is distributed evenly between workstations in a

way to meet the Takt time (Tapping & Fabrizio, 2000). If any operation exceeds the

Takt time, the line cannot produce at the necessary rate, unless inventory buffers are

introduced, as in Picture (a).

Picture (a) is an illustration of a motorized process (i.e. stabilized flow) where the

pace of the process is set to the Takt time. As illustrated, Cycle times vary

significantly from one processing step to another (Cycle time for a machine or work

station is the time required from completion of one unit to completion of the next

operators. So, the line is unbalanced and operator 4 is tempted to cut corners in order

to finish his/her job within the Takt time, while operators 1, 6 and 7 drag their heels.

On the other hand, if the production line is not motorized (i.e. variable flow rate)

varying cycle times will lead to build-ups of inventory between the workstations. So,

9

line imbalance impairs quality, leads to underutilized machinery and people, builds up

inventory levels, causes individual frustration, and triggers team dissension. Picture

(b) illustrates improved balance of the line. In Picture (b) the work content is

balanced in a way that the cycle times are just below the Takt time. Ohno (1988)

refers to work balancing as the skill of passing the baton in a track relay. Ohno

explains that the more capable workers should make up for the less skilled, just as the

faster track runner carriers the baton for slower team-mates. So, in a balanced line,

workload is split according to individual skills and duration of specific tasks.

Line balance creates a situation where individual and team performance can be

monitored. Also, it increases morale since everyone works equally hard.

(a) (b)

Source: Strategos (2004)

2.1.2.3 Enhanced awareness on performance. Takt time is displayed on the

shop floor, sometimes using electronic devices (Andon board) which count back from

the Takt time to zero in every cycle. So, the production team tracks time and

"everyone can see where production stands at each moment" (Womack & Jones,

1996). This provides frequent and cyclic feedback on productivity, machine

reliability and quality problems, which increases the level of awareness in both

workers and management. Such heightened awareness is a great motivator, which

leads to higher productivity and better quality.

The objective of each processing step is to do the work within the span of Takt time.

The production team needs to provide rapid response (within Takt time) to any

problem that might cause delay. The root cause of problems should be eliminated so

10

THSASSUIVIPTION UNIVERS= LIBRARY

3531c-1

that they never disrupt the process again. Also, changeover times should be

minimized to enable the operator to change tools — if needed and to produce — within

the Takt slot (Miltenberg, 2001; Rother & Shook, 1998).

2.2 Operator Balance Chart

Normally, some operations may use more time than other operations, then the free

time may happen whilst awaiting the next work piece, or some operations may

necessitate using more than one operator. Line Balancing is distributing the work

elements equally, according to Takt time. Line Balancing helps to allocate the work

suitably to each operator. Customer demand fluctuates and can affect Takt time, and

then line balancing is necessary. Line Balancing must start from a current state

analysis. The best tool is the Operator Balance Chart. This chart can show the

improvement channel by visually showing the Takt time and cycle time of each

operation. The operator balance chart is "a graphic tool that assists the creation of

continuous flow in a multi-step, multi-operator process by distributing operator work

elements in relation to Takt time" (Lei, 2003). An operation balance chart uses

vertical bars to represent the total amount of work each operator must do compared to

Takt time. Creating an operation balance chart helps the critical task of redistributing

work elements among operators. This is essential for minimizing the number of

operators needed by making the amount of work for each operator nearly equal to, but

slightly less than, Takt time (Lei, 2003). Rother and Harris (2002) give examples of

practical use of this tool to improve work design.

Simons and Zokaei (2005) analyze five cutting rooms - by means of activity sampling

and observation - and categorize them as traditional and advanced, with significant

differences in productivity. The traditional cutting rooms have no concept of Takt

time or standardized work. These lines were run at a fast pace exhibiting the waste of

"over-production" (Ohno, 1988) resulting in variable flow, non-standard work and

intermittent operator activity. The advanced lines all run at a pace that operators can

apply standard operations and cut to the correct quality and were also paced to a Takt

time. The paper tentatively (due to the activity sampling method) concludes on

11

operator activity, that traditional lines run at 60 percent and advanced lines run at 80

percent; and therefore advanced lines can operate with 25 percent less labor cost due

to improved line balance.

2.3 Time and Motion Study

Time study was first used by Frederick W. Taylor while he is working at the Midvale

Steel Company in the 1890's. At about the same time, Frank B. Gilbreth applied

motion study to bricklaying as a means of improving his contracting business.

Motion and time study affects the way a man works and how much he gets for his

work. These things are vital to him. He finds it difficult to accept any change without

understanding the reason for it. In most cases, motion and time study is not fully

understood by those not actually trained to work with the technique. Often the lack of

understanding and the misapplication of motion and time study are responsible for

much of the controversy.

2.3.1 Why have motion and time study?

Management of manufacturing concerns feel that economy of effort and cost are

extremely important factors in the operation of a plant. In many cases they use

motion and time study as one of the techniques to achieve this economy. In addition,

they give serious consideration to the effect of production economy on the buying

public. They try to set the selling price of a product at a level the customer is willing

and able to pay. Frequently, if the product is a good one, well known, and sells at a

reasonable price, a manufacturer may gain a leading position in the field. Thus he is

able to maintain good profits and security.

In order to price a product, most manufacturers try to determine and lower three major

cost factors — material, overhead, and labor. Motion and time study has dealt mainly

with labor costs. Yet it is affected by many complex variables such as the

understanding of the whole field of motivation. It is this technical treatment of the

12

subject, without due regard for the human being, which has caused many motion and

time study systems to get into untenable positions in industry (Barbara, 1952).

Motion and Time study can reduce and control costs, improve working conditions and

environment, and motivate people. The basic purpose is to improve the work and to

reduce waste. Motion studies are performed to eliminate waste. Before any

improvement in quality or quantity of output, any study of operations time, any

scheduling of work or balancing of workload or any calculation of standard time, a

study of the current and proposed method is required. Studies of overall factory flow

or process, called macromotion studies, and then additional studies of detail or

operations, called micromotion studies, should be completed for a project. Motion

study seeks to minimize and simplify manual efforts.

2.3.1.1 Macromotion Study

Any process can be studied by dividing it into process activities. Although each

activity is different, depending on the product, there are five classes of activities that

are included in all process. Savings may be found in the process by reorganizing

activities. These activities found in every sequence of processes are

Operations Changes in the properties of the product

Transportations Changes in the location of the product

Inspection Confirmation that change fits the specification

Delay Wait for start of operation, transportation, or inspection

Storage Wait until needed

When the process is first studied, each activity is recorded and arranged into one of

the five classes. All observed activities are recorded, and activities not done are not

recorded. The purpose of each activity should be studied.

13

2.3.1.2 Micromotion Study

Considerable wasted motion and idle time can occur within an operation. This time

cannot be found with macromotion studies because is usually within one process

operation. The improvement is gained from reducing the operation cycle time. The

definition of a time standard is "the time required to produce a product at a work

station with the following three conditions":

1. a qualified, well-trained operator,

2. working at a normal pace,

3. doing a specific task

These three conditions are essential to the understanding of time study. The time

standard is one of the most important pieces of information produced in the

manufacturing department. It is used to develop answers for the following problems:

- Determining the number of machine tools to buy

- Determining the number of production people to employ

- Determining manufacturing costs and selling prices

Scheduling the machines, operations, and people to do the job and deliver on

time

Determining the assembly line balance, determining the conveyor belt speed,

loading the work cells with the correct amount of work, and balancing the

work cells

- Determining individual worker performance and identifying operations that

are having problems so the problems can be corrected

- Paying incentive wages for outstanding team or individual performance

- Evaluating cost reduction ideas and picking the most economical method

based on cost analysis, not opinion

- Evaluating new equipment purchases to justify their expense

- Developing operation personnel budgets to measure management performance

14

2.3.2 Motion and Time Study in the Wage Structure

In the technical sense, motion and time study can be placed between the job

evaluation system and the specific wage incentive plan used in the company. The

motion and time study program establishes the minimum expected rate of production

on each job to which it is applied for the base money rate being paid for that job.

(The base money rate for the job may change from time to time due to changing

economic conditions and social outlooks, but the time standard should remain the

same as long as the method of doing the job is not changed.)

Furthermore, motion and time study programs set the basis for wage incentive

systems. Through the use of motion and time study, the unit base of measure for extra

pay for extra production above the acceptable minimum is established.

2.3.2.1 Motion Study

To achieve rational and reasonable results it is essential to use motion and time study

together to determine a production standard. It is particularly important that

reasonable effort be applied in motion study to insure equitable results when time

study is used.

Basically, motion study is the foundation for time study. The time study determines

the time to do the job according to a certain method and is valid only so long as

method is continued. Once a new way to do the job is developed, the time study must

be changed to agree with the new method. Otherwise the time allowed for the job

would be too great, and a loose standard would result. This, in turn, would mean

inconsistent standards or unequal opportunity for all persons on incentive work to

earn essentially equal bonuses.

Motion study can be used successfully without time study — but time study cannot be

used without motion study. Since motion study is the foundation for time study and

should be done before a time study is made.

15

The purpose of motion study should be to find the greatest economy of effort with due

regard for safety and the human aspect. The total cost for human expenditure of effort

can be reduced at the same time that the unit cost for human effort is increased. The

same amount of work can be accomplished in less time with more efficient

application of human effort which will justify higher hourly wage rates.

Stated simply, motion study means —

1. Find out how a job is being done now.

2. Thoroughly question the reason for each step as it is being done now on

the job.

