Lto: Vehicle Registration Renewal

[pic 1]

De La Salle University

Gokongwei College of Engineering

Industrial Engineering Department

Case No. 1

LTO: Vehicle Registration Renewal

In Partial Fulfillment

of the Requirements for

IMEPRO2

2nd Trimester, Academic Year 2015-2016

Submitted by:

Ang, Jared Constantin

Castillo, Justine

Madria, Wira

Miguel, Angelimarie

Wu, Judy Ann

Submitted to:

Mr. Eric Siy

January 19, 2016

1. Introduction

Henry Dilay, a branch manager of the LTO, was tasked by his regional director to find a way to improve the system for vehicle registration renewal. There are currently 6 operations in the renewal process. The list of operations, including their respective times (in minutes), numbers of workers, an hourly rates (in Pesos), were given, as well as the hourly demand in the past 5 years.

1. Statement of the Problem

In order to improve the vehicle registration renewal system, Mr. Dilay needs to find a way to increase its productivity, reduce cost, and accommodate demand given the current data.

1. Objectives of the Study

1. To illustrate the proper precedence diagram that would represent the present vehicle registration renewal system.
2. To determine the current capacity, productivity, and utilization percentage of the branch office.
3. To assess which alternative should be adopted by the system to accommodate the hourly demand of the following year, which at the same time, would increase productivity and reduce cost if possible.
4. To suggest possible improvements regarding on the current system with respect to its input, output, process, and work environment.

IV.        Analysis and Solution

In analyzing the given situation, the following assumptions were made:

1. It takes 30 minutes to complete operation 2 (inspecting the vehicle) if two operators are working together. Therefore, it takes 1 hour for one operator to do operation
2. Working hours of each operator is equivalent to 8 hours per day and there are 5 working days in a week.
3. In selecting the best alternative on improving the system, only the criteria shown in the assessment matrix were used. Hence, cost was not mainly focused and prioritized.
4. The group assumed that since LTO is a government unit, then the system should be more concerned on accommodating the people's needs and quality of service rather than profit. Hence, increasing productivity and capacity may be prioritized more than reducing costs.
5. There can only be one manager per LTO branch.

Demand forecast

The demand forecast for the past 5 years were: 1.5, 2, 2.5, 3, and 3.5. Forecasting demand using trend projection was used due to the exhibiting trend behavior.

[pic 2]

Figure 2. Linear Graph of the Demand Projection

Using trend projection, the equation of the line derived to be used in forecasting the demand for Year 6 is as follows:

y = 1 + 0.5x

x = 6 (Year 6) →  y = 1+ 0.5(6) = 4.

Therefore, 4 renewals per hour is the forecasted demand for the following year to be assessed.

Precedence Diagram of the Present System

[pic 3]

Figure 1. Precedence diagram of the present system of the LTO branch office

Operation 1 (Review of renewal application for corrections) should be performed first before other operations. Operations 2 (Inspection of vehicle), 3 (Checking of file for violations and restrictions), and 4 (Preparation of registration form) can be done in any order while operations 5 (Approval and signature), and 6 (Processing of payment and releasing) should be the fifth and last step respectively. The bottleneck of the process is operation 2, which takes 30 minutes to be completed given the available number of operators for the task. The bottleneck will determine the capacity of the branch.

1. Present Capacity, Productivity, and Utilization of the Branch

a. Hourly Capacity

         =   =    = 2 renewals per hour[pic 4][pic 5]

b. Hourly Manpower Productivity (in man-hours)

        =  = 1.3333 renewals per man-hour[pic 6]

c. Hourly Manpower Productivity (in pesos)

        =  = 0.0080 renewals per peso[pic 7]

d. Percent Utilization of the branch office

= 2 renewals per hour / 2 renewals per hour = 100%

1. Evaluation of the Given Alternatives

Alternative 1: Increase number of inspectors of vehicles by 100%

Table 1. Alternative 1 Configuration