What is SMV and why is it important?
Standard Minute Value (also referred to as the “Standard Time” or “SMV”), is the time required for a qualified worker working at “Standard Performance” to perform a given task. The SMV includes additional allowances for rest and relaxation, machine delay and anticipated contingencies.
SMV is the universal measurement of time and its accuracy and consistency are essential as the foundation for measurement and organisation of key business processes such as Production Targets, Line Balancing, Production Planning, Incentive Schemes, and the quantification of Operator Performance and Factory Efficiency.
Establishing a precise SMV can however be extremely difficult when using traditional methods of work measurement. This is because production workers are neither robots nor machines, and do not work at a constant rate throughout the working day. Making accurate and consistent measurement is therefore very difficult. Moreover, people are affected by motivation, fatigue and job familiarity and therefore work at a varying performance levels during their working period.
A reliable, predictive and ethical means of establishing Standard Time is therefore an essential element of today’s business process – and GSDCost is the world-leading fashion industry benchmark to calculate SMV.
Traditional Time Quantification
1. Time Study
Time Study is a traditional method of time quantification, developed under very different business conditions than those we see today. In today’s business environment, there are essentially four main areas where the process of Time Study does not meet the needs of a modern manufacturer and, as a consequence creates inaccurate and inconsistent data:
- Time Consuming
During time study, a large statistical sample must be taken in order to compensate for the variability of the human worker. A one-minute operation should be studied for two hours. That’s 40 hours of Time Study for a 20-minute product. Shorter studies may, of course, be made but only at the cost of accuracy and in today’s highly competitive conditions this trade-off is unacceptable.
With today’s short production runs and rapid product re-styling, there is often insufficient time to properly and ethically apply Time Study.
- Subjective Performance Rating
A mandatory element of Time Study, Performance Rating is the adjustment of the Observed Time value, based on the Time Study practitioner’s subjective assessment of the operator’s performance. The subjectivity of Performance Rating creates inconsistency, uncertainty, disagreement, and mistrust with the consequence that operation times and targets subsequently become a matter of negotiation rather than objective analysis.
Time Study is “reactive” in that a process cannot be timed until it is physically undertaken in the manufacturing environment and by that time product price and delivery have been agreed. If the product cannot subsequently be made on time and/or ‘to cost’, profit margins will suffer, wages will be suppressed, and excessive overtime may follow.
- Lack of Standardised Methods
Time Study does not focus on standardising ‘method’ and because operators often use different methods, the variation in Standard Minutes grows even greater, creating inconsistent manufacturing and costing environment.
2. Accurate Estimates and Historical Data
When Time Study fails, the “fall back” position is all too often to simply estimate production capability. Estimates (usually based on historical information) are certainly quick, but they may also be dangerously inaccurate and inconsistent. The more the styles vary, the more inaccurate and inconsistent the estimates become. Over a period of time, estimates are based on earlier estimates, which are perhaps themselves based on historical information. So, ultimately, there is a ‘drift’ away from reality.
Because materials, styles, machinery, workplaces and people change, estimates and historical data (which also includes everything that went wrong in the past) are simply not accurate enough and become little more than guesswork. Over time the “drift” away from reality invariably increases, and times become more and more inaccurate and inconsistent.
Predetermined Time Standards
A Predetermined Time Standard (PTS) system establishes Basic Time, to which is added agreed allowances for Rest and Relaxation, Machine Delay and Contingency, thereby providing ‘Standard Time’ for any given process. If you’re curious to know more about Predetermined Time Standards, our article ‘Understanding PMTS in Garment Industry’ will help you to understand how PTS enables you to pre-determine Standard Time (and therefore cost) for a given manufacturing process – even before production has begun, also offering speed, accuracy and consistency while establishing such data.