Capacity Planning Fundamentals

Course No: K03-003

Credit: 3 PDH

Richard Grimes, MPA, CPT

Continuing Education and Development, Inc.

22 Stonewall Court
Woodcliff Lake, NJ 07677

P: (877) 322-5800
[email protected]
Capacity Planning
Fundamentals

Richard Grimes
 Table of Contents

Table of Contents .......................................................................................................................... 2

Overview ....................................................................................................................................... 3
Learning Outcomes....................................................................................................................... 3
Intended Audience ........................................................................................................................ 3
Concepts of Capacity .................................................................................................................... 4
Laying Out the Facility .................................................................................................................. 6
Types of Layouts ....................................................................................................................... 7
Process (or functional) Layouts ............................................................................................. 7
Product Layouts ..................................................................................................................... 9
Fixed Position Layouts......................................................................................................... 10
Designing Process Layouts ..................................................................................................... 10
Block Diagramming .............................................................................................................. 10
Relationship Diagramming ................................................................................................... 13
Designing Service Layouts .................................................................................................. 15
Designing Product Layouts .................................................................................................. 16
Designing With Precedence Considerations ....................................................................... 25
Comments about the Workflow ............................................................................................ 29

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 Overview
Long term capacity planning is a strategic decision for a company that must be carefully
researched before implementation. The placement of equipment and its related work and
maintenance access, material and work flows, plus potential expansion is critical because plant
design and construction are normally tied to it. Clearly, this is an example of form following
function.

This course identifies the fundamental considerations associated with capacity planning so a
student can converse more knowledgeably with plant designers, industrial engineers, and
representatives of operations, procurement, human resources, and safety.

Learning Outcomes

Participants in this self-study course will learn to:

1. Analyze floor plans for optimal work flow
2. Analyze work flows to determine their current efficiency
3. Explain and apply the principles of ‘line balancing’
4. Determine work process flow adequacy
5. Revise workflows to improve efficiency
6. Explain the concept of ‘flow time’
7. Create optimal production cycle timing
8. Apply three capacity planning strategies effectively.
9. Apply the skills learned to practice exercises within the course

Intended Audience
This course is designed for project managers, operations managers and supervisors, human
resource professionals, or anyone involved in the process of converting raw materials into
finished products who want to have a fundamental understanding of the factors that influence
planning the capacity of a production process. These products can also be finished documents
and not only hardware or durable goods.

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 Concepts of Capacity

Capacity is about an organization’s capability of producing something. Planning for this capacity
typically happens at a variety of levels and detail. This course will focus on the basics essential
to a fundamental understanding of the process.

An organization’s capacity is pulled by customer demand (if they didn’t want

it, why would you make it?) and pushed by the receipt of raw materials from
suppliers. In a perfect world, the demand would be constant, the supplies on
time and in the exact quantities and quality we need, while our machines
would hum along at peak efficiency. [Remember, also, that we are not just
talking about the industrial world here: “production” also applies to
assembling complex documents such as all the paperwork associated with
buying a home, or serving customers at the drive up window of a fast food outlet.] Taking this a
step farther, our customers would pay early and we would pay our providers (suppliers) at the
last possible minute before incurring penalties so we can hold on to the cash as long as
possible and maximize our cash flow.

Unfortunately, this is not a perfect world and many factors can impact the ability of our assembly
lines to hum along at peak efficiency. Companies who enjoy greater success in producing,
selling, and delivering products focus on the demand side of the equation. In other words, the
more they can understand their customers’ needs and meet them, the greater their success.
This is in contrast to companies who focus primarily on their suppliers by fighting hard for the
best prices, quantities, qualities, and delivery dates.

Although it is certainly important to fight for the best prices, etc. from your supplier, it is only
through a strong relationship with their customers that a producer can make sure they buy the
right kinds of raw materials in the qualities and quantities they need to meet demand. It is
surprising but true that many manufacturers have a lot of money tied up in inventory that is
either obsolete or just not part of what customers are demanding currently. They focus on what
they have to sell instead of what their customers want to buy.