3. Remove the steps on the job which cannot be fully justified.

4. Install and standardize the new procedure for doing the job. The job study

may be simple or elaborate — depending on the desires of those making the

study and the people on the job. The amount of time and money to be

spent may limit the scope of the study.

The usual and tested procedures in motion study involve the use of —

1. Process Charts. The study of a series of steps in making an article or the

series of events a person goes through in completing a job assignment.

2. Flow Charts. A supporting route of travel that an article or person may

take in completing a series of steps in a job assignment. This chart is

usually used to supplement the process chart.

3. Operation Charts. A detailed analysis of just what an employee does in a

specific step or task.

4. Micromotion (simo) Charts. An elaborate breakdown of an operation chart

into very fine motion patterns, showing what the employee does in a

specific step or task.

16

2.3.2.2 Time Study

Once the method of doing the work is determined by motion study, it is often

desirable to find out how much time is used to do the work. Many industries adopt

some sort of a time study system to record the time on a job.

The name time study implies that some sort of a time-measuring device must be used.

In most case, it is a stopwatch. This particular area is more familiar to the employee

because he is able to observe at least the physical aspects of a time study man with his

stopwatch and board.

Before taking a time study, it is necessary to understand just what a time study

attempts to do. A time study attempts to find out the amount of work that a qualified

operator, properly trained, can do in a given time. The operator must do the work

according to a certain method, under certain conditions, and at a certain pace which

will produce a certain physical reaction. Certain allowances for personal and other

delays are provided.

In this explanation, "certain" is used several times. It is the problem of each

individual plant to determine the exact specifications for the "certain" method,

"certain" conditions, "certain" pace, "certain" physical reaction, and "certain"

allowances. Just how the specifications are determined - unilaterally by management

or bilaterally by management and the employees or union — is decided in each case by

the person or persons involved. But it must be remembered that the employees'

acceptance of the final answer — the production-standard-time to be allowed — is one

of the criteria for the success of time study.

From the technical aspect, this first step of the time study is not too important.

However, from the psychological point of view, it is perhaps the one which

determines whether the idea of time study is accepted or rejected. In most cases, the

employee's first contact with time study comes when he sees the time study man with

his board and stopwatch.

17

a) Recording the actual time value

The selection of a method depends upon the time study department's preference and

the acceptance of the selected method by the working force. The two methods of

recording as below:

1. Continuous Stopwatch Reading and Recording

The stopwatch is started at the beginning of the first element of the job description

and runs continuously until the study is completed. At the end of each element, in

turn, the particular reading of the watch is recorded for the corresponding element.

2. Snapback or Repetitive Stopwatch Reading and Recording

The stopwatch is started at the beginning of each element. At the end of each

element, the watch is read and the hand is snapped back to zero.

b) Determining the average time to do the job by a certain operator

To avoid the misuse of the idea of abnormal time valued, consideration of this policy

is suggested:

All time values for an element are to be included in determining the average time for

an operator studied, unless a specific rate is made in each case of a discarded time

value that the job method is not followed.

This means that if all the work calls for in the element of the job is not done, the time

value (which probably will be low) will be discarded. If the operator unnecessarily

does more work than the element of the job calls for, the time value (which probably

will be too high) also will be discarded.

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TIMASSUMPTION UNIVERSTrY LIBRARY

c) Determining the Base Time for the Job by Rating or Leveling

The process of comparing a worker's rate of performance with the performance

expected of a person working at the selected speed for the area, industry, or plant is

called rating or leveling.

The rating process is a systematic attempt to relate the observed performance to the

performance expects from a certain type of individual who has certain skill

qualifications, who follows a certain method, and who works under certain conditions

and at a certain pace.

The Westinghouse System of Rating was created by the Westinghouse Company in

1927. This system of rating consists of four factors, which are:

1. Skill — The operator can work according to the assigned method rapidly.

2. Effort — The operator desires to work efficiency.

3. Consistency — The operator can operate work consistently.

4. Conditions — Something that affects the operator and non-operator.

Determining the operator rating gives a mark to these four factors, as in Table 2.1.

19

Table 2.1: Determining Operator Rating

Skill Effort

+0.15 Al Super Skill +0.13 Al Super Skill

+0.13 A2 +0.12 A2

+0.11 B1 Excellent +0.10 B 1 Excellent

+0.08 B2 +0.08 B2

+0.06 Cl Good +0.05 Cl Good

+0.03 C2 +0.02 C2

0.00 D Average 0.00 D Average

-0.05 El Fair -0.04 El Fair

-0.10 E2 -0.08 E2

-0.16 Fl Poor -0.12 Fl Poor

-0.22 F2 -0.17 F2

Conditions Consistency

+0.06 A Ideal +0.04 A Perfect

+0.04 B Excellent +0.03 B Excellent

+0.02 C Good +0.01 C Good

0.00 D Average 0.00 D Average

-0.03 E Fair -0.02 E Fair

-0.07 F Poor -0.04 F Poor

d) Determining the Normal Time

Normal Time = Selected Time * Rating Factor

e) Determining and Applying Allowances

Regardless of the occupation, certain interruptions occur during a regular working

day. No operator can be reasonably expected to work a full shift without some

stoppages that are beyond his control. Delays which are caused by the nature of the

work situation should not be permitted to act as a penalty upon the operator. A

20

definite policy should establish which type and duration of delays are to be covered in

the delay allowances in time study and which are to be covered by the time card.

Allowances for personal needs, such as food, drink, and toilet, and rest allowances

can be determined by study and agreement between management and labor. The

formula is

Percent allowance for delay = Delay time * 100

Net production time

Then,

Production-standard-time-allowed = base time * (1.00 + percent allowance for delay)

(Barbara, 1952).

In a group of approximately 15 factories productivity is as low as a 30 rating before

the introduction of work study. After work study is applied, new layouts introduced,

job methods revised, and preventive maintenance brought into use - the rating

increases to 55. this is still below the normal rating of 60. At this stage, incentives

are introduced, and the operators' performance steadily increases until an 80 rating is

achieved. Work study achieves an increase from 30 to 55, representing a gain of

83%. By applying incentives the performance increases from 55 to 80, a gain of a

further 83% (Gordon, 1958).

One paper studied organizational changes at 0. M. Scott after a leveraged buyout.

For fifteen years before the buyout, Scott was a subsidiary of ITT Corporation. The

company's principal controls and incentives were imposed by the corporate parent.

After the buyout was completed in 1986, Clayton and Dubilier, a private firm

specializing in leveraged buyouts, worked with management to come up with new

incentives. The major changes introduced after the buyout swere substantial increases

in salary and even greater increases in bonuses that managers can earn by meeting,

corporate performance targets. More managers participate in the program, and factors

that determine bonuses now include corporate performance, divisional performance,

and individual goals and performance. The plan is designed so that the payoff is

extremely sensitive to change in performance. Average bonuses as a percentage of

21

salary for the top ten managers increases from 10% and 17% in the two years before

the buyout to 66% and 39% in the two years after, during which period operating

income increases by 42%. Personal objectives are set by managers and their

superiors, and achievement against those objectives is monitored by superiors (Bruns,

1992).

Normally, if the incentive scheme is used to motivate the operator, the working level

of operator will increase about 25-35%. This increment rate is called "Average

Incentive Pace".

Manufacturing management and engineering students are being prepared to design

work stations, develop efficient and effective work methods, establish time standards,

balance assembly lines, estimate labor costs, develop effective tooling, select proper

equipment, and layout manufacturing facilities. However, the most important thing is

to learn how to train production workers in these skills and techniques so they can

become motion and time conscious. Motion study offers a great potential for savings

in any area of human effort. We can reduce the cost by combining elements of one

task with elements of another. Motion study uses the principles of motion economy

to develop work stations that are friendly to the human body and efficient in their

operation. Motion study must consider the operator's safety. Time study can reduce

cost significantly well. Time standards are goals to strive for. In organizations that

operate without time standards, 60% performance is typical. When time standards are

set, performance improves to an average of 85%. This is a 42% increase in

performance. Incentive systems can improve performance even further. Incentive

system performances are 120%: that is another 42% increase in performance.

Manufacturing plants with no standards average 60% performance, with time

standards average 85% performance, and with incentive systems average 120%

performance. If additional production output is required, do not buy more machinery,

do not add a second shift, and do not build a new plant. Just establish a motion and

time study program.

22

BMR Case Studies on Wage Based Incentive Schemes

1. A furniture manufacturing business with a turnover of $11.5 million dollars per

year employing 62 employees improved their bottom line profit by $485,835

within 10 months of commencing the program. Employee levels reduced by 10%

in the first four months with increased overall production levels resulting in

reduced wage costs offsetting the cost of the program.

2. By introducing a wages based incentive scheme into the business, a manufacturing

company increased production by 23% within 12 months while reducing their

work force. Increased production due to motivation and natural attrition achieved

savings of $405,000 per year.

3. A joinery business employing 30 staff with an annual turnover of $4.5 million

incurred an annual loss of $346,000. On commencing the program the company

started to see significant gains after 9 months and went on to record a net profit of

$155,000 within 18 months.

4. A small manufacturing company with eight employees with an annual turnover of

$2.1 million dollars per year increased production by 20% over four months

increasing the net profit by $25,200 per month allowing an increase in sales of

approximately $32,000 per month by introducing a Wage Based Incentive Scheme

based on a Piece Rate.

