1 5. Flow Rate and Capacity Analysis Flow Rate and Capacity Analysis Throughput and Capacity ...

1

5. Flow Rate and Capacity Analysis

Flow Rate and Capacity Analysis

Throughput and Capacity

Resources and Resource Pools

Theoretical capacity

Bottleneck resources

Capacity utilization

Product mix and its effect on theoretical capacity and

profitability

Capacity Improvement

2


Throuhput and Takt Time

Throughput: Average Flow Rate

The average number of flow units that flow through a process per unit of time in a stable process

Takt time = 1/(throughput)

The time interval between exit of two consecutive products. The average activity time at a workstation on an assembly line.

Process Capacity

The maximum sustainable flow rate of a process

3


Resources in a Process

Inputs Outputs

GoodsServices

Informationstructure

Network ofActivities and Buffers

Flow units(customers, data, material, cash, etc.)

Resources

ProcessManagement

Labor + Capital

4


Resources and Resource Pools

Resources» Capital – Fixed Assets such as land, buildings, facilities, equipment

and machinery» Labor – people such as engineers, operators, assemblers, chefs

customer-service representatives, etc.

Resource Unit: An individual resource (chef, mixer, oven etc)

Resource Pool: A collection of interchangeable resource units that can perform an identical set of activities

Resource Pooling: The combining of separate resource pools into a single pool to perform several activities

Unit Load of a Resource Unit (Tp): The amount of time the resource works to process each flow unit

5


A Resource Pool

Activity ResourceWork Content

(minutes)

MailroomMailroom Clerk 0.6

Data EntryData-entry Clerk 4.2

Initial Processing

Claims processor 4.8

InspectionClaims Supervisor 2.2

Final Processing


ResourceUnit Load(minutes)

Mailroom Clerk 0.6

Data-entry Clerk 4.2


Claims Supervisor 2.2

6


Flow Rate Measurement

Theoretical capacity of a resource unit – maximum sustainable flow rate if it were fully utilized

Theoretical capacity of a resource pool – sum of all the theoretical capacities of all the resource units in that pool

Bottleneck – the slowest resource pool of a process

Theoretical bottleneck – The resource pool with the minimum theoretical capacity

Theoretical capacity of a process – theoretical capacity of the theoretical bottleneck

7


The Theoretical Capacity

Theoretical Capacity of a Resource unit = 1/unit load = 1/ Tp

Theoretical capacity of a Resource pool = Rp = cp/ Tp

Resource pool (p)

Unit Load(min./claim)(Tp)

Theoretical Capacity of a Resource Unit = 1/Tp claims/min

Number of Units in Resource Pool = cp

Theoretical Capacity of Resource Pool Rp=cp/Tp

claims/min

Mailroom clerk

0.6 1.6666 1 1.66

Data-entry clerk

4.2 0.2380 8 1.90

Claims processor

6.6 0.1515 12 1.82

Claims supervisor

2.2 0.4545 5 2.27

8


Other Factors Affecting Theoretical Capacity

Load batching – a resource processes several flow units simultaneously (one oven and 10 loaves of bread)

Scheduled availability – The amount of time that a resource is schedule for operation. (certain hours, certain days, total hours per week)

Theoretical capacity of a resource unit =

(1 / Tp) × Load batch × Scheduled availability

Theoretical capacity of a resource pool =

Rp =(cp / Tp) × Load batch × Scheduled availability

9


Theoretical Capacity for Physicians Claims (Revised)

Resource pool (p)

Scheduled availability(min/day)

Unit Load(min/claim)(Tp)

Theoretical Capacity of Resource Unit(claims/day)

Number of Units in Resource Pool

Theoretical Capacity of Resource Pool (claims/day) (Rp)

Mailroom clerk

450 0.6 450/0.6 = 750 1 760×1 = 750

Data-entry clerk

450 4.2 450/4.2=107.1 8 107.1×8 = 856.8

Claims processor

360 6.6 360/6.6=54.5 12 54.5×12 = 654

Claims supervisor

240 2.2 240/2.2=109.1 5 109.1×5 = 545.5

Claims supervisors are the bottleneck and theoretical capacity is 545 claims per day

10


Throughput and Capacity Utilization

Throughput is rarely equal to theoretical capacity because of

» Internal inefficiencies (resource unavailability or idleness)

» External inefficiencies (low inflow/supply or low outflow/demand)

Capacity utilization of a resource pool (ρp) – Measures degree to

which resources are effectively used by a process.

