Lead Time iSounds Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 50 printed circuit boards. Each board requires 4 minutes of board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 12 minutes to complete. The final assembly for each stereo unit requires 18 minutes and is also done in batches of 50 units. A batch of 50 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30 minutes. The units wait while the setup is performed. In the final test, the 50-unit batch is tested one at a time. Each test requires 8 minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of 50 units is sent from testing to shipping. The Shipping Department is located next to testing. Thus, there is no move time between these two operations. Packaging and labeling requires 6 minutes per unit. Required: 1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 50 units. Categorize the non-value-added time into wait and move time. Round the percentage to one decimal place. Value-added lead time * min. b. Changing the layout from a process orientation to a product orientation. c. Increasing batch sizes. d. Eliminating the testing step. e. Hiring more workers. Feedback Check My Work 1. Classify value-added time and non-value-added time. Recall that lead time can be classified as one of the following: (i) Value-added lead time, which is the time spent in converting raw materials into a finished unit of product (ii) Non-value-added lead time, which is the time spent while the unit of product is waiting to enter the next production process or is moved from one process to another In this problem: Value-added time will include four activities. Determine the total. Non-value-added time = Within-batch wait time for PC board assembly + Within-batch wait time for final assembly + Within-batch wait time for testing + Within-batch wait time for shipping + test setup + Move time Add value-added lead time and non-value-added lead time to obtain total lead time. Calculate Value-Added Ratio = Value-Added Lead Time Total Lead Time 2. Is the value-added ratio low? If so, consider changing the layout from a process orientation to a product orientation. Non-value-added lead time: * Wait time lead time min. Move time lead time Total non-value-added lead time Total lead time min. min. min. Value-added ratio (as a percent) % 2. Move time in this process could best be reduced by: a. Doing nothing.