We will begin our learning by looking at three strategies to plan capacity: lead, average, and
lagging.

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 1. Lead capacity strategy – capacity is expanded in
anticipation of a growth in demand. This anticipation may
result from a marketing plan to lure customers away from
another or by entering a market by offering special pricing
or quantities. It also helps companies plan for anticipated
surges in demand or to provide high levels of customer
service during specific periods.

2. Average capacity strategy – we expand capacity to coincide Units

with an average of what we expect knowing there will be times
when we cannot meet all the demand as well as time when we
have too much capacity for a lowered demand. We expect that
about 50% of the time, capacity will lead demand and lag behind
Time
it at about 50%, too.

Units
3. Lagging capacity strategy – capacity expands after an increase
has been documented. Although customer service suffers
initially, it assumes they will be back because there are few (if
any) other places where they can obtain this product after our
capacity has increased. Time

Once a capacity strategy is identified, then the extent of the increase is based upon:
 The volume and certainty of anticipated demand
 Strategic objectives in terms of customer service, anticipated growth, and anticipated
competition
 The cost of anticipated expansion and operation to meet the company’s strategy

We will address the issues of anticipating demand and production planning in the rest of this
course.

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 How would these various strategies be used in higher education?
Suppose that a state is experiencing a large increase in population which means there will
be a demand for higher education in just over a decade. This is how the three different
strategies would be applied:
 An established university that is guaranteed applicants even in lean years
may follow a lag strategy
 A new university may use a lead strategy to capture applicants who cannot
get into the established university
 A community college may use the average strategy because there is little
Think
about… risk when considering its mission to admit all eligible applicants.

Laying Out the Facility

The art (or science depending on how you look at it) of laying out a facility has changed over the
years because of changes in:
1. Our concepts of how to produce (do we keep extensive inventory on hand because we
are supplier driven or small amounts -“just-in-time” - because we are customer focused);
2. What to produce (markets have changed in demand and location)
3. The constant evolution of technology plus a shrinking, ageing workforce can change our
long-term strategy.

Some thinking associated with the machinery we will use or tasks we must complete should
consider:
 Minimize material-handling costs
 Utilize space and labor efficiently
 Eliminate bottlenecks
 Facilitate communication and interaction between all involved
 Reduce manufacturing cycle time and customer service time
 Eliminate wasted or redundant movement
 Increase capacity (produce more, not just do more)
 Facilitate entry, exit, and placement of material, products, and people
 Incorporate safety and security measures
 Promote product and service quality
 Encourage proper maintenance activities
 Provide a visual control of activities and flexibility to adapt to changing conditions

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 Types of Layouts

We will look at three basic types of layouts. Please remember that capacity planning is not
confined to just “making things”, it is also relevant to customer service businesses and retail
outlets where customers serve themselves. The three most common examples are:

1. Process (aka ‘functional’) layouts - group similar activities together according to the
process or function they perform

2. Product layouts - arrange activities in line according to sequence of operations for a

particular product or service

3. Fixed-position layouts - are used for projects in which the product cannot be moved

Process (or functional) Layouts

This layout groups similar functions together. It may be thousands of different types of items in a
do-it-yourself ‘big box’ store, types of clothing in a retail store that makes it easy for clerks or
customers to find what they need by visiting different departments or a machine shop may
group saws in one place, drills in another, and sanders in a third.

This layout is characteristic of intermittent operations where a wide variety of customers with
wide-ranging needs are served. In a process layout, like a machine shop or automotive repair
center, the equipment is general purpose and the workers are
skilled at operating their machines in their departments or
areas.

The advantage of this is flexibility and can meet customers’

needs easily and quickly but, since work doesn’t flow smoothly
through it and may ‘backup’ from down-line stations, or cross
the flow of other work, this is also a disadvantage.

