Case Analysis – “Don’t bother me, I can’t cope”

Operations Management

Summary and context of the case

The case deals with developing a plan to meet a new order received by a small assembly shop. The order
requires increasing the capacity of both the sub-assemblies: Line A and Line B.

Line A: The capacity of this line has to be increased from 315units/day to 420 units/per day. It employs 7
workers. The regular wage per worker is Rs.18/hour and the overtime wage is Rs.30/hour. The assembly
consists of 16 different tasks with a defined precedence relationship. Overtime doesn’t lead to any
rejection rate. Sane, the supervisor of Line A has demanded 2 more workers to meet the 33% increase in
production requirement.

Line B: The new order requires the production capacity of this line to increase to 210 units/day. It
employs 2 workers. Overtime on this line leads to a rejection rate of 1% due to fatigue. The cost of unit
rejected is Rs.420. Uma, the supervisor of Line B has also 2 more workers to meet the increased
demand.

The shop operates 8 hours a day. However, this includes 4 rest periods of 15 minutes each. An overtime
of 2 hours is possible on both the lines.

The issue in meeting the increased demand is that both the supervisors have asked for 2 additional
workers whereas Shantha, the owner has specified that it would not be possible to hire more than 3
workers on a short notice. Also the cost of training workers is quite high i.e. Rs.6,000.

It is also not very clear as to why 100% increase in workers is needed to produce 50% more on Line B,
whereas only 30% increase in workforce is being demanded for an increase of 33% workload on Line – A.

The analysis below deals with process flow diagram and assembly balancing to find out if the supervisors
are justified in making their demands for additional workers.

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Assembly Layout/Flow Diagram

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3
Problems raised and changes/modifications required to resolve the
problems.
Shanta can recruit only 3 workers but each assembly line demanded two additional workers i.e. 4 in
total. But due to limited budget constraints we can recruit only 3 workers and assume additional
overtime. We need to decide which sub assembly actually requires two additional workers. Here, we
are analyzing the possibility of additional workers in both the sub assemblies and the one in which the
labor cost is minimum is the most feasible.

Analysis
Line A Existing Production 315 Units/Day

Activity Activity Time (Sec) Immediate Predecessor

1 30 None
2 50 None
3 40 1
4 50 1
5 20 2
6 10 3
7 10 4,5
8 20 2
9 10 6
10 40 9
11 20 7
12 30 7
13 50 9
14 50 10
15 10 11
16 40 8,12
Total Lead Time 480

Cycle Time for 315 Units / Day = 420 Mins / 315 Units = 1.33 Minutes/ Unit = 80 Seconds / Unit

No of Work Station required = Lead Time x Prod Units / Available Time = 6 Work Stations

Presently, Mr. Sane is using 7 workstations against the needed 6 work Stations as following.

W/S Activities Time (Seconds) Time (Minutes) Idle Time

(Minutes)
1 1,3 70 1.16667 0.163333
2 2,5 70 1.16667 0.163333
3 4,8 70 1.16667 0.163333
4 6,9,13 70 1.16667 0.163333
5 7,10,11 70 1.16667 0.163333

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6 14,15 60 1 0.33
7 12,16 70 1.16667 0.163333

Available Time (Minutes) = 7 W/S x Cycle Time 1.33 Mins = 9.31

Idle time = 1.31

Efficiency % = 8 Mins / 9.31 Mins = 85.93

Line A Desired Production 420 Units/Day

Cycle Time for 420 Units / Day = 420 Mins / 420 Units = 1 Minutes/ Unit = 60 Seconds / Unit

No. of Work Station required = Lead Time x Prod Units / Available Time = 8 Work Stations

w/s Activities Time (Seconds) Maximum Production

Capacity (# of Units /
day)
1 2 50 504
2 1,5 50 504
3 3,8 60 420
4 4,6 60 420
5 7,9,13 70 360
6 10,11 60 420
7 14,15 60 420
8 12,16 70 360

With the given nature of certain tasks, we cannot group them in a way that each Work Station can have
less or equal to 60 Seconds (Cycle Time) of tasks. Thus, Work Stations 4 and 8 would have Bottleneck
capacity of 360 Units / Day, which is less then desired 420 Units/ Day.

