Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported:

Inspection time 0.3 days
Wait time (from order to start of production) 14.0 days
Process time 2.7 days
Move time 1.0 days
Queue time 5.0 days

Required:
1. Compute the throughput time (days).
2. Compute the manufacturing cycle efficiency (MCE) for the quarter (round to nearest percent).
3. What percentage of the throughput time was spent in non-value-added activities?
4. Compute the delivery cycle time (day).
5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE?

Explanation:

The computations are shown below:

1 As we know that.

Inspection time  = Average throughput time - process time - average move time - average queue time

0.3 days = Average throughput time - 2.7 days - 1.0 days - 5.0 days

So, the average throughput time is 9 days

2. As we know that

Process time  = Manufacturing cycle efficiency (MCE) × average throughput time  

2.7 days = Manufacturing cycle efficiency (MCE) × 9 days

So, Manufacturing cycle efficiency (MCE) is 0.3 or 30%

3. Since the Manufacturing cycle efficiency (MCE) comes 30% of the through put time so the percentage is 70% percentage

4. As we know that

Wait time  = Delivery cycle time - average throughput time  

14.0 days = Delivery cycle time  - 9 days

So, the delivery cycle time is 23 days

5. As we know that

Inspection time  = Average throughput time - process time - average move time

0.3 days = Average throughput time - 2.7 days - 1.0 days

So, average throughput time is 4 days

Now the  Manufacturing cycle efficiency (MCE) is

Process time  = Manufacturing cycle efficiency (MCE) × average throughput time  

2.7 days = Manufacturing cycle efficiency (MCE) × 4 days

So, Manufacturing cycle efficiency (MCE) is 0.675 or 67.5%

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