Williams Optical Inc. is considering a new just-in-time product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 40 units. The process time for each step is as follows:
Process Step 1 .....6 minutes
Process Step 2 .......10 minutes
Process Step 3 .....6 minutes
Process Step 4 .....8 minutes
The time required to move each batch between steps is 8 minutes. In addition, the time to move raw materials to Process Step 1 is also 8 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 8 minutes.
The new just-in-time layout will allow the company to reduce the batch sizes from 40 units to 5 units. The time required to move each batch between steps and the inventory locations will be reduced to 2 minutes. The processing time in each step will stay the same.
Determine the value-added, non-value-added, and total lead times, and the value-added ratio under the present and proposed production approaches. Round whole percentages to one decimal place.