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Table 1 - Process Layout Summary
Characteristics Application to a Process Layout
Description Functional grouping of activities
Type of Process Intermittent, job shop, batch production, mainly fabrication
Product Varied, made to order
Demand Fluctuating
Volume Low
Equipment General Purpose
Workers Varied skills - some potential for cross-functional working
Inventory High in-process, low finished goods
Storage Space Large
Materials Handling Variable path (forklift)
Aisles Wide
Scheduling Dynamic – varies with the demand
Layout Decision Machine location
Goal Minimize material handling cost
Advantage Flexibility

Process Layout for a Retail Business

Garden Yard Tools Paint

Deck Furniture Kitchens Hardware

Plumbing Lighting
Finished wood

Process Layout for a Manufacturing Business

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 Product Layouts

Product layouts are better known as assembly lines. Henry Ford taught this to American
industry when he demonstrated that a line of sequential events with each sub-assembly having
its own line was a secret to mass production. (This assumes, of course, that materials flowed
into the plant at about the same speed finished cars rolled out the other end.) The flow of work
is orderly and efficient moving from one workstation to the next where the technicians wait to
perform their specialty – whether welding the car frame or tightening a lug nut on a wheel.

Since the market for these products is very specific, dependable, stable, it makes economic
sense to purchase large, immovable machines performing limited functions. The product made
is a standardized one (not like a craftsman’s single piece) and the volume is high.
Table 2 Product Layout
Characteristics Application to a Product Layout
Description Sequential arrangement of activities
Type of Process Continuous, mass production, mainly assembly
Product Standardized – made to stock
Demand Stable
Volume High
Equipment Special Purpose
Workers Limited skills - no cross functional work potential
Inventory Low in-process, high finished goods
Storage Space Small
Materials Handling Fixed path (conveyor)
Aisles Narrow
Scheduling Stable - Varies with balancing and demand
Layout Decision Line balancing
Goal Equalize work at each station
Advantage Efficiency

Product Layout
In

Out

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 Fixed Position Layouts

This layout is the only one suitable for its products that
cannot be moved until nearly completed. They are too
large, bulky, or fragile to be moved such as houses,
ships, or airplanes. The highly skilled workers – such as
carpenters, plumbers, electricians, and painters – come
to the layout. Their specialized equipment, such as
cranes, scaffolding, generators, or air compressors for
painting, is rented for the project.

Designing Process Layouts

There is one primary consideration when designing a process layout: MINIMIZE MOVEMENT
AND/OR MATERIALS HANDLING COSTS. Following that rule, work stations with the greatest
interaction between each other should be as close as possible while those having the least
amount of contact with the others should be placed at the fringes of the work area unless some
safety, construction, or cost consideration must take precedence.

There are two commonly used methods of approaching the layout design:
 Block diagramming – use to minimize nonadjacent workloads or when quantitative
data is available
 Relationship diagramming - based on location preference between areas or when
quantitative data is not available

Block Diagramming

We use historical data or talk with experienced employees to estimate the presumed movement
between two work stations. We will express our finding in terms of “loads” and distance to move
that load. The content and weight of the load depends on the business. It may be palletized for
moving with a forklift like lumber that a cabinet maker would use, in baskets of sub-documents
that an employee would carry for a document processing business, or parts of a meal that an
employee of a fast-food restaurant would assemble and hand to the customer on a tray.

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Begin developing the block diagram by listing all the work stations involved in the process. We
will list them here as A, B, C, D, and E. Then list the possible combinations with the typical daily
load movement between them. (A-B reads as “going from A to B.”)

