1. Process Analysis

2. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran2 Outline Process Analysis Defined Key Terms and Metrics Process Flowcharting Example: Ouslander

3. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran3 A set of concepts, tools, and metrics for describing, planning, controlling managing, and improving processes. A process is any part of an organization that transforms inputs into outputs, preferably adding value. Process Analysis

4. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran4 Process Layout –Traditional Approach –Aimed at Economies of Scale and Specialization Product Layout –Basis for Cellular Manufacturing, Applied in some services –More customer focused? –Behavioral benefits among workers? Process Layout

5. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran5 Other Types of Processes 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

6. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran6 Types of Processes Single-stage Process Stage 1 Stage 2Stage 3 Multi-stage Process

7. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran7 Process Analysis Terms Level of Analysis: The scope of our study; a single machine, an assembly line, a factory, etc. Cycle Time: The average time between completions of successive units –Typically used at the lower levels of analysis

8. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran8 Process Analysis Terms Utilization: The ratio of the time that a resource is actually activated relative to the time that it is available for use Flow Time: The time it takes for a single customer’s order to proceed through the process from start to finish. Sometimes called Throughput Time Throughput: The volume of production passing through the process over some time period –Typically used at the higher levels of analysis

9. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran9 Process Analysis Terms Bottleneck –Occurs 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 process, work will begin to pile up in front of that employee. In this is case the employee represents the limited capacity causing the bottleneck. Pacing –Refers to the fixed timing of the movement of items through the process

10. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran10 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, the employee will hold on to it not able to continue working on the next unit 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 Process Analysis Terms

11. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran11 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 Bottlenecks, buffers, blocking, and starving are key concepts in Just-in-Time systems, which we will study later in the course Process Analysis Terms

12. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran12 Types of Processes (Continued) Stage 1Stage 2 Buffer Multi-stage Process with Buffer

13. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran13 Process Performance Metrics Operation time = Setup time + Run time Velocity = Throughput time Value-added time Throughput rate = 1. Cycle time

14. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran14 Process Performance Metrics Efficiency = Actual output Standard Output Productivity = Output Input Utilization = Time Activated Time Available

15. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran15 Cycle Time Example 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? Answer: 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 = 4,800/600 units = 8 minutes. Answer: 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 = 4,800/600 units = 8 minutes.

16. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran16 Process Improvement Flow Time Reduction –Perform activities in parallel –Change the sequence of activities –Reduce interruptions Elimination of Non-Value-Added Steps Quality Improvement

17. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran17 Process Flow Diagram A process flow diagram (a.k.a. flow chart) is a graphical tool for describing the major elements of a process The elements can include tasks or operations, flows of materials or customers, decision points, and storage areas or queues It is an ideal methodology by which to begin analyzing a process

18. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran18 Flowchart Symbols Tasks or operations Examples: Giving an admission ticket to a customer, installing a engine in a car, etc. Decision Points Examples: How much change should be given to a customer, which wrench should be used, etc.

19. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran19 Examples: Sheds, lines of people waiting for a service, etc. Examples: Customers moving to a seat, mechanic getting a tool, etc. Storage areas or queues Flows of materials or customers

20. © The McGraw-Hill Companies, Inc., 2004 Example: Flowchart of Student Going to School Yes No Goof off Go to school today? Walk to class Drive to school

21. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran21 The man and the woman agree to have a date Man tries again; Asks for a second date At the end of the date, the man makes sexual advances Woman is more relaxed this time Man guesses that the time is right and approaches the woman sexually No sex for a long time Man nags about the reasons why the woman doesn’t want to have sex Man trips on the edge of the carpet on purpose to show the woman how vulnerable he is Woman melts Mans knee heals rapidly and he suggests sex Man discovers how much fun they have even without sex Woman suggests making dinner together Man pretends to be hungry After cooking for hours, they eat Man approaches woman sexually Man falls asleep Woman agrees Man suggests a refreshing walk, hoping that it will relax her Man gets angry Man suggests a trip to Venice Woman gets excited and starts to go through brochures Man suggests a short cut Woman starts to get tired Man suggests a bath together After a glass of wine the man Finds courage to say what he’s been trying to say all evening and makes a confession of love SEX Woman changes her mind No sex Flow Chart of a Relationship Man almost drinks the whole bottle himself After the bath the man suggests opening a bottle of Champagne

22. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran22 Gantt Chart Activity 1 Activity 2 Activity 3 Activity 4 Activity 5 Activity 6 Time Vertical Axis: Always Activities or Jobs Horizontal Axis: Always Time Horizontal bars used to denote length of time for each activity or job.

23. © The McGraw-Hill Companies, Inc., 2004 Littlefield Technologies Setting Up the Game Round 1 Round 2

24. © The McGraw-Hill Companies, Inc., 2004 To order the Littlefield Technologies Access Code http://www.bookstores.nyu.edu Click on the "Search all books" link "Search by ISBN" option: 9780977094400 Proceed to Checkout and complete your order. You should receive a confirmation that your order has been processed and a second email with your Access Code and registration information.

25. © The McGraw-Hill Companies, Inc., 2004 Setting Up the Game Vendor (Responsive Learning Technologies) sets up an account with capacity for a certain number of teams Students register teams at: http://sim.responsive.net/lt/nyu/start.html Use the bookstore code AND the course code ‘stern’ to register Make up a team name and a team password No apostrophes! Deadline to register: 11:59 PM Saturday February 7

26. © The McGraw-Hill Companies, Inc., 2004 Playing Round 1 Juran “initializes” the game by 1:00 PM Sunday Sept. 8, generating 50 days of data and then pausing the game While the game is paused, you can view your factory and analyze the first 50 days of data, but you can’t make changes yet: http://sim.responsive.net/lt/nyu/entry.html Juran starts the game 2:00 PM Thu. Feb. 19 The game ends automatically after 4 days, 22 hours, and 35 minutes (12:35 PM on Tuesday Feb. 24) http://sim.responsive.net/lt/nyu/entry.html

27. © The McGraw-Hill Companies, Inc., 2004

28. Playing Round 1 Objective: Finish the game with the most cash Decision variables: Purchases/sales of machines at three manufacturing stations Written deliverable March 4 / 23: What decisions did you make? What analysis led you to make those decisions? What did you learn from this game? 2 pages max.

29. © The McGraw-Hill Companies, Inc., 2004 Record Holders (Round 1) juranjuran $1,428,756 Shaurav Datta Gus Giacoman Jordin Greene Julia Lamm Paulo Souza (all MBA’11)

30. © The McGraw-Hill Companies, Inc., 2004 Record Holders (Round 2) synergy5 $1,604,719 Neil Mayer Douglas Monaster Yothin Peanpanich Jeff Shiue Diana Tsirlina (all MBA’10)

31. © The McGraw-Hill Companies, Inc., 2004 Record Holders (Total) synergy5 $2,984,853 Neil Mayer Douglas Monaster Yothin Peanpanich Jeff Shiue Diana Tsirlina (all MBA’10)

32. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran32 Kristin’s Cookies Read the Harvard Case (9-686-093). Answer the six key questions at the end. Also: What is the cycle time, throughput time, and capacity of each operation and the whole production system? Hand in this analysis at the beginning of class. Draw a Gantt chart for Kristen's operation assuming orders are for two-dozen cookies. (The Gantt chart does not have to be handed in.)

33. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran33 In-class Problem: Ouslander Assembly

34. © The McGraw-Hill Companies, Inc., 2004 Operations -- Prof. Juran34 Summary Process Analysis Defined Key Terms and Metrics Process Flowcharting Example: Ouslander