PROCESS DESIGN

AND ANALYSIS

Chapter Eleven

Learning
g Objectives
j
Exemplify a typical business process
and how it can be analyzed.
Compare different types of processes.
Explain
p
how jjobs are designed.
g
Analyze manufacturing, service, and
logistics processes to
t ensure the
th
competitiveness of a firm.

11-2

Process Analysis
y
Process: any part of an organization that
takes inputs and transforms them into
outputs
t t
Cycle time: the average successive time
between completions of successive units
Utilization: the ratio of the time that a
resource is actually activated relative to
th titime th
the
thatt it iis available
il bl ffor use

11-3

Analyzing
y g a Las Vegas
g Slot Machine
1
1.
2.

3.
4.

Analyzing the mechanical slot machine

Analyzing the new electronic slot
machine
Comparison
p
The slot machine is one of many casino
processes

11-4

Process Flowcharting
g
Process flowcharting: 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,
points and storage areas or queues.
queues
It is an ideal methodology by which to begin
analyzing
l i a process.

11-5

Flowchart Symbols
y

11-6

Process Flowchart Example (Slot

M hi )
Machine)

11-7

Types
yp of Processes
Single-stage
Single
stage process
Stage 1

Multistage process
Stage 1

Stage 2

Stage 3
11-8

6-9

Types of Processes (Continued)

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

Multi-stage Process with Buffer

Buffer
Stage 1

Stage 2

6-10

Other Process Terminology

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

p y to place
p
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

6-11

Other Process Terminology

gy (Continued)
(
)

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, workk will
ill b
begin
i to
t pile
il up in
i front
f t off
that employee. In this is case the employee
represents the limited capacity causing the
bottleneck.

6-12

Other Types of Processes

Make-to-order
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

Hybrid

Combines the features of both make

make-to-order
to order and
make-to-stock.

Other Types
yp of Processes
Serial flow process: a single path for all
stages of production
Parallel process: some of production has
alternative paths where two or more
machines are used to increase capacity
Logistics processes: the movement of
things such as materials, people, or
fi i h d goods
finished
d

11-13

Measuring
g Process Performance

11-14

6-15

Cycle Time Example

SSuppose you h
had
d to
t produce
d
600 units
it in
i 80 hours
h
to
t
meet the demand requirements of a product. What is
the cycle time to meet this demand requirement?
Answer: There
h
are 4,800 minutes
i
(60
( minutes/hour
i
/h
x
80 hours) in 80 hours. So the average time between
completions would have to be: Cycle time =
4,800/600 units = 8 minutes.

Production Process Mapping and

Littl Law
Littles
L

Total average
g value of inventoryy

Inventory turns

Cost of goods sold divided by the average inventory value

Days-of-supply

Sum of the value of raw materials, work-in-process, and finished

goods inventory

Inverse of inventory turns scaled to days

Littles law

There is a long-term relationship among inventory,

inventory throughput,
throughput and
flow time
Inventory = Throughput rate x Flow time

Throughput
Th
h t is
i the
th movementt off inputs
i t and
d outputs
t t through
th
ha
production process.
11-16

Example
p 11.1: Car Batteries

Average cost $45

12 hours to make a car
Assembles 200 cars per 8-hour
8 hour shift
Currently

one shift

Holds on average 8,000

8 000 batteries in raw material
inventory

11-17

Example
p 11.1: Average
g Inventoryy

WIP = Throughput x Flow time

WIP = 25 batteries x 12 hours
WIP = 300 batteries

T l=8
Total
8,000
000 + 300 = 8,300
8 300 batteries
b
i

11-18

Example
p 11.1: Value and Flow Time

Value = 8,300 x $45 = $375,000

Flow time = Inventory/Throughput
Flow time = 8,000/200 = 40 days

11-19

Behavioral Considerations in
J b Design
Job
D i

Specialization of labor

Made high-speed, low-cost production possible

Greatly enhanced standard of living
Adverse effects on workers

Job enrichment

Making job more interesting to the worker

Horizontal enrichment: worker performs a greater number of
variety of tasks
Vertical enrichment: worker is involved in planning, organizing, and
inspecting work

11-20

Work Measurement and Standards

Work measurement is a process of analyzing jobs

for the purpose of setting time standards.
Why use it?
1.
2.
3.
4.

