Chapter 3

1. Chapter 3 Time Study

2. Objectives • After reading the chapter and reviewing the materials presented the students will be able to: • Understand the concepts of time study and time standards. • Identify various techniques of establishing time standards. • Identify steps in performing a stopwatch time study.

3. Time Standards • A time standard is defined as the time required to produce a product at a workstation with the following three conditions: (1) a qualified, well trained operator, (2) working at a normal pace, and (3) doing a specific task. • Experience is usually what makes a qualified well trained operator, and time on the job is the best indicator of experience. • Normal pace is the pace at which a trained operator, under normal conditions performs a task with a normal level of effort. • A specific task is a detailed description of what must be accomplished.

4. The Importance and Uses of Time Study • An operation that is not working toward time standards typically works 60 % of the time. • Those working with time standards work at 85% of normal performance. • Industrial plants on incentive pay plans have an average performance of 120%.

5. How many machines do we need? • The answer depends on two questions: • 1. How many pieces need to be manufactured per shift? • 2. How much time does it take to make one part (time standard)? • If the time standard is .400 minute per unit, and the plant rate is .161 minute per unit (see pages 55, 56) then you need .400/.161 = 2.48 machines = 3 machines (always round up).

6. How many people should we hire? • See the operations chart in figure 3-3, page 57. • In the operation of casting the handle, the 05 indicates the operation number (first operation of each part), the 500 is the pieces per hour standard, and the 2.0 is the hours required to produce a 1,000 pieces. • At 500 pieces per hour it would take 2 hours to make 1,000 pieces. • If the efficiency is 75 % then we need 2 hours per 1,000 pieces / 75% = 2.67 hours for 1,000 pieces. • # of hours / 8 hours per employee = # of employees needed.

7. How much will our product cost? • Product costs may include the following: • Manufacturing costs (50%): Direct labor (8%), direct materials (25%), overhead (17%). • Front end costs (50%): Sales and distribution costs (15%), advertising (5%), administrative overhead (20%), engineering (3%), profit (7%). • Direct labor cost is the most difficult component of product cost to estimate. • Time standards must be set prior to any equipment purchase or material availability. Time standards are set using predetermined time standards or standard data from blueprints and workstation sketches. • Material cost is estimated by calling vendors for a bid price. • Overhead costs are all expenses of running a factory, except direct labor and direct material.

8. How much work can we handle with the equipment and people we have? • One scheduling philosophy is that operating departments are compared to buckets of time. • The size of the bucket is the number of hours that each department can produce in a 24 hour day (see example on page 61). • Inventory is a huge cost in manufacturing, so knowledge of time standards will reduce inventory requirements, which will reduce cost.

9. How do we balance the work cells? • The objective of assembly line balancing is to give each operator as close to the same amount of work as possible. • If a person has extra time, he could be given some work from a busier workstation. • There will always be a workstation or cell that has more work than others. This station is defined as the 100 % loaded station, or bottleneck station, and will limit the output of the whole plant. • If you have 200 people on an assembly line and only one 100% station, you can save the equivalent of 2 people by reducing the 100% station by just 1 %. You can use this multiplier to help justify spending large sums of money to make small changes.

10. How do we measure productivity? • Productivity is measured as output divided by input. • For example: • output = 1,000 units per day / Input = 50 people @ 8 hours per day • = 1000 / 400 = 2.5 units per work hour. • A performance control system will improve performance by an average of 42 percent over performance with no control system. • Companies without performance control system typically operate at 60 % of standard. Companies with performance control system typically operate at 85 % of standard. • Productivity improvement is accomplished by: 1. Identifying non productive time and eliminating it. 2. Identifying poorly maintained equipment and fixing it. 3. Identifying causes for downtime and eliminating them. 4. planning ahead for the next job.

