PROCESS DESIGN AND ANALYSIS

Chapter Eleven

Learning Objectivesg j

Exemplify a typical business process Exemplify a typical business process and how it can be analyzed.

Compare different types of processes. Explain how jobs are designed.p j gAnalyze manufacturing, service, and

logistics processes t th logistics processes to ensure the competitiveness of a firm.

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Process Analysisy

Process: any part of an organization that Process: any part of an organization that takes inputs and transforms them into

t toutputsCycle time: the average successive time

between completions of successive units Utilization: the ratio of the time that a Utilization: the ratio of the time that a

resource is actually activated relative to th ti th t it i il bl f the time that it is available for use

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Analyzing a Las Vegas Slot Machiney g g

1 Analyzing the mechanical slot machine1. Analyzing the mechanical slot machine2. Analyzing the new electronic slot

machine3. Comparisonp4. The slot machine is one of many casino

processes

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Process Flowchartingg

Process flowcharting: the use of a diagram to Process flowcharting: the use of a diagram to present the major elements of a process

The basic elements can include tasks or The basic elements can include tasks or operations, flows of materials or customers, decision points and storage areas or queuesdecision points, and storage areas or queues.

It is an ideal methodology by which to begin l i analyzing a process.

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Flowchart Symbolsy

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Process Flowchart Example (Slot M hi )Machine)

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Types of Processes

Single-stage process

yp

Single stage process

Stage 1Stage 1

Multistage process

Stage 1 Stage 2 Stage 3

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Types of Processes (Continued)

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Types of Processes (Continued)

A buffer refers to a storage area between stages A buffer refers to a storage area between stages where the output of a stage is placed prior to being used in a downstream stage

Multi-stage Process with BufferBuffer

Multi-stage Process with Buffer

Stage 1 Stage 2

Other Process Terminology

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Blocking Occurs when the activities in a stage must stop because there is no

place to deposit the item just completed

If there is no room for an employee to place a unit of work down, p y p ,the employee will hold on to it not able to continue working on the next unit

Starving Starving Occurs when the activities in a stage must stop because there is no

work

If an employee is waiting at a work station and no work is coming to the employee to process, the employee will remain idle until the next unit of work comes

Other Process Terminology (Continued)

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gy ( )

BottleneckOccurs when the limited capacity of a process

causes work to pile up or become unevenly distributed in the flow of a process

If an employee works too slow in a multi-stage k ill b i t il i f t f process, work will begin to pile up in front of

that employee. In this is case the employee represents the limited capacity causing the represents the limited capacity causing the bottleneck.

Other Types of Processes

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Make-to-order Make to order Only activated in response to an actual order Both work-in-process and finished goods inventory

kept to a minimum

Make-to-stock Process activated to meet expected or forecast

demand

Customer orders are served from target stocking level Customer orders are served from target stocking level

Hybrid Combines the features of both make-to-order and Combines the features of both make to order and

make-to-stock.

Other Types of Processesyp

Serial flow process: a single path for all Serial flow process: a single path for all stages of production

Parallel process: some of production has alternative paths where two or more machines are used to increase capacity

Logistics processes: the movement of Logistics processes: the movement of things such as materials, people, or fi i h d dfinished goods

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Measuring Process Performanceg

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Cycle Time Example

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S h d t d 600 it i 80 h t Suppose you had to produce 600 units in 80 hours to meet the demand requirements of a product. What is the cycle time to meet this demand requirement?the cycle time to meet this demand requirement?

h i ( i /hAnswer: There are 4,800 minutes (60 minutes/hour x 80 hours) in 80 hours. So the average time between completions would have to be: Cycle time = completions would have to be: Cycle time 4,800/600 units = 8 minutes.

Production Process Mapping and Littl LLittles Law Total average value of inventoryg y Sum of the value of raw materials, work-in-process, and finished

goods inventory

Inventory turns Inventory turns Cost of goods sold divided by the average inventory value

Days-of-supply Inverse of inventory turns scaled to days

Littles law There is a long-term relationship among inventory throughput and There is a long-term relationship among inventory, throughput, and

flow time Inventory = Throughput rate x Flow timeTh h t i th t f i t d t t th h Throughput is the movement of inputs and outputs through aproduction process.