Schedule work and allocate capacity

Motivate and measure work performance
Evaluate performance
Provide benchmarks

11-21

Work Measurement Techniques

q

Direct methods
1.
2.

Time study
Work sampling

Indirect methods
1
1.
2.

Predetermined motion
motion-time
time data system
Elemental data

11-22

Example
p 11.2: Bread Making
g
Current Layout

11-23

Example 11.2: Running at 100 Loaves

per Hour

Both bread making and packaging operate the

same amount of time.
Capacity is 100 loaves per hour.
Packaging is idle for a quarter hour.
Has

75 percent utilization.
utilization

11-24

Example 11.2: Bread Making on Two

P ll l Li
Parallel
Lines

11-25

Example
p 11.2: Multiple
p Shifts

Bread making runs two shifts.

Produces

Packaging runs three shifts.

shifts
Produces

200 x 8 x 2 = 3,200
133.3 x 8 x 3 = 3,200

Capacities are roughly equal.

equal

11-26

Process Flow Time Reductions

1
1.
2.
3
3.

Perform activities in parallel.

Change the sequence of activities.
Reduce interruptions.
interruptions

11-27

6-28

Question Bowl

Which of the following

g are possible
p
examples
p of
cycle times?
a.
Time for each television to come off an
assembly line.
b.
Time it takes for a stock purchase
c.
Time it takes for an instructor to grade an exam
d.
Time it takes to build an automobile
e.
All of the above

Answer: e.
e All of the above

6-29

Question Bowl

Which of the following are used as symbols in a

Process Flowchart?
a.
Decision points
p
b.
Blocking
c.
Starving
d.
Bottleneck
e.
All of the above

A
Answer:
a. Decision
i i points
i
(A diamond
i
shaped symbol.))

6-30

Question Bowl

Which type
yp of process
p
is configured
g
as follows?

a.
b.
c
c.
d.
e.

Single-stage process
Multi-stage process
Make-to-order process
Make-to-stock process
All of the above

Answer: b. Multi-stage process

6-31

Question Bowl

a.
b.
c.
d
d.
e.

When an assembly
y line employee
p y is waiting
g for
a unit of work to come down the line so they
can stop being idle and get back to work, it is
an eexample
ample of which
hich of the following
follo ing process
p ocess
terms?
Buffering
g
Blocking
Starving
Bottleneck
All of the above

Answer: c. Starving

6-32

Question Bowl

a.
b.
c.
d.
e.

When a company
p y waits until they
y have an order for their
product in hand before beginning any production for
that order, we can characterize their operation as which
of the following processes?
Single-stage process
Multi-stage process
Make-to-order process
Make-to-stock process
All of the above

A
Answer:
c. M
Make-to-order
k t
d process

6-33

Question Bowl

a
a.
b.
c.
d.
e.

If the Run Time for a batch of parts is 45 minutes on a

machine, and the Setup Time is 65 minutes, which of
the following is the Operation Time?
75 minutes
110 minutes
Only 45 minutes
65/45 minutes or 1.44 hours
Can not be computed on the data above

Answer: b. 110 minutes ( Operation Time is the sum of

Run Time and Setup Time, or 65 + 45 = 110 minutes)

6-34

Question Bowl

a.
b.
c.
d.
e.

If the standard expected

p
phone
p
calls for a telephone
p
marketers is 24 per hour, and one telephone marketer
did 27 per hour, which of the following can be used to
describe their Efficiency?
88.8%
100%
112.5%
Well over 150%
Can not computed on the information given.
given

Answer: c. 112.5%
(Ratio of actual performance/expected performance, or
(27/24) x 100 = 110 minutes)

35