It is established practice in the plantation sector in Tamil Nadu for triennial industry-

wide wage agreements to be negotiated between the authorized representatives of

management and workers, and for the understanding arrives at to be recognized as a

formal settlement by the Labor Department of the state government. Until the 1980s,

tea pluckers were paid a fixed daily wage plus a cost-of-living allowance (revised

every quarter, based on published index numbers). In return, they had to harvest a

minimum quantity of green leaf per day. For any excess quantity harvested above the

norm, they were paid a plucking incentive. This is a constant amount per kilogram of

leaf but, in due course, the system was refined by having two incentive slabs

(categories). The general feeling among management was that the incentive scheme

was defective in that the minimum quantity was the same in both the high and lean

cropping months, and that the rate of incentive was not attractive to the worker. A

23

scheme was formulated in 1985 by the association of planters and taken up for

internal consideration among its members. The initial response from the practicing

planters is that they were not ready for such a scheme and that it was premature to

place it before the trade unions as part of the negotiating package. Over the next three

years, the scheme was discussed by management with a view to reaching agreement.

In the light of comments and suggestions, the minimum quantity of leaf to be plucked

as well as the incentive slabs and rates were modified, and a compromise reached

within the management camp, it being evident from the calculations that all

managements would stand to gain from the proposed incentive system. An evaluation

of the scheme indicated that it was implemented with fairness and transparency and,

in the process, it gained credibility in the eyes of the trade unions. The existence of a

grievance redress process was added to the successful working of the scheme. Both

management and workers gained, albeit to a different extent. According to one

estimate -- and this comes from a highly productive and well-managed group -- a

combination of programmed plucking based on leaf expansion time (LET), selective

use of shear harvesters and the adoption of the new incentive system has led to a 36

percent improvement in the plucking average over the past five years, since the

scheme has been in operation. It is also reported by the same group that, as a

consequence, 10 percent of the total leaf harvested during 1994 came from pluckers in

the 50 kg plus slab. In terms of incentive earnings, the benefit to pluckers during the

five-year period goes up by 25 percent (Sivaram, 2000).

24

CHAPTER III

METHODOLOGY

The research objective is the operation production line, productivity, quality in

production time, and performance improvement by using Takt Time, Time and

Motion, and a Wage Incentive Scheme. The aim is waste reduction or elimination,

production process and cycle time reduction, and motivation of the operator to work

with more productive effort. These techniques will be used as the operation guideline

in the production line in this plastic spoon manufacturer. The researcher separates the

techniques into three groups. The first group is "Takt Time and Do Line Balancing"

which comprises data set and data collection, draw a current state line balance by

using an operator balance chart, and do line balancing. The second group is "Improve

Production Efficiency". The third group is "Improve Production Performance". To

demonstrate this, the methodology processes are shown in Figure 3.1.

25

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3.1 Perform Takt Time and Line Balancing

3.1.1 Data Set and Data Collection

The researcher collects the data of the Plastic Spoon Manufacturer such as customer

demand, regular and overtime costs, production processes, work time, etc., by

choosing the highest customer demand year, and the highest labor cost section. After

the year and section are specified, the qualifications of the Packing section are

collected (such as cycle time, available production time, number of operators, in-

process inventory, on time delivery, and defects, etc).

3.1.2 Draw current state Line Balance by using the Operator Balance Chart

After finishing the data set and data collection, Takt time will be calculated. The best

way is to achieve target Takt time at fluctuation of demand. Takt time is a better

measure over cycle time and lead time. The customer has the demand of a daily rate

of supply, therefore Takt time is chosen as a reference number. This number gives a

sense for the rate at which a process should be producing. It helps to see how one is

doing and what needs to be improved. Takt time is the rate at which a company must

produce a product to satisfy customer demand. A comparison of station cycle time

against Takt time guides the improvement areas. Then, the operation processes and

the cycle time in each operation will be specified.

The current state line balance will be drawn by using the operator balance chart which

can help to see the situation clearly, and a bar chart shows the current state of balance

outside line and non-equilibrium point. This chart shows the cycle time, the number

of operators, and Takt time.

The researcher shows the worker time comparisons with each other, compares cycle

time against Takt time, and specifies target manpower which is separate into two

calculation methods (calculated from available working regular time and overtime,

and calculated from available working regular time). These calculations show the

27

difference between the manpower available and the target manpower in each

operation.

The line balance efficiency of current state will be calculated. The objective of line

balance efficiency calculation is to check the waiting time in the production system

when compared with the bottleneck (longest operation).

3.1.3 Do Line Balancing

The number of operators and the description in each operation will be specified

(before and after reallocation), and then the number of operators and process in each

operation will be reallocated.

Waste will be identified, with an explanation of the seven wastes (Overproduction,

Inventory, Conveyance, Defect Waste, Processing Waste, Operation Waste, and Idle

time).

After finishing in waste identification, the waste will be eliminated in product

movement and human motion. For waste elimination in product movement, retention

and conveyance are the main sources of waste. These wastes are about the type of

"conveyance". Then, the retention and conveyance points will be eliminated. If the

retention and conveyance points are reduced or eliminated, more than half of all

wastes will be eliminated. The packing section layout before improvement and

reallocation will be shown at the retention and conveyance point, work in process, and

the checking point. And for the waste elimination in human motion, the labor motion

and the type of waste in each operation (before and after improvement) will be

specified. The packing section layout after improvement and reallocation will be

shown at the retention and conveyance point, work in process, and the checking point

again.

When the operations are reallocated and the wastes are eliminated from the human

motion and product movement, the production will be more efficient. Then, these

operations will be rebalanced. The new cycle time, target manpower and manpower

28

available after being rebalanced, will be specified. Then, the reallocated work and

rebalance will be shown in the standard work layout and operator balance chart again.

The future state of line balance efficiency will be calculated again which shows how

much these operations are better.

3.2 Improve Production Efficiency

3.2.1 Time study of production process

For average time study, the researcher studies only the highest cycle time and labor

cost because this process has more problems and affects other operations especially

labor. The researcher calculates the time of the operators' work, for about 30 persons

(10 times per each person).

Standard time calculation starts from normal time calculation, rating factor, and

selected time. The rating factor comprises skill (considered as the skill of operator's

work), effort (considered as the operator's working effort to succeed in work),

condition (considered from the operator's working condition that affects the speed of

working or not), consistency (considered as the operator's working consistency

between reckoned time). The assessment the rating factor of operators in this process

is specified by the head worker and the production manager. After the normal time is

calculated, the next process is standard time calculation by using allowance time. The

allowance time in this research is specified by the head worker and production

manager.

The researcher takes the normal time to calculate the number of hours that the

operators must work to support the demand fluctuation in each month. And then, the

researcher takes these work hours per day in each month to calculates the regular time

cost and the overtime cost.

After finishing the calculation of average work hours, standard time, and allowance

time, the production performance will be calculated. The researcher calculates the

pay performance which gives us as the number of standard minutes per hour for

29

which the department is paid. And true performance will be calculated, which gives

us the number for production of good work.

3.3 Improve Production Performance

After the researcher acquires knowledge of the performance, the researcher applies an

incentive scheme to motivate the operator towards more productive effort, and this

scheme creates the average incentive pace.

Nowadays, the wage system of this operation is the hourly wage. For the incentive

scheme application, the wage will be paid in accordance with the productivity (wage

per box). The wage rate per box is specified by the production manager and the head

worker. Then, the labor cost and the work time will be changed. The researcher

expects that the work time will be reduced from the normal time by about 10 percent

approximately.

From the new average work hours, standard time, and allowance time, the production

performance in pay and true performance are calculated again. The researcher

calculates and compares between the normal method (hourly wage) and the new

method (wage per box) of labor cost calculations, if the customer demand increases

by about 10 percent.

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►ASSUMPTION UNTI/ERSITY LIBRARY

CHAPTER IV

PRESENTATION AND CRITICAL DISCUSSION OF RESULTS

This chapter shows the details and figures of all parts of the methodology processes.

4.1 Collect and Set Data

4.1.1 Set Data

The historical demand for plastic spoons (in box), 2006-2008, is shown in Table 4.1.

Table 4.1: Plastic spoon demand (box) (2006-2008)

Month/Year 2006 2007 2008

January 11,489 10,492 12,024

February 10,940 10,864 11,677

March 10,796 9,391 10,544

April 12,153 11,131 12,099

May 12,052 11,392 12,643

June 11,056 10,152 11,480

July 13,107 11,570 13,398

August 11,648 11,920 12,597

September 11,446 11,096 12,386

October 10,001 9,754 10,605

November 9,265 8,900 9,729

December 12,240 12,338 13,533

Total (per box) 136,193 129,000 142,715

From the financial report, costs consist of the production cost, plus sale and

administrative expense. The production cost is about 95.64% and sale and

administrative expense is only about 4.36%. The production cost comprises Raw

material (67.28%), Labor cost (17.86%), Utilities expense (5.98%), Packaging

(2.62%), Depreciation expense (4.18%), and other expenses (2.08%). Although the

raw material (Plastic Resin and Color) is the main cost, the company finds it hard to

31

control this cost because the Plastic Resin price is changeable, depending on the

market price. The second main cost for the company is the Labor cost.

Out of all the labor costs in 2008, the labor cost comprises the Packing section

(73.01%) (Regular time 42.97% and Overtime 30.04%);; Injection section (23.04%)

(Regular time 14.74% and Overtime 8.30%); and Mix, Blow, Screen, and Cut sections

(3.95%). The main labor cost is from the Packing section.

Within the labor cost of the Packing section, the labor cost of regular time (8.00-

17.00) is 56.82% and Overtime is 43.18%.

