2. Process Analysis Process Flowcharting Types of Processes Process Performance Metrics OBJECTIVES

3. Process Analysis Terms Process: Is any part of an organization that takes inputs and transforms them into outputs Cycle Time: Is the average successive time between completions of successive units Utilization: Is the ratio of the time that a resource is actually activated relative to the time that it is available for use

4. Process Flowcharting Defined Process flowcharting is the use of a diagram to present the major elements of a process The basic 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

5. 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. Process Performance Metrics Operation time = Setup time + Run time Throughput time = Average time for a unit to move through the system Velocity = Throughput time Value-added time

7. Process Performance Metrics (Continued) Cycle time = Average time between completion of units Throughput rate = 1. Cycle time Efficiency = Actual output Standard Output

8. Process Performance Metrics (Continued) Productivity = Output Input Utilization = Time Activated Time Available

9. 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.

10. Process Throughput Time Reduction Perform activities in parallel Change the sequence of activities Reduce interruptions

11. HighLow Volume Customization High Low Figure 3.1b Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank Continuous process Power generation plant Providing telephone line access

12. HighLow Volume Customization High Low Figure 3.1a Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Batch process Forging process to make fittings for pressure vessels access Producing a batch of textbooks at R. R. Donnelley’s plant Line process Auto assembly King Soopers bread line Continuous process Oil refining process Borden’s pasta making process

13. Units per year (Q) Process 2: Special-purposeequipment Process 1: General-purposeequipment Break-even quantity F2F2 F1F1 Total cost (dollars) Figure 3.4

14. HighLow Volume  Less vertical integration  More resource flexibility  More customer involvement  Less capital intensity/ automation  More vertical integration  Less resource flexibility  Less customer involvement  More capital intensity/ automation Low volume, make- to-order process High volume, make- to-stock process Figure 3.5 Project process Selecting location for new plant in Europe Installing ERP for a manufacturing firm’s business processes Job process Machining precision metal tubes Internal consulting team at manufacturing firm Batch process Forging process to make fittings for pressure vessels access Producing a batch of textbooks at R. R. Donnelley’s plant Line process Auto assembly King Soopers bread line Continuous process Oil refining process Borden’s pasta making process Process design choices

15.  Less vertical integration  More resource flexibility  More customer involvement  Less capital intensity/ automation  More vertical integration  Less resource flexibility  Less customer involvement  More capital intensity/ automation Low volume, customized-service process High volume, standardized-service process HighLow Volume Figure 3.6 Project process Real estate process for leasing and constructing facilities for large insurance company Student team’s field project Job process Customer service process at financial services firm General medical practice Batch process Order fulfillment process of importer/distributor Placing purchase orders at public relations agency Line process Cafeteria line Teller line at bank Continuous process Power generation plant Providing telephone line access

16. * = Points critical to the success of the service † = Points at which failure is most often experienced Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Collect payment Notify customer Check parts availability † Order parts Repair complete Figure 3.7 Repair not authorized Parts available Service visible to customer Repair authorized Service not visible to customer Perform work † Inspect/ test and repair Perform corrected work Corrective work necessary Parts not available

17. To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved. Figure 4.8 Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Step description Insert Step Append Step Remove Step 1XEnter emergency room, approach patient window 2XSit down and fill out patient history 3XNurse escorts patient to ER triage room 4XNurse inspects injury 5XReturn to waiting room 6XWait for available bed 7XGo to ER bed 8XWait for doctor 9XDoctor inspects injury and questions patient 10XNurse takes patient to radiology 11XTechnician x-rays patient 12XReturn to bed in ER 13XWait for doctor to return 14XDoctor provides diagnosis and advice 15XReturn to emergency entrance area 16XCheck out 17XWalk to pharmacy 18XPick up prescription 19XLeave the building 0.5015 10.0- 0.7540 3.00- 0.7540 1.00- 1.0060 4.00- 5.00- 2.00200 3.00- 2.00200 3.00- 2.00- 1.0060 4.00- 2.00180 4.00- 1.0020 Transport911815 Operation523— Inspect28— Store——— Delay38—

18. Figure 3.8 Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital 10.5015XEnter emergency room, approach patient window 210.0-XSit down and fill out patient history 30.7540XNurse escorts patient to ER triage room 43.00-XNurse inspects injury 50.7540XReturn to waiting room 61.00-XWait for available bed 71.0060XGo to ER bed 84.00-XWait for doctor 95.00-XDoctor inspects injury and questions patient 102.00200XNurse takes patient to radiology 113.00-XTechnician x-rays patient 122.00200XReturn to bed in ER 133.00-XWait for doctor to return 142.00-XDoctor provides diagnosis and advice 151.0060XReturn to emergency entrance area 164.00-XCheck out 172.00180XWalk to pharmacy 184.00-XPick up prescription 191.0020XLeave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport911815 Operation523— Inspect28— Store——— Delay38— Step description Insert Step Append Step Remove Step

19. Product-Flow Characteristics Types of Product Flow Line Flow Batch Flow Project Flow Characteristics of Flows (see Table 4.1)

20. Line Flow WS 1WS 2WS 3 WS Task or work station Product flow

21. Batch Flow WS 1 WS 3 WS 5 WS Task or work station Product flows WS 2WS 4

22. Project Flow Start Task 1 Task 3 Task Task or activity Precedence relationship Task 2Task 4 End

23. Classification by Type of Customer Order Make to Stock (MTS) (Standardisation) (Create Inventory,Push to Market) Make to Order(MTO) ( MKt Pull-No Invent.) Assemble to Stock (Mass Customisation) Engineer to order (Higher Customisation) MTS >>>>ATS>>>>ETO >Increasing Customisation

24. Make to Stock (MTS) Advantages Inventory for Peak Disadvantage Inv.Cost-Obsolescence Key performance measures Information flow (see Figure 4.4)

25. Process Life Cycle Stages  Jumbled flow (job shop)  Disconnected line flow (batch)  Connected line flow (assembly line)  Continuous flow

26. I Low volume-low standardization, one of a kind Commercial Printer Heavy Equipment Automobile assembly Sugar Refinery II Multiple products, low volume III Few major products higher volume III High volume-high standardization, commodity products PRODUCT-PROCESS MATRIX (Figure 4.5) PRODUCT STRUCTURE (Product Life Cycle) PROCESS STRUCTURE (Process Life Cycle) I Jumbled flow (job shop) II Disconnected line flow (batch) III Connected line flow (assembly line) IV Continuous flow NONE

27. Product Life Cycle Stages  Low volume-low standardization, one of a kind  Multiple products, low volume  Few major products, higher volume  High volume-high standardization, commodity product