CWI receives orders for approximately 24,000 pencils each week. The average order size is 100 pencils. Orders are evenly distributed among each of the five colors. CWI operates one shift (8 hours each day) running 5 days each week.

The Pencil-Making Process

Victoria S. Morgan decides to "walk the process" with her production staff to collect the data required for value stream mapping. The team carries paper and pencils to document the process steps, and stop watches to time the various steps of the process.

The Raw Materials Storage Area

The team documents the raw materials in stock for making pencils:

Wood: 20 days

Graphite: 8 days

Erasers: 9.5 days

Metal Tops: 12 days

Boxes: 32 days

The Cutting Department

In the Cutting Department, wood dowels are cut to the correct length; 4, 6, or 8 inches long to make a pencil "blank." Victoria and her team watch the process for a while. The Cutting Department makes 10,000 of a single length and color before sending the blanks to the Insert Department. First, the machine used in this department requires 5 minutes to set-up for the particular length to be cut. Next, an operator cuts the painted dowel. Victoria times how long it takes for the operator to create a pencil blank. After watching the process run for 15 minutes, 409 pencil blanks have been made. Therefore, the processing time is 2.2 seconds [15 minutes x 60 seconds / 409 pencil blanks]. One person works in this department.

Cutting Department Summary: Employees in Department = 1 person

Setup Time, S/U = 5 minutes per batch

Batch Size = 10,000 pencil blanks

Processing Time = 2.2 seconds per pencil blank

Inventory after Cutting

The improvement team notes that there are 6000 completed pencil blanks sitting in the Cutting Department and another 44,000 pencil blanks sitting in a staging area waiting to be processed by the Insert Department. Therefore, there are 50,000 pencil blanks in work-in-process inventory between the Cutting and Inserting.

The Insert Department

In the Insert Department, the operator inserts a graphite rod into the center of the pencil blank. The Insert Department makes pencils in batches of 10,000. There is no setup required for this operation. After watching the Insert Department for 20 minutes, 375 pencils were processed through the department. One person works in this department.

Inventory after Insert

The improvement team notes that there are 9000 pencils sitting in the Insert Department that have completed the graphite inserting process. An additional 151,000 pencils are sitting in an inventory staging area waiting to have erasers attached.

Eraser Department

In the Eraser Department, the pencils are banded with a metal band and an eraser is crimped into place. Because each pencil is the same diameter, there is no setup required for this process. Currently, six eraser installers work in this department; each operating one of six eraser installing machines. To operate a machine, an operator places five pencils in a fixture and then presses a start button. The machine then installs erasers on all five pencils. Then the operator removes the finished pencils from the machine and loads five more. After watching one of the operators work at this process, Victoria and her team observe that it takes an average of 87 seconds for each group of five pencils to be processed through this machine. Because each pencil spends 87 seconds in this process, Victoria records this as the Processing Time. Erasers are attached to pencils in batches of 10,000 before being sent to the Boxing Department.

Inventory after Eraser

The improvement team notes that there are 10,000 pencils sitting in the Eraser Department that have erasers attached. The team notices that there are an additional 240,000 pencils in an inventory staging area waiting to be boxed.

Boxing Department

The Boxing Department boxes the pencils into custom imprinted boxes. The boxes are supplied by the Printing Department who prints the boxes for all the products at CWI. Each day, the box workers receive a list of orders that should be packaged that day. Each worker in the Boxing Department takes a single order, boxes that order, and takes the order to the finished goods storage area. Because the operators box one order at a time, and the average order consists of 100 pencils; the average batch size for the Boxing Department is 100 pencils. Fourteen (14) people work simultaneously during the shift. Approximately 20% of the orders filled by the Boxing Department are for pencils. Victoria is able to calculate the Full Time Equivalent (FTE) number of people that work on pencils by multiplying 14 people x 20% of time working on pencils (2.8 FTE people). After watching the department for 20 minutes, the improvement team notes that one of the average workers has boxed 60 pencils. Victoria calculates the Processing Time for this operation by dividing 1200 seconds [20 minutes x 60 seconds] by 60 pencils resulting in 20 seconds per pencil. Cycle Time is the average time that occurs between individual parts being completed by all the employees in a process. Therefore, Victoria calculates the Cycle Time to be 7.14 seconds by dividing the Processing Time by the Full Time Equivalent (FTE) number of people working on pencils [20 seconds / 2.8 people].

Finished Goods Storage Area

CWI maintains boxed products in the finished goods storage area for customers that order on a routine basis. Victoria and her team note that there are currently 160,000 pencils in finished goods storage.

Question 1) What is the cycle time and utlization for each department????