I am interested in methods for tracking and auditing time studies. There are thousands of time studies here, which after some time need to be audited for accuracy. I would like to know how some of you track and audit your time studies. And what triggers the audit? Is it based on a predetermined schedule? Thanks for any help.
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Method for Tracking and Auditing Time Studies
- Thread starter AuburnIE
- Start date
We initially set up our time standards when doing pre-production pilot runs. From there, the "standard" (based on average time per unit applied by line personnel) is either rolled up or down usually on an annual basis. Large variances from the standard can trigger an audit. We will also adjust standards based on procedural improvements at the time the improvement is verified.
Regards,
Regards,
- Thread starter
- #3
PSE, thanks for your response. So, are you visually reviewing all of the standards annually for variances and the ones that you find you audit? Is that correct? Also, do you all use a software package to maintain and track your standards? We are a fabrication and assembly plant, so there are thousands of standards and line balances for different operations. What methods are you using for your standards, stopwatch, MOST, etc? Again, thanks for your help.
We did time studies in the presence of the operator, and it had mixed results. One character would routinely step away from the machine when a time study was initiated.
Another would purposely slow down the operations to add time. A tray of loosely assembled parts were examined minutely before staking them together in assy.
The key is to do it out of view of the operator.
Another would purposely slow down the operations to add time. A tray of loosely assembled parts were examined minutely before staking them together in assy.
The key is to do it out of view of the operator.
In reference to PSE's comment about variances, generally, the standard time for various items come into question when efficency reports or financial reports begin to generate consistantly high or low efficiencies/and cost variances. This should trigger an inquery when efficincies (usually dept. or business unit level) exceed 80% (and you have work sampling/casual observation that supports excessive waste)....certainly anything above 100%.
Many companies use absorption cost accounting. Basically, standard overhead (absorption) cost is a product of standard labor cost (which is a product of standard time and the average hourly labor) and an average overhead factor typically between 250% -600% for most manufacturers in the US(usually on a facility, Dept., or business unit level).
So, if you have inflated labor standards you may very well have inflated standard overhead costs. When actual costs are compared to this you get a variance. Large descrepancies in overhead variance are typically due to antiquated standards. If the current variances are favorable (you can absorb more than you actually spend)....be careful as you asend this slippery slope. This may have huge perception implications on the performance of business unit as well as upper management.
Many companies use absorption cost accounting. Basically, standard overhead (absorption) cost is a product of standard labor cost (which is a product of standard time and the average hourly labor) and an average overhead factor typically between 250% -600% for most manufacturers in the US(usually on a facility, Dept., or business unit level).
So, if you have inflated labor standards you may very well have inflated standard overhead costs. When actual costs are compared to this you get a variance. Large descrepancies in overhead variance are typically due to antiquated standards. If the current variances are favorable (you can absorb more than you actually spend)....be careful as you asend this slippery slope. This may have huge perception implications on the performance of business unit as well as upper management.
- Thread starter
- #6
We use a module of our MRP system for tracking. Reports can be generated if needed by completed work order so each could be checked against the standard time. It is not necessarily the best package as it does not delve into individual operational steps. For that, we are left to our own home grown devices.
Regards,
Regards,
AuburnIE,
We have three possible triggers for standard review: production request/grievence, part or process change or variance notice. This allows nearly anyone who has a stake in the costing to make themselves heard.
We adopted the standard that the variance needed to be greater than 10% before undertaking a time study.
We keep our data in a spreadsheet by date, operation, product and various other factors that we feel impact the results. Once a year, or as larger blocks of data are added, we run a modeling program on this data that allows us to develop labor costs for proposed products and to model results of proposed changes.
Plasgear's comments about operator shinanigans during time studies are addressed by pace rating, by notation in the time study form, by involving the supervisor and by formal discipline if required.
We keep hard copies as well as e-files.
Griffy
We have three possible triggers for standard review: production request/grievence, part or process change or variance notice. This allows nearly anyone who has a stake in the costing to make themselves heard.
We adopted the standard that the variance needed to be greater than 10% before undertaking a time study.
We keep our data in a spreadsheet by date, operation, product and various other factors that we feel impact the results. Once a year, or as larger blocks of data are added, we run a modeling program on this data that allows us to develop labor costs for proposed products and to model results of proposed changes.
Plasgear's comments about operator shinanigans during time studies are addressed by pace rating, by notation in the time study form, by involving the supervisor and by formal discipline if required.