ρp = Throughput/Theoretical capacity of a resource pool = R/Rp

11


Capacity Utilization

Resource pool (p)Theoretical Capacity of Resource Pool (claims/day) (Rp)

Capacity Utilization(ρp=R/Rp)

Mailroom clerk 750 480/750=64%

Data-entry clerk 856.8 480/857=56%

Claims processor 654 480/654=73%

Claims supervisor 545.5 480/545=88%

The capacity utilization of the entire process is 88%

Throughput = 480

12


VOH Hospital: Work Content and Resources

Activity Description Work Content min/pat

Resources Allocated

Start Patient leaves Dr office --- ---

1 Patient walks to the X-ray 7 ---

2 X-ray request travels to X-ray lab by messenger 20 Messenger

3 X-ray technician fills form 6 X-ray tech

4 Receptionist receive patient info 5 Receptionist

5 Patient undresses for X-ray 3 Changing room

6 A lab technician takes X-rays 7.5 X-ray tech, X-ray lab

7 A darkroom technician develop X-rays 15 Dark room tech, darkroom

8 The lab technician develop X-ray 2.5 X-ray tech

9 Patient puts on clothes and get ready to leave 3 Changing room

10 Patient walls back to Dr’s office 7 ---

11 The X-rays are transferred to the Dr. by a messenger 20 Messenger

12 Patient and X-rays arrive at the Dr’s office --- ---

13


Theoretical Capacity and Capacity Utilization

Resource pool (p)

Unit load (min/ pat)

Theoretical Capacity of Resource Unit (patients per hour)

Number Units in Resource Pool (Cp)

Theoretical Capacity of Resource Pool (patients per hour) (Rp)

Capacity Utilization (%)

ρp = R/Rp

Messenger 20+20=40 60/40=1.5 6 1.5×6=9 5.5/9=61.11%

Receptionist 5 60/5=12 1 12×1=12 5.5/12=45.83%

X-ray tech 6+7.5+2.5+16

60/16=3.75 4 3.75×4=15 5.5/15=36.67%

X-ray lab 7.5 60/7.5=8 2 8×2=16 5.5/16=34.38%

Darkroom tech

15 60/15=4 3 4×3=12 5.5/12=45.83%

Darkroom 15 60/15=4 2 4×2=8 5.5/8=68.75%

Changing room

3+3=6 60/6=10 2 10×2=20 5.5/20=27.50%

14


Unit Load for a Product Mix

Unit load for a given product mix is computed as the weighted average of unit loads of individual products.

Billing: Physician claims, Hospital claims, and 60/40 mix

Resource Pool UL (Physician)min. /claim

UL (Hospital)min. /claim

UL (60%-40%) mixmin. /claim

Mailroom clerk 0.6 1.0 0.6(.6)+1(.4) =0.76

Data-entry clerk 4.2 5.2 4.60

Claims processor 6.6 7.5 6.96

Claims supervisor 2.2 3.2 2.60

15


Theoretical Capacity for Physicians Claims

Resource pool (p)

Scheduled availability(min/day)

Unit Load(min/claim)(Tp)

Theoretical Capacity of Resource Unit(claims/day)

Number of Units in Resource Pool

Theoretical Capacity of Resource Pool (claims/day) (Rp)

Mailroom clerk

450 0.6 450/0.6 = 750 1 760×1 = 750

Data-entry clerk

450 4.2 450/4.2=107.1 8 107.1×8 = 856.8

Claims processor

360 6.6 360/6.6=54.5 12 54.5×12 = 654

Claims supervisor

240 2.2 240/2.2=109.1 5 109.1×5 = 545.5

16


Theoretical Capacity for Hospital Claims

Resource pool (p)

Scheduled availability(min./day)

Unit Load(Tp)

(min./claim)

Theoretical Capacity of

Resource Unit(claims/day)

Number of Units in

Resource Pool


Resource Pool (Rp) (claims/day)

Mailroom clerk

450 1.0 450 / 1.0 = 450 1 450× 1 = 450

Data-entry clerk

450 5.2 450 / 5.2= 86.5 8 86.5 × 8 = 692

Claims processor

360 7.5 360 / 7.5 = 48 12 48 × 12 = 576

Claims supervisor

240 3.2 240 / 3.2 = 75 5 75 × 5 = 375

17


Theoretical Capacity for 60% / 40% Mix

Resource pool (p)

Scheduled availability(min./day)

Unit Load(Tp)

(min./claim)


Resource Unit(claims/day)

Number of Units in

Resource Pool


Resource Pool Rp (claims/day)

Mailroom clerk

450 0.76 450/0.76=592 1 592×1 = 592

Data-entry clerk

450 4.60 450/4.60=98 8 98×8 = 784

Claims processor

360 6.96 360/6.96=51.7 12 51.7×12 = 621

Claims supervisor

240 2.60 240/2.60=92 5 92×5 = 460

Linear Programming: Find the optimal product mix to maximize profit.

