How to Calculate Daily Target using SAM

An industrial engineer wrote me the following email with questions and asked for the clarifications. In this article, I will share my comments. We will try to understand the difference in calculating the daily production target of a sewing line using the standard time (SAM) and average operation cycle time.

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I have read and understood well to your explanation about how to calculate SAM of a garment. Formula: Standard Time = Basic Time + various Allowance (around 20%) where Basic time = Observe Time x Performance Rating. Using the above formula, we get the Standard Time. So, we can set daily production target based on Standard Time. My example:  52 workers, 10 hours/day, SAM =34.25 Line Target per day = (52x10x60)/34.25 = 911pcs My understanding, 911pcs/day is at 100% target of the standard time that we need to calculate it into 80% which to cover around 20% downtime in the production floor. So, ((52x10x60)/34.25)x80% = 729 pieces/day Question#1. Do you agree with this calculation? But my boss's understanding is that I have added around 20% allowance to normal time (BT) and again 20% to Standard Time when setting the daily target that is too much allowance to operators. So, he discussed with me to calculate by this following method: Standard time = Average Cycle Time +20% (for all kinds of operation) Example : Total Average Cycle Time = 2.72 minutes  (all operations) Standard Time = 2.72 / 0.80 (it means he added 20% to the cycle time) = 3.40 minutes Qestion#2. He said that 3.40 minute already added 20% allowance to the operators with unavoidable downtime in the work floor. So as above all description, I need your help to explain the difference between these two methods and introduce some article which you may already be written. I am waiting to read your reply explanation in the nearest future.

Thanks for following technology GTM tutorials and writing an email to me with questions and asking for clarification.