Automobile License Renewals

Henry coupe, the manager of a metropolitan branch office the state

Department of Motor Vehicles, attempted to analyze the driver's
license-renewal operations. He had to perform several steps. After examining
the license-renewal process, he identified those steps and associated times
required to perform each step, as shown in the following table:
State Automobil Ucense Renewals Process Times
Step

Average Time to Perform (seconds)

1. Review renewal application for correctness

15

2. proeess and record payment

30

3. Check file for violations and restrictions

60

4. Conduct eye test

40

5. Photograph applicant

20

6. Issue temporary license

30

Coupe found that each step was assigned to a different person. Each
application was a separate process in the sequence shown above. He determined
that his office should be prepared to accommodate a maximum demand of
processing 120 renewal applicants per hour.
He observed that work was unevenly divided among clerks and that the clerk
responsible for checking violations tended to shortcut her task to keep
up with the others. Long lines built up during the maximum-demand periods.
Coupe also found that steps 1 to 4 were handled by general clerks who were
each paid $6 per hour. Step 5 was performed by a photographer paid $8 per
hour. (Branch offices were charged $5 per hour for each camera to perform
photography.) Step 6, issuing temporary licenses, was required by state
policy to be handled by uniformed motor vehicle officers. Officers were
paid $9 per hour but could be assigned to any job except photography.

A review of the jobs indicated that step I, reviewing applications for

correctness, had to be performed before any other step could be taken.
Similarly, step 6, issuing temporary licenses, could not be performed until
all the other steps were completed.
Henry Coupe was under severe pressure to increase productivity and reduce
costs, but he was also told by the regional director that he must accommodate
the demand for renewals. Otherwise, "heads would roll."
Discussion Questions
1.

What is the maximum number of applications per hour that can be handled
by the present configuration of the process?

2.

How many applications can be processed hour if a second clerk is added to

check for violations?

3.

Assuming the addition of one more clerk, what is the maximum number of
applications the process can handle?

4.

How would you suggest modifying the process in order to accommodate 120
applications per hour?

THE ANSWER OF CASE STUDY

1.

What is the maximum number of applications per hour that can be handled by the present
configuration of the process?
The process times and activities for each activity are identical because all have only one
station. The maximum output of renewals will be limited to 60 renewals/hour (3600 sec/hr + 60
sec/renewal) by the bottleneck or longest process time.
If each step in the process is handled by one person. it can be seen that each station will
be waiting for the clerk who checks the file for violations. This is because this step takes
the longest (60 seconds). The task of "check file" will be the bottleneck, and a line will build
up in front of this station. The c1erlc and expensive equipment for the photographic step will
be idle approximately 113 of the time (20 seconds + 60 seconds).
A balanced line process is one in which the process times of each step are the same. The
process time is defined as the activity time (the time required to perform the activity) divided

by the number of stations or locations performing the activity. The cycle time is the longest
process time and dictates the tate at which the whole process produces output
An obvious way to balance the line is to add stations to the bottleneck activity. However,
this may not be the most efficient solution. In some cases. it is possible to combine activities
creatively and make more productive use of workers.
2.

How many applications can be processed per hour if a second clerk is added to check for
violations ?
If a second file c1erlc is added to the activity of checking files, the process time for this
activity is reduced to 30 sec/location (60 secondsI2 locations). The bottleneck now becomes the
eye test. The maximum output of renewals becomes 90 renewals/hour (3600 sec/hour + 40
sec/renewal).

3.

Assuming the addition of one more clerk, what is the maximum number of applications the process
can handle?
If activities 1,2, and 3 can be successfully combined to form a new activity taking 105 seconds
that is accomplished by the same three people, the process time of the new combined task is 35
seconds. So without adding any personnel, as was done above, it is possible to process up to
90 renewals per hour.
Creative rearranging and combining of tasks can produce other cycle times. The only
limitations are: (1) the tasks must be performed in a logical sequence, and (2) the facilities
and equipment must be available for the tasks.

4.

How would you suggest modifying the process in order to accommodate 120 applications per hour?
This question requires trial-and-error creation of proposed solutions. Presented below are
four proposed solutions that each result in the capacity for handling 120 renewals per hour.
Solution A was achieved by simply expanding the number of stations performing each job so that
at least 120 licenses are processed per hour. Solution B combines jobs such that the process
time at most stations equals the bottleneck process time (or cycle time). Although this reduced
the number of employees from 8 to 7. one of these is an additional photographer with another
camera. So the total costs is increased. Solutions C and D produce the same costs per renewal,
$0.2375. and both employ 7 persons.

Are solutions C and D equal? Some managers would argue that the five people who each perform
jobs 1. 2. and 3 have an enriched job. Others would argue that enlarging a job is not the same
as enriching a job. How difficult will it be to monitor the performance of each of these five
people working independently as a line process? How difficult will it be to teach each of the
five employees all four jobs rather than teaching each person one or two jobs. This is where
the quantitative analysis ends and judgment must be exercised.