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PROCESS DESIGN AND ANALYSIS
Chapter Eleven
Learning Objectivesg j
Exemplify a typical business process Exemplify a typical business process and how it can be analyzed.
Compare different types of processes. Explain how jobs are designed.p j gAnalyze manufacturing, service, and
logistics processes t th logistics processes to ensure the competitiveness of a firm.
11-2
Process Analysisy
Process: any part of an organization that Process: any part of an organization that takes inputs and transforms them into
t toutputsCycle time: the average successive time
between completions of successive units Utilization: the ratio of the time that a Utilization: the ratio of the time that a
resource is actually activated relative to th ti th t it i il bl f the time that it is available for use
11-3
Analyzing a Las Vegas Slot Machiney g g
1 Analyzing the mechanical slot machine1. Analyzing the mechanical slot machine2. Analyzing the new electronic slot
machine3. Comparisonp4. The slot machine is one of many casino
processes
11-4
Process Flowchartingg
Process flowcharting: the use of a diagram to Process flowcharting: the use of a diagram to present the major elements of a process
The basic elements can include tasks or The basic elements can include tasks or operations, flows of materials or customers, decision points and storage areas or queuesdecision points, and storage areas or queues.
It is an ideal methodology by which to begin l i analyzing a process.
11-5
Flowchart Symbolsy
11-6
Process Flowchart Example (Slot M hi )Machine)
11-7
Types of Processes
Single-stage process
yp
Single stage process
Stage 1Stage 1
Multistage process
Stage 1 Stage 2 Stage 3
11-8
Types of Processes (Continued)
6-9
Types of Processes (Continued)
A buffer refers to a storage area between stages 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 BufferBuffer
Multi-stage Process with Buffer
Stage 1 Stage 2
Other Process Terminology
6-10
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 to place a unit of work down, p y p ,the employee will hold on to it not able to continue working on the next unit
Starving 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
Other Process Terminology (Continued)
6-11
gy ( )
BottleneckOccurs 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 k ill b i t il i f t f process, work will begin to pile up in front of
that employee. In this is case the employee represents the limited capacity causing the represents the limited capacity causing the bottleneck.
Other Types of Processes
6-12
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 Customer orders are served from target stocking level
Hybrid Combines the features of both make-to-order and Combines the features of both make to order and
make-to-stock.
Other Types of Processesyp
Serial flow process: a single path for all 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 Logistics processes: the movement of things such as materials, people, or fi i h d dfinished goods
11-13
Measuring Process Performanceg
11-14
Cycle Time Example
6-15
S h d t d 600 it i 80 h t 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?the cycle time to meet this demand requirement?
h i ( i /hAnswer: 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 = completions would have to be: Cycle time 4,800/600 units = 8 minutes.
Production Process Mapping and Littl LLittles Law Total average value of inventoryg y Sum of the value of raw materials, work-in-process, and finished
goods inventory
Inventory turns Inventory turns Cost of goods sold divided by the average inventory value
Days-of-supply Inverse of inventory turns scaled to days
Littles law There is a long-term relationship among inventory throughput and There is a long-term relationship among inventory, throughput, and
flow time Inventory = Throughput rate x Flow timeTh h t i th t f i t d t t th h Throughput is the movement of inputs and outputs through aproduction process.
11-16
Example 11.1: Car Batteriesp
Average cost $45 Average cost $45 12 hours to make a car Assembles 200 cars per 8 hour shift Assembles 200 cars per 8-hour shift Currently one shift
Holds on average 8 000 batteries in raw material Holds on average 8,000 batteries in raw material inventory
11-17
Example 11.1: Average Inventoryp g y
WIP = Throughput x Flow time WIP = 25 batteries x 12 hours WIP = 300 batteries
T l 8 000 + 300 8 300 b i Total = 8,000 + 300 = 8,300 batteries
11-18
Example 11.1: Value and Flow Timep
Value = 8,300 x $45 = $375,000 Value 8,300 x $45 $375,000
Flow time = Inventory/Throughput Flow time Inventory/ThroughputFlow time = 8,000/200 = 40 days
11-19
Behavioral Considerations in J b D iJob Design 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 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 Work measurement is a process of analyzing jobs for the purpose of setting time standards.
