Welcome to your final year at school!

• Introductions

Teams

• Tom• Lara• Alex

• Lloyd• George• Emma• Luke H

• Russell• Alysha• Luke S

A

C

B

BUSS3 Operational Strategies: Lean Production

• Outline the meaning and value of Critical Path Analysis

• Apply CPA to a business case to calculate Earliest Start Time (EST), Latest Finish Time (LFT) and Float

• Explain with examples how CPA can be used to achieve Lean Production

Hats enough! – Activity 1• You are the manager of a

small retail outlet, Hats Enough, selling hats, gloves etc.

• The popularity of your business has meant you need to consider opportunities for growth in order to satisfy consumer demand

• You realise that relocation is one your main options

• To get an understanding of the complexity of the task you brainstorm all the factors you feel might be involved in relocating

Write your ideas on your worksheet

Hats enough! – Activity 2• Having identified a range of

activities involved in a relocation, you will need to create a mental plan covering the ORDER in which the activities should take place.

• Assuming you have purchased a new outlet in the new shopping centre, you have to create a TIME LINE to plan the move, using the activities you identified in Activity 1.

1. Activity D2. Activity B3. Activity A4. Activity C

How long?

1 day5 days3 days1 month

Write your ideas on your worksheet

Critical Path Analysis

• CPA is sometimes called network analysis

• It’s a tool used to plan activities so that a job can be completed in the SHORTEST time

• It breaks down a job into a number of tasks and looks at their DEPENDENCIES

• Used commonly in manufacturing and construction

Parts of a Network

A simple Network diagram

Illustrating simultaneous activities

Developing the network

Earliest Start Time (EST)

• The main reason for drawing a network is to identify the CRITICAL activities

• To do this we must calculate the earliest time at which any given activity can start– This is called the Earliest Start Time (EST)

of the activityEST = EST of Previous activity + Duration of previous activity

Earliest Start Time (EST)

EST and simultaneous activities

• The EST of the first activity is always ZERO

• Calculate the EST by working Left to Right across a network

EST = EST of Previous activity + Duration of previous activity

EST Recap

• When there are 2 simultaneous activities the HIGHEST figure is used as the EST

Latest Finish Time (LFT)

• There is one final piece of information needed to complete our network diagram

• To identify the CRITICAL activities we must also know the latest time at which any given activity must end

– This is called the Latest Finishing Time (LFT) of the activity

• It is calculated by working BACKWARDS across the network using the following formulaLFT = LFT at the end of following activity – Duration of following activity

Latest Finish Time (LFT)

LFT and simultaneous activities

LFT Recap

• The LFT of the last activity is always equal to its EST

• The LFT of the first activity is always ZERO

• Calculate the LFT by working Right to Left across a network

LFT = LFT at the end of following activity – Duration of following activity

• When there are 2 simultaneous activities the LOWEST figure is used as the LFT

Hats enough! – Activity 3• Order your SORT CARDS in

a time line• Insert arrows and record

the task and duration (see activity 4 for duration)

• Before and after each activity add a node

• Enter the ESTs for the whole project

• Enter the LFTs by working backwards

• Identify any activities which you think could be carried out at the same time to speed up the process

Arrows and Nodes!

Hats enough! – Activity 4

• Put away the sort cards

• Read the table to identify DEPENDENT activities with 2 immediate predecessors

Building the network!

The Float

• Any activity without spare time is CRITICAL

• Spare time is referred to as the FLOAT

Calculating the FLOAT

Activity LFT EST Duration TotalFLOAT

A 14 0 12 2

AA 14 0 14 0

B 17 14 3 0

• Total FLOAT = the amount of spare time available for an activity without delaying the whole project

FLOAT= LFT – (EST+ Duration)

What does this mean?

This data tells us:

• Activity A can be delayed 2 weeks without delaying the whole project

• Activity AA is CRITICAL

– any delay will hold up the project

• Activity B is CRITICAL

Activity LFT EST Duration TotalFLOAT

A 14 0 12 2

AA 14 0 14 0

B 17 14 3 0

Identifying the Critical Path

Advantages of CPA

• Managers need to consider exactly what activities are involved in a project

• Managers can identify CRITICAL activities to be completed on time to get the whole project completed ASAP

• Good use of CPA can enable managers to reduce time to market and costs, and make the business more efficient

Disadvantages of CPA

• Diagrams can become complicated and unmanageable

• Relies on good estimates from reliable staff– Can be padded to make performance look better

than it really is

– OR can be overoptimistic

• Can make the company v. dependent on suppliers and hence they need to be v. reliable

Other issues

• Managers must agree ‘what success looks like’ so that staff do not cut corners

• Managers must also agree what resources and spend are available to the project

• Managers must also watch the utilisation of resources throughout the project in order to schedule work to make the most of paid staff

CPA and Lean Production• Lean production aims to reduce wastage and

thereby make a business more efficient and competitive.

• Two operational strategies based on CPA to achieve Lean Production:

– Kaizen (continuous improvement)

– JIT – Just In Time production

Kaizen

• Employees attempt to improve what they do in some small way every day

• Small regular contributions from the whole firm can have big cumulative effects

JIT

• Holding stock increases costs:– Warehousing, breakages, capital

• JIT aims to minimise the stocks held at any point of the production process:

Raw Materials and

components

Raw Materials and

components

Work in progress

(unfinished goods)

Work in progress

(unfinished goods)

Finished goodsFinished goods

Homework

For Friday assessment• Revise CPA method and calculation

to score application and analysis marks

• Research and revise qualitative issues in CPA to score evaluation marks

BUSS3 Operational Strategies: Lean Production

• Outline the meaning and value of Critical Path Analysis

• Apply CPA to a business case to calculate Earliest Start Time (EST), Latest Finish Time (LFT) and Float

• Explain with examples how CPA can be used to achieve Lean Production

It’s your lucky day!