We keep hard copies as well as e-files.
Griffy
- Thread starter
- #9
Griffy,
That is very similar to what we do here. We have about 4 different systems for maintaining the standards, which include the e-files, spreadsheets, etc. I want to find something that would integrate all of those. Have you heard of EaseWorks? It is suppose to accomplish this. Do you all have a hard copy of all of your standards? This presents another problem because some are quite old and I have been unable to locate the hard copies to back up the standards. I am basically having to recreate a system for developing, maintaining, and auditing standards.
That is very similar to what we do here. We have about 4 different systems for maintaining the standards, which include the e-files, spreadsheets, etc. I want to find something that would integrate all of those. Have you heard of EaseWorks? It is suppose to accomplish this. Do you all have a hard copy of all of your standards? This presents another problem because some are quite old and I have been unable to locate the hard copies to back up the standards. I am basically having to recreate a system for developing, maintaining, and auditing standards.
- Thread starter
- #11
Auburn,
The first thing you may wish to do is look at what you must have. In our case, we needed three things: 1) data to support our MRP system; 2) a record of method for setting the standard; and, 3) a record of results.
The first we needed to conduct business. The second was to c.y.a. in case our methods were challenged. The third was to allow the development of a forecasting model to be used by engineering and marketing (How often can you please BOTH of these areas?). The first two being corporate required residence where many could access them while the third, being departmental, needed only to reside where those in our department could get at it.
Old data obtained using good methods is still good as long as there is decent information on the details under which it was obtained. Consequently, if no one knows who, when, why, or how, you probably want to replace these first because they are indefensible.
On the other hand, even poor results to which you have the answers to those questions has more value.
I suggest you get a copy of Maynard's IE handbook if you don't already have one. There is a lot of info on various facets of your problem.
One last item. You might want to enlist someone familiar with developing relational databases. While they may not know much about doing your job, they should know the questions to ask of a software provider to help you get what you pay for.
Okay, off soapbox.
Griffy
The first thing you may wish to do is look at what you must have. In our case, we needed three things: 1) data to support our MRP system; 2) a record of method for setting the standard; and, 3) a record of results.
The first we needed to conduct business. The second was to c.y.a. in case our methods were challenged. The third was to allow the development of a forecasting model to be used by engineering and marketing (How often can you please BOTH of these areas?). The first two being corporate required residence where many could access them while the third, being departmental, needed only to reside where those in our department could get at it.
Old data obtained using good methods is still good as long as there is decent information on the details under which it was obtained. Consequently, if no one knows who, when, why, or how, you probably want to replace these first because they are indefensible.
On the other hand, even poor results to which you have the answers to those questions has more value.
I suggest you get a copy of Maynard's IE handbook if you don't already have one. There is a lot of info on various facets of your problem.
One last item. You might want to enlist someone familiar with developing relational databases. While they may not know much about doing your job, they should know the questions to ask of a software provider to help you get what you pay for.
Okay, off soapbox.
Griffy
- Thread starter
- #13
Griffy,
Thanks so much for your help. Of course I have Maynard's IE handbook. I don't see how any IE could live without it. It has some very valuable information in there of which I definitely use. I will get help with the software to be sure it does what I expect. So, it seems like I am headed in the right direction. Again, thanks.
Thanks so much for your help. Of course I have Maynard's IE handbook. I don't see how any IE could live without it. It has some very valuable information in there of which I definitely use. I will get help with the software to be sure it does what I expect. So, it seems like I am headed in the right direction. Again, thanks.
AuburnIE
Before you start auditing your standards gather information about the operations by work station and annual usages of the parts either past usage or forecasted usage. Determine the importance of the different time standards by work station. Classify by annual hours and do the highest annual hours first. I believe you will find the old 80%-20% rule applies. Many of your standards probably never need auditing.
Work on things which have the largest financial impact. The problem areas will be ones where there are many parts and many different parts made such as a saw operation or CNC laser/plasma/punch operation. Group operations are another problem area such as paint lines.
Bill
Before you start auditing your standards gather information about the operations by work station and annual usages of the parts either past usage or forecasted usage. Determine the importance of the different time standards by work station. Classify by annual hours and do the highest annual hours first. I believe you will find the old 80%-20% rule applies. Many of your standards probably never need auditing.
Work on things which have the largest financial impact. The problem areas will be ones where there are many parts and many different parts made such as a saw operation or CNC laser/plasma/punch operation. Group operations are another problem area such as paint lines.
Bill
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