1. OPSM 301 Operations Management Spring 2012 Class 5: Business process flows: Applications

2. Example: A Hospital Emergency Room
A hospital Emergency Room (ER) is currently organized so that all patients register through an initial check-in process. At his or her turn, each patient is seen by a doctor and then exits the process, either with a prescription or with admission to the hospital. Currently, 50 people per hour arrive at the ER, 10% of whom are admitted to the hospital. On average, 30 people are waiting to be registered and 40 are registered and waiting to see a doctor. The registration process takes, on average, 2 minutes per patient. Among patients who receive prescriptions, average time is spent with a doctor is 5 minutes. Among those admitted to the hospital, average time is 30 minutes.
a. On average, how long does a patient stay in the ER?
b. On average, how many patients are being examined by doctors?
c. On average, how many patients are in the ER?
Assume the process to be stable; that is, average inflow rate equals average outflow rate.

3. The ER Process: 1.Description
prescription
Waiting-2
Waiting-1
0.90
Examination
registration
TH=50/hr
0.10
I=30
T=2 min
I=40
Te=30 min for 10%
5 min for 90%
admission
Average Flowtime for the ER?
Average Inventory for the Examination Process?
Average Inventory for the ER?
T = I / R

4. a. Average Flowtime for the ER
prescription
Waiting-2
Waiting-1
0.90
Examination
registration
R=50/hr
0.10
I=30
T=2 min
I=40
T=5 min for 90%
30 min for 10%
admission
T=I/R=30/50 hr
=36 min
T=40/50 hr
=48 min
T = I / R

5. b. Average Number of People being examined by the doctors
prescription
Waiting-2
Waiting-1
0.90
Examination
registration
R=50/hr
0.10
I=30
T=2 min
I=40
T=5 min for 90%
30 min for 10%
admission
R for examination= 50/hr
T for examination = 7.5/60 hr
I for examination= 50* 7.5/60 = 6.25 people
T = I / R

6. c. Average Number of People in the ER (=Total Inventory for the ER)
prescription
Waiting-2
Waiting-1
0.90
Examination
registration
TH=50/hr
0.10
I=30
T=2 min
I=40
T=5 min for 90%
30 min for 10%
admission
I = 2/60 hr * 50 patients/hr
=1.66 patients
I =6.25
FT = I / TH

7. Example: Accounts Receivable Department
Accounts Receivable (AR) receives an average of 1,000 payments per week. There is an average of 500 checks waiting to be deposited.
a. What is the average time spent by each check waiting to be deposited?
b. Assume that the checks coming in are either small or large. Small checks are for an average of $500 and large checks are for an average of $5, % of the checks coming in are large with the rest being small. Currently no distinction is made between the large and small checks. As a result, 20% of the checks waiting to be processed are large. Is it worth reallocating resources so that large checks wait an average of 0.3 weeks while small checks wait an average of 0.8 week before being processed?

8. AR Department: Current Situation
T = I / R
I=500 checks
1000 checks/week

9. AR Department : Proposed System
T = I / R
Large checks:
5000 $ /check
200 checks/week
0.20
T=0.3 week
1000 checks/week
0.80
800 checks/week
Small checks:
500 $/check
T=0.8 week

10. Key Learnings: Little’s Law
Relates three leading performance measures based on process flows: throughput, inventory, flow time
Applies to processes in steady state
Important to
First determine process boundaries for analysis
Then identify appropriate flow unit for your analysis

11. From measurement to analysis
So far we have considered
Measuring process flows-R, T, I
Relating these measures through Little’s Law: I=RxT
Next: understand what drives each measure
What drives flow time?
What drives throughput rate?
What drives inventory?

12. 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)

13. Flowchart Symbols Tasks or operations Decision Points
Examples: Giving an admission ticket to a customer, installing an engine in a car, etc.
Examples: How much change should be given to a customer, which wrench should be used, etc.
Decision Points 4

14. Flowchart Symbols Storage areas or queues
Examples: Lines of people or cars waiting for a service, parts waiting for assembly etc.
Examples: Customers moving to a seat, mechanic getting a tool, etc.
Flows of materials or customers 4