The regular and overtime cost of the Packing Section for 2008 is shown in Table 4.2.

Table 4.2: The labor cost of Packing Section (baht) (2008)

Month/Year Regular time cost (baht) Overtime cost (baht)

January 472,212 309,929

February 435,888 367,828

March 472,212 221,378

April 417,726 430,836

May 435,888 449,567

June 454,050 298,009

July 472,212 442,755

August 454,050 425,726

September 472,212 354,204

October 472,212 221,378

November 454,050 170,291

December 454,050 462,729

Total 5,466,762 4,154,630

4.1.1.1 Production Processes of the Plastic Spoon Manufacturer

This company produces many types of plastic spoon for Ice-cream and Yoghurt

manufacturing in Thailand. This company is separated into two lines of production.

32

/ Cut section

Packing section

Injection section

Mixing section

Blow section

--*

Screen section

The first line is plastic spoon production which comprises two sections (Mixing, and

Injection section). The second line is packaging bag production which comprises

three sections (Blow, Screen, and Cut sections). The production process is shown in

Figure 4.1.

Figure 4.1: Production process of the Plastic Spoon Manufacturer

4.1.1.2 Customer Requirements

Customer requirements data set out below:

- Average customer demand : 142,715/12 = 11,892.92 boxes per month

142,715/301 = 474.14 boxes per day

- Quantity per packing : 3,000 units (1 box)

- Number of packing per day : 474.14 boxes

There is no exact delivery schedule. The delivery schedule is decided by

the production planning department in accordance with the customer order.

4.1.1.3 Work Time

Working time data set is as below:

- 301 days in 2008

33

- One shift production in all production departments except the Injection

department

- Company holiday is Sunday

- For one shift : Between 8:00 and 17:00

(60 minutes for unpaid lunch break) (12:00-13:00)

: Overtime between 17:00 and 20:00

(One x 15 minutes break during Overtime) (17:00-17:15)

4.1.1.4 Plastic Spoon Manufacturer Production Control Department

Data for the information and material flow from and to the production control

department is as below:

- The company communicates with the customers and the suppliers by

electronic device.

- Customer services department receives one month prior forecast from the

customer.

- Production control department receives the customer forecasts, validates

them, and converts the validated forecasts into company work orders.

Work order status is updated and issued weekly. Each work order contains

six active sections. Weekly work orders (targets) are hung up on the

production board in order to provide information to the group leaders

- Shipping schedule is decided by the logistics department of the Plastic

Spoon Manufacturer

- Production control department enters the material requirements into the

company data, and the purchasing of necessary parts is done by the

procurement department. Weekly meetings are held in order to discuss

critical procurement issues

4.1.2 Collect Data

Some processes on the production shop floor are done manually by the operators.

And some processes are done manually by both the operators and the machine. The

start time of each process is considered to be the time when the operator picks up the

34

product from the incoming buffer of each section. The finish time of each process is

considered to be the time when the operator delivers the product to the outgoing

buffer of each section (Figure 4.2).

Figure 4.2: Illustration of the defined cycle time

i

Process

Incoming Buffer

Outgoing Buffer

Buffer Cycle Time Buffer

4.1.2.1 The qualifications of the Plastic Spoon Manufacturer process

Packing Section takes the raw materials from the packaging bag and plastic spoon

store to pack and patch so as to become manufactured products.

Packing Section:

- Cycle Time = 7,865.64 seconds per box

- Available Production Time = 28,800 seconds

Work Time per day: 9 hours * 60 minutes = 540 minutes

Minus Downtime: Lunch break = 60 minutes

= 480 minutes

Modified to Seconds: 480 * 60 seconds = 28,800 seconds

- Number of Operators = 88 people

- In-process Inventory

Line for Plastic Spoon and Packaging Bag (Injection and Cut) send to

Packing Area, then

- Between Injection and Packing: 910 boxes

- Between Cut and Packing: 666 boxes

- Between Packing and Shipping (FG): 630 boxes

- Work-In-Process inventory day

35

The work-in-process inventory day calculation is In-process inventory

divided by the customer demand per day. Customers demand data shown in

the previous part in the topic of the customer requirements data set Line for

Plastic Spoon and Packaging Bag (Injection and Cut) are sent to the Packing

Area, then.

- Between Injection and Packing : 910 boxes (910 boxes/474.14

boxes per day) = 1.92 days

- Between Cut and Packing : 666 boxes (666 boxes/474.14 boxes

per day ) = 1.41 days

- Between Packing and Shipping (FG) : 630 boxes (630

boxes/474.14 boxes per day) = 1.33 days

On time Delivery

On time Delivery of Plastic Spoon Manufacturer is 97% (about 138,433.55

boxes per year) which is the source of the problem:

- Job allocation for workers in the packing section still has problems.

Sometimes, the customers may be quick in ordering, in which it

can be seen that the job allocation is still not good enough.

Whenever quick ordering is required, it may affect normal ordering

if the company cannot allocate the job to the worker suitably. This

could result in late delivery to the customers.

- Production Schedule is changed all the time.

- Defects (per one million units)

The defective rate is shown in Parts per Million (ppm) that equals

5,000 units (1.67 boxes). And most defects result from the packing station.

These defects must be re-checked and corrected.

After finishing the Packing process, it is taken to the Packing Section Store (Finished

Products) (3,000 pieces per box).

4.2 Draw current state Line Balance by using the Operator Balance Chart

36

4.2.1 Calculate Takt time

The best way out is to achieve target Takt time at fluctuation of demand. Takt time is

a better measure over cycle time and lead time. The customer has the demand at a

daily rate supply, therefore Takt time was chosen as a reference number. This number

gives a sense for the rate at which a process should be producing. It helps to see how

one is doing and what needs to be improved. Takt time is the rate at which a company

must produce a product to satisfy customer demand. A comparison of station cycle

time against Takt time guides the improvement areas.

Takt time = Available working time during the period

Customer demand during the period

Average Takt Time (2008) of the Packing Section:

Average Customer Demand = 474.14 boxes/day

Total Time Available = 28,800 seconds

Average Takt Time = 28,800 seconds

474.14 boxes / day

= 60.74 seconds / box

The Takt time of the Packing Section in each month is shown in Table 4.3.

37

Table 4.3: Takt time (year 2008)

Month/Year Customer Demand

(box)

Available Working

Regular Time (seconds)

Takt Time

(seconds/box)

January 12,024 748,800 62.28

February 11,677 691,200 59.19

March 10,544 748,800 71.02

April 12,099 662,400 54.75

May 12,643 691,200 54.67

June 11,480 720,000 62.72

July 13,398 748,800 55.89

August 12,597 720,000 57.16

September 12,386 748,800 60.46

October 10,605 748,800 70.61

November 9,729 720,000 74.01

December 13,533 720,000 53.20

4.2.2 Time the Process

There are six operations in the Packing process. The cycle time and the process are

shown in Figure 4.3.

Figure 4.3: Packing Section processes

Opl Op 2 Op 3

CT = 67s CT = 49.67s CT = 92.50s

Receive Allocate Inserting the Production

Planning and Do Worker Job Plastic Spoon

into Raw Material

Allocation Packaging

bag

NO

Op6 Op5 Op4 •

CT = 54.16s YES CT = 94.38 s YES CT = 85.72s

Quality Control Seal the Quality and Send to Packaging Control

Packing Store bag

NO

38

4.2.3 Draw current state Line Balance by using the Operator Balance Chart

Draw a bar chart to see the situation clearly: a bar chart shows the current state of

balance outside the line and non-equilibrium point. The operator balance chart of the

current state is shown in Figure 4.4.

Figure 4.4: Operator balance chart - Current state

Seconds

Total Cycle Time = 443.43s

92.50s

85.72s

49.67s

110

100

90

80 —

70 — 67s

60 —

50 —

40 —

94.38s

Takt 60.74s

54.16s

30 —

20 —

10 —

1 2 3 4 5 6 Operation

/ (1) (3) (70) (3) (8) (3)

No. of Operators Available

39

4.2.4 Compare workers' time to each other and compare Cycle Time against Takt

Time and specify target manpower

The researcher shows the worker time comparison with each other and compares

cycle time against Takt time and specifies target manpower in two tables (Table 4.4 :

calculates from available working regular time and overtime; Table 4.5 calculates

from available working regular time).

Target Manpower = Cycle Time

Takt Time

Specify the target manpower by taking the cycle time divided by Takt time (average

number in 2008), as below:

Table 4.4: The time and manpower of the Packing Section (calculated from available

working regular time and overtime)

Op. Cycle Time

(seconds/box

/person)

Cycle Time at stations

when using multiple

operators

(CT/Manpower

Available)

(seconds/box)

Takt

Time

(seconds

/box)

Target

Manpower

Manpower

Available

1 67 67 89.75 0.75 1

2 149 49.67 89.75 1.66 3

3 6,475 92.50 89.75 72.15 70

4 257.17 85.72 89.75 2.87 3

5 755 94.38 89.75 8.41 8

6 162.47 54.16 89.75 1.81 3

Total 7,865.64 443.43 89.75 87.65 88

40

Table 4.5: The time and manpower of Packing Section (calculated from available

working regular time)

Op. Cycle Time

(seconds/box/

person)

Cycle Time at

stations when

using multiple

operators

(CT/Manpower

Available)

(seconds/box)

Takt Time

(seconds/box)

Target

Manpower

Manpower

Available

1 67 67 60.74 1.10 1

2 149 49.67 60.74 2.45 3

3 6,475 92.50 60.74 106.60 70

4 257.17 85.72 60.74 4.23 3

5 755 94.38 60.74 12.43 8

6 162.47 54.16 60.74 2.68 3

Total 7,865.64 443.43 60.74 129.50 88

Target Manpower = Total Cycle Time

Takt Time

= 7,865.64

60.74

= 129.50

Specify target manpower (each month) by taking the cycle time (see Table 4.5) in

each operation, divided by Takt time (each month), as shows in Table 4.6.

