MCE, Lean Measures, and the Balanced Scorecard
Numark, Inc., manufactures a product that experiences the following activities and times:
| |
Hours
|
|
Processing (two departments)
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42.0
|
|
Inspecting
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2.8
|
|
Rework
|
7.0
|
|
Moving (three moves)
|
11.2
|
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Waiting (for the second process)
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33.6
|
|
Storage (before delivery to customer)
|
43.4
|
Required
1. Compute the MCE for this product.
2. A study lists the following root causes of the inefficiencies: poor quality components from suppliers, lack of skilled workers, and plant layout. The management of Numark immediately began to install some lean manufacturing initiatives to address the problems. First, they installed cellular manufacturing, changing the plant layout. The result was a dramatic reduction in move time and wait time. Next, they began an intensive training program to improve worker skills so that fewer defectives would be produced. They also initiated a supplier selection program, selecting and working with suppliers so that the components being delivered are of higher quality. Training and supplier selec- tion both produced a significant reduction in defective units. Express a cost reduction strategy as a series of if-then statements that will reduce MCE and lower costs. Finally, prepare a strategy map that illustrates the causal paths. In preparing the map, use only three perspectives: learning and growth, process, and financial.
3. Is MCE a lag or a lead measure? If and when MCE acts as a lag measure, what lead measures would affect it?