SUMMARY OF CHAPTER 9

(PROPOSED METHOD ELEMENTATION)

WORK SYSTEM, ANALYSIS, AND DESIGN

By :

Jessica Ananda Putri

004201800010

Industrial Engineering (Manufacturing Class 1)

Engineering lectured by
Andira Taslim, S.T., M.T.

PRESIDENT UNIVERSITY
Jl. Ki Hajar Dewantara, Jababeka Education Park ,Cikarang Baru,
Bekasi
West Java - Indonesia 17750
 CHAPTER 9
PROPOSED METHOD ELIMINATION

9.1 DECISION MAKING TOOLS

a. Decision Tables
Decision tables are a structured approach for taking the subjectivity out of
decision making, that is, determining which of several alternatives methods changes
should be implemented. This tables consist of condition-action statements, similar to if-
then statements in computer programs. If the right condition or combination of conditions
exists, then specified actions are taken. Then, decision tables can also describe about
complex, multirule, multivariable decision systems.
Then the other, we can called them as hazard action tables, are usually utilized in
safety program to specify certain actions for given hazard conditions. The hazard may be
identified by two different variables, which is it can identified about frequency (how
often the accident is likely to occur) and severity (how sever the loss will be). For the
additional notes, the frequency may be categorized as extremely remote or highly
probable, while severity may have levels of negligible, marginal, critic, and catastrophic.

b. Value Engineering
Value engineering (VE) is a systematic method to improve the "value" of goods
or products and services by using an examination of function. Value, as defined, is the
ratio of function to cost. Value can therefore be manipulated by either improving the
function or reducing the cost. It is a primary tenet of value engineering that basic
functions be preserved and not be reduced as a consequence of pursuing value
improvements. Or it also has functions to computes a “value score” for each alternative,
thus facilitating their comparison.
 c. Cost-Benefit Analysis
Cost-benefit analysis is a more quantitative approach to deciding between different
alternatives . It also has functions to allows comparison of alternatives based on a
cost/benefit ration. This approach requires 5 steps :
1. Determine what is changed due to better design, that’s, increased productivity, better
quality, decreased injury, so on.
2. Quantify these changes (benefits) into monetary units.
3. Determine the cost required to implement the changes.
4. Divide the cost by the benefit for each alternative, to create a ratio.
5. The smallest ratio determines the desired alternative.

Example 9.1 :
The operators have complained about wrist, neck, back, and ankle pain. Possible method
changes:
1. Replacement of the mechanical pedal with foot-operated electric switch, to reduce ankle
fatigue.
2. Better adjustment of the position of the stereoscope, to reduce neck fatigue.
3. Implementation of a video projection systems, for heads up viewing.
4. Use a gravity feed bin for the nibs, to improve productivity.
5. Replacement of the tweezers with a vacuum-operated stylus, to both improve
productivity and eliminate a potential cumulative trauma disorder (CTD) causing pinch
grip.
Methods engineers to proceed if condition 1 and either condition 2 or 3 are met ;
Condition 1: implementation cost is $200 or less,
Condition 2: productivity increase greater than 5%
Condition 3: injury risks reduced by more than 33%
Work design and
Productivity (%) CTD Risk (%) Cost ($)
methods engineering
Foot-operated electric
0 -1 175
switch
Adjust stereoscope 0 -2 10
Video project system +1 -2 2000
Gravity feed bin +7 -10 40
Vacuum stylus +1 -40 200
Decision Table of Cutoff Operation

Condition
Action
Method Changes 1 2 3 Policy
Electric Switch -
Adjust Stereoscope -
Video Projection System -
Gravity Feed Bin Proceed
Vacuum Stylus Proceed

Value Engineering Analysis of Cutoff Production

Plant :Dorben Co. A B C D E
Project : Cutoff Al
Operation
ter
Date : 6-12-97 Electri Adjust Video Gravit Vacuu
na
c steroscop projectio y feed m
tive Switch e n bin stylus
Analyst : AF s

Ratings and weighted ratings

Comment
Factor/Consideratio s
Wt A B C D E
n
Increase in
6 0 0 0 0 1 6 3 18 1 6
productivity
Decrease injuries 4 1 4 1 4 1 4 2 8 3 4
Low-cost solution 8 3 24 4 32 1 8 4 32 3 24

Totals 28 36 18 58 42
Cost-Benefit Analysis
Benefits
Method
Productivity Injury rates Total Cost ($) Cost Benefits
Changes
Electric
0 60 60 175 2.92
switch
Adjust
0 120 120 10 0.08
stereoscope
Video
production 645 120 765 2,000 2.61
system
Gravity feed
4,515 600 5,115 40 0.01
bin
Vacuum
645 2,400 3,045 100 0.03
stylus
Methods
5,160 3,120 8,280 150 0.03
changes 2,4,5

d. Crossover Charts
Crossover charts or usually known as break-even are very useful in comparing the
payback times of alternative methods changes. One may use general-purpose equipment
with low capital costs but higher setup costs, while the other may use special equipment
at higher capital cost but with lower setup costs. At some productions quantity, the two
methods are equal, this called as crossover point.

e. Multiple-Criteria Decision Making

It means the decision in the presence of multiple, often conflicting, criteria can be
approached by a relatively new process.