41

Table 4.6: The time and target manpower of Packing Section

Month/Year Takt Time

(seconds/box)

Target Manpower

Op. 1 Op. 2 Op. 3 Op. 4 Op. 5 Op. 6

Jan 62.28 1.08 2.39 103.97 4.13 12.13 2.61

Feb 59.19 1.13 2.52 109.39 4.35 12.76 2.75

Mar 71.02 0.94 2.10 91.17 3.62 10.63 2.29

April 54.75 1.22 2.72 118.27 4.70 13.79 2.97

May 54.67 1.23 2.73 118.44 4.70 13.81 2.97

June 62.72 1.07 2.38 103.24 4.10 12.04 2.59

July 55.89 1.20 2.67 115.85 4.60 13.51 2.91

Aug 57.16 1.17 2.61 113.28 4.50 13.21 2.84

Sept 60.46 1.11 2.46 107.10 4.25 12.49 2.69

Oct 70.61 0.95 2.11 91.70 3.64 10.69 2.30

Nov 74.01 0.91 2.01 87.49 3.48 10.20 2.20

Dec 53.20 1.26 2.80 121.71 4.83 14.19 3.05

This compares cycle time against Takt time and specified target manpower. In Table

4.4, the target and available manpower are equal because this table is calculated from

total available working regular time and overtime. But for Table 4.5, the target

manpower is more than the available manpower in every operation of 2008 because

this Table is calculated from available working regular time. Then, this year has

overtime in each month which has more effect on the company's labor cost. Then, the

researcher tries to reduce or avoid this overtime cost, or tries to improve the

production process to create quality in production time, performance, and productivity

which affect the production cost of the company. This section is not involved with the

machine capacity; then the manpower can be reallocated to create the production

capacity. It may happen to be more or less workers, or the packing process work

allocation is still not good. Then, the researcher will analyze this section and the work

allocation in the packing section.

42

4.2.5 Calculate Line Balance Efficiency

The objective of line balance efficiency calculation is to check the waiting time in the

production system when compared with the bottleneck (longest operation). The

formula is:

Line Balance Efficiency = Total Cycle Time

Number of Stations * Longest Operation

= 443.43 sec * 100

(6 * 94.38 sec)

=78.31 %

Current State

Target 6 Manpower (Ops)

Takt 60.74 sec

Cycle Time 443.43 sec

Line Balance 78.31% Efficiency

4.3 Balance Line Balancing

4.3.1 Re-allocate work

The number of operators and process in each operation will be re-allocated:

Operation 1 (5 processes, 1 manpower) and Operation 2 (11 processes, 3 manpower)

are mixed and reallocated to be one operation (9 processes, 2 manpower);

Operation 3 (1 process, 70 manpower) is reallocated to be (1 process, 72 manpower);

Operation 4 has the same number of process and manpower;

Operation 5 (1 process, 8 manpower) is reallocated to be (1 process, 9 manpower);

Operation 6 (5 processes, 3 manpower) is reallocated to be (5 processes, 2

manpower).

The description of the Packing Section process (before and after reallocation) is

shown in Appendix A.

4.3.2 Reduce Non Value Added and eliminate waste

Value Adding: Any process that changes the nature, shape or characteristics of the

product, in line with customer requirements e.g. machining, assembly

43

Non-Value Adding, but unavoidable with current technology or methods: Any work

carried out which does not increase product value. Often, there are forms of waste

that are necessary for the current state of a process. In TPS this is called incidental or

auxiliary waste. e.g. inspection, part movement, tool changing, maintenance, walk

time or conveyance that cannot currently be eliminated or reduced further. They add

no value but are stuck as part of the current process.

Waste (Pure Waste): All other meaningless, non-essential activities that do not add

value to the product can be eliminated immediately e.g. looking for tools, waiting

time.

Waste is defined as an actions that increases cost more than necessary, lowers quality,

damages tools and equipment, does not meet objectives, etc.

4.3.2.1 Waste Identification of the seven wastes

1. Overproduction happens because

The production schedule planning is not balanced and the production is not in

accordance with the production schedule. The product is produced before the

customer demand (supply>demand). The production does still have defects, so the

safety products must be stocked instead of defective parts. Parts and equipment are

lost and damaged, and if the production in each process is not balanced, then some

processes have more manpower and equipment than they require.

2. Inventory happens because

The products are produced before the customer demand (supply>demand). Safety

products must be stocked instead of the defective parts. And some processes are

produced more rapidly than the next processes; thus, the production line is not

balanced. There are also a lot of inventories on the shelf and the floor where this

storage has more space and blocks the way, and the inventory between each process is

piled up against the operators and the processes.

44

3. Conveyance happens because

The parts are piled in sets between transporting, and there is a change of trolley during

the conveyance, and the conveyance distance is too far. Thus, the layout is still not

practical and some manpower does not have the skill needed for the operation.

4. Defect Waste happens because

The downstream checking (quality checking) is attended which sometimes the quality

checking still does not meet the standard. Sometimes there are some complaints

about the previous process and there are defects in the processes and mistakes from

human working in which the operator is not interested. The operation is neglected,

does not have mistake protection, and does not have activities to improve and manage

the defects.

5. Processing Waste happens because

Many processes, operations, and equipments are not learnt sufficiently and the

operator still does not meet the standard. There are unnecessary processes in the

operation and there are some parts of the operation which can possibly be eliminated,

which does not affect the product's quality.

6. Operation Waste happens because

The operation does not flow and does not meet the standard. Some operators do not

have the morale and are not well-trained in working. The workers' skills are not

developed; some of them are walking, turning around, leaning to one side, bending,

and making unnecessary wrist movements. The arm movement is too wide. The left

or right hand is not used in an operation. And the workers and working hours increase

while most break time is not properly used. Sometimes, the installation or parts

movement are useless.

45

7. Idle Time happens because

The production line does not flow. Sometimes the upstream operation has some

problems because the previous process is slow and some parts are lost. The

production capacity is not balanced because of the imbalance of the working process

and an ineffective plan. The operation does not meet the standard. Some operators

take time off, and there is more manpower than necessary.

4.3.2.2 Waste Elimination

Waste will be eliminated in product movement (conveyance) and human motion

(operation waste). The basic analysis research is that these two types of wastes are

the main sources of the problem.

a) Waste Elimination in Product Movement

Retention and conveyance are the main sources of the waste. These sources are

involved with the waste of "conveyance". Then, the retention and conveyance point

must be eliminated.

Retention and Conveyance:

If the retention and conveyance point are reduced or eliminated, more than half of all

wastes will be eliminated. Firstly, the packing section layout before improvement and

reallocation will be shown at the retention and conveyance point, work in process, and

the checking point (see Appendix B).

Appendix B shows the packing section layout before improvement and reallocation.

The Packing section has one floor, six operations (two operations for value added

activities), 29 points in retention, 3 points in conveyance, and 2 points in checking.

There are six operations and 88 operators, and the description of each operation will

be shown in Appendix C.

46

nar ASSUMPTION IJINTI'VERSITY LIBRARY

In the first improvement process, the retention and conveyance point will be

eliminated and reduced to discover wastes easily. And then, some wastes will be

easily eliminated too. The retention and conveyance point elimination can help to

reduce the waste from conveyance. Then, the retention point of operation 2 and 3 will

be eliminated. The packing layout will be allocated to help in easy retention and

conveyance elimination.

For Operation 2, the conveyance point will be located between the Packaging Bag

Store and the Injection Store. When the operator takes the raw materials from two

stores, the operator will not take them to the Head Worker at the retention point, but

the operator and the head worker walk together to take the raw materials to each

worker and assign work to each worker.

For Operation 3, the operator takes the raw materials (plastic spoon and packaging

bag) to each worker. The plastic spoons will be poured on the table. They will not be

piled in sets at the retention point, for the packaging bag is beside on each worker,

only one box. When these raw materials are almost used up, the operator takes them

to each worker.

For operation 5, the retention point increases because the operators increase from 8 to

9 operators.

The packing section layout after improvement and reallocation will be shown in

Appendix D.

Appendix D shows the packing section layout after improvement and reallocation.

The Packing section has one floor, five operations (two operations for value added

activities), 11 points in retention, 3 points in conveyance, and 2 points in checking.

There are five operations and 88 operators; a description of each operation will be

shown in Appendix E.

47

b) Waste elimination from the human motion

This waste includes all labor motions (such as bending over, stretching out one's

hand, raising it, etc). This labor motion is involved with operation waste which will

be identified and eliminated.

From checking and analyzing the human motion of work elements in each operation

before work reallocation, the waste from human motion in six operations is shown

below:

Operation 1: There is no standardization in laying down tools and equipment (such

as Computer, Telephone, Printer, etc). Then, the worker must use more movement in

working.

Operation 2: There are more torso and leg movements than necessary to take the

equipment to the workers.

Operation 3: The working method causes workers to work more slowly. Workers

felt tired because the body and arm movements are not balanced. There are more arm

and body movement because the worker must stretch out the hand to pick up the raw

materials. And the chair does is not standard, causing them to feel tired. The

retention point is not suitable causing them to use more eye and neck movements.

