The day the "Allowance Rate" report came out, the manager froze for three seconds
I remember years ago, we introduced new equipment to our production line, thinking it was a good opportunity to re-establish the Standard Time. When Xiao Li, the R&D person in charge, presented the report, the manager's face went from red to white after reading it, then he froze for about three seconds. I glanced at the data and, seeing the "Allowance Rate" figure, I pretty much knew what had happened. Xiao Li had included all sorts of miscellaneous tasks, personal physiological needs, and even his bad mood from arguing with his wife that morning. The resulting allowance rate was incredibly high. This is a classic example of what we often call 'too loose' or 'unprincipled' allowance rate setting.
Where's the problem? Is your work time truly "standard"?
Simply put, standard time is "the time required for a well-trained operator to complete one unit of product using standard methods at a normal pace." But a devil lies within: how are "normal pace" and "standard methods" defined? This is where the "Allowance Rate" comes in. It's not for slacking off, but rather to compensate for the unavoidable time spent by operators in actual work on physiological needs (restroom breaks, drinking water), fatigue (continuous operation causes tiredness), and some unavoidable miscellaneous tasks (material fetching, mold changes, equipment fine-tuning).
If you set the allowance rate too high, your standard time will become inflated. The result is that the production line appears "idle," but actual capacity doesn't increase. Conversely, if it's set too low, operators will feel exploited, complain constantly, and even affect product quality, as people will cut corners to rush production. Therefore, the key is that the allowance rate must be set "reasonably," not based on gut feeling.
How to do it in practice? Replace "feeling" with "statistics"
Frankly, there are several common methods for setting allowance rates. The most common and highly recommended is a combination of "time study" and "work sampling."
- Physiological and Fatigue Allowance: This is the most basic, usually having a base value. For example, for personal needs (restroom, drinking water), you can set a fixed percentage, say 5%. Fatigue allowance depends on the nature of the work. If your operators need to stand for long periods, repeatedly lift heavy objects, or require high precision in operation (e.g., assembling chips where CPK needs to reach above 1.08), then the fatigue allowance must be increased. If they are just comfortably sitting and clicking a mouse, it can be reduced.
- Special Condition Allowance: This part relies on data.
* Tool Preparation and Cleaning: Checking tools before starting work each day and cleaning the workstation before leaving also need to be included.
The key, therefore, is that you need data to support your allowance rate, not just guesswork. Otherwise, you'll end up like Xiao Li, who even included arguments with his wife.
The Most Common Trap: Treating "Abnormalities" as "Normal"
The most common trap I've encountered is including "abnormal" situations in the allowance rate. For example, if equipment DPMO is as high as 6210, crashing every few days, and operators spend a lot of time troubleshooting. At this point, if the troubleshooting time is also included in the allowance rate, it's equivalent to shifting the cost of equipment malfunction onto labor hours. The result is that your standard time is inflated, but there's no incentive for equipment improvement. The correct approach should be to first improve equipment stability to a reasonable level (e.g., reduce DPMO to below 1000), and then re-evaluate the allowance rate.
Another trap is "personal influence pressure." Some veterans might tell you, "This job is really tiring! Give us a bit more!" If you don't have data, it's easy to be persuaded. At this point, you need to present your "work sampling" data and let the numbers speak.
One Thing You Can Do Today
Pick a process where you feel the labor time is most "inflated," and start "work sampling" today! Observe for at least 2 hours and record what the operators are doing.