PRODUCTION OPERATIONS MANAGEMENT

P MO

By: ZAHID HUSSAINM Phil: Total Quality Management

Lead Auditor 5-S IRCA Lead Auditor ISO-9001-2000

IRCA Lead Auditor ISO-14000-2004IRCA 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 CurvesLearning 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

Suppose you start a term paper typing business. You time yourself on the first paper, then the second, and so on.

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

90 % & 80% learning

90 % & 80% learning

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.

Definitionimprovement curve- Table of UNIT value

Unit # Learning % , 80% Learning % 90%

1 1.000 1.000

2 0.8000 0.9000

4 0.6400 0.8100

8 0.5120 0.7290

16 0.4096 0.6561

improvement curve- Table of CUMULATIVE value

Unit # Learning % , 80% Learning % 90%

1 1.000 1.000

2 1.800 1.900

4 3.142 3.556

8 5.346 6.571

16 8.920 12.04

ExampleQ. 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.

ExampleQ. 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.

Unit #

Cost $Millions

Unit # Cost $Millions

1 $ 100 5 60

2 83 6 57

3 73 7 53

4 62 8 51

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?

Unit # Learning Curve

UI Factor

C I Factor

1000 80% 0.1082 158.7

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%

Unit #

Cost $Millions

Unit # Cost $Millions

1 $ 100 5 60

2 83 6 57

3 73 7 53

4 62 8 51

Unit # Learning Curve

UI Factor

C I Factor

1000 80% 0.1082 158.7

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

Unit #

Cost $Millions

Unit # Cost $Millions

1 $ 100 5 60

2 83 6 57

3 73 7 53

4 62 8 51

Unit # Learning Curve

UI Factor

C I Factor

1000 80% 0.1082 158.7

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

Unit #

Cost $Millions

Unit # Cost $Millions

1 $ 100 5 60

2 83 6 57

3 73 7 53

4 62 8 51

Unit # Learning Curve

UI Factor

C I Factor

1000 80% 0.1082 158.7

QUESTIONS