Greedy Algorithm. Produce products with highest unit contribution margin

18


Resource Pool

No. Units in

Resource Pool

Load Batch

Unit Load Standardminutes


resource pool

(standard per hour)

Unit load fancy

minutes


resource pool

(fancy per hour)

Unit Load75% - 25%

mix

Theoretical capacity of

resource Pool(75%-25% mix

per hour)

Worker S 1 1 10 6.00 10 6.00 10 6.00Punch press R 1 1 22 2.73 30 2.00 24 2.50Punch press B 1 1 30 2.00 50 1.20 35 1.71Worker PR 1 1 22 2.73 30 2.00 24 2.50Worker PB 1 1 30 2.00 50 1.20 35 1.71Forming machine R 1 1 12 5.00 15 4.00 12.75 4.71Forming machine B 1 1 6 10.00 10 6.00 7 8.57Worker FR 1 1 12 5.00 15 4.00 12.75 4.71Worker FB 1 1 6 10.00 10 6.00 7 8.57Welding gun 1 1 13 4.62 20 3.00 14.75 4.07Worker SA 1 1 13 4.62 20 3.00 14.75 4.07Worker FA 1 1 10 6.00 15 4.00 11.25 5.33Inspector 2 1 36 3.33 40 3.00 37 3.24

Optimizing Profitability: Wonder Shed example

19


Optimizing Profitability: Wonder Shed exampl

Decisions of product mix affect process capacity which therefore affect profitability

Optimize profitability by producing products with highest unit contribution margin» keep in mind: unit load, resource capacity, and process capacity

Contribution Margin – revenue less all of its variable costs

Contribution Margin per UnitStandard = $200Fancy = $260

Contribution Margin Per Unit of TimeStandard 2 × $200 = $400 per hourFancy 1.2 × $260 = $312 per hour

20


Optimizing Profitability

Shift length 8working days per mo. 25Avail hours 200Demand - Fancy 150Demand - Standard 350CM - Fancy 260CM - Standard 200

Type No. of units No. of hours units per hour C.M. per unit ext. profitFancy 150 125 1.2 $260 $39,000Standard 150 75 2 $200 $30,000

200 $69,000

Standard 350 175 2 $200 $70,000Fancy 30 25 1.2 $260 $7,800

200 $77,800

21


Why Wasted Time?

Process capacity is usually less than the theoretical capacity due to process inefficiencies (time wasted).

Resource availability loss: resource is not available » Breakdown or absenteeism» Preventive maintenance

Scheduled availability: the scheduled time period during which a resource unit is available for processing flow units

Net availability = Schedule availability – Lost time due to breakdown and maintenance

Availability loss factor = 1 – (Net Availability/Scheduled Availability)

Resource idleness: resource is available but is not processing» Starvation: Idleness of resources due to the unavailability of inputs» Blockage: When resources are prevented from producing because there is

no place to store (internal), or there is no demand (external)

22


Setup Batch, Unit Load, Total Unit Load

Setup or Changeover: activities related to cleaning, resetting and retooling of equipment in order to process a different product.

Qp : Setup batch or lot size; the number of units processed consecutively after a setup;

Sp : Average time to set up a resource at resource pool p for a particular product

Average setup time per unit is then Sp / Qp

Tp = Unit load (it does not count for the setup time)Total unit load = Tp + Sp / Qp

What is the “right” lot size or the size of the set up batch? Lot Size or ?» The higher the lot size, the lower will be the total unit load and thus the

higher the capacity.» The higher the lot size, the higher will be the inventory and therefore, the

higher the flow time.

Reducing the size of the setup batch is one of the most effective ways to reduce the waiting part of the flow time.

23


Total Unit Load for Products, and a Product mix

Regular Jumbo Mix

Unit Load (Tp) 2 1 (2×.75)+(1×.25)=1.75

Sp/Qp 30/300=0.1 30/100=0.3 (0.1×0.75)+(0.3×0.25)=0.15

Total unit load 2+0.1=2.1 1+0.3=1.3 (2.1×.75)+(1.33×.25)= 1.9

Two Sizes Tiles Cutting time Setup time Regular 300 units (75%) 2 minutes 30 minutesJumbo 100 units (25%) 1 minute 30 minutes

Load batch: the number of units processed simultaneously. Often constrained by technological capabilities of the resource.