Stations Loads Stations Loads Stations Loads Stations Loads Stations Loads
A-B 100 B-A 0 C-A 0 D-A 0 E-A 0
A-C 110 B-C 200 C-B 0 D-B 0 E-B 0
A-D 0 B-D 150 C-D 40 D-C 0 E-C 0
A-E 0 B-E 50 C-E 50 D-E 60 E-D 0

Obviously, there will be places that receive work but do not send it back into the system such as
workstation “E” in our example which, by simply looking at the activity, indicates it’s the end of
the production line. Materials from here do not come back into the layout but must go “outside
the system”, i.e., out of the factory to the consumer.

Although this table is accurate regarding the data, it doesn’t tell us much about the potential
layout. But, if we construct a simple grid to understand the flow better, it all becomes more
visible. Especially the 150 loads moving between non-adjacent locations (dotted lines).

Nonadjacent Loads = 110+40=150

110

100 200
A B C
150 50 50

60
D E
40

A little change in the work locations of the future facility can greatly improve the workflow like
this. The same amount of loads move but there is no long trips around work stations as in the
first diagram.

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 Nonadjacent Loads = 0

100 150
A B D
20 50 40 60
110
50
C E

Now that you have a better positioning of the work stations by eliminating all of the nonadjacent
workloads, you can use that layout as a basic for the building plans. Many vendors provide
templates for the space required for their equipment installation and maintenance and will help
you begin to sketch the layout. Since this is not a design course, we won’t go into great detail.
Suffice it to say the diagram above can easily become these block diagrams.

(a) Initial block diagram (b) Final block diagram

A D
A B 4 B

C E C E

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 Relationship Diagramming

If quantitative data is not available or moving large amount of material is not relevant to the
organization’s function, a relationship diagram is very useful when managers want to plan the
layout of their department. (This planning tool, a Muther’s Grid, was devised by Richard Muther,
an Industrial Engineer, in 1956 and has grown in use well beyond the scope of this course.)

Like all good tools in engineering, it is based upon a simple concept that can be applied
universally. The preference information for the location of offices is based on the familiar five
vowels used in English: A, E, I, O, and U with the letter X added. The letters help us remember
the preference code used in the grid. “A” means “absolutely necessary”, “E” is “especially
important”, “I” means simply “important”, “O” is “okay”, “U” is “unimportant”, and “X” is
“undesirable.” As you can see, they descend in logical order from absolutely necessary to
undesirable.

Come into the grid like a highway mileage chart along the
List all colored row comparing the top of the list with each office
of the
offices below in order. For example, what about putting offices next to
in any
order
the production area, and we say, “OK” by putting an O there.
on
these
lines
Production
O
Offices A A Absolutely necessary
U I E Especially important
Stockroom O E I Important
A X A O Okay
Shipping and receiving U U U Unimportant
U O X Undesirable
Locker room O
O
Tool room

This final look at the grid tells us the department manager says (among other things), “It’s OK
(O) if offices are next to production, absolutely necessary (A) that the stockroom be next to
production, important (I) that shipping and receiving be next to production but that the offices
MUST NOT (X) be next to the locker room.”

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Once you have decided on the preference for the placement of the offices using a Muther’s
Grid, you can represent the importance of your choices of A, E, I, O, U, or X using a series of
lines like this:

(a) Relationship diagram of original layout

Key:
Office Locker Shipping A
and
receiving E

O
Stockroom Tool room Production
U

Clearly, we see in this diagram those three stations with great importance for each other, the
stockroom, production, and shipping and receiving, are too far apart for maximum efficiency.
Also, the locker room should not be next to the offices. So, if we rearrange the offices based on
the Muther Grid showing our preferences, we will get a traffic pattern like this.

(b) Relationship diagram of revised layout

Stockroom

Office Shipping
and
receiving

Tool room Production Locker

room

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 Designing Service Layouts

Service layouts frequently follow production layouts from the perspective of smooth flows of
traffic but in retail outlets, the businesses’ objectives will influence parts of the layout.

For example, a grocery store will arrange its shelves with milk at one end of the store with bread
at the other to lead customers along a path of attractive displays, much lighting, and sale items
as they fill their shopping carts. Retail clothing outlets encourage shoppers to browse around
randomly spending as much time as possible at every counter.

