Reference no: EM132930797

Question - D LTD. supplies batteries for a large automobile manufacturing company. The auto company has recently requested tha company to decrease its delivery time. D LTD made a commitment to reduce the lead time for delivery from 16 days to 4 days. To help achieve this goal, engineering and production staff made the commitment to reduce time for the setup activity (other activities such as moving materials and rework were also being examined simultaneously). Current setup times were 24 hours.

Setup cost was $600 per setup hour. For the first quarter, engineering developed a new process design that it believed would reduce the setup time from 24 hours to 16 hours. After implementing the design, the actual setup time dropped from 24 hours to 18 hours. In the second quarter, production workers suggested a new setup procedure. Engineering gave the suggestion a positive evaluation, and they projected that the new approach would save an additional ten hours of setup time. Setup labor was trained to perform the new setup procedures. The actual reduction in setup time based on the suggested changes was six hours.

Required -

-What kaizen setup standard would be used at the beginning of each quarter?

-What is Kaizen standard and what is the significance of using it?