Chap-3 Pak

PRODUCTION OPERATIONS MANAGEMENT
By: ZAHID HUSSAIN

M Phil: Total Quality Management Lead Auditor 5-S IRCA Lead Auditor ISO-9001-2000 IRCA Lead Auditor ISO-14000-2004 IRCA Lead Auditor OHSAS 18000-2007 B. Sc Engineering (Chemical)
Learning Curves
Underlying Principles of Learning Curves

1. Each time you perform a task it takes less time than the last time you performed the same task 2. The extent of task time decreases over time 3. The reduction in time will follow a predictable pattern
Learning Curves
Learning curves are useful for preparing cost estimates, bidding on special orders, setting labor standards, scheduling labor requirements, evaluating labor performance, and setting incentive wage rates.
Example of Learning Curve

90 % & learning 80%
Suppose you start a term paper typing business. You time yourself on the first paper, then the second, and so on.
Term paper 1 2 4 8
Time (in Minutes) 100 90 81.00 72,9
Time (in Minutes) 100 80 64 51.2
Types of Learning Individual learning Organizational learning

Individual Learning Improvement when individuals gain a skill or efficiency by repetition of a job
From Learning Curves to Performance Improvement (Individual Learning)

1. Proper selection of workers
Test for assembly work, Mental ability test for mental work Customer interaction test at front desk
2. Proper training
More effective training Faster learning rate.
Motivation
Productivity base on learning curve base on reward.
Work specialization
Simpler the task faster the learning curve.
From Learning Curves to Performance Improvement (Individual learning)

5. Do one or very few jobs at a time
Learning is faster when focus on one job.
6. Use tools or equipment that assists or supports performance 7. Provide quick and easy access for help
Assistance ensures the benefits of trainings.
8. Allow workers to help redesign their tasks

Include the performance factors in learning curve , it improve the learning curve.
From Learning Curves to Performance Improvement (Organizational Learning)

Organizational Learning Main source of org learning is individual learning of employees. Organization acquires knowledge in its technology (Software) , its structure, functions, its documentations and SOPs. Improvement from the groups of individuals from repetition and changes in administration, equipment, and product design.
Definition
improvement curve- Table of UNIT value
Unit # 1 2 4 8 16 Learning % , 80% 1.000 0.8000 0.6400 0.5120 0.4096 Learning % 90% 1.000 0.9000 0.8100 0.7290 0.6561
improvement curve- Table of CUMULATIVE value

Unit # 1 2 4 8 16 Learning % , 80% 1.000 1.800 3.142 5.346 8.920 Learning % 90% 1.000 1.900 3.556 6.571 12.04
Example
Q. A job applicant is being tested for an assembly line position. Management feels that steady state times have been approximately reached after 1000 performances. Regular assembly line workers are expected to perform the task within four minutes. a). If the job applicant performed the first test operation in 10 minutes and second one in 9 minutes, should this applicant be hired? (improvement curve at 1000 unit is 0.3499 at 90% leering)
Ans: Learning rate =9/10x100= 90% Time for 1000th unit = I C at 1000 unit x time of first performance ( 0.3499 x 10 minutes= 3.499 The person can be hired.
Example
Q. A job applicant is being tested for an assembly line position. Management feels that steady state times have been approximately reached after 1000 performances. Regular assembly line workers are expected to perform the task within four minutes. b). What is expected time that the job applicant would take to finish the 10th unit? (improvement curve at 10th unit is 0.7047 at 90% learning)
Ans: Learning rate =9/10x100= 90% Time for 10th unit = I C at 10th unit x time of first performance ( 0.7047 x 10 minutes= 7.047
Example
Q. Boeing aircraft collected following data on the first 8 units of their new business jet.
Uni Cost t # $Millions 1 2 3 4 $ 100 83 73 62 Unit # Cost $Millions 5 6 7 8 60 57 53 51 Unit # 1000 Learning Curve 80% UI Factor 0.1082 CI Factor 158.7
a). Estimate the learning curve for the new business jet? b). Estimate the AVERAGE cost for first 1000 units of jets? c). Estimate the cost to produce the 1000th jet?
Example
a). Estimate the learning curve for the new business jet?
LC for Unit 1 to 2 = 83/100 *100= 83% LC for Unit 2 to 4 = 62/83 * 100= 74.7% LC for Unit 4 to 8 = 51/62 * 100= 82.26% Average learning curve = (83+74.7+82.26)/3= 80%
Example
b). Estimate the AVERAGE cost for first 1000 units of jets? (CUMULATIV E IMPROVEMENT FACTOR improvement factor for 1000th unit at 80% learning curve is 158.7).
It is CIF so the cost to produce first 1000 units i.e. $ 100 x 158.7 = $ 15,870 M the average cost for each of first 1000 units is $ 15,870/1000 = $ 15.8 M
Example
c). Estimate the cost to produce the 1000th jet? = Cost of first unit x unit improvement factor for 1000th unit at 80% learning = $100 M x 0.1082 = @ 10.82 M
QUESTIONS

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PRODUCTION OPERATIONS MANAGEMENT

By: ZAHID HUSSAIN

Underlying Principles of Learning Curves

Example of Learning Curve

Time (in Minutes) 100 90 81.00 72,9

Time (in Minutes) 100 80 64 51.2

Types of Learning Individual learning Organizational learning

From Learning Curves to Performance Improvement (Individual Learning)

From Learning Curves to Performance Improvement (Individual learning)

8. Allow workers to help redesign their tasks

From Learning Curves to Performance Improvement (Organizational Learning)

improvement curve- Table of CUMULATIVE value

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