With Work Stations = 9, following organization would be suitable.

w/s Activities Time (Seconds) Maximum Production

Capacity (# of Units /
day)
1 1 30 504
2 2 50 504
3 3,5 60 420
4 4,6 60 360
5 10 40 420
6 7,11,12 60 420
7 9,13 60 420
8 14,15 60 360
9 8,16 60

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Available Time (Minutes) = 9 W/S x 420 Mins each day = 3780
Utilized time = Lead time 8 Mins x Units Produced 420 Units = 3360
Efficiency % = Utilized Time / Available Time 88.89
Line B –Existing Production 140 Units/ Day
Activity Activity Time (Sec) Immediate Predecessor
A 40 None
B 50 None
C 70 A
D 20 A
E 50 A
F 40 B, C
G 60 E
H 30 D, F, G
Lead time 360 6 minutes

W/S Activities Time (Seconds) Maximum Production

Capacity (# of Units /
day)
1 A, b, c, d 180 140
2 E, f, g, h 180 140

Available Time (Minutes) = 2 W/S x 420 Mins each day = 840

Utilized time = Lead time 6 Mins x Units Produced 140 Units = 840
Efficiency % = Utilized Time / Available Time = 100.00
Line B –Desired Production 210 Units/ Day

w/s Activities Time (Seconds) Maximum Production

Production Capacity with 1
Capacity (# of Hour Overtime
Units / day)
1 A, b, d 110 229 262 (Not used)
2 C, e 120 210 240 (Not used)
3 F, g, h 130 194 222 (Used for
extra 16 Units
only – 36
Minutes)

Available Time (Minutes) = 3 W/S x 420 Mins each day = 1260

Utilized time = Lead time 6 Mins x Units Produced 210 Units = 1260

Efficiency % = Utilized Time / Available Time 100.00

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Solution
On analysis of the given case, as described in subsequent sections following is the
recommendations. Line A: Solution 1 is suitable, if this order has to be continued for more than 91
working days.

# Units Per Unit Per Day Regular # of Regula Over Wages / Contributio
Produced Contributi Contributio wages worke r hours Time Day + n / Day /
/ Day on (Rs) n (Rs) (Rs) rs Hour Overtim Worker
s e

420 30 12600 18 9 8 0 1296 1256

(Desired)
420 30 12600 18 7 8 2 1428 1596
(Desired)
315 (Old) 30 9450 18 7 8 0 1008 1206

Solution 1: This recommendation requires hiring two additional resources, which involves Rs. 12000
training cost and per day wages is Rs. 1296.

Solution 2: This solution has continuing with 7 workers with 2 hours of overtime each day. The
differential wage per day including overtime is Rs. 132 in this case. (12000 / 132 = 90.90)Line B: Solution
1 is suitable

# Units Per Unit Per Day Regular # of Regula Over Wages / Contributio
Produced Contributi Contributio wages worke r hours Time Day + n / Day /
/ Day on (Rs) n (Rs) (Rs) rs Hour OverTim Worker
s e

210 30 6300 18 3 8 1 529.2 1923.6

(Desired)
210 30 6300 18 4 8 0 576 1431
(Desired)
140 (Old) 30 4200 18 2 8 0 288 1956

Solution 1: This recommendation requires hiring one additional resource, which involves Rs. 6000
training cost. In this case, the Efficiency of operation is maintained at 100%, but involved overtime for 1
worker for 1 hour. (Actually making 16 extra unit consuming 36 minutes on 3rd workbench), considering
wages of Overtime and 1% rejection due to fatigue.

Solution 2: This recommendation requires hiring two additional resources, which involves Rs. 12000
training cost. But wages exceeds to Rs. 576, more than solution 1.