1. Current Process Regular Shirts Labor content Operation Min/shirt Cutting 1. Make collar 2. Make Cuff 3.

. Make Sleeve 4. Make Front 5. Make Back 6. Join Shoulder 7. Attach collar 8. Attach Sleeve 9. Stitch down sleeve 10. Sew side seem 11. Attach cuff 12. Hem bottom 13. Inspect 14. Iron 15.Packaging 120*4/480=1 3.9 2 0.65 2.5 1.7 0.66 1.65 1.55 0.65 1.8 1.55 1.7 1.5 1.95 1.75 Capacity Shirts/day 1920 985 960 1477 1152 1129 1455 1164 1239 1477 1067 1239 1129 1280 985 1097 Capacity Utilization 0.42 0.81 0.83 0.54 0.69 0.71 0.55 0.69 0.65 0.54 0.75 0.65 0.71 0.63 0.81 0.73

No of workers 4 8 4 2 6 4 2 4 4 2 4 4 4 4 4 4

Cycle Time min/shirt 0.25 0.49 0.50 0.33 0.42 0.43 0.33 0.41 0.39 0.33 0.45 0.39 0.43 0.38 0.49 0.44

Analysis of the current plan Bottleneck Bottleneck Production Capacity(shirts/day) Bottleneck Cycle Time(min/shirt) = based on above capacity Actual Production Rate(shirts/day) Actual Cycle Time(min./shirts) Capacity Utilization WIP Inventory(shirts) =16000(total shirts)/20(days) = based on actual capacity (480/800) =A.C./ R.C = 800/960 =196*60 (Exhibit 3) =0.6*11760/480 Manufacturing Lead Time(days) or =11760/800 Direct Labor Content(min./shirts) Sum(all Process time) Direct Labor Utilization Direct Labor Cost($/shirts) =(26.51*800)/(64*8*60) =64*8*6/800 26.51 0.69 3.84 14.7 Make cuffs 960 0.5 800

0.6 0.83 11760

Mikes Plan Regular + Exclusive shirts (800 + 100 = 900 shirts) Operation Labor content Min/shirt New Cutting m/c Cutting 1. Make coller 2. Make Cuff 2.5 / 5 120* 4 / 480 3.9 2 1 4 8 4 2 6 4 2 4 4 No. of workers Cycle time min/shirt 0.50 0.25 0.49 0.50 0.33 0.42 0.43 0.33 0.41 0.39 Capacity shirts/day 960 1920 985 960 1477 1152 1129 1455 1164 1239 Capacity Utilization 0.10 0.42 0.91 0.94 0.61 0.78 0.80 0.62 0.77 0.73

3. Make Sleeve 0.65 4. Make Front 5. Make Back 2.5 1.7

6. Join Shoulder 0.66 7. Attach coller 1.65 8. Attache Sleeve 9. Stich down sleeve 10. Sew side seem 11. Attach cuff 1.55

0.65

0.33

1477

0.61

1.8 1.55

4 4 4 4 4 4

0.45 0.39 0.43 0.38 0.49 0.44

1067 1239 1129 1280 985 1097

0.84 0.73 0.80 0.70 0.91 0.82

12. Hem bottom 1.7 13. Inspect 14. Iron 15. Packaging 1.5 1.95 1.75

Analysis of Mikes Plan Bottleneck Bottleneck Production Capacity(shirts/day) Bottleneck Cycle Time(min/shirt) Actual Prodcution Rate(shirts/day) Actual Cycle Time(min./shirt) Capacity Utilization WIP Inventory(shirts) Manufacturing Lead Time(days) Direct Labor Content(min./shirt) Direct Labor Utilization Direct Labor Cost($/shirt) = based on above capacity =800 regular shirts + 100 custom shirts = based on actual capacity (480/900) =A.C./ R.C = 900/960 =396*5 (Exhibit 5) =0.53*1980 or =1980/900 Make Cuff 960