Some typical layouts:

 Free flow - encourages browsing, increases impulse purchasing, are flexible and
visually appealing
 Grid - encourages customer familiarity, are low cost, easy to clean and secure, and
good for repeat customers
 Spine and Loop - both increase customer sightlines and exposure to products, while
encouraging customer to circulate through the entire store

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 Designing Product Layouts

The product layout is the basic assembly line of sequential tasks that Henry Ford immortalized
when he created the American auto industry. Although a very straightforward concept, there are
some considerations necessary to optimize the potential speed and efficiency of the line. These
‘optimization’ topics are what we will consider next.

Some terms that we will use are

 Precedence requirements - tasks that must be completed before doing the next one
such as testing the components inside a radio before sealing the outer shell.

 Precedence diagram – a drawing showing the assembly line with work stations
arranged so as to honor the precedence requirements

 Work station – any place along the line where work is done on the product

 Line balancing – the process of equalizing the amount of work at each work station so
the line keeps moving and no back-ups occur

 Cycle time – the maximum amount of time a part in the assembly process can spend at
any single workstation in order to meet production requirements in a balanced line. We
emphasize “can spend” because we want to meet some production criteria. Do not
confuse this with “does spend” which is the amount of time a part may spend at a station
if the line is not balanced.

 Flow time – the amount of time it takes a product to emerge from the end of the
production line in comparison to when it entered the line. This includes all time spent
waiting at any workstation.
.
 Line efficiency – is the ratio of the time spent doing work to the overall flow time of an
assembly line. The overall flow time may include some idle time at one workstation while
work at another takes a little longer for completion. For example, if the flow time for a
product is 200 seconds which includes 40 seconds of idle time at one workstation while

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 work is being done at another, the amount of time the machines were working was 200 –
40 = 160 seconds. Then 160/200 = 80% efficient.

1 2 3

3 minutes 4 minutes 2 minutes

Flow time = 3 + 4 + 2 = 9 minutes
Cycle time = max (3, 4, 2) = 4 minutes

Let’s talk about cycle time and see how the term, “the maximum time that can be
spent at a work station” applies in a production setting.

Suppose a company wants to produce 200 radios in an eight hour day (or work
shift.) The first thing we must do is break the hours into minutes to get the smallest
practical time unit available. Therefore, an eight hour day (or shift) is also equal to 8
Think
about… hours x 60 minutes in an hour = 480 minutes. So we now know the company wants
to produce 100 radios within 480 minutes.

Our formula for cycle time is Ct = production time available/desired units of output or 480/100 =
4.8 minutes. This means the longest time a radio can spend at any workstation is 4.8 minutes.

It does not matter how many work stations you have in the process because this assumes the
radios are working their way along the assembly line continuously. What it DOES TELL YOU is
the longest it can sit at any one station is 4.8 minutes if you expect to produce 100 radios in 480
minutes.

Next, we will look at line balancing which is fundamentally a trial and

error process.

Let’s suppose we work for the Big Sound Radio Manufacturing

Company. The company designed a new model, called the Big Blaster
that they think will be a huge seller.

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 Based on the drawings we have seen, it looks like there are eight steps in the production
process with an estimated time (in seconds) of how long each step should take. This is the
sequence of tasks and the length of time to do each. (Time expressed in seconds)

Work Process Task Time

Station (seconds)
1 Receive the new radio shell, clean it, and place on conveyor belt. 12
(Do this first.)

2 Install internal speakers 45

3 Install AM & FM receivers 120

4 Solder all electrical connections - melt weld all plastic connections 30

5 Attached the 120 volt electrical cord to the radio 42

6 Attach the back to the radio (only after all internal work is done) 25

7 Test the radio on AM & FM receivers. 15

8 Place in box, send to shipping department, and get ready for the next 8
one.
(This must be done last.)

This is what we must determine: (come back and answer these as we move through the
lesson.)