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Example 11.1: Car Batteriesp

Average cost $45 Average cost $45 12 hours to make a car Assembles 200 cars per 8 hour shift Assembles 200 cars per 8-hour shift Currently one shift

Holds on average 8 000 batteries in raw material Holds on average 8,000 batteries in raw material inventory

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Example 11.1: Average Inventoryp g y

WIP = Throughput x Flow time WIP = 25 batteries x 12 hours WIP = 300 batteries

T l 8 000 + 300 8 300 b i Total = 8,000 + 300 = 8,300 batteries

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Example 11.1: Value and Flow Timep

Value = 8,300 x $45 = $375,000 Value 8,300 x $45 $375,000

Flow time = Inventory/Throughput Flow time Inventory/ThroughputFlow time = 8,000/200 = 40 days

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Behavioral Considerations in J b D iJob Design Specialization of labor Made high-speed, low-cost production possible Greatly enhanced standard of living Adverse effects on workers

Job enrichment Making job more interesting to the worker Horizontal enrichment: worker performs a greater number of Horizontal enrichment: worker performs a greater number of

variety of tasks Vertical enrichment: worker is involved in planning, organizing, and

inspecting work

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Work Measurement and Standards

Work measurement is a process of analyzing jobs Work measurement is a process of analyzing jobs for the purpose of setting time standards.

Why use it? Why use it?1. Schedule work and allocate capacity2. Motivate and measure work performance2. Motivate and measure work performance3. Evaluate performance4. Provide benchmarks

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Work Measurement Techniquesq

Direct methods Direct methods1. Time study2. Work sampling2. Work sampling

Indirect methods1 Predetermined motion-time data system1. Predetermined motion time data system2. Elemental data

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Example 11.2: Bread Makingp g

Current LayoutCurrent Layout

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Example 11.2: Running at 100 Loaves per Hourper Hour

Both bread making and packaging operate the Both bread making and packaging operate the same amount of time.

Capacity is 100 loaves per hour. Capacity is 100 loaves per hour. Packaging is idle for a quarter hour. Has 75 percent utilization Has 75 percent utilization.

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Example 11.2: Bread Making on Two P ll l LiParallel Lines

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Example 11.2: Multiple Shiftsp p

Bread making runs two shifts. Bread making runs two shifts. Produces 200 x 8 x 2 = 3,200

Packaging runs three shifts Packaging runs three shifts. Produces 133.3 x 8 x 3 = 3,200

Capacities are roughly equal Capacities are roughly equal.

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Process Flow Time Reductions

1 Perform activities in parallel.1. Perform activities in parallel.2. Change the sequence of activities.3 Reduce interruptions3. Reduce interruptions.

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Question Bowl

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Which of the following are possible examples of g p pcycle times?

a. Time for each television to come off an assembly line.

b. Time it takes for a stock purchaseTime it takes for an instructor to grade an examc. Time it takes for an instructor to grade an exam

d. Time it takes to build an automobilee. All of the above

Answer: e All of the aboveAnswer: e. All of the above

Question Bowl

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Which of the following are used as symbols in a Which of the following are used as symbols in a Process Flowchart?

a. Decision pointspb. Blockingc. Starvingd. Bottlenecke. All of the above

A i i i (A i )Answer: a. Decision points (A diamond shaped symbol.)

Question Bowl

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Which type of process is configured as follows?yp p g

1 2 3

a. Single-stage processb. Multi-stage processc Make-to-order processc. Make-to-order processd. Make-to-stock processe. All of the above

Answer: b. Multi-stage process

Question Bowl

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When an assembly line employee is waiting for y p y ga unit of work to come down the line so they can stop being idle and get back to work, it is an e ample of hich of the follo ing p ocess an example of which of the following process terms?

a. Bufferinggb. Blockingc. Starvingd Bottleneckd. Bottlenecke. All of the above

Answer: c. Starving

Question Bowl

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When a company waits until they have an order for their p y yproduct in hand before beginning any production for that order, we can characterize their operation as which of the following processes?of the following processes?

a. Single-stage processb. Multi-stage processc. Make-to-order processd. Make-to-stock process

All of the abovee. All of the above

A M k t dAnswer: c. Make-to-order process

Question Bowl

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If the Run Time for a batch of parts is 45 minutes on a If the Run Time for a batch of parts is 45 minutes on a machine, and the Setup Time is 65 minutes, which of the following is the Operation Time?

a 75 minutesa. 75 minutesb. 110 minutesc. Only 45 minutesd. 65/45 minutes or 1.44 hourse. Can not be computed on the data above

Answer: b. 110 minutes ( Operation Time is the sum ofAnswer: b. 110 minutes ( Operation Time is the sum of Run Time and Setup Time, or 65 + 45 = 110 minutes)

Question Bowl

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If the standard expected phone calls for a telephone p p pmarketers is 24 per hour, and one telephone marketer did 27 per hour, which of the following can be used to describe their Efficiency?describe their Efficiency?

a. 88.8%b. 100%c. 112.5%d. Well over 150%

Can not computed on the information givene. Can not computed on the information given.

Answer: c. 112.5% (Ratio of actual performance/expected performance, or (27/24) x 100 = 110 minutes)

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