The raw materials are taken to the retention point more than is necessary. This

process must use more specialized and experienced workers who work quicker and

make less mistakes in working. For a new worker or less experienced, or an elderly

worker, there are more mistake, they work slowly, and create waiting time. The

workers have differences in being diligent, cautious, and intent in working: these

things have a large effect on the production efficiency of each worker.

Operation 4: There are more leg and torso movement then necessary to lift the

finished rack to QC and lift to the next process.

Operation 5: There are more in arm and body movement because the worker must

stretch out the hand to pick up the raw materials. And the chair is not the standard,

causing them to feel tired. The retention point is not suitable causing them to make

48

more eye and neck movements. The raw materials are taken to the retention point

more than necessary. The working surroundings are still not comfortable because the

seal machine generates heat all the time. But sometimes, this section does not open

the window to relieve the heat. And there are less electric fan than necessary.

Operation 6: There are more leg and torso movements than necessary to lift the

finished box to QC and lift to the Packing store.

Then, these wastes in each operation will be improved and eliminated: the detail is

shown in Appendix F, and the layout after improvement is shown in Appendix D.

4.3.3 Re-balanced

When the operations are reallocated and the wastes are eliminated from the human

motion and product movement, the production will be more efficient. Then, these

operations will be rebalanced.

Table 4.7 showing the time and manpower of the Packing Section after rebalance.

Table 4.7: The time and manpower of Packing Section (after rebalance)

Op. Cycle Time

(seconds/box/

person)

New CT at stations

when using

multiple operators

(CT/Manpower

Available)

(seconds/box)

Takt Time

(seconds/box)

Target

Manpower

Manpower

Available

1 173.84 86.92 60.74 2.86 2

2 6,450 89.58 60.74 106.19 72

3 249.75 83.25 60.74 4.11 3

4 725.63 80.63 60.74 11.95 9

5 150.12 75.06 60.74 2.47 2

Total 7,749.34 415.44 60.74 127.58 88

49

Date : Operation Sequence

From: Receive order to plan and assign work To: Finished Goods

Seal Packaging Bag

CO.63s)

Insert Plastic Spoon into Packaging Bag

89.58s

Re-allocation of work and re-balancing will be shown in the standard work layout and

operator balance chart again. The standard work layout will be shown in Figure 4.5,

and the operator balance chart (after reallocation and rebalancing) will be shown in Figure 4.6.

Figure 4.5: Standard work layout

Standard Work Layout

Check Quality

Safety First Cycle Time (each operation)

No. of WIP (box)

Takt Time Cycle Time

No. of Operator

• 1 60.74 415.44 88

(1) +

50

Figure 4.6: Operator balance chart (reallocate and rebalance)

Total Cycle Time = 415.44s

110

100

90 --

86.92s 89.58s 83.25s

80.63s

Takt 60.74s

75.06s 80 —

70 ---

60 —

50 —

40 —

30 —

20 —

10 —

1 2 3 4 5 Operation

(2) (72) (3) (9) (2)

No. of Operators Available

51

4.3.4 Updated Calculations

Line Balance Efficiency = Total Cycle Time

Number of Stations * Longest Operation

415.44secs * 100

(5 * 89.58secs)

= 92.75%

Future State

Operation 5

Takt 60.74secs

Cycle Time 415.44 secs

Line Balance 92.75% Efficiency

After reallocating work and rebalancing, the researcher sees that the operation process

still has more difference between the target manpower and manpower available,

especially the operation process of "Insert plastic spoon into packaging bag" (Op. 2),

and this process uses more cycle time. Most of the workers are in this process, which

has a big effect on the labor cost.

4.4 Improve Production Efficiency by using Time and Motion Technique

The researcher improves operation 2 (Insert Plastic Spoon into Packaging Bag) again

by using a time and motion technique. A time and motion technique will be used in

this operation to help to reduce cycle time and work process. This technique will be

used to enhance the efficiency and productivity of the production line. The main

problem involves the slow rate of production. As the layout of the production line

does not allow workers to move easily, workers readily felt tired, causing them to

work more slowly. And the workers have difference in work line balance (unequal

work).

The motion of the work element in the process of "Insert plastic spoon into packaging

bag" is studied and improved in the previous part by reducing the operation waste.

Then, the next step, the time study, will be taken to find the working time and the

performance of the worker.

52

4.4.1 Time study of production process

For average time study, the researcher studies only the process of `Insert plastic spoon

into packaging bag" because this process has more problems and effect than other

operations, especially concerning labor. The researcher reckons the time of the

operators working, about 30 persons (10 times per each person). The average time of

operators is shown in Appendix G.

4.4.1.1 Standard, Normal, and Allowance time calculation

Standard time calculation starts from normal time calculation, rating factor, and

selected time. The rating factor comprises skill (considered from the skill of the

operator working), effort (considered from the operator's working effort to success),

condition (considered from the operator's working condition that affects the speed of

working or not), consistency (considered from the operator's working consistency

between reckoned time).

The assessment of the rating factor of operators in this process is specified by the head

worker and the production manager. Normal time calculation of the process of "Insert

plastic spoon into packaging bag" and the assessment the rating factor of operator in

this process are given a mark as below:

Skill: Good = C2 +0.03

Effort: Average = D 0.00

Conditions: Fair = E -0.03

Consistency: Average = D 0.00

Total = 0.00

The rate of 0.00 will be taken to unite with 1 because the rating is calculated from the

base 100, thus the working efficiency is 100 or 1%.

Then,

Normal Time = 51.60 * 1.00 = 51.60 second (per 24 units)

53

After the normal time is calculated, the next process is standard time calculation by

using allowance time. The allowance time in this research is specified by the head

worker and production manager. The allowance time is specified as 'minute per shift'

as below:

Personal Allowance = 24 minutes (1,440 second)

Fatigue Allowance = 19 minutes (1,140 second)

Delay Allowance = 5 minutes (300 second)

Total Allowances = 48 minutes (2,880 seconds) per day or 10% of all operation time

Standard time calculation

Normal time = 51.60 seconds (per 24 units)

Allowance time 10 %

Standard Time = Normal Time + A* (NT)

=NT*(1 +A)

= 51.60 * (1 + 0.1)

= 56.76 seconds (per 24 units)

The standard time, normal time, and allowance time of all 30 operators in the process

"Insert plastic spoon into packaging bag", is shown in Table 4.8.

Table 4.8: The time (before improvement) (seconds/24 units)

Normal Time (NT) Allowance Time (A) Standard Time (STD)

51.60 0.1 56.76

The normal time is 51.60 seconds. The researcher takes this time to calculate the

number of hours that the operators must work to support the demand fluctuation in

each month (shown in Table 4.9).

54

Table 4.9: Work Hours (calculate from normal time)

Month/Year Customer Demand

(box)

Work Hours

(hours/day)

January 12,024 11.51

February 11,677 12.11

March 10,544 10.09

April 12,099 13.09

May 12,643 13.11

June 11,480 11.43

July 13,398 12.82

August 12,597 12.54

September 12,386 11.85

October 10,605 10.15

November 9,729 9.68

December 13,533 13.47

Total 142,715 141.85

The average work hours is 141.85 / 12 = 11.82 hours (42,552 seconds) per day

The researcher then takes these work hours per day in each month to calculate the

regular time cost and the overtime cost. The regular time in each day is 8 hours and

the overtime in each day is about 2-5 hours (according to the customer demand

fluctuation). The wage rate of labor is 25.75 baht per hour. The overtime rate is 1.5

times the normal rate (25.75), so the overtime rate is equal to 38.63 baht per hour.

The regular time cost and the overtime cost of this process are shown in Table 4.10.

55

Table 4.10: Labor cost (baht) (after reallocate and rebalance)

Month/Year Regular time cost (baht) Overtime cost (baht)

January 385,632 289,224

February 355,968 300,344

March 385,632 180,760

April 341,136 351,801

May 355,968 367,096

June 370,800 243,342

July 385,632 361,530

August 370,800 347,625

September 385,632 289,224

October 385,632 180,760

November 370,800 139,050

December 370,800 382,392

Total 4,464,432 3,433,148

4.4.2 Production Performance Calculation

The researcher calculates the production performance, as shown below:

From the calculation of average work hours (11.82 hours or 42,552 seconds) per day,

the standard time (56.76 seconds per 24 units), and the allowance time (10%) then,

Total standard minutes earned = 17,992.39 ( 24 * 42,552 )

56.76

Total lost minutes = 1,799.24 ( 24 * 4,255.20 )

56.76

Total = 19,791.63

Average hours worked = 11.82 hours or 42,552 seconds

1. The "pay performance"

Total standard minutes paid for = 19,791.63

Total hours worked 11.82

1,674.42

56

This figure gives us the number of standard minutes per hour for which the

department is paid.

2. The true performance

Total number of standard minutes produced on good work

Total number of hours worked

= 17,992.39 = 1,522.20

11.82

Let us examine these figures for a moment. The department is paid at the rate of

1,674.42 units per hour and produces only 1,522.20 units per hour of good work.

There are 152.22 minutes per hour of time available, which if it could be put to

productive effort instead of being lost for one reason or another, would represent an

available increase in productivity of 152.22 *100 = 10% approximately.

1,522.20

4.5 Improve Production Performance by applying a Wage Incentive Scheme

The researcher applies an incentive scheme to motivate the operator towards more

productive effort, and this scheme creates the average incentive pace.