11. How Can We Pay Our People for Outstanding Performance? • Every supervisor knows whom to count on to get the job done. • Stage 1: Plants with no standards operate at 60% performance. • Stage 2: Plants with standards and performance control systems operate at 85% performance. • Stage 3: Plants with incentive systems operate at 120 % performance. • A National Science Foundation study found that when workers pay was tied to their efforts, productivity improved, cost was reduced, workers pay increased, and workers morale improved.

12. How Can We Select the Best Method or Evaluate Cost Reduction Ideas? • A basic rule of production management is , “All expenses must be cost justified.” • A basic rule of life is, “Everything changes.” • Planners must keep improving or become obsolete. • The return on investment (ROI) is the amount of return divided by the investment. • See example on pages 64 and 65.

13. How do we Develop a Personnel Budget • Budgeting is one of the most important management tools. • Budgeting is a part of the cost estimating process. • Labor is only one part of the budget, but is one of the most difficult to estimate and control. • Without time standards it would be a very expensive guess.

14. Techniques of Time Study • Predetermined time standard system (PTSS) methods of time measurement (MTM) must be used if you are building a new plant. • Once a machine or workstation has been operational for a while, the stopwatch technique is used. • Other methods are work sampling, standard data, and expert opinion standard and historical data.

15. Predetermined Time Standards System • The technologist would design a workstation for each step of the new product manufacturing plan, develop a motion pattern, measure each motion and assign a time value. • The total of these time values would be the time standard. • This time standard would be used to determine the equipment, space, and people needs of the new product and its selling price.

16. Stopwatch Time Study • Stopwatch time study is the method that most manufacturing employees think of when talking about time standards. • Time study is defined as the process of determining the time required by a skilled, well-trained operator working at a normal pace doing a specific task. • Digital watches and computers are much more accurate and many have memory functions that improve recording data.

17. Time Study Procedure & Step by Step Form • The time study procedure has been reduced to 10 steps (fig 3-7, page 72): • 1. Select the job to study: Requests for time study can come from many directions – unions, supervisors, new jobs, new products, new machinery, and job changes. The person to be time studied should be a qualified, well trained operator. • 2. Collect the information about the job: Operation description, & drawing blueprint (parts description & material specification). • 3. Divide the job into elements: Time study elements should be as small as possible. • 4. Do the actual time study: Step-by-step recording of time for each element. Continuous reading (R) or elemental (E) where watch is reset after each reading. • 5. Extend the time study: For continuous time study subtract the beginning time from end time to give elemental time. • 6. Determine the number of cycles to be timed: As a rule of thumb, 20 to 25 observations should provide sufficient accuracy. • 7. Rate, level, and normalize the operator’s performance: Technologist’s opinion of operator performance. • 8. Apply allowances: Allowances make the time standard practical. • 9. Check for logic: Check normal time for one unit, and see if it is practical. • 10. Publish the time standard: Placed on operations sheet, production route sheet, or computer to communicate time standard to everyone.

18. Rating, Leveling, and Normalizing • Rating the operator includes 4 factors: skill, consistency, working conditions, and effort (which is most important). • Time study only people that are skilled. If an operator shows lack of skill, the technologist should find someone else to time study. • Operators are consistent when they run the elements of the job in the same time. • If the employees are asked to work in hot, cold, dusty, dirty, noisy environments, their performance will suffer. • Effort is measured based on the normal operator working at 100 percent – defined as walking 3 miles per hour.

19. Allowances • Allowances are extra time added to normal time to make the time standard practical and attainable. • Allowances fall into 3 categories: personal, fatigue, and delay. • Personal allowance is the time that is allowed for personal activities such as: talking to friends, going to the bathroom, getting a drink, or any other operator controlled reason for not working. An appropriate amount of time has been defined as about 5% of the workday or 24 minutes per day. • Fatigue allowance time is given to employees in the form of work breaks (coffee breaks). A 5% fatigue allowance is given for every 10 pound increase in exertion required of the employee. If an employee has to pick up a 50 pound part, fatigue allowance is 5 x 5 = 25% allowance. • Delay allowance are unavoidable because they are out of the operator’s control. • Personal, fatigue and delay allowances are added together, and the total allowance is added to the normal time. Normal time + allowance = standard time.

