1. CHAPTER 5 Processes The Building Blocks of the Value-Driven OM System

2. 2 PROCESS CHOICE n Project process – 특정과제, 컨설팅 n Job process – 응급실, 특수 우편물 n Batch process – 단체여행 n Line process – 자동차, 패스트 푸드 n Continuous process – 정유소, 화학공정 n 수직적 통합, 자원유연성, 고객관여도, 자본집약도.

3. 3 SERVICE OPERATION RELATIONSHIP

4. 4 PROCESSES n A PROCESS is a collection of activities that transforms inputs into outputs of higher value to the customer. – Structure and Capacity determine the resources – Process are linked to other processes n Categories of Activities within a Process PROCESS OUTPUTSINPUTS OperationsTransportation DelaysInspections Storage

5. 5 CATEGORIES OF ACTIVITIES WITHIN A PROCESS n OPERATION : A change or transformation to an input n TRANSPORTATION : Change only the location of a part n INSPECTION – check or verifies the result of another activity – Standard(Internal, external, benchmarking) n DELAY : result from interference with the process n STORAGY : place an item under some kind of control

6. 6 INPUTS, OUTPUTS, & PROCESSES n Flows : Information & Physical flow n Input : Material, Energy, Information(knowledge), Technology, Facilities, Labor. n Structure – Deals with the organization of input, activities, and output of a process – Ordering activities : Strict & non strict precedence – Positioning activities : Sequential & Parallel – Linking activities : Spatial & Physical n Determinants of Process performance – Activities, Structure, Capacity

7. 7 CAPACITY AND PROCESS n CAPACITY is a measure of the rate of output of a process. – Determine the resource available to all activities – Capacity limit : delay, lead time n How to Measure Capacity – Resource availability & potential output – Maximum (design) & effective Capacity – Sequential systems & Parallel systems(bottleneck) – Input, product mix n General flow →Time period→Common unit →Maximum capacity

8. 8 EVALUATING PROCESSES- ESTABLISHING THE LINK TO VALUE n PROCESSES exist to serve an organization’s strategic goal of satisfying a specific set of customers. n As such, they are evaluated against a standard that matches the customers values. – Cost performance – Quality performance – Lead time performance – Flexibility performance

9. 9 PROCESS FLOW ANALYSIS n PROCESS INTERFACE : Coordination n PROCESS FLOW ANALYSIS – Understand the process & highlight potential improvement – is a five-step technique for documenting activities in a detailed, compact, graphic form. – Identify and categorize process activities – Document the process as a whole – Analyze the process and identify opportunities for improvement – Recommend appropriate changes to the process – Implement the changes

10. 10 DOCUMENT THE PROCESS AS A WHOLE n General process chart n Process flow chart : Sequence of activities n Process flow diagram – Spatial relationships(physical layout), sequential pattern n Assembly process chart – Shows the entire system with all of its sub-processes – Combine the structure of a process with its capacity n Flow chart

11. 11 LEAD TIMES IN PROCESS FLOW ANALYSIS n Time required for each activity – Operation & inspection : Lead time =(run time + set up time)*Efficiency – TP : amount, distance, speed – Storage & delay : the demand the items n Process structure : Sequence & parallel n Amount of capacity for each activity – Processing time & waiting time n Fewer step, increasing capacity, parallel organization

12. 12 USING A VALUE-DRIVEN PERSPECTIVE TO CHANGE PROCESSES n Combining a value perspective and process flow analysis provides a more powerful way to enhance the value-enhancing capabilities of a process. n A four-step procedure – Set value-judging standards : surveying customer & benchmarking – Evaluate the process against these standards : value- adding, non value-adding, waste creating, uncertain – Determine disposition of specific activities : keep, combine, rethink, eliminate – Determine positions of remaining activities

13. 13 BENCHMARKING n BENCHMARKING is the process of comparing your own practices against similar practices of firms recognized as the most effective at some specific task. Types of Benchmarking – Product-dissects goods or services – Process-studies manufacturing processes – Best Practices-studies management processes – Strategic-studies management directions n Customer surveys and benchmarking are used to establish standards.

14. 14 BUSINESS PROCESS REENGINEERING n Technique for implementing radical change in a process by defining the sequence of activities that most effectively deliver the output that customers want. n Vision Statement : Process 의 이상적인 상태를 묘사 n Impact Statement : OM System 과 기업 전체의 Process 사이의 영향 관계를 파악 n Reengineering the Process - 핵심 Process - 강력한 Leadership - Cross-functional Team - 정보 기술 - 백지 철학 (Zero-base) - Process 분석 n Principles of Business Process Reengineering - Process-oriented - Rule-breaking process - Create an entirely new sequence of activities