Nowadays, the wage system of this operation is an hourly wage which is separated

into two rates (Regular rate 25.75 baht per hour, Overtime rate 1.5 times the regular

rate (38.63 baht per hour)). The overtime hours in each month are about 2-5 hours

which depends on the customer demand fluctuation. The regular and overtime cost in

each month are shown in Table 4.10 in the previous page. For the incentive scheme

application, the wage will be paid in accordance with the productivity (wage per box).

The wage rate per box is equal to 56 baht per box. Then, the labor cost and the work

time will be changed. The researcher expects that the work time will be reduced from

the normal time by about 10 percent approximately.

The normal time of 51.60 seconds per 24 units will be reduced to 46.44 seconds per

24 units (or 5,805 seconds per 3000 units (per box)). When, the work time is about

5,805 seconds per 3,000 units (per box), the work hours in each month is in

accordance with customer demand fluctuation, and will be changed as below:

57

Table 4.11: Work hours (before and after improvement)

Month/Year Work Hours (hours/day)

(Before Improvement)

Work Hours (hours/day)

(After Improvement)

January 11.51 10.36

February 12.11 10.90

March 10.09 9.08

April 13.09 11.78

May 13.11 11.80

June 11.43 10.28

July 12.82 11.54

August 12.54 11.29

September 11.85 10.67

October 10.15 9.14

November 9.68 8.72

December 13.47 12.12

Total 141.85 127.68

The total work hours (after improvement) are 127.68. The average work hours (per

day) are 127.68/12 =10.64 hours per day. The average work hours (per day) reduces

by about 10 percent.

The researcher calculates the production performance to be as shown below:

From the calculation of average work hours (10.64 hours or 38,304 seconds) per day,

the standard time (51.08 seconds per 24 units), and the allowance time (10%) then,

Total standard minutes earned = 17,997.18 (24 * 38,304)

51.08

Total lost minutes = 1,799.72 (24 * 3,830.40)

51.08

Total = 19,796.90

58

Average hours worked = 10.64 hours or 38,304 seconds

1. The "pay performance"

Total standard minutes paid for = 19,796.90

Total hours worked 10.64

= 1,860.61

This figure gives us the number of standard minutes per hour for which the

department is paid.

2. The true performance

Total number of standard minutes produced on good work

Total number of hours worked

= 19,796.90 = 1,860.61

10.64

Let us examine these figures for a moment. The department is paid at the rate of

1,860.61 units per hour and produces 1,860.61 units per hour of good work. When

the productive effort could be put to good use instead of being lost for one reason or

another, the pay performance will equal to the true performance.

The researcher calculates the wage rate per box from the labor cost calculation of

normal method (before and after improvement). The wage rate per box (before

improvement) is 55.50 baht and the wage rate per box (after improvement) is 48.50

baht. The researcher interviewed the production manager and the head worker of the

Packing Section about the new wage rate (wage per box). The new wage rate is

specified by the head worker and production manager as 1 percent of the wage rate

calculation of the normal method (hourly wage) (before improvement). Therefore, the

new wage is 56 baht per box.

From the new wage rate of 56 baht per box then, the new labor cost (before and after

improvement of the normal method) (hourly wage) and the new labor cost (after

improvement of the new method) (wage per box) in each month is in accordance with

the customer demand, as shown in Table 4.12.

59

Table 4.12: The Labor cost (before and after improvement)

Month/Year Customer

Demand

(box)

Labor Cost

(baht)

(Before

Improvement)

(Normal

Method)

Labor Cost

(baht)

(After

Improvement)

(Normal

Method)

Labor Cost

(baht)

(After

Improvement)

(New Method)

January 12,024 674,856 566,397 673,344

February 11,677 656,312 556,200 653,912

March 10,544 566,392 494,091 590,464

April 12,099 692,937 596,988 677,544

May 12,643 723,064 622,944 708,008

June 11,480 614,142 544,613 642,880

July 13,398 747,162 674,856 750,288

August 12,597 718,425 614,138 705,432

September 12,386 674,856 602,550 693,616

October 10,605 566,392 494,091 593,880

November 9,729 509,850 440,325 544,824

December 13,533 753,192 683,663 757,848

Total 142,715 7,897,580 6,890,856 7,992,040

The changed result after applying the wage incentive scheme is:

The average work hours will be reduced by about 10 percent

(from 11.82 to be 10.64 hours per day); the operator's work time

will be reduced from 6,450 seconds to be 5,805 seconds per box

(3,000 units). When there is quality in production time, the

Utilities Expense of the Packing Section will be reduced by about

5.26 percent (from 782,720 per year to be 704,581 per year)

(reduced about 78,139 baht per year). The work which was

stressful and hurried lives, with workers then likely to suffer from

anxiety, depression, and other abnormalities of mental health,

will be reduced. The environment benefits (such as less need for

60

convenience products (e.g.. fast food), time to make other

behavioral choices, etc.) will be increased.

- The pay performance will be equal to the true performance (The

department will be paid at the rate of 1,860.61 units per hour and

produces 1,860.61 units per hour of good work.).

- When the work hours reduce by about 10 percent, the total labor

cost (normal method calculation) will be reduced by about 12.75

percent (from 7,897,580 to be 6,890,856). But the company must

use the new calculation method (wage per box) because this

method is used to motivate the operator's work and effort to be

more productive. Thus, the total labor cost (new method) (wage

per box) will be increased by only 1.20 percent (from 7,897,580

to be 7,992,040 baht) (an increase of 94,460 baht per year).

Although the total labor cost (after improvement) will be increased by about 1.20

percent, it is worthwhile because of the quality in production time and performance

improvement of the operator.

The researcher calculates and compares the normal (hourly wage) and the new

method (wage per box) of labor cost calculation, if the customer demand increases by

10 percent. The calculation is shown in Table 4.13.

61

Table 4.13: Customer demand, Work hours, Labor cost (normal and new method)

Month/Year Customer

Demand

(box)

Work

Hours

(hours/day)

Labor Cost

(baht)

(normal method)

Labor Cost

(baht)

(new method)

January 13,226 12.66 747,162 740,656

February 12,845 13.32 723,060 719,320

March 11,598 11.10 638,703 649,488

April 13,309 14.40 756,896 745,304

May 13,907 14.42 789,804 778,792

June 12,628 12.57 718,425 707,168

July 14,738 14.11 855,621 825,328

August 13,857 13.79 787,950 775,992

September 13,625 13.04 783,315 763,000

October 11,666 11.17 638,703 653,296

November 10,702 10.65 579,375 599,312

December 14,886 14.82 857,475 833,616

Total 164,125 156.05 8,876,489 8,791,272

From the calculation, the labor cost (new method) is less than the labor cost (normal

method) by 85,217 baht (0.96 percent). Thus, the new method of labor cost

calculation can help to reduce the labor cost if the business expands in the future.

62

CHAPTER V

SUMMARY FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

5.1 Conclusions

Nowadays, there is high competition and rapidly changing customer demand, which

affects the plastic spoon industry. Therefore the company tries to develop its

competition potentiality. The company faces many problems (such as high

production cost (Raw Material and Labor Cost), production line imbalance, labor

which uses more or less time than production time schedules, overtime, defects, late

delivery, and safety stock). Most of problems happen in the packing section because

this section is labor intensive. These problems create many wastes. Therefore, the

company is looking for improvement opportunities to balance the production line, so

as to improve production efficiency and performance.

Takt Time can be applied to do line balancing in the packing Section. This technique

is about standardizing the production cycle times. Producing to Takt time is about

making the production rate accord with the selling rate. This paper applies the Takt

time technique to identify the rate of production which the company must produce so

as to be in accordance with customer demand. To improve the operation of the

production line is the objective of the packing Section, therefore the company wants

to balance the production line to enhance its efficiency and productivity.

From the comparison between cycle time against Takt time and specifying target

manpower, in Table 4.4, the target and available manpower is equal because this

Table is calculated from total available working regular time and overtime. But For

Table 4.5, the target manpower is more than the manpower available in every month

in 2008 because this Table is calculated from available working regular time. This

year had overtime in each month which has a big effect on the company's labor cost

The researcher tried to reduce or avoid this overtime cost, and tried to improve the

63

production process to create quality in production time, performance, and productivity

which affects the company's production cost.

After the production line was rebalanced and reallocated, the researcher saw that the

operation process still had more difference between the target manpower and

manpower available, especially the operation process of 'insert plastic spoon into

packaging bag' (Op. 2). This process also uses more cycle time. Most of the labor is

involved in this process which therefore has a big effect on the labor cost. The

researcher improved this operation again by using the time and motion technique

The time and motion technique was used in the process of "Insert Plastic Spoon into

Packaging Bag" to help to reduce cycle time and work process. And this technique

was used to enhance the efficiency and productivity of the production line. The main

problems were involved with the slow rate of production. As the layout of the

production line does not allow workers to move easily, workers readily felt tired,

causing them to work more slowly. Also, the workers had differences in work line

balance (work is unequal).

The motion of work elements in this operation process (Insert plastic spoon into

packaging bag) was studied and improved in the process of eliminating waste by

reducing the operation waste of the packing section. The next step, the time study,

was taken to find the working time and performance of the worker.

From the calculation of average work hours (11.82 hours or 42,552 seconds) per day,

the standard time (56.76 seconds per 24 units), and the allowance time (10%) then,

the department is paid at the rate of 1,674.42 units per hour and produces only

1,522.20 units per hour of good work. There are 152.22 minutes per hour of time

available, which if it could be put to productive effort, instead of being lost for one

reason or another, would represent an available increase in productivity of

152.22 *100 = 10% approximately.