0.5

900

0.53 0.94 1980 2.2

Sum(all Process time) =(27.01*900)/(65*8*60) =65*6*8/900

27.01 0.7791 3.466

Ikes Plan for 100 custom shirts Operation Labor content Min/shirt New Cutting m/c 2.5 1. Make collar 2. Make Cuff 3. Make Sleeve 4. Make Front 5. Make Back 6. Join Shoulder 7. Attach coller 3.9 2 0.65 2.5 1.7 0.66 1.65 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 No. of workers Cycle time min/shirt 0.5 3.90 2.00 0.65 2.50 1.70 0.66 1.65 1.55 0.65 1.80 1.55 1.70 1.50 1.95 1.75 Capacity shirts/day 960 123 240 738 192 282 727 291 310 738 267 310 282 320 246 274 Capacity Utilization 0.10 0.81 0.42 0.14 0.52 0.35 0.14 0.34 0.32 0.14 0.38 0.32 0.35 0.31 0.41 0.36

8. Attache Sleeve 1.55 9. Stich down sleeve 0.65

10. Sew side seem 1.8 11. Attach cuff 12. Hem bottom 13. Inspect 14. Iron 15. Packaging 1.55 1.7 1.5 1.95 1.75

Analysis of Ikes Plan Bottleneck Bottleneck Production Capacity(shirts/day) Bottleneck Cycle Time(min/shirt) Actual Production Rate(shirts/day) = based on above capacity Make collar 123

3.9

=100 custom shirts

100 4.8 0.81 45 0.45

Actual Cycle Time(min./shirt) = based on actual capacity Capacity Utilization WIP Inventory(shirts) Manufacturing Lead Time(days) Direct Labor Content(min./shirt) Direct Labor Utilization Direct Labor Cost($/shirt) =A.C./ R.C = 100/123 =3*15 (Ike's Plan) =4.8*45 or =45/100

Sum(all Process time) =(26.01*100)/(16*8*60) =16*8*6/100

26.01 0.3386 7.68

Ikes Plan for 800 regular shirts Operation Labor content no. of workers Min/shirt Old cutting m/c 120*4/480 1. Make coller 2. Make Cuff 3.9 2 4 7 3 1 5 3 1 3 3 min/shirt 1 0.56 0.67 0.65 0.50 0.57 0.66 0.55 0.52 shirts/day 1920 862 720 738 960 847 727 873 929 Utilization 0.42 0.93 1.11 1.08 0.83 0.94 1.10 0.92 0.86 Cycle time Capacity Capacity

3. Make Sleeve 0.65 4. Make Front 5. Make Back 2.5 1.7

6. Join Shoulder 0.66 7. Attach coller 1.65 8. Attache Sleeve 9. Stich down sleeve 10. Sew side seem 11. Attach cuff 1.55

0.65

0.65

738

1.08

1.8 1.55

3 3 3 3 3 3

0.60 0.52 0.57 0.50 0.65 0.58

800 929 847 960 738 823

1.00 0.86 0.94 0.83 1.08 0.97

12. Hem bottom 1.7 13. Inspect 14. Iron 15. Packaging 1.5 1.95 1.75

Analysis of Ikes Plan for 800 regular shirts Bottleneck Bottleneck Production Capacity(shirts/day) Bottleneck Cycle Time(min/shirt) Actual Production Rate(shirts/day) Actual Cycle Time(min./shirt) Capacity Utilization WIP Inventory(shirts) Manufacturing Lead Time(days) Direct Labor Content(min./shirt) Direct Labor Utilization Direct Labor Cost(Rs/shirt) Aditinal labor Cost (Rs/shirt) for 80 shirts Actual Cost /shirt with overtime = based on above capacity (480/720) = 800 shirts (required) = based on actual capacity =A.C./ R.C = 720/720 =151*60 (Exhibit 5) =0.66*9060 or =9060/720 (800) Sum(all Process time) =(26.51*720)/(49*8*60) =49*8*6/720 Make cuff 720 0.66 720 0.66 1.00 9060 12.58 (11.32) 26.51 0.81 3.266

=49*1*9/80 =(3.26*720+5.51*80)/800

5.51 3.49

Comparison of Current process, Mikes and Ikes Plan Current Process Regular Shirts Actual Cycle Time (min/shirt) M.L.T. (days) WIP Inventory (shirts) Production Capacity (shirts/day) Capacity Utilization Direct Labor Content(min/shirt) 0.6 14.7 11760 960 0.83 26.51 Mikes Plan Regular & Custom Shirts 0.53 2.2 1980 960 0.94 25.51 without cutting 26.01/26.51 0.78 3.46 Regular Shirts 0.67 12.58 9060 720 1 26.51 Custom Shirts 4.8 0.45 45 123 0.81 26.01 Ikes Plan