Formula :

a. To calculate the expected return under each decision alternative and select the
largest value to maximize or the smallest value to minimize
σ𝑛
𝑗=𝑖 𝑃𝑗𝐶𝑖𝑗
E(a) :
𝑛
b. Qi to determine for each alternative
Qi : (X) (Max Cij) + (1-X) (Min Cij)
f. Economic Decision Tools
There are three techniques for determining the desirability of investing in a
proposed method are (1) the return on sales method, (2) the return on investment or
payback method, (3) the discounted cash flow method.
The return on sales method involves computing the ratio of (1) the average yearly
profit brought about through using the method to (2) the average yearly sales or increase
in dollar value added to the product, based on the pessimistic estimated life of the
product. However, while this ratio provides information on the effectiveness of the
method and the resulting sales efforts, it doesn’t consider the original investment required
to get started on the method.
The return on investment method gives the ratio of (1) the average yearly profit
brought about using the method, based upon the pessimistic estimated life of the product,
to (2) the original investment. Of two proposed methods that would result in the same
sales and profit potential, management would prefer to use the one requiring the least
investment capital. The reciprocal of the return on investment is often referred to payback
method.
The disconnected cash flow method compute the ratio of (1) the present worth of
cash flow, based on a desired percentage return, to (2) the original investment. This
method calculates the rate of flow of money in and through the company and the time
value of money.

The following applies to the present-value concept :

Single Payment

- Future-worth factor (given P, find F) F = P (1 + 𝑖)𝑛

- Present-worth factor (given F, find P) P = F (1 + 𝑖)−𝑛

Uniform Series
𝐹𝑖
- Sinking fund factor (given F, find R) R = (𝑖+1)𝑛 −1
𝑃𝑖 (1+𝑖)𝑛
- Capital recovery (given P, find R) R =
(1+𝑖)𝑛 −1
𝑛
- Future-worth factor given R, find F F = R[(1 + 𝑖) − 1]Τ𝑖
𝑅 [(1+𝑖)𝑛 −1]
- Present-worth factor = given R, find P P =
𝑖(1+𝑖)𝑛

Note :

I = interest rate ; P = Present sum of money

N = number of interest period ; F = future sum of money

R = end-of period payment

Example 9.4 :

Investment for proposed method : $10,000

Desired return on investment : 10%

Salvage value of jigs, fixtures, and tools : $500

Estimated life of the product for which the proposed method will be used : 10 years

Solution :

1. Present worth of cash flow :

(3,000)(0.9091) = $2,730 (3,800)(0.5645) = $2,140
(3,800)(0.8264) = $3,140 (3,000)(0.5132) = $1,540
(4,600)(0.7513) = $3,460 (2,200)(0.4665) = $1,025
(5,400)(0.6830) = $3,690 (1,400)(0.3855) = $595
(4,600)(0.6209) = $2,860 (500)(0.3855) = $193
Total = $21,373
2. Salvage value of tools :
(500)(0.3855) = $193
Total present worth of anticipated gross profit and tool salvage value = $21,566
Ratio of present worth to original investment = 21,566/10,000 = 2.16

Table comparison of economic justification methods

Increase in sales Cost of production Gross profit due to
End of Year values due to with proposed proposed method
proposed method method
1 $5,000 $2,000 $3,000

2 $6,000 $2,200 $3,800

3 $7,000 $2,400 $4,600

4 $8,000 $2,600 $5,400

5 $7,000 $2,400 $4,600

6 $6,000 $2,200 $3,800

7 $5,000 $2,000 $3,000

8 $4,000 $1,800 $2,200

9 $3,000 $1,600 $1,400

10 $2,000 $1,500 $500

 Total $53,000 $20,700 $32,300

Average $5,300 $2,070 $3,230

Return on sales = 3,230/5,300 = 61% Return on investment = 3,320/10,000 = 32,3%

Payback = 1/0.323 = 3,09 years

9.2 INSTALLATION
The analyst should stay with their job during installation, to ensure that all details are carried out
in accordance with the proposed plan. The analyst should verify that the work center being established
is equipped with facilities proposed, the planned working are provided, the tooling is done in
accordance with recommendations. And the work is progressing satisfactorily. The analyst should ‘sell’
the new method to the operator, supervisor, and setup person.

