Memorandum
To: Alistair Wu & Catherine Pang
CC: Cynthia Crowninshield
From: Chantell Sicard
Date: [ 8/7/2015 ]
Re: Work Flow, Initial and Ongoing Cost, Staff Planning & Short Term Scheduling
The purpose of this Memorandum is, to present recommendations based on analysis in order to help improve workflow, costing and staffing at ShuzWorld.
Work Flow Analysis
ShuzWorld currently produces a line of Rugged Wear Work Boots at its Shangahai Production Warehouse. Due to a Steel Toe feature the Rugged Wear Work Boots take longer to assemble than other shoe’s produced at the warehouse. The assembly line in place is made up of 8 workstations. The workstation task time varies with the maximum task taking 10 minutes to complete. Below is a schedule of the current time and sequence of the assembly line in place at ShuzWorld.

In an effort to help improve workflow, an analysis was completed using the information above and the Assembly Line Balancing tool. The purpose of the Assembly Line Balancing tool is to achieve efficiency by using the correct amount of workstations. This will help to increase workflow and reduce production cost.
Assembly Line Balancing
Confidential

Based on the above analysis, I would recommend the assembly line be reduced to five working stations. The workstations would consist of the following task sequence; * Station 1 | Task A | 10 min | * Station 2 | Task B & C | 9 min | * Station 3 | Task D | 8 min | * Station 4 | Task F, E & G | 10 | * Station 5 | Task H | 9 |
The current production line is operating at a 92% efficiency rate and has a balance delay of 8%. Implementing the recommended station reduction and task sequence will help ShuzWorld to obtain an efficiency rate of 100% and balance delay of 0%. This will provide ShuzWorld with both efficiency and cost savings. It must be noted that both Station 2 & 4 involve consolidating multiple tasks. Therefore, employees must be crossed trained in order to perform the entire task at each of those stations.

Initial and Ongoing Cost Analysis

As requested by Ms. Tarbox an Ongoing Cost Analysis has been done on the Maui Sandal Shoe line. In order to determine what amounts should be budgeted for direct labor costs during each of these months; a Learning Curve Analysis tool was used. The learning curve analysis tool was chosen due to its emphasis on strategic importance based on the learning curve. The learning curve is used to help assist in the development of strategic decisions concerning, capacity, pricing, costs and employment levels. As you will note, repetition will result in a decrease of time allocation for that operation. Therefore, this decrease in time allocation leaves more time to produce an increase number of products, since it takes less time to produce. Below you will find two charts 1) Learning Curve Results; 2) Learning curve unit times.

Learning Curve Results

As you can see from the above chart, the total time to produce one batch will decrease from 1,000 hrs to 381 hrs. This is due to the constant repetition. The chart below will assist in budgeting for the months ahead as it takes into consideration the projected learning curve from above. Using the cumulative time it has been determined that the Maui Sandals anticipated 4 month production run will take a total of 20,121.71 labor hours and cost $21,731.45 at the labor rate of $1.08 per hour. The hours determined for the first month are 3,738 labor hours for a total cost of $4,037.04. The second month will require 4,773 labor hours at a cost of $5,154.84. The third month will require 5,510 labor hours at a cost of $5,950.80. The fourth month will require 6,102 labor hours at a cost of $6,590.16(please note the labor hours have been rounded up for easier cost calculations). As production time continues the amount of labor decrease is smaller than at the beginning when the production initially started. As you can see from the below analysis it took 3737.74 labor hours for the production of the first 5 batches of the Maui Sandal. As the production continued it only took 6,102 labor hours to produce 10 times the amount of sandals produced in the first batch.

Learning Curve Unit Times

Staffing Plan

In order to find a way for ShuzWorld to save in the production of women shoes four specific operators can be shifted between four machines. The Assignment Tool was used to determine which job should be shifted to what machine. The Assignment Tool was selected to perform an optimal cost effective analysis for the 4 operators and the 4 machine. The Assignment Tool determined which machine would perform which job while providing the lowest cost to the company. The purpose of performing this analysis is to help minimize both time and cost of production.

Based on the above analysis if the following staffing plan assignment is chosen Shuzworld will have an optimal cost of $37. As noted above the following staffing plan assignment should be implemented. This will help to reduce both time and cost.. Machine Operator | Job | 1 | 1 | 2 | 2 | 3 | 4 | 4 | 3 | someone full time to keep these charts up to date.