1. OPSM 501: Operations Management Week 4: Process analysis Kristen’s Cookie Koç University Graduate School of Business MBA Program Zeynep Aksin zaksin@ku.edu.tr

2. Mark your calendars: Plant visit to Mercedes Benz in Hadimkoy on 19/12 9:30-12:00 at plant Departure very early from campus with pick-up stop from Ataturk Oto Sanayi

3. 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)

4. 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.

5. 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.

7. 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. 1234 Flow time

8. 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

9. 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

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

11. 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

12. Example 32 1 4765 11 109 startend 25% 75%7 206 53 612 2 20 37 transport support Value added decision Measured actual flow time: 154 minutes 8

13. Consider all possible paths  Path1: 1-4-5-6-7-8-9-1050  Path 2: 2-3-4-5-6-7-8-9-1069  Path 3: 1-4-5-6-7-8-1160  Path 4: 2-3-4-5-6-7-8-1179

14. 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.

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

16. 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

17. Tools: Gantt Chart Gantt charts show the time at which different activities are performed, as well as the sequence of activities Resources 12341234 time activities

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

19. Gantt Chart AAAA BBBB 5 1015 20 712 1722

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

21. Gantt Chart A1 B 510 15 20 712 1722 A2 5 12 1722 B 9 BB 14 BB 19 BB 24

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

23. Gantt Chart A1 B 510 15 20 712 1722 A2 5 20 B 9 BB 14 BB 19 BB 24 1015

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

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

26. 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

27. 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]

28. X-ray revisited 32 1 4765 11 109 startend 25% 75%7 206 53 612 2 20 37 transport support Value added decision Measured actual flow time: 154 minutes 8

29. 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 6+7.5+2.5160/16=3.75415 X-ray lab6+0.25(6)= 7.5 160/7.5=8216 Darkroom technician 12+0.25(12) =15 160/15=4312 Darkroom12+0.25(1 2)=15 160/15=428 Changing room 3+3160/6=10220

30. Utilizations given an observed throughput of 5.5 patients/hr Resource poolTheoretical capacity Patients/hr Capacity utilization Messenger961.11 Receptionist1245.83 X-ray technician1536.67 X-ray lab1634.38 Darkroom technician1245.83 Darkroom868.75 Changing room2027.50

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

32. Effect of Product Mix- Example Resource pool Unit Load (Physician) Unit Load (Hospital) Unit Load (60%-40% mix) Mailroom clerk 0.61.00.76 Data-entry clerk 4.25.24.60 Claims processor 6.67.56.96 Claims supervisor 2.23.22.60

33. Theoretical capacity for hospital claims ResourceSch. availability Unit Load min/claim Th. Capacity resource Number in pool Th. Capacity pool Mailroom clerk 4501.0 450/1=450 1450 Data entry clerk 4505.2 450/5.2=86.5 8692 Claims processor 3607.5 360/7.5=48 12576 Claims supervisor 2403.2 240/3.2=75 5375

34. Theoretical capacity for 60%-40% mix ResourceSch. availability Unit Load min/claim Th. Capacity resource Number in pool Th. Capacity pool Mailroom clerk 4500.76 592 1 Data entry clerk 4504.60 98 8784 Claims processor 3606.96 51.7 12621 Claims supervisor 2402.60 92 5460

35. In summary  Throughput Process Capacity Effective Capacity Theoretical Capacity

36. 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

37. Example 10 min/unit2 min/unit 6 min/unit Flow time T = 2+10+6 = 18 min. System cycle time 1/R= 10 min. Throughput rate R= 6 units / hour Utilizations: R1: 2/10=20% R2=100% (bottleneck) R3=6/10=60% R1R2R3

38. Tools: Gantt Chart Gantt charts show the time at which different activities are performed, as well as the sequence of activities Resources 12341234 time activities

39. R2 10 min/unit R1 2 min/unit R3 6 min/unit R1 R2 R3 10 20 30 40 50 60 1 2 3 4 5 Three Workers W1 W2W3

40. R1 R2 R3 10 20 30 40 50 60 1 2 3 4 5 Three Workers Throughput time for an order of 5 units System cycle time Throughput time for a rush order of 1 unit

41. R1 R2 R3 10 20 30 40 50 60 1 2 3 4 5 W1 W2 Two Workers 1 2 3 4 5

42. More on multi-products and product-mix

43. Announcement  Assignment 2: Individual problem solving –Will encourage you to read the Chapters –Will prepare you for the exam –Will help you review the process analysis module –There are simple solved questions which you can look at first  If after serious attempts you are unable to solve, come to my office for hints and pointers.  Assigned problems: 2.5, 2.10, 3.5, 4.3  Due: Session 6-same due date as The Goal  Can do first two this week