Once the new work center has been installed, the analyst must check all aspects to see whether
they conform to the specifications established. In particular, the analyst must verify the reach and move
distances.

Once every aspects to the new method is ready for operation, the supervisor assigns the
operator who will be working with the method. The analyst should stay with the operator as long as
necessary to ensure that the operator is familiar with the new assignments.

Once the operator begins to get a feel for the method and can work systematically, the analyst
can proceed with other work.

Implementing Changes :

 Resistance to Change
 Hawthorne Effect
The Hawthorne effect refers to an often quoted study emphasizing the need for worker
involvement in methods changes or production planning leading to increased motivation and
productivity.
Based on this method, workers involvement in change and motivation can have a large
impact on productivity. It has been studied at Western Electric, Co.’s Hawthorne plant near
Chicago in 1924-1927.
There are three experiments at Hawthorne plant: (1) Illumination increased;
productivity increased. (2) Illumination decreased; productivity decreased. (3) Illumination
same, but light bulbs changed and workers allowed to believe it illumination was increased;
productivity increased.
Another set of experiments (1927 – 1932), explored impact of mental attitudes on
effectiveness . There are 6 operators were studied under various conditions: (1) Group
 incentives, (2) More rest breaks, (3) Shorter work days, (4) Shorter work weeks, (5) Lunches or
beverages at company expense.
Regardless of the controversy, the Hawthorne studies have three main implications : (1)
the basic rule of experimentation, (2) proper human relations can act as a strong motivator, and
(3) it is very difficult to tease apart confounded factors in an uncontrolled study.

9.3 JOB EVALUATION

A job evaluation should start with an accurate title, a detailed job description identifying the
specific duties and responsibilities of the job, and the minimum requirements for the worker performing
the job.

Essentially, the job evaluation is a procedure by which an organizations ranks its job in order of
their worth or importance . It should provide the following :

1. A basis for explaining to employees why one job is worth more (or less) than another job.
2. A reason to employees whose rates of pay are adjusted because of a change in method.
3. A basis for assigning personnel with specific abilities to certain jobs..
4. Criteria for a job when new personnel are employed or promotions are made.
5. Assistance in the training of supervisory personnel.
6. A basis for determining where opportunities for methods improvement exist.

 Job Evaluation Systems

For this method of job evaluation, the analyst uses the following procedure :
1. Prepare a grade description scale for each type of job
2. Write the grade descriptions for each grade in each scale, using factors :
a. Type of work and complexity of duties
b. Education necessary to perform job
c. Experience necessary to perform job
d. Responsibilities
e. Effort demanded
3. Prepare job descriptions for each job

In the point system, analyst directly compare all the attributes of a job with the
attributes in other job, using the following procedure :

1. Establish and define the basic factors common to most jobs.

2. Specifically define the degrees of each factor
3. Establish the points to be accredited to each degree of each factor.
4. Prepare a description of each job.
5. Evaluate each job by determining the degree of each factor contained in it.
6. Sum the points for each factor to get the total points for the job.
7. Convert the job points into a wage rate.
 The factor comparison method of a job evaluation usually has the following statements :
1. Determine the factors establishing the relative worth of all jobs.
2. Establish an evaluation scale that’s usually similar to a point scale.
3. Prepare job descriptions.
4. Evaluate the key jobs, factor by factor, by ranking each job from lowest to highest.
5. Pay wages on each key job, based on various factor.
6. Evaluate other jobs, factor by factor, on the basis of the monetary values assigned
to the various factors in key jobs.
7. Determine a wage by adding the money values of the various factors.

The ranking method arranges jobs in order of importance, or according to relative

worth. Generally, the ranking method is less objective than the other techniques. Here,
the following steps apply to the ranking method :

1. Prepare job descriptions

2. Rank job in order of their relative importance
3. Determine the class or grade for groups of jobs, using a bracketing process
4. Establish the wage or wage range for each class or grade

 Factor Selection
Under the factor comparison method, most companies use five factors. In some point
programs, 10 or more factor may be used. However, it is preferable to use a small number
of factors. The elements of any job may be classified according to :
1. What job demands the employee meets in the form of physical and mental factors.
2. What the job takes from employee in the form of physical and mental fatigue.
3. The responsibilities that the job demands.
4. The conditions under which the job is done.

Other factors may include educations, experience, initiative, ingenuity, physical demands,
mental and/or visual demands, working conditions, hazards, equipment responsibility,etc.

 Performance Evaluation