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Chapter 11 Work System

Design
Operations Management
by
R. Dan Reid & Nada R. Sanders
4th Edition Wiley 2010
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Learning Objectives
Describe the elements of work system
design and the objectives of each element
Describe relevant job design issues
Describe methods analysis
Understand the importance of work
measurement
Describe how to do a time study

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Learning Objectives cont
Describe how to do work sampling
Develop standard times
Show how to use work standards
Describe compensation plans
Describe learning curves

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Designing a Work System
Designing a work system is part of developing an
operations strategy
Effective operations strategy provides structure for
company productivity
The work system includes:
Job design
Work measurements
Worker compensation
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Design a Job
Job Design specifies work activities of an
individual or group
Jobs are designed by answering questions
like:
What is the jobs description?
What is the purpose of the job?
Where is the job done?
Who does the job?
What background, training, or skills are required to do
the job?

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Additional Job Design Factors
Technical feasibility:
The job must be physically and mentally doable
Economic feasibility:
Cost of performing the job is less than the
value it adds
Behavioral feasibility:
Degree to which the job is intrinsically
satisfying to the employee

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Machines or People - Should
the Job Be Automated?
Safety & risk of injury to workers
Repetitive nature of the task
(monotonous?)
Degree of precision required
Complexity of the task
Need for empathy, compassion, or other
emotional elements
Need for personal customer relationships
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Levels of Labor Specialization
Level of labor specialization can:
Reduce the employees scope of expertise (higher
levels of specialization)
Increase the employees scope of expertise (lower
levels of specialization)
Work satisfaction helps define level of
specialization
Specialization can result in employee boredom
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Specialization: Managements View
Advantages:
Readily available labor
Minimal training
required
Reasonable wages
costs
High productivity
Disadvantages:
High absenteeism
High turnover rates
High scrap rates
Grievances filed

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Specialization: Employees View
Advantages:
Minimal credentials
required
Minimal
responsibilities
Minimal mental effort
needed
Reasonable wages
Disadvantages:
Boredom
Little growth
opportunity
Little control over work
Little room for initiative
Little intrinsic
satisfaction

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Eliminating Employee Boredom
Job enlargement
Horizontal expansion of the job through increasing the
scope of the work assigned.
Job enrichment
Vertical expansion of the job through increased worker
responsibility
Adding work planning or inspection to a routine
assembly task
Job rotation
Shifting of cross trained workers to other tasks
Broadens understanding and can reduce fatigue

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Team Approach to Job Design
Problem-solving teams:
Small groups, trained in problem-solving techniques.
Used to identify, analyze, & propose solutions to
workplace problems
Special-purpose task forces:
Highly-focused, short-term teams with a focused
agenda (often cross-functional)
Self-directed or self-managed teams:
Team members work through consensus to plan,
manage, & control their assigned work flow

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The Alternative Workplace
An alternative workplace brings work to the worker rather
than the worker to the workplace
Alternative workplaces are made possible by
technologies like email, e-networks, cell phones, & video
conferencing. Current situation:
More than 30 million employees work in alternative workspaces
A survey at IBM reveals that 87% of alternative workplace
employees believe their effectiveness has increased significantly
Sun Microsystems gives many of its designers the option to work
at home
AT&T provides flexible workstations so workers can rotate in and
out as needed
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Methods Analysis
A detailed step-by-step analysis of how a given job
is performed
Can distinguish between value-added & non-
value-added steps
Analysis can revise the procedure to improve
productivity
After improvement, must revise the new
standard operating procedure
Follow-up to insure that changes actually
improve the operation

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Methods Analysis
Method analysis consists of:
1. Identify the operation to be analyzed
2. Gather all relevant information
3. Talk with employees who use the operation
4. Chart the operation
5. Evaluate each step
6. Revise the existing or new operation as needed
7. Put the revised or new operation into effect, then
follow up on the changes or new operation

