Case Study Ch.

8:
Bank USA cash
movement
Group Members:
Gagik Sirekanyan
Vigen Torosyan
Arpi Orujyan
Ani Khachatryan
Vanik Barseghyan
 ▫ The cash movement (CM) operating unit is responsible for transferring money for Bank
USA and any of its customers. 

Summary ▫ Cycle time for outgoing wires is computed as follows CT= A/R= [(7.5hrs/day)(60min/hr)]/
(306wires/day)= 1.47min/wire
▫ Process work flow: 47 detailed steps consolidated into 16 workgroups.
▫ A wire transfer request can "fail" in several ways with consequences to the bank.
▫ CM processes 1,500 outgoing wires per week with about 1 error every two weeks.
▫ different types of errors include: the same wire being sent out twice, not sent out at all, sent
with inaccurate information on it including dollar amount, or sent to the wrong place.
▫ The cost of these errors can be so high that 5 quality control steps are built into the cash
management process.

Employ 21 people:  Quality control checkpoints:

▫ 3 managers
▫ 11 associates in outgoing wires
▫ 2 associates in incoming wires
▫ 3 associates in checks
▫ 2 associates in other areas
▫ 1. Verify the receipt of Fax
▫ 2. Verify the accuracy of the wire request
▫ 3. Verify the accuracy of the keyed wire
▫ 4. Verify the wire was sent correctly 
▫ 5. Verify the appropriate funds were taken 
▫ from the customer's account
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  Question 1

What is the best way to group the work represented by the 16 workgroups for an average
demand of 306 outgoing wires per day? What is your line balance if peak demand is 450
wires per day? What is assembly-line efficiency for each line balance solution?

Assembly line balancing

Cycle time: 1.47 minutes/wire (306 wires/day) C=1.0 min/wire (457 wires/day)
Work station Tasks Total Time Idle time Work station Tasks Total Time Idle time
1 1,2 1.1 0.37 1 1 0.8 0.20
2 3,4 0.9 0.57 2 2 0.3 0.70
3 5,6,7 1.4 0.07 3 3,4 0.9 0.10
4 8 0.5 0.97 4 5 1.0 0.0
5 9,10,11,12 1.25 0.22  5 6,7,8 0.9 0.10 
6 13,14,15 1.15 0.32 6 9 1.0 0.0
7 16 0.75 0.72 7 10,11,12,13,14 1.0 0.0
Total 7.05 min 3.24 min 8 ,15 0.4 0.60
9 16 0.75 0.25
Total 7.5min 3.24 min
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   Question 2
How many people are needed for outgoing wires using
assembly line balancing methods versus the current
staffing level of 11 full-time equivalent employees?

Total Time Available = (# work stations)(Cycle Time) = N*CT = By grouping work using assembly line
7(1.47)= 10.29 minutes balancing you 
Total Idle Time = N*CT-Et = 7(1.47) - 7.05 = 3.24 minutes need 7 people not 11 as currently
Assembly Line Efficiency = Et/(N*CT) = 7.05/(7*1.47) = 68.85% assigned if you plan for average
Balance Delay = 1 - Assembly Line Efficiency = 1.0 - .6885 = .3115 or demand of 306 wires per day.
31.15%

Therefore, by grouping work using

Total Time Available = (N*CT) = 9(1)=9.0 min
assembly line balancing you need 9
Total Idle Time= N*CT-Et= 9(1)-7.05=1.95 min 
people, not 11 as currently assigned
Assembly Line Efficiency= Et/(N*CT)= 7.05/(9*1)= 78.33%
labor savings= 9 (2 employees)($30,000)
Balance Delay= 1 - Assembly Line Efficiency= 1.0-.7833= 21.67%
(1.30)= $78,000
 Final Advantage of 9 employees:
▫ saves money
recommendations ▫ less idle time
▫ room to work with employees
Disadvantages of 9 employees:
▫ doesn't save as much money

Advantages of 7 employees:
▫ saves the most money
Disadvantages of 7 employees:
▫ a lot of risk
▫ and high cost of failure

Having 9 employees seems most reasonable

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Thank you!
Any Questions?