Labour Cost - Work Measurement
Contract bidding, customer estimates, and cost budgeting all require some type of determination of labour and material requirements. A process layout can be designed without determination of labour operating requirements but the same is not true for a product layout. The product layout is actually dependant on determining the labour content for each job in advance so the line can be designed with all jobs balanced or equally loaded. Fine tuning can be done once the line is in operation and the cost/unit revised but the modifications are limited to minor changes. Otherwise the whole line would have to be rebalanced. In a process layout each different product requires a planned path through the process. The labour content will vary and has to be determined for each product.
The historical method to determine the work content was the time study with a stop watch.
This has two main disadvantages.
- The work has to be observed and therefore can’t be determined before the operation is carried out.
- Rating is required by the observer in order to make an adjustment to fit a standard. The observer has to be trained to enable rating to a standard.
A more efficient method is to use a predetermined time system such as MTM, MOST or MODapts.
These systems allow work time requirements to be calculated without actually observing the work. This gives the following advantages:
- Work content can be determined without incurring the cost of producing the product
- The product design can be enhanced to reduce labour cost before production
- Workers are not subject to rating performance during a time study
- Accuracy is improved since performance rating is eliminated
MOST and MODapts are newer systems than MTM and require less time to apply.