Setup batch: the number of units processed consecutively after a setup. Setup is determined managerially

24


Effective Capacity of a Process

Theoretical Capacity of a resource unit: (1/Tp) ×Load Batch ×Scheduled Availability

Effective Capacity of a resource unit : (1/Total Unit Load) × Load Batch ×Net Availability

Effective Capacity takes into account the setup per unit time (Total unit load) and the resource availability loss (Net availability)

The effective capacity of a pool is the effective capacity of all resources in the pool: (cp/Total Unit Load) × Load Batch ×Net Availability

» Cp is the number of units in the resource pool

» Total unit load= Tp+(Sp/Qp)

The effective capacity of a process is the effective capacity of its slowest resource pool (effective bottleneck).

25


Resource Pools, Effective Capacity

Resource Pool

No. Units in Resource

PoolLoad

Batch

(Total) Unit Load

Standardminutes

Scheduled avilability hours /day

Loss Factor

Net Availability (Minutes)

Effective Cap. Resource Pool (flow units/day)

Worker S 1 1 10 8 6.25% 450 45.00Punch press R 1 1 22 8 5% 456 20.73Punch press B 1 1 30 8 5% 456 15.20Worker PR 1 1 22 8 5% 456 20.73Worker PB 1 1 30 8 5% 456 15.20Forming machine R 1 1 12 8 10% 432 36.00Forming machine B 1 1 6 8 10% 432 72.00Worker FR 1 1 12 8 6.25% 450 37.50Worker FB 1 1 6 8 6.25% 450 75.00Welding gun 1 1 13 8 10.0% 432 33.23Worker SA 1 1 13 8 6.25% 450 34.62Worker FA 1 1 10 8 6.25% 450 45.00Inspector 2 1 36 8 6.25% 450 25.00

Effective capacity = (cp/Total Unit Load) × Load Batch ×Net Availability

26


Levers for Managing Throughput

Theoretical capacity» The theoretical capacity of the theoretical bottleneck. » Rp = cp/Tp × Load batch × Scheduled availability

Effective capacity» Replace Schedule availability with net availability» Replace Unit load (Tp) by Total unit load Tp+Sp/Qp. That is unit load plus

setup per unit in the setup batch

Process capacity» Is less than Effective Capacity Resource idleness due to starvation and

blockages

Throughput » Average flow rate per unit Note: (1/throughput = Takt time)

Throughput ≤ Process capacity ≤ Effective capacity ≤ Theoretical capacity

27


Improving Theoretical Capacity

Decrease unit load on the bottleneck: Decrease the work content of the activity performed by the bottleneck resource pool

Increase the Load Batch of the bottleneck resource: Expanding the resource will increase resource capacity

Increase the number of bottleneck resources: Adding units to the bottleneck resource pool will increase resource capacity

Increase Scheduled Availability of bottleneck resource: Add more hours to the resource such as adding overtime or second shift operations

28


Internal and External Bottlenecks

Internal Bottleneck: When Throughput is equal to Process Capacity The output of the process is limited by the process’s own

constraints (the bottleneck resource)

External Bottleneck: When Throughput is less than to Process Capacity The output of the process is limited by conditions external to the

the boundaries of the internal process constraints. Examples include: demand for product, raw material shortages

If process capacity is close to throughput, the dominating effect is internal (recourse unavailable; breakdowns, preventative maintenance, set up). You should increase net availability of the bottleneck resource pools and reduce setup waste.

If effective capacity is close to the theoretical capacity the dominating effect is external (starvation, blockage). The way to raise capacity in this case is to reduce idleness.

29


Increase net availability, Reduce setup

Increasing net availability

» Regular Maintenance of equipment Reduces breakdowns during manufacturing process Perform maintenance after production line shutdown Have problem solving measures in place to keep the manufacturing

process functioning

Reducing setup waste

» Planning Reduce the frequency of changeovers Managing the product mix

» Reduce the amount of time required to setup a line Caution: Increasing batch size or length of run leads to increased

inventory and longer flow times.

30


Decrease resource idleness

Decreasing resource idleness» Starvation and Blockage are the problems.

If we have two raw material for a process and one is unavailable we have a starvation condition

If the buffer is not big enough upstream and there is no place for the product to go we have a blockage condition

» Techniques to avoid Starvation and Blockage Proper buffer size Process flow synchronization

Internal bottle neck will require increasing the capacity of the bottle neck to a capacity where a new bottleneck will appear. Once the old bottleneck does not have the lowest capacity do not continue to increase capacity. It will not increase overall capacity any further.

1 5. Flow Rate and Capacity Analysis Flow Rate and Capacity Analysis Throughput and Capacity ...

Documents

Transcript of 1 5. Flow Rate and Capacity Analysis Flow Rate and Capacity Analysis Throughput and Capacity ...