OPSM 301: Operations Management Session 7: Process analysis Koç University Zeynep Aksin

Process Architecture is defined and represented by a process flow chart: Process = network of activities performed by resources 1. Process Boundaries: –input –output 2. Flow unit: the unit of analysis 3. Network of Activities & Storage/Buffers –activities with activity times –routes: precedence relationships (solid lines) 4. Resources & Allocation 5. Information Structure & flow (dashed lines)

Flowchart Symbols Tasks or operations Examples: Giving an admission ticket to a customer, installing an engine in a car, etc. Decision Points Examples: How much change should be given to a customer, which wrench should be used, etc.

Flowchart Symbols Storage areas or queues Examples: Lines of people or cars waiting for a service, parts waiting for assembly etc. Flows of materials or customers Examples: Customers moving to a seat, mechanic getting a tool, etc.

Recall:Terminology Flow Time (T) The flow time (also called variously throughput time, cycle time) of a given routing is the average time from release of a job at the beginning of the routing until it reaches an inventory point at the end of the routing Flow time

Flow time in the House Game process? Production Control (color sheets, log sheets, scissors) (scissors) Base Cut (scissors) Final Assembly (tape) Base Weld (stapler) Quality Control Customer Roof Base Form

Critical Path & Critical Activities  Critical Path: A path with the longest total cycle time.  Critical Activity: An activity on the critical path. AB C D

Operational Measure: Flow Time Driver: Activity Times, Critical Activity  (Theoretical) Flow Time  Critical Activity  Flow Time efficiency =

X-Ray Service Process  1. Patient walks to x-ray lab  2. X-ray request travels to lab by messenger  3. X-ray technician fills out standard form based on info. From physician  4. Receptionist receives insurance information, prepares and signs form, sends to insurer  5. Patient undresses in preparation of x-ray  6. Lab technician takes x-ray  7. Darkroom technician develops x-ray  8. Lab technician checks for clarity-rework if necessary  9. Patient puts on clothes, gets ready to leave lab  10. Patient walks back to physicians office  11. X-rays transferred to physician by messenger

Example startend 25% 75% transport support Value added decision Measured actual flow time: 154 minutes 8

Consider all possible paths  Path1:  Path 2:  Path 3:  Path 4:

Levers for Reducing Flow Time  Decrease the work content of critical activities –work smarter –work faster –do it right the first time –change product mix  Move work content from critical to non-critical activities –to non-critical path or to ``outer loop’’  Reduce waiting time.

Most time inefficiency comes from waiting: E.g.: Flow Times in White Collar Processes

Flow rate (capacity) in the House Game process? Production Control (color sheets, log sheets, scissors) (scissors) Base Cut (scissors) Final Assembly (tape) Base Weld (stapler) Quality Control Customer Roof Base Form

Tools: Gantt Chart Gantt charts show the time at which different activities are performed, as well as the sequence of activities Resources time activities

Example of a two-stage production line AB 5 min 2 min

Gantt Chart AAAA BBBB

Example of a two-stage production line A1 B 2 min A2 5 min

Gantt Chart A1 B A B 9 BB 14 BB 19 BB 24

Theoretical Capacity  Theoretical capacity: The capacity (throughput rate) of a process under ideal conditions (units / time)  Effective capacity: The capacity that one expects of a process under normal working conditions (units/time)  Effective capacity < Theoretical capacity

Effective Capacity (scheduled availability)  Effective capacity depends on the following –Number of shifts –Product variety –Maintenance –Idleness

Realized Capacity (net availability)  Actual production or realized throughput rate –Usually lower than effective capacity. Machine and equipment failures Quality problems Workforce losses Other uncertainties

Operational Measure: Capacity Drivers: Resource Loads  (Theoretical) Capacity of a Resource  Bottleneck Resource  (Theoretical) Capacity of the Process  Capacity Utilization of a Resource/Process = Realized throughput [units/hr] Theoretical capacity [units/hr]

X-ray revisited startend 25% 75% transport support Value added decision Measured actual flow time: 154 minutes 8

X-Ray revisited Resource Pool Res. Unit Load Load Batch Theoretical Capacity of Res. unit No of units in pool Theoretical capacity of pool Messenger20+20 min/patient 160/40=1.5 patients/hr 61.5(6)=9 Patient/hr Receptionist5160/5=12112 X-ray technician /16= X-ray lab6+0.25(6)= /7.5=8216 Darkroom technician (12) =15 160/15=4312 Darkroom (1 2)=15 160/15=428 Changing room /6=10220

Utilizations given an observed throughput of 5.5 patients/hr Resource poolTheoretical capacity Patients/hr Capacity utilization Messenger Receptionist X-ray technician X-ray lab Darkroom technician Darkroom Changing room

A Recipe for Capacity Measurements * assuming system is processing at full capacity

Effect of Product Mix- Example Resource pool Unit Load (Physician) Unit Load (Hospital) Unit Load (60%-40% mix) Mailroom clerk Data-entry clerk Claims processor Claims supervisor

Theoretical capacity for hospital claims ResourceSch. availability Unit Load min/claim Th. Capacity resource Number in pool Th. Capacity pool Mailroom clerk /1= Data entry clerk /5.2= Claims processor /7.5= Claims supervisor /3.2=

Theoretical capacity for 60%-40% mix ResourceSch. availability Unit Load min/claim Th. Capacity resource Number in pool Th. Capacity pool Mailroom clerk Data entry clerk Claims processor Claims supervisor

In summary  Throughput Process Capacity Effective Capacity Theoretical Capacity

Levers for Increasing Process Capacity  Decrease the work content of bottleneck activities –work smarter –work faster –do it right the first time –change product mix  Move work content from bottlenecks to non-bottlenecks –to non-critical resource or to third party  Increase Net Availability –work longer –increase scale (invest) –increase size of load batches –eliminate availability waste

Announcements  Read and be prepared to analyze Kristen’s Cookie for next class (Mon 17/10)  Second Assignment: Read the Universal Pulp and Paper case-due next Wednesday 19/10! –Draw a process flowchart –Find the bottleneck for this process. Show all analysis in detail. –To produce the projected 3.68 million tons per year of newsprint, where should an investment in capacity occur? –Do you have any further recommendations for management?