20. Methods of Applying Allowances • Method 1: 18.5 hours per 1000 • This method is based on a constant allowance of 10 percent. • Method 2: Constant Allowance added to Total Normal Time • This method is used in this text and is the most common used in industry. An explanation of what makes up the allowance must be included (page 87). • Method 3: Elemental Allowances Technique • The theory behind this technique is that each element of a job can have different allowances (page 88). • Method 4: The PF&D Elemental Allowance Technique • The personal fatigue and delay (PD&F) method shows exactly how the allowance was developed (page 88). It is very descriptive, but the cost is too high for most companies.

21. Work Sampling • Work sampling is the same scientific process used in Nielsen ratings, Gallup polls, attitude surveys, and federal unemployment statistics. • You could walk through a plant of 250 people one time and count people who are working and those who are not working and calculate the performance of that plant within +/- 10%. • Consultants expect 60% performance in plants without standards and 70 to 75% in plants with better management. • Ten percent extra time for personal time, fatigue, and delay is considered normal.

22. Standard Data • Machines like welders have simple formulas, such as 12 inches per minute. • The machine manufacturers are a good source of standard data. • Metal cutting machines are examples of the need for and use of formulas. Feeds and speeds can be looked up in the Machinery Handbook and substitute the information into 3 simple formulas to determine the time standard.

23. Expert Opinion Time Standards and Historical Data • An expert opinion time standard is an estimation of the time required to do a specific job. • This estimate is made by a person with a great experience base. • In well managed companies new maintenance projects will not be approved until the job is estimated. • A bad standard is better than no standard at all.

24. Time Standards for Manufacturing Facilities Design • Time standards are used for 5 main purposes in facilities design: • 1. Determining the number of workstations and machines. • 2. Determining the number of people. • 3. Determining conveyor line speeds. • 4. Balancing assembly and pack out lines. • 5. Loading work cells.

25. Summary • A time standard is defined as the time required to produce a product at a workstation with the following three conditions: (1) a qualified, well trained operator, (2) working at a normal pace, and (3) doing a specific task. • How many machines do we need? The answer depends on two questions: 1. How many pieces need to be manufactured per shift? 2. How much time does it take to make one part (time standard)? • How many people should we hire? At 500 pieces per hour it would take 2 hours to make 1,000 pieces. If the efficiency is 75 % then we need 2 hours per 1,000 pieces / 75% = 2.67 hours for 1,000 pieces. # of hours / 8 hours per employee = # of employees needed. • Product costs may include the following: Manufacturing costs (50%): Direct labor (8%), direct materials (25%), overhead (17%). Front end costs (50%): Sales and distribution costs (15%), advertising (5%), administrative overhead (20%), engineering (3%), profit (7%). • Inventory is a huge cost in manufacturing, so knowledge of time standards will reduce inventory requirements, which will reduce cost. • There will always be a workstation or cell that has more work than others. This station is defined as the 100 % loaded station, or bottleneck station, and will limit the output of the whole plant. • Productivity is measured as output divided by input. For example: output = 1,000 units per day / Input = 50 people @ 8 hours per day = 1000 / 400 = 2.5 units per work hour. • Productivity improvement is accomplished by: 1. Identifying non productive time and eliminating it. 2. Identifying poorly maintained equipment and fixing it. 3. Identifying causes for downtime and eliminating them. 4. planning ahead for the next job. • A National Science Foundation study found that when workers pay was tied to their efforts, productivity improved, cost was reduced, workers pay increased, and workers morale improved. • A basic rule of production management is , “All expenses must be cost justified.” • Budgeting is one of the most important management tools. • Rating the operator includes 4 factors: skill, consistency, working conditions, and effort (which is most important). • Allowances fall into 3 categories: personal, fatigue, and delay.

26. Home Work • Define time standard. • What is a basic rule of production management? • What are the 4 skill factors in rating the operator? • What are the 3 categories of allowances?