Why use it? Why use it?1. Schedule work and allocate capacity2. Motivate and measure work performance2. Motivate and measure work performance3. Evaluate performance4. Provide benchmarks
11-21
Work Measurement Techniquesq
Direct methods Direct methods1. Time study2. Work sampling2. Work sampling
Indirect methods1 Predetermined motion-time data system1. Predetermined motion time data system2. Elemental data
11-22
Example 11.2: Bread Makingp g
Current LayoutCurrent Layout
11-23
Example 11.2: Running at 100 Loaves per Hourper Hour
Both bread making and packaging operate the Both bread making and packaging operate the same amount of time.
Capacity is 100 loaves per hour. Capacity is 100 loaves per hour. Packaging is idle for a quarter hour. Has 75 percent utilization Has 75 percent utilization.
11-24
Example 11.2: Bread Making on Two P ll l LiParallel Lines
11-25
Example 11.2: Multiple Shiftsp p
Bread making runs two shifts. Bread making runs two shifts. Produces 200 x 8 x 2 = 3,200
Packaging runs three shifts Packaging runs three shifts. Produces 133.3 x 8 x 3 = 3,200
Capacities are roughly equal Capacities are roughly equal.
11-26
Process Flow Time Reductions
1 Perform activities in parallel.1. Perform activities in parallel.2. Change the sequence of activities.3 Reduce interruptions3. Reduce interruptions.
11-27
Question Bowl
6-28
Which of the following are possible examples of g p pcycle times?
a. Time for each television to come off an assembly line.
b. Time it takes for a stock purchaseTime it takes for an instructor to grade an examc. Time it takes for an instructor to grade an exam
d. Time it takes to build an automobilee. All of the above
Answer: e All of the aboveAnswer: e. All of the above
Question Bowl
6-29
Which of the following are used as symbols in a Which of the following are used as symbols in a Process Flowchart?
a. Decision pointspb. Blockingc. Starvingd. Bottlenecke. All of the above
A i i i (A i )Answer: a. Decision points (A diamond shaped symbol.)
Question Bowl
6-30
Which type of process is configured as follows?yp p g
1 2 3
a. Single-stage processb. Multi-stage processc Make-to-order processc. Make-to-order processd. Make-to-stock processe. All of the above
Answer: b. Multi-stage process
Question Bowl
6-31
When an assembly line employee is waiting for y p y ga unit of work to come down the line so they can stop being idle and get back to work, it is an e ample of hich of the follo ing p ocess an example of which of the following process terms?
a. Bufferinggb. Blockingc. Starvingd Bottleneckd. Bottlenecke. All of the above
Answer: c. Starving
Question Bowl
6-32
When a company waits until they have an order for their p y yproduct in hand before beginning any production for that order, we can characterize their operation as which of the following processes?of the following processes?
a. Single-stage processb. Multi-stage processc. Make-to-order processd. Make-to-stock process
All of the abovee. All of the above
A M k t dAnswer: c. Make-to-order process
Question Bowl
6-33
If the Run Time for a batch of parts is 45 minutes on a 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?
a 75 minutesa. 75 minutesb. 110 minutesc. Only 45 minutesd. 65/45 minutes or 1.44 hourse. Can not be computed on the data above
Answer: b. 110 minutes ( Operation Time is the sum ofAnswer: b. 110 minutes ( Operation Time is the sum of Run Time and Setup Time, or 65 + 45 = 110 minutes)
Question Bowl
6-34
If the standard expected phone calls for a telephone p p pmarketers is 24 per hour, and one telephone marketer did 27 per hour, which of the following can be used to describe their Efficiency?describe their Efficiency?
a. 88