Fig 1.

Process Flow Diagram- Current Production Process

Current Production Process

Time required for producing one unit from laying and cutting operation=120/60*8=0.25 min Table 1.1. Current Production Plan

Operation

Regular Shirt Labour Content 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

Number of workers 8 4 2 6 4 2 4 4 2 4 4 4 4 4 4

Time required for producing one unit (in min.) .4875 .5 .325 .41 .42 .33 .41 .39 .32 .45 .39 .42 .38 .49 .42

Make Collar Make Cuffs Make Sleeves Make Front Make Back Join Shoulder Attach collar Attach sleeves Stitch Down sleeves Sew Side seam Attach cuffs Hem Button Inspect Iron Fold Package

From the table it is clear that cuff making is the slowest process and hence the cycle time of Regular Shirt making is equal to the time of cuff making=0.5 min.

Table 1.2. Current Production Plan Quantity Actual Cycle Time (min/shirt) Production Capacity (shirts/day) WIP Inventory Total Inventory Bottle neck time Bottle neck time Obtained Value Bottle Neck = 30 min per batch 0.5 per shirt

Bottle Neck = 30 min per batch

480/0.5 =960 units

Cutting + Other operations WIP/production Capacity 800/960

10800+960 =11760

Manufacturing Lead Time(days) Capacity Utilisation

Input to Output

11760/960 =12.25

Actual Production : Production Capacity

83.33%

Direct Labour Utilisation(min/shirt)

Direct Labour per unit

Cutting + Other operations

25.51+4(0.25)= 26.51

Direct Labour Cost ($/shirt) Direct Labour Utilisation

Total labour cost per unit of production

Labour cost =64 * 8 * 6

3072/800=$ 3.84/shirt

Labour utilized/ Labour Available

(800 * 26.51)/(8*60*64)

69.03%

Fig 2: Process Flow Diagram- Mikes Plan

Mikes Production Plan

Time required for producing one unit from laying and cutting operation=120/60*8=0.25 min whereas the cycle time of laser cutting machine is 2.5/5=0.5 Table 2.1. Mikes Production Plan

Operation

Regular Shirt Labour Content 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

Number of workers 8 4 2 6 4 2 4 4 2 4 4 4 4 4 4

Time required for producing one unit (in min.) .4875 .5 .325 .41 .42 .33 .41 .39 .32 .45 .39 .42 .38 .49 .42

Make Collar Make Cuffs Make Sleeves Make Front Make Back Join Shoulder Attach collar Attach sleeves Stitch Down sleeves Sew Side seam Attach cuffs Hem Button Inspect Iron Fold Package

From the table it is clear that cuff making is the slowest process and hence the cycle time of Mikes Shirt making process is equal to the time of cuff making=0.5 min.

Table 2.2. Mikes Production Plan

Quantity
Actual Cycle Time (min/shirt) Production Capacity (shirts/day) WIP Inventory Total Inventory Bottle neck time Bottle neck time

Obtained Value(Regular and Custom Shirts)

Bottle Neck = 30 min per batch 0.5 per shirt

Bottle Neck =40 min per batch

480/0.5=960 units

Cutting + Other operations WIP/production Capacity 900/960

1800+180 =1980

Manufacturing Lead Time(days) Capacity Utilisation

Input to Output

1980/960=12.58

Actual Production : Production Capacity

93.75%

Direct Labour Utilisation(min/shirt)

Direct Labour per unit

Cutting + Other operations

25.51+0.5=26.01

Direct Labour Cost ($/shirt) Direct Labour Utilisation

Total labour cost per unit of production

Labour cost =65* 8 * 6

3120/900=3.47

Labour utilised : Labour Available

Labour Utilised = 900 * 26.01

75.02%

Fig 3: Process Flow Diagram- Ikes Plan

Regular Shirt

Custom Shirt

Ikes Production Plan

Table 3.1. Ikes Production Plan

A. Regular Shirt Production

Operation Make Collar Make Cuffs Make Sleeves Make Front Make Back Join Shoulder Attach collar Attach sleeves Stitch Down sleeves Sew Side seam Attach cuffs Hem Button Inspect Iron Fold Package Regular Shirt Labour Content 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 Number of workers 7 3 1 5 3 1 3 3 1 3 3 3 3 3 3 Time required/lbr/shrt (in min) .56 .67 .65 .5 .57 .66 .55 .52 .65 .6 .52 .57 .5 .65 .59

Table 3.2. Ikes Production Plan

B. Customized Shirt
Operation Make Collar Make Cuffs Make Sleeves Make Front Make Back Join Shoulder Attach collar Attach sleeves Stitch Down sleeves Sew Side seam Attach cuffs Hem Button Inspect Iron Fold Package CUSTOM Shirt Labour Content 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 Number of workers 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Time required/lbr/shrt (in min) 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

Table 3.3. Ikes Production Plan Quantity Actual Cycle Time (min/shirt) Production Capacity (shirts/day) WIP Inventory Total Inventory Bottle neck time Bottle neck time Obtained Value(Custom Shirts) Bottle Neck = 3.9 min per shirt 3.9 per shirt

Bottle Neck =3.9 min per shirt

480/3.9 =123 units

Cutting + Other operations WIP/production Capacity 100/123

45+5 =50

Manufacturing Lead Time(days) Capacity Utilisation

Input to Output

50/123 =0.41

Actual Production : Production Capacity

81.3%

Direct Labour Utilisation(min/shirt)

Direct Labour per unit

Cutting + Other operations

25.51+0.5 =26.01

Direct Labour Cost ($/shirt) Direct Labour Utilisation

Total labour cost per unit of production

Labour cost =16* 8 * 6

768/100=7.68

Labour utilised : Labour Available

Labour Utilised = 100 * 26.01

33.86%

Table 4: Comparison of Mikes and Ikes Production Plan

Quantity Current Process Regular Shirts Actual Cycle Time(min./ shirt) 0.5 Mikes plan Regular & Custom shirts 0.5 Ikes plan Regular Shirts 0.67 Ikes plan Custom Shirts 3.9

Manufacturing Lead Time ( days)

12.25

2.06

12.58

0.41

WIP Inventory (shirts)

11760

1980

9060

50

Production capacity ( shirts/ day) Capacity Utilization

960

960

720

123

83.33%

93.75%

111.11%

81.3%

Direct Labour content (min/shirt) Direct Labour utilization

26.51

26.01

26.51

26.01

69.03%

75.02%

90.17%

33.8%

Direct labour Cost ( $/ shirt )

3.84

3.47

3.43

7.68

Table 5: Cost Comparison of Mikes and Ikes Plan A. For Normal Shirts Mikes plan Raw materials Direct labor Indirect labor Other Indirect Cost Total manufacturing Cost Retail price Profit Profit for 100 shirts $7.7 $3.46 $.66 $4.50 $16.32 $87.5 $71.18 $34622 Ikes plan $7.7 $7.68 $.66 $4.50 $20.54 $87.5 $66.96 $34312

B. For Customized Shirt Mikes plan Raw materials Direct labor Indirect labor Other Indirect Cost Total manufacturing Cost Retail price Profit Profit for 100 shirts $7.7 $3.46 $.66 $4.50 $16.32 $87.5 $71.18 $34622 Ikes plan $7.7 $7.68 $.66 $4.50 $20.54 $87.5 $66.96 $34312