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Methods Analysis at FEAT Company: The methods analyst has
been asked to review the transformer wiring operation because of
past quality problems from poor solder joints. The solder operation
sequence and the workstation layout are shown below.
1. Picks up wire in left hand and
moves it to the terminal
2. Simultaneously picks up
solder iron in right hand and
moves to the terminal
3. Solders wire to terminal and
replaces solder iron in holder
4. Solders terminal #1, then
#2 - #6, going right to left
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Analysts Recommendations: A. Maize reviews the workplace
layout and the present flow chart (below), and recommends
reversing the solder sequence from #6-#1, which is less
problematic for the right handed operator. He schedules a follow
up to insure that the new method has fixed the quality problem.
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The Work Environment
Working conditions can effect worker productivity,
product quality, and worker safety
Temperature, ventilation, noise, and lighting are all
factors in work system design
Congress passed OSHA in 1970 to mandate specific
safety conditions that must be met
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Work Measurement
Work Measurement helps determine how
long it should take to do a job
Involves determining Standard Time
Standard time: the length of time a qualified
worker, using appropriate processes and tools
to complete a specific job, allowing time for
personal fatigue, and unavoidable delays
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Work Measurement
Standard time is used in:
Costing the labor component of products
Tracking employee performance
Scheduling & planning required resources
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Setting Standard Times
Step 1: Choose the specific job to be studied
Step 2: Tell the worker whose job you will be studying
Step 3: Break the job into easily recognizable units
Step 4: Calculate the number of cycles you must observe
Step 5: Time each element, record data & rate the
workers performance
Step 6: Compute the normal time
Step 7: Compute the standard time

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How to do a Time Study
When making a time study several decisions
are made to assure desired results:
# of observations to make
Desired level of accuracy
Desired level of confidence for the estimated
standard time
Desired accuracy level is typically expressed
as a % of the mean observed times


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Doing a Time Study
Need to determine how many observations are required
Involves determining the level of accuracy required and confidence
level desired



n: number of observations of an element that are needed
z: the number of normal standard deviations needed for desired
confidence
s: the standard deviation of the sample
a: desired accuracy or precision
x-bar: the mean of the sample observations

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Pats Pizza Place: Pat hires an analyst to determine a standard
time to prepare a large pepperoni and cheese pizza. He takes 10
observations of the 7 elements and calculates the mean time and
the standard deviation per element. He must then calculate the #
of observations to be within 5% of the true mean 95% of the time.
The analyst must calculate the observations for each element to
determine how many additional observations must be taken. The
maximum number of 25 (in this case) for element #7 means that an
additional 15 observations must be made and then the observed
times are revised.

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A B C D E
Example 11.3 Pat's Pizza Place
Standard Deviation Mean Observed Revised Observed
Work Element (minutes) Time (minutes) Time (minutes) # Observations
1. Get ball of dough 0.010 0.12 0.15 11
2. Flatten dough 0.030 0.25 0.25 23
3. Spin and toss dough 0.040 0.50 0.60 10
4. Place dough on counter 0.005 0.12 0.15 3
5. Pour sauce on formed dough 0.035 0.30 0.30 21
6. Place grated cheese on top 0.025 0.25 0.28 16
7. Place pepperoni on sauce 0.030 0.24 0.28 25
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Other Time Factors Used in
Calculating Standard Time
The normal time (NT) is the mean observed
time multiplied by the performance rating
factor (PRF)
The PRF is a subjective estimate of a workers
pace relative to a normal work pace
The frequency of occurrence (F) is how
often the element must be done each cycle.



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Other Time Factors Used in
Calculating Standard Time
The allowance factor (AF) is the amount of time
allowed for personal, fatigue, and unavoidable delays
Standard Time=normal time x allowance factor,
where:



(NT)(AF) ST
117.6% 1.176
0.15 1
1
PFD 1
1
AF Worked Tme
=
= =

=
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Calculating Normal Time and
Standard Time at Pats Pizza
The standard time for preparing a large, hand-tossed pepperoni
pizza is 2.312 minutes. This means that a worker can prepare 207
pizzas in an 8-hour shift (480 minutes divided by 2.312 minutes)
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A B C D E F
Example 11.4 Calculating Standard Time for a Hand-Tossed Cheese and Pepperoni Pizza
Revised Observed Performance Rating Frequency Normal Time Standard Time
Work Element Time (minutes) Factor (minutes) (minutes)
1. Get ball of dough 0.15 0.90 1 0.135 0.159
2. Flatten dough 0.25 1.00 1 0.250 0.294
3. Spin and toss dough 0.60 0.85 1 0.510 0.600
4. Place dough on counter 0.15 1.10 1 0.165 0.194
5. Pour sauce on formed dough 0.30 1.20 1 0.360 0.423
6. Place grated cheese on top 0.28 1.00 1 0.280 0.329
7. Place pepperoni on sauce 0.28 0.95 1 0.266 0.313
Total Time 1.966 2.312
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Other Time Study Methods
Elemental time data establishes standards based
on previously completed time studies, stored in an
organizations database.
Predetermined time data (e.g. MTM and MTS) is a
published database element time data used for
establishing standard times
Reach, grasp, move, engage, insert, turn, etc.
Work Sampling is a technique for estimating the
proportion of time a worker spends on an activity
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Work Sampling Procedures
1. Identify the worker or machine to be sampled
2. Define the activities to be observed
3. Estimate the sample size based on level of accuracy and
confidence level
4. Develop the random observation schedule. Make
observations over a time period that is representative of
normal work conditions
5. Make you observations and record the data. Check to see
whether the estimated sample size remains valid
6. Estimate the proportion of the time spent on the given
activity

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Work Sampling Example: We are interested in estimating the
proportion of time spent by secretaries arranging and scheduling
travel. We are considering the possibility of bringing an on site
travel agency to free up secretaries from this time consuming task.
We estimate that the proportion might be as high as .50.
Step 1 We need to estimate the number of observations needed to provide
an estimate with 97% confidence (z=2.17), and the resulting estimate will be
within 5% of its true value. We use



Step 2 Based on the first 30 observations the secretary was making travel
reservations 6 times (6 out of 30 observations = 0.2). With this new estimate,
recalculate the sample size needed .





Final Step After making the 302 observations, the secretary was making
reservations 60 times or 19.9%. This estimate can now be used to make the
decision on savings that might result by consolidating this task with an in
house travel agency



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Compensation
Compensation is the third part of work system design
Time-based plans (pay based on the number of
hours worked) vs. output-based systems (pay based
on the number of units completed)
Group incentive plans: profit sharing & gain sharing
Plans put part of a workers salary at risk
Does the compensation system undermine teamwork?
Does plan prevent free-riders not doing their fair share?
Does the incentive plan encourage workers to support the
long-term health of the organization?

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Worker Compensation Systems
cont
Group incentive plans reward employees when
company achieves certain performance objectives
Profit sharing a employee bonus pool based on
sharing of companys profits
Gain sharing emphasizes cost reduction rather than
profits
Plans put part of a workers salary at risk
Compensation system may undermine teamwork
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Learning Curves
When the number of times the task is
repeated doubles, the time per task
reduces as shown in the graph
With an 85% learning curve rate, the
2nd time a task is done will take 85%
of the 1st time.
The 4
th
time will take 85% of the 2
nd
If an employee took 12 hours to
complete an initial task, how long will
the 16
th
time take (4
th
doubling)?
T x L
n
= time required to
perform a task the nth time
T = the time required to
perform the task the first
time
L = the rate of learning
n = the number of times the
task has doubled