Direct Labor Utilization Direct Labor Cost($/shirt)

0.69 3.84

0.81 3.49

0.33 7.68

Normal Process Flow Diagram

Make Collars

Make Cuffs

Cutting

Make Front Join Shoulder Make Back Inspect Attach Collar Attach Sleeves
Stitch down sleeves

Sew Side Seam

Attach cuffs

Hem Bottom

Make Sleeves

Iron

Folding, Package

Mikes Plan Flow Diagram

Make Collars

Make Cuffs

Cutting

Make Front Join Shoulder Make Back Inspect Attach Collar Attach Sleeves
Stitch down sleeves

Sew Side Seam

Attach cuffs

Hem Bottom

Make Sleeves

Iron

Folding, Package

Ikes Plan Flow Diagram

Make Collars

Make Cuffs

Cutting

Make Front Join Shoulder Make Back Inspect Attach Collar Attach Sleeves
Stitch down sleeves

Sew Side Seam

Attach cuffs

Hem Bottom

Make Sleeves

Iron

Folding, Package

2. Suggestion to Dwight Collier: From the table we observe that, the Direct Labor Cost for manufacturing Custom shirts using Mikes plan is less by an amount of 4.22 per shirt when compared to that of Ikes plan. It can also be inferred that the Labor costs for Regular shirts using Ikes plan costs 0.03 per shirt which is very minimal when compared to 4.22. Hence, by using Mikes plan a labor cost of 4.17 per shirt can be saved over Ikes plan. Moreover in Mikes plan the Capacity utilization is 94% whereas, for Ikes plan it is 81%. In Mikes plan Maximum utilization is achieved as both types of shirts are manufactured under the same process, whereas, in Ikes process the utilization is over used in Regular process and under used in Exclusive shirt process.i.e. In regular process the workers need to work in additional shifts and in Exclusive shirt process the workers are free for a large amount of time. In addition, the Initial cost of setting up the equipment in Ikes process would be more because it requires the Exclusive Shirt process to be arranged separately. This requires a lot of removing and fixing the Machines form their present positions, whereas, in Mikes process the Exclusive shirts can be manufactured in the current set up. Hence, we recommend Dwight Collier to go for Mikes plan as it seems to be more beneficial when compared to Ikes plan.

An operation is composed of processes designed to add value by transforming inputs into useful outputs. Operations deal with process aspects such as cost, quality, flexibility, and speed. Some of the process performance measures that communicate these aspects include:

Process capacity - The capacity of the process is its maximum output rate, measured in units produced per unit of time. The capacity of a series of tasks is determined by the lowest capacity task in the string Capacity utilization - the percentage of the process capacity that actually is being used. Throughput rate (flow rate ) - the average rate at which units flow past a specific point in the process. The maximum throughput rate is the process capacity. Flow time (throughput time or lead time) - the average time that a unit requires to flow through the process from the entry point to the exit point. Cycle time - the time between successive units as they are output from the process. Cycle time for the process is equal to the inverse of the throughput rateProcess time - the average time that a unit is worked on. Process time is flow time less idle time. Direct labor content - the amount of labor (in units of time) actually contained in the product. Excludes idle time when workers are not working directly on the product. Also excludes time spent maintaining machines, transporting materials, etc. Direct labor utilization - the fraction of labor capacity that actually is utilized as direct labor.

Little's Law The inventory in the process is related to the throughput rate and throughput time by the following equation: W.I.P. Inventory = Throughput Rate x Flow Time The Process Bottleneck The process capacity is determined by the slowest series task in the process; that is, having the slowest throughput rate or longest cycle time. This slowest task is known as the bottleneck. Identification of the bottleneck is a critical aspect of process analysis since it not only determines the process capacity, but also provides the opportunity to increase that capacity. Saving time in the bottleneck activity saves time for the entire process. Saving time in a non-bottleneck activity does not help the process since the throughput rate is limited by the bottleneck. It is only when the bottleneck is eliminated that another activity will become the new bottleneck and present a new opportunity to improve the process.