If we set up the production line with the eight steps and times shown above, what will be
the cycle time per radio? ________

If we set up the production line with the eight steps and times shown above, what will be
our production capacity for each eight-hour shift? ____

If we set up the production line with the eight steps and times shown above, what will be
our production efficiency for each eight-hour shift? _____

What is the best line balancing we can achieve each shift? (You will see which choice
is best.) This is how we will find the answers to these questions.

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 We will look a little closer at the proposed production schedule.

Work Process Task Longest Idle time

Station Time time for waiting
(w/s) # any task for next
w/s
1 Receive the new radio shell & clean it. 12
(This must be done first.)
2 Install internal speakers 45
3 Install AM & FM receivers 120
4 Secure all connections 30
5 Attach the 120 volt cord 42
6 Attach the back (internal work must be 25
completed first.)
7 Test the AM & FM receivers 15
8 Place in box for shipping. (This must be last.) 8
Time in seconds 297

These are typical questions to consider in a production environment.

What is the longest time for any single task? _______ Write this amount in each cell in
that column. Why should we do that? (This becomes evident soon, also.)

Can additional tasks be completed and moved before the longest task is finished?
___________

What impact does that “longest task” have on the whole work cycle? (Everything else
stops until this part is completed)

Write in the amount of idle time at each station while waiting for the longest task to be
completed.

Some questions we can ask at this point:

Is this the only sequence that we can have? (Answer: The step at station #1 must
come first and placing in a shipping box must come last.)

Steps 2 & 3 can be reversed if neither must come before the other and there isn’t some
other reason why we can’t such as having the AM & FM receivers in the cabinet would

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 make it hard to install the speakers. We will have to talk to the workers who actually do
this to find the answer. (Talking to the people doing the work is a simple concept many
managers do not understand.)

Step 4 can only come after we make the connections.

Step 5 must have something inside the radio to which we can attach the cord.

Step 6 must come now because we cannot put on the back until everything is placed
inside.

Step #8 must be last because it goes to shipping after assembly.

The only flexibility we have is reversing steps 2 & 3 if that would help.

What is the longest time spent at any workstation? (Answer: 120 seconds at step 3.)

What happens to the whole assembly line while step #3 occurs? (Answer: The whole
line stops and waits.)

This is what production actually looks like with all workstations filled and taking into account
delays while longer processes are completed.
Work Process Task Longest Idle time waiting
Station Time time for for next work
# any task station
1 Receive the new radio shell & clean it. 12 120 108 (We work for
(This must be done first.) 12 seconds and
wait for another
108 until station 3
completes it work
of 120 seconds.)
2 Install internal speakers 45 120 75
3 Install AM & FM receivers 120 120 0
4 Secure all connections 30 120 90
5 Attach the 120 volt cord 42 120 78
6 Attach the back (we must complete internal 25 120 95
work first.)
7 Test the AM & FM receivers 15 120 105
8 Place in box for shipping. (This must be last.) 8 120 112
Time in seconds 297 960 663
Flow
Time

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This is an important consideration that must not be overlooked when looking at production - the
longest time spent at any workstation delays every workstation once the line is “full” and
each station is engaged in production.

More Questions

1. If we set up the production line with the eight steps and times shown above, what will be
our production capacity for each eight-hour shift?

We have seen that it takes 960 seconds for a complete “flow” in the assembly of one
radio. Since our answer for flow time is expressed as seconds, we must convert our 8-
hour work shift to seconds so we are dealing with similar amounts.

The 8-hour shift has 60 minutes in each hour with 60 seconds in each minute.
Therefore, 8 x 60 x 60 = 28,800 seconds per shift. If it takes 960 seconds to build a
radio and we have 28,800 seconds on the shift, we can build 28,800 ÷ 960 = 30 radios
per shift.

2. If we set up the production line with the eight steps and times shown above, what will be
our production efficiency for each eight-hour shift?

We found the flow time to be 960 seconds. During this time, work is being done for only
297 seconds: the rest of the cycle is idle time waiting for the longest task to be
completed so the line can move again. The efficiency of the line is determined by
dividing the total work time within a flow by the length of the work flow. This is 297 ÷
960 = 30.9% efficient.

3. What is the best line balancing we can achieve on each shift?

We will rearrange the tasks slightly to reduce as much idle time as possible. We will still
acknowledge the sequence requirements (which step must come before any others) as
we do this.

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 Work Process Task Longest Idle time
Station Time time for waiting for
# any task next w/s
1 Receive the new radio shell & clean it. 12 120 108
(This must be done first.)
2 Install AM & FM receivers 120 120 0
Install internal speakers 45
Put the longest task as close to
Secure all connections 30
the front as you can while still
3 Attach the 120 volt cord 42 acknowledging sequence
These 117 120
are
Total time at this workstation = priorities. 3
sequence Attach the back (internal work must be 25
priorities. completed first.) Put the next longest task next.
4 Test the AM & FM receivers 15
Place in box for shipping. (This must be 8
last.)
48 120 72
Total time at this workstation =
Time in seconds 297 480 183

We collapsed eight separate steps into four, grouped three steps together for completion (117
seconds) as station #3 while waiting for step #2, and three steps at station #4 for 48 seconds.
This means we can save money on purchasing workstations and hiring workers for each station.

Work flow time remains at 297 seconds because it still takes the same amount of work to build
each radio. However, we have reduced the waiting time significantly. This means the cycle
time is lower, too. This means we can produce more radios during each shift.

If it now takes 480 seconds to build a radio and we have 28,800 seconds on the shift, we can
build 28,800 ÷ 480 = 60 radios per shift.

Efficiency is now 297 ÷480 = 61.9%.

The next page contains a sample of how a spreadsheet and charts would look as we compare
the current production with our proposed.

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This is the current process with 8 workstations.

This is the recommended process with 4 workstations.

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Capacity Planning Fundamentals OutsourceTrainingOnline.biz ©Richard Grimes 2011 Page 24
 Designing With Precedence Considerations

Here is another way of line balancing that considers the precedence requirements as we
package food. We will use the information in the boxes below.

1. Draw and label a precedence diagram

2. Calculate desired cycle time required for line (the most that can be spent at any one
station and still give us the daily production we need)
3. Calculate theoretical minimum number of workstations (we will do this next)
4. Group elements into workstations, recognizing cycle time and precedence constraints
5. Calculate the efficiency of line
6. Determine if theoretical minimum number of workstations or an acceptable efficiency
level has been reached. If not, go back to step 4.

WORK ELEMENT PRECEDENCE TIME (MIN)

A Press out sheet of fruit — 0.1

B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3

0.2
B

0.1 A D 0.3

C
0.4

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 How many workstations will we need to have for this example?

WORK ELEMENT PRECEDENCE TIME (MIN)

A Press out sheet of fruit — 0.1

B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3

This assumes a 40 hour production week and a desire to produce 6,000 units per week. First,
we convert 40 hours into minutes by multiplying 40 hours x 60 minutes/hour to get 2,400
production minutes per week.

If we want to produce 6,000 units during these 2,400 minutes, we see we have only .4 minutes
available to produce one item (2,400/6,000 = .4)

Our chart above shows the maximum cycle time is .4 minutes at step C and the flow time is 1.0
minutes (.1 at A; .2 at B, .4 at C, and .3 at D = 1.0 minute.)

40 hours x 60 minutes / hour 2,400

Cycle Time = = = 0.4 minute
6,000 units 6,000
Number of
workstations 0.1 + 0.2 + 0.3 + 0.4 1.0
required are = = = 2.5  3 workstations
0.4 0.4 (We cannot have less
than a whole workstation)

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Here is the line balancing calculation for this process:

Cycle Time = 0.4

Number of workstations needed = 2.5
(i.e., 3 stations since we can’t have less than a whole one.)

Work Work Work

station 1 station 2 station 3

A, B C D

0.3 minute = step 0.4 0.3

A (.1) + step B (.2) minute minute

0.1 + 0.2 + 0.3 + 0.4 1.0 Total working time

E= = = 0.833 = 83.3%
3 x (0.4) 1.2 Flow time = working time + idle time
3 workstations x the longest time at
any one station (the cycle time of .4)

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Here is another practice opportunity for streamlining an office workflow.

Department: _Accounts Payable___ Date observed: __June 23-24____

Job Observed: ___Reimbursing expense reports___________________
Observer: Logan Grant

OBSERVATION CODES

W = Working (doing what they are paid to do) M = Moving from work station
I = Idle (any time waiting or not working) F = Filing (Or storing something)

What comments can be made about improving the workflow based on this example?
Step Describe the Step Code Distance Time in Comments
# in feet min/sec
1. Goes to incoming mail area to M 70’ r/t 0:45 (next page)
get expense reports and
returns to work station (desk)
2. Opens envelope, organizes W - 1:15
receipts.
3. Notices some expense code W - 2:10
fields are empty, looks up
proper codes.
4. Completes authorization to W - 0:15
reimburse form on PC and
send to the shared printer.
5. Goes to shared printer to get W 25 0:10
form
6. Waits while admin assistant I - 2:15
finishes printing new parking 60’ r/t for
policy.(Admin assistance goes admin
to get more paper.)
7. Takes printed form to boss for M 45’ 0:20
review and approval.
8. Boss on the phone – clerk I - 3:15
waits
9. Goes to copier to make 2 W 35’ 0:25
copies of approved form
10. Copier toner low. Must find W/I - 3:50
new cartridge and refill
11. Makes copies and back to W 35’ 0:20
desk
12. Cuts reimbursement check W - 2:00
and places it into I/O envelope.
13. Starts at step 1 again

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Summary: Time for 1 complete work cycle: ___16:50 minutes/seconds__
Take a few minutes to consider each step. Then list some questions that you would ask about
each step in this situation. At this point, we are not ready to make any recommendations for
change: we are just asking questions to make sure we clearly understand the situation.

Comments about the Workflow

Step Describe the Step Code Distance Time in Comments
# in feet min/sec
1. Goes to incoming mail area to M 70’ r/t 0:45 Can we bring mail
get expense reports and to them?
returns to work station (desk)
2. Opens envelope, organizes W - 1:15
receipts.
3. Notices some expense code W - 2:10 Print most
fields are empty, looks up common codes on
proper codes. the form? On-line
reference?
4. Completes authorization to W - 0:15
reimburse form on PC. Sends
to the shared printer.
5. Goes to the shared printer to W 25 0:10
get form
6. Waits while admin assistant I - 2:15 Store paper at
finishes printing new parking 60’ r/t for printer? Dedicated
policy. (Admin assistance admin printer for
goes to get more paper.) accounts payable?
7. Takes printed form to boss for M 45’ 0:20 Authorize clerks to
review and approval. OK up to a
8. Boss on the phone – clerk I - 3:15 threshold?
waits.
9. Goes to copier to make 2 W 35’ 0:25
copies of approved form.
10. Copier toner low. Must find W/I - 3:50 Check all copiers
new cartridge and refill. at end of day for
toner and paper to
be ready for next
day?
11. Makes copies and back to W 35’ 0:20
desk.
12. Cuts reimbursement check W - 2:00
and places it into I/O
envelope.
13. Starts at step 1 again.

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Although the comments made may not all lead to a change (would clerks REALLY be
authorized to approve expenses up to a limit?), they do indicate some potential opportunities for
process improvement.

And, when you think about it, that is what this course is all about...streamlining the workflow to
increase your production capacity.

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