(jit) principles and systematic layout planning as tools to improve ...

4.10 Set-up Time Reduction Saving
There were two cases where it took less than two hours for the
technicians to change the tool. Firstly, the technicians took 85 minutes
to change the tool but had to wait for 95 more minutes for the raw
material to be supplied to the machine for production. Secondly, the
technicians took exactly two hours to change the tool. In other words,
the technicians .have a capability of achieving the company target of
two hours for changing the tool by proper planning. This could be
improved further if electrical or pneumatic tools were used as opposed
to the current manual tools.
If the set-up time is reduced from three to two hours, the machine can
start producing part one hour early. Average cycle time for producing
each part is one 49 seconds and there are four tool changes everyday.
Therefore, the saving will be {[(4 tool changes per day x 1 hour per
tool change) x 60 mins/hour x 60 secs/min]/ 49 sees} x £4.494 (Table
6.1) = £1,320.69 per day x 260 days per year = £344,000 per year.
4.11 Higher Productivity and Higher Flexibility of Workers
With the higher productivity and higher flexibility of workers in the
new production system coupled with the new layout, it is expected that
overtime can be eliminated. The overtime records for May to July
1997 production is as listed in Table 2.3.
The company record also shows that the average number of machines
run every weekend for the overtime production was four with one
worker per machine. Therefore, total overtime saved during the
weekend is calculated as follows:
Saving = 122.4 hours/week x 52 weeks/year x 4 workers x
(24.26/hour (double pay during the weekend) = £618,000 per year.
4.12 Total Savings
From the four aspects mentioned above the total savings for Birkbys
Plastics are £250,000 per year + £170 per year + £344,000 per year
+ £618,000 per year = £1,212 ,000 per year.
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