Measures of Internal Business Process Performance [LO3]

Lipex, Ltd., of Birmingham, England, is interested in cutting the amount of time between when a customer places an order and when the order is completed. For the first quarter of the year, the following data were reported:

Inspection time . . . . . . . . . . . . . . . . . . . . . 0.5 days Process time . . . . . . . . . . . . . . . . . . . . . . . 2.8 days Wait time. . . . . . . . . . . . . . . . . . . . . . . . . . 16.0 days Queue time . . . . . . . . . . . . . . . . . . . . . . . . 4.0 days Move time . . . . . . . . . . . . . . . . . . . . . . . . . 0.7 days Required:
1. Compute t he t hroughput t ime.
2. Compute the manufacturing cycle efficiency (MCE) for the quarter.
3. What percentage of the throughput time was spent in non–value-added activities?
4. Compute t he de livery c ycle t ime.
5. If by using Lean Production all queue time can be eliminated in production, what will be the new M CE?