1. IES 303 Chapter 4: Process Analysis Week 4 Dec 1, 2005 Objectives:
Introduce some practical tools used in designing and improving processes
Week 4
Dec 1, 2005

2. Process Analysis
Understanding how process work is essential to ensuring the competitiveness of a company
Example of 2 fast-food restaurants
If restaurant A can delivery a hamburger to customer for $0.50 in direct costs and restaurant B costs $0.75, ____________________________________________
____________________________________________

3. Objectives of Process Analysis
To be able to answer the following key questions:
How many customers can the process handle per hour?
How long will it take to serve a customer?
What change is needed in the process to expand capacity?
How much does the process cost?
What part of process should be improved or eliminated in order to reduce non-value added cost?

4. Measuring Process Performance
Productivity
Ratio of output to input
________________________________________________
Efficiency
Ratio of actual output of a process relative to some standard
Throughput Time
Utilization

5. A Systematic Approach to Process Analysis2 1 3 6 4 5
Figure 4.2

6. Flowchart of the Sales Process for a Consulting Company
Figure 4.3

7. Flowchart of Nested Subprocess of Client Agreement and Service Delivery Step
Figure 4.4

8. Flowchart of the Process Showing Handoffs Between Departments
Figure 4.5

9. Service visible to customer
Flow Diagrams
Service visible to customer
Service not visible to customer
Customer departs with car
Repair not authorized
Repair authorized
Order parts
Parts available
Check
parts availability†
Perform work†
Parts not available
Customer drops off car
Mechanic makes diagnosis*
Discuss needed work with customer*
Inspect/ test and repair
Perform corrected work
Corrective work necessary
Repair complete
Collect payment
Notify customer
* = Points critical to the success of the service
Figure 4.6
† = Points at which failure is most often experienced

10. Process Charts

11. Recommended readings
“Work measurement at United Parcel Service (UPS)” from Operations Management for Competitive Advantages, page 192
“Customer-Driven Service for McDonald’s – Self-ordering kiosks and environment” from Operations Management for Competitive Advantages, page

12. Case Exercise Select a process (service or manufacturing)
Example of service system:
MK restaurant (dine-in or delivery)
SIIT registration process
Write a flow diagrams and/or process chart for its operations

13. Pareto Charts Figure 4.9 Figure 4.10
This series of slides presents Example 6.1, the use of Pareto charts. The first step is to plot the data on a histogram.
This slide advances automatically.
Figure 4.10 1

14. Cause-and-Effect Diagram Ex: Checker Board Airlines
Aircraft late to gate
Mechanical failures
Equipment
Passenger processing at gate
Late cabin cleaners
Unavailable cockpit crew
Late cabin crew
Personnel
Weather
Air traffic delays
Other
Delayed flight departures
Materials
Late food service
Late fuel
Late baggage to aircraft
Contractor not provided
updated schedule
Procedures
Waiting for late passengers
Weight/balance sheet late
Poor announcement of departures
Delayed check-in procedure
Figure 4.11

15. Tools for Improving Quality Wellington Fiber Board Co.
Step 1—Checklist
Step 2—Pareto chart
Step 3—Cause-and-effect diagram
Step 4—Bar chart
The next series of slides presents Example 6.3. The series builds in steps to the conclusion of the Example showing the development of key graphics along the way.. 8

16. Wellington Fiber Board Co.
Checklists
Headliner Defects
Defect type Tally Total
A. Tears in fabric //// 4
B. Discolored fabric /// 3
C. Broken fiber board //// //// //// ////
//// //// //// / 36
D. Ragged edges //// // 7
Total 50
This is the last slide in the sequence with the balance of the observations added in a batch.
Figure 4.12 9

17. Wellington Fiber Board Co.
Pareto Chart
100 80 60 40 20
Cumulative percentage
Number of defects 50 30 10
Defect type C D A B
This slide adds the cumulative line to the chart showing the alternate charting technique.
Figure 4.12 12

18. Wellington Fiber Board Co.
Cause-and-Effect Diagram
Training
Absenteeism
Communication
People
Out of specification
Not available
Materials
Broken fiber board
This is the CE Diagram for the headliner problem.
Humidity
Schedule changes
Other
Machine maintenance
Machine speed
Wrong setup
Process
Figure 4.12 13

19. Wellington Fiber Board Co.20 15 10 5
Number of broken fiber boards
First Second Third
Shift
Bar Chart
And finally the bar chart (essentially a histogram) of the defects analyzed by shift. This clearly illustrates the value of looking at data arranged in alternate schemes (as long as there is some theoretical justification for the different view).
Figure 4.12 14

20. Next week Case: Jose’s Authentic Mexican Restaurant
Read and analyze the case: Jose’s Authentic Mexican Restaurant, textbook page 166
Answer the posted questions. Also perform and construct any applicable graphical displays in analyzing the problem.