Proper utilization and efficiency of manufacturing processes

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Reference no: EM132260608

At my facility, the management team is charged with ensuring proper utilization and efficiency of our manufacturing processes. Management has determined that some of the new product manufacturing processes show an underutilization in the standard work day in certain job functions. Because our products are based on a competitive market cost analysis we have to ensure that our products still make a profit, while ensuring that we can remain competitive. Some products were determined to have a small contribution margin.

Because of this lack of profit margin, this is an excellent area for an observational study. The best type of study for this observation would be a nonbehavioral observation study. I would start with record analysis to determine the output from each area. This would allow the company to identify if there was excess cost being realized at the facility due to bad processes. Second I would utilize a process analysis, where the company should perform time studies to determine if the correct times were being utilized per process. Since the product is directly costed based on our standard shop rate by the process, we could show which models and specific processes were not aligned.

Much of the variance I believe is due to a scope creep in work centers, where individuals are performing more work than required in their area. Certain work centers are costed at a higher rate due to the skill level required for those positions. This would show through the observation study that work centers do not have individual acceptable utilization, thus increasing costs to the product and decreasing overall site utilization.

One concern might be that of a bias in the data where the participant believes they are being evaluated as an individual. Because of this, the site could use participant observation where the observer could participate in the actual actions. Since job cards are used to process products, it would be easier to collect the data based on actual processes performed throughout the life of the manufacturing process.

Reference no: EM132260608

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