hours 6.26 (.85) x 12 task 16th for Hours
4
= =
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Work System Design within
OM: How it all fits together
Work system design includes job design, methods
analysis, and work measurement. Manufacturing or
industrial engineers often do these activities. Job design
determines exactly how the product or service will be
done and is linked directly to product and process design.
Based on the type of product (standard or custom) and its
proposed process (mass-producing or producing one at a
time), a company determines the skills set needed by its
employees as well as the necessary equipment.
Method analysis provides a means for evaluating different
processes and materials, thus allowing a company to focus
on continuous improvement. This ties in directly with a
companys total quality management (TQM) focus.
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WSD: How it all fits together
cont
Work measurement techniques allow a company to develop
standards to use as a basis for evaluating the cost and effectiveness
of different methods and materials for building a product or
providing a service. These time standards provide a time estimate to
use as a basis for establishing detailed work schedules and for
determining long-term staffing levels. These time estimates can be
used as a basis for making delivery or completion-time promises to
customers. Standard times are used to develop lead-time estimates,
which are inputs for the MRP (material requirement planning)
system as well as the MPS (master production schedule) process.
Work system design provides the means for setting standards
against which to compare new methods, new materials, and new
designs, assures that employees know how to do their job, and
provides the information needed by the company to calculate its
costs.

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Work System Design Across
the Organization
Work system design affections functional
areas throughout the organization
Accounting calculates the cost of products
manufactured, variances between planned and
actual costs as well as operational efficiency
Marketing uses work system design as the
bases for determining led time
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Work System Design Across
the Organization cont
Information systems uses estimates of job
duration and resources in the software for
scheduling and tracking operations
Human resources uses work sampling to
establishes and validate hiring criteria
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Chapter 11 Highlights
Work system design involves job design, methods or process
analysis and work measurement. Job design specifies the
work activities of an individual or group in support of
organizational objectives
Relevant job design issues include design feasibility, the
choice of human or machine, the use of teams, and the
location where the work is to be done. Technical feasibility is
the degree to which an individual or group of individuals is
physically and mentally able to do the job. Economic
feasibility is the degree to which the value of a job adds and
the cost of have the job done are profitable for the company.

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Chapter 11 Highlights cont
Methods or process analysis is concerned with how the employee
does the job. Methods analysis can also be used to improve the
efficiency of an operation.
Work measurement is used to determine standard times. A
standard time is how long it should take a qualified operator, using
the appropriate process, material, and equipment, and working at a
sustained pace, to do a particular job. Standard times are used for
product costing, process and material evaluations, and for planning
workloads and staffing. Standard times are usually based on time
studies. Work sampling is used to estimate the proportion of time
that should be spent on an activity.

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Chapter 11 Highlights cont
To do a time study, first identify the job then break the job into work
elements. Finally, determine the number of observations needed and
perform the observation.
Work sampling involves random observations of a worker. Each time
you observe the worker, you note what activity the worker is doing.
After numerous observations, you can project the expected proportion of
time the worker should spend on different activities.
Standard times are developed with either time studies, elemental time
data, or predetermined time data. You learned how to develop standard
times using time studies. After conducting the time study, you compute
the mean observed time for each work element. You compute the
normal time for the work element by multiplying the mean observed
time by the performance rating factor. You find the standard time for
each work element by multiplying the normal time by the allowance
factor.
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Chapter 11 Highlights cont
Standard times are used to compare alternative processes, evaluate new
materials or components, and evaluate individual worker performance.
Standards also allow you to determine when a job should be completed
or how many units can be done in a period of time.
Worker compensation systems are either time-based or out-put based.
Time-based systems pay the employee for the number of hours worked.
Output-based systems pay the employee for the number of units
completed. Compensation schemes can be based on either individual or
group performance. and can be based on individual or group
performance.
Learning curves show the rate of learning that occurs when an employee
repeats the same task. Using learning curves, you can estimate how
long a particular task will take. It allows the company to schedule better
and calculate cost more accurately.
Chapter 11 Homework Hints
11.5: calculate normal time (NT)
11.6: use NT from 11.5 and allowance factorjob time
[AF
JOB
] to calculate standard time (ST)
11.7: use the total ST from 11.6 to calculate the number of
units.
11.8: use NT from 11.5 and allowance factortime worked
[AF
TIME WORKED
] to calculate ST
11.9: use the total ST from 11.8 to calculate the number of
units.
11.10: check the book for help in finding other factors to
choose between the two models calculated above.
11.19: refer to example 11.6 and use table 11-9 for data to
calculate the time based on the learning curve.
Note that problems 5-10 are worth 5 points; 19 is worth 10
for a total of 40 points for the assignment.