1,522.20

64

The researcher applied an incentive scheme to motivate the operator towards more

productive effort, and this scheme creates the average incentive pace. In the incentive

scheme application, the wage will be paid in accordance with the productivity (wage

per box). The wage rate per box is equal to 56 baht per box. Then, the labor cost and

the work time will be changed. The researcher expects that the work time will be

reduced from the normal time by about 10% approximately.

Although the total labor cost (after improvement) increases by about 1.2%, it is

worthwhile because of the quality in production time which reduces the Utilities

Expense of the packing section by about 5.26 percent, and reduces the stressful labor

and hurried lives, and creates environment benefits, along with performance

improvement of the operator.

The researcher calculated and compared the normal and new methodd of labor cost

calculation, if the customer demand increases by 10 percent. The result is that the

labor cost decreases by about 85,217 or 0.96 percent (from 8,876,489 to be 8,791,272

baht). Thus, the new method of labor cost calculation can help to reduce the labor

cost if the business expands in the future.

It was proposed that Takt time and line balancing would improve the productivity and

quality of the packing production line. Reallocation and traditional cases were studied

and it was illustrated that the results from the reallocation case are superior. It is

concluded that these systems generally improve the quality and productivity in the

packing section of this manufacturer of plastic spoons. In this paper, the causal links

between these systems (Takt time and line balancing) and improved performance, are

explained. Also, this research studies the time and motion technique which can

reduce and control costs, improve working conditions and the environment, and

motivate people. Motion study seeks to minimize and simplify manual efforts. A

time study attempts to find out the amount of work that a qualified operator, properly

trained, can do in a given time. The operator must do the work in accordance with a

certain method, under certain conditions, and at a certain pace, and a certain physical

reaction will be produced. A wage incentive can motivate the operator's working

efforts, which can then improve the quality of the production time and production

65

performance. Also, this wage incentive can help to reduce the labor cost if the

business expands in the future.

5.2 Limitations

The result of this study is greater effectiveness for a plastic spoon manufacturer which

had a problem of line balance and operation performance. However, there are some

limitations to this research:

- This study only concerns the packing section of plastic spoon

manufacturer. There may be other considerations and factors in

other sections which would affect the operation of the production

line.

- This case study used historical data from 2008 only. Therefore,

the simulation result could change from the example in this

paper, and could affect the production time, performance, and

productivity.

5.3 Recommendations

5.3.1 The operators working capacity data should be kept and added to the database

for other work.

5.3.2 In the production line of the packing section, there are more variables because

this section involves manpower capacity. The line balance controlling and checking

should receive attention to improve and balance the production line.

5.3.3 The working time should always be checked and compared with the standard

time. If there are problems, these problems should be considered and corrected.

In conclusion, it is necessary to develop the company to be more efficient in

manufacturing in order to reduce cost and expand its market, and it may be interested

to test the proposed method.

66

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69

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d re

ceiv

e, c

heck

sto

ck a

nd p

lan

- Con

firm

to I

njec

tion,

Pac

kagi

ng b

ag s

tore

, and

Pro

duct

ion

plan

ning

depa

rtm

ent

- Iss

ue

3 R

M r

equi

sitio

n do

cum

ent

- Hea

d pl

an a

nd is

sue

job

allo

catio

n sc

hedu

le

-

Lab

or w

alk

to tw

o st

ores

- Wai

t Hea

d of

two

stor

es c

heck

and

sig

n to

app

rove

- L

ift R

M

- Tak

e RM

to e

ach

wor

ker

- Lif

t RM

and

Hea

d as

sign

wor

k

Inse

rt P

last

ic s

poon

into

Pac

kagi

ng b

ag

-

Lab

or w

alk

to li

ft F

R

-

Lif

t FR

to Q

C

-

QC

che

ck q

ualit

y an

d is

sue

qual

ity a

ppro

val d

ocum

ent

- Lab

or w

alk

to li

ft F

R to

nex

t pro

cess

- Lif

t FR

Seal

Pac

kagi

ng B

ag

- Lab

or w

alk

to li

ft FG

- L

ift F

G to

QC

- QC

che

ck q

ualit

y an

d is

sue

qual

ity a

ppro

val d

ocum

ent

-

Lab

or w

alk

to ta

ke F

G to

Pac

king

Sec

tion

Sto

re

-

Lif

t FG

Tot

al

11. V

,-, CNII Cn 71- If)

- The

nec

essa

ry to

ol a

nd e

quip

men

t wil

l be

laid

dow

n ne

ar a

nd in

fro

nt o

f th

e w

orke

r to

eas

y in

stre

tchin

g o

ut

the

han

d. A

nd t

he

table

, ch

air,

and e

quip

men

t hei

ght

level

wil

l be

kep

t in

acco

rdan

ce w

ith th

e w

orke

r he

ight

.

- The

layo

ut w

ill b

e ch

ange

d to

red

uce

the

dist

ance

.

- The

cus

hion

sea

t wil

l be

take

n to

cre

ate

the

com

fort

able

to th

e w

orke

r.

- The

sta

inle

ss w

ill b

e sl

oped

and

it w

ill b

e ta

ken

to th

e m

iddl

e of

tabl

e. W

hen

the

plas

tic

spoo

n

is p

oure

d of

f to

the

stai

nles

s sl

ope,

the

plas

tic

spoo

n w

ill f

low

to th

e w

orke

r ea

sily

. The

n, th

e

arm

mov

emen

t will

be

redu

ced.

- The

ret

enti

on p

oint

of

the

plas

tic

spoo

n ra

ck b

esid

e th

e w

orke

r w

ill b

e el

imin

ated

by

usin

g pu

ll

prod

uctio

n.

- The

layo

ut w

ill b

e ch

ange

d to

red

uce

the

dist

ance

.

- The

cus

hion

sea

t wil

l be

take

n to

cre

ate

the

com

fort

able

to th

e w

orke

r.

- The

am

ount

of

fini

shed

rac

k in

the

left

han

d si

de o

f th

e w

orke

r w

ill b

e re

duce

d. T

he p

alle

t wil

l

be la

id d

own

in th

e le

ft h

and

side

of

the

wor

ker

and

the

fini

shed

rac

k w

ill b

e la

id d

own

abou

t 4

rack

s to

red

uce

the

over

lie

of th

e fi

nish

ed r

ack

whi

ch c

an h

elp

to r

educ

e th

e li

ftin

g ti

me

for

thes

e

rack

s. T

he p

alle

t can

hel

p to

trea

t cle

anin

g. F

or th

e ri

ght h

and

side

of

the

wor

ker,

the

pall

et w

ill

be ta

ken

to la

y do

wn

the

fini

shed

box

too.

- The

ele

ctri

c fa

n w

ill b

e in

stal

led

for

each

wor

ker.

All

win

dow

s w

ill b

e op

ened

to r

elie

ve th

e

heat

and

cre

ate

the

com

fort

able

to th

e w

orke

r.

- The

layo

ut w

ill b

e ch

ange

d to

red

uce

the

dist

ance

.

Bef

ore

- The

re a

re n

ot s

tand

ardi

zati

on i

n la

ying

dow

n th

e to

ol a

nd e

quip

men

t (s

uch

as

Com

pute

r, T

elep

hone

, Pri

nter

, etc

). T

hen,

the

wor

ker

mus

t us

e m

ore

mov

emen

t in

wor

king

.

- The

re a

re m

ore

in T

orso

and

leg

mov

emen

t to

take

the

raw

mat

eria

ls a

nd e

quip

men

t

to w

orke

r th

an n

eces

sary

.

- Cha

ir d

oesn

't ha

ve th

e st

anda

rd.

- The

re a

re m

ore

in a

rm m

ovem

ent t

han

nece

ssar

y be

caus

e th

e w

orke

r m

ust s

tret

ch

out t

he h

and

to p

ick

up th

e ra

w m

ater

ials

.

- The

raw

mat

eria

ls a

re t

aken

to

proc

ess

mor

e th

an n

eces

sary

tha

t cr

eate

bot

her

in

wor

k sp

ace.

- The

re a

re m

ore

leg

and

tors

o m

ovem

ent t

o li

ft th

e fi

nish

ed r

ack

to Q

C a

nd li

ft to

the

next

pro

cess

than

nec

essa

ry.

- The

cha

ir d

oesn

't ha

ve th

e st

anda

rd.

- The

re a

re m

ore

in a

rm m

ovem

ent t

han

nece

ssar

y be

caus

e th

e w

orke

r m

ust s

tret

ch

out t

he h

and

to p

ick

up th

e ra

w m

ater

ials

. The

raw

mat

eria

ls a

re ta

ken

to p

roce

ss m

ore

than

nec

essa

ry th

at c

reat

e bo

ther

in w

ork

spac

e.

- The

wor

king

sur

roun

ding

s do

n't s

till

hav

e th

e co

mfo

rtab

le b

ecau

se th

e se

al m

achi

ne

has

the

heat

all

the

tim

e. B

ut s

omet

imes

, thi

s se

ctio

n do

es n

ot o

pen

the

win

dow

to

reli

eve

the

heat

. And

ther

e ar

e le

ss th

e el

ectr

ic f

an th

an n

eces

sary

.

- The

re a

re m

ore

leg

and

tors

o m

ovem

ent

to l

ift

the

fini

shed

box

to

QC

and

lif

t to

Pack

ing

stor

e th

an n

eces

sary

.

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