Lead Time

Master Chef Appliance Company manufactures home kitchen appliances. The manufacturing process includes stamping, final assembly, testing, and shipping. In the stamping operation, a number of individuals are responsible for stamping the steel outer surface of the appliance. The stamping operation is set up prior to each run. A run of 40 stampings is completed after each setup. A setup requires 60 minutes. The parts wait for the setup to be completed before stamping begins. Each stamping requires 5 minutes of operating time. After each batch is completed, the operator moves the stamped covers to the final assembly area. This move takes 10 minutes to complete.

The final assembly for each appliance unit requires 22 minutes and is also done in batches of 40 appliance units. The batch of 40 appliance units is moved into the test building, which is across the street. The move takes 25 minutes. In the final test, the 40-unit batch is tested one at a time. Each test requires 8 minutes. The completed units are sent to shipping for packaging and final shipment to customers. A complete batch of 40 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 shipment labeling requires 15 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 kitchen appliance in a batch of 40 units. Round percentages to one decimal place. Categorize the non-value-added time into wait and move time.

1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average kitchen appliance in a batch of 40 units. Round percentages to one decimal place. Categorize the non-value-added time into wait and move time. Value-added lead time min. Non-value-added lead time: Wait time lead time min. Move time lead time min. Total non-value-added lead time min. Total lead time min. % Value-added ratio (as a percent) 2. The company could improve the process by changing the layout from: a process orientation to a product orientation