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time studies

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  • #42240

    whiskeydelta
    Member

    I am tasked with doing time studies in a manufacturing facility.  I am interested in setting up standard costs.  I have performed and recorded the time necessary to perform the actions in one cycle.  My problem is with the calculations necessary to arrive at the set up and run time for the data I have.  Any suggestions on the calculations necessary would be greatly appreciated

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    #133350

    Johnny Guilherme
    Participant

    Whiskeydelta i am not sure that i understand your problem. If you have measured the necessary times for each of the activities/processes on the line, then what you must do is try to balance the line as best you can, (by maybe assigning more people, putting tasks togther etc). Once you have done that then you look at the slowest operation in that process and based on the available time for the shift/day you can then work out the units/hour or as i used to do it hours/thousand units. Once you have the units/hour you then assign the direct labour rates to get a costing per unit based on the time it takes to make one unit. This will then be your “run time”. Set up time for the process is different and i am not sure how you would handle that. Hope i have been able to help.
    Johnny

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    #133755

    Talaid
    Participant

    If your purpose is to determine costs, then Time Studies are only a piece of a larger pie. Activity based costing has its place, I guess, but you have to look at the bigger picture. Set-Up Time + Cycle Time + materials does not equal the cost to produce something. What’s it costing you to have that WIP sitting there taking up floor space? How about for the operator to take 5 extra minutes for a break for a month? How about for the engineers to sit around and “brainstorm” discussing their personal situations?
    I think your better off working at eliminating waste than to spend time with activity based costing efforts, unless you are tryuing to determine your base line before doing some value stream mapping and line balancing.
    Andy
     

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    #133756

    Johnny Guilherme
    Participant

    Andy
    You have to get a baseline cost (for direct labour) and a time study will help here. Thats why understanding the time it takes to make a product is important from a direct labour point of view. Remember unit costs are made up of direct labour, indirect labour, overhead costs and material costs. The question that was posed originally was about direct labour (i think??) and how it contributes to the unit cost. This was not clarified by the person who posted originally.
    What you are talking about is waste i.e. wip, operator wasting time. This can be seen in variances of actual time to produce versus the standard that was set up through the time study.
    Hopefully we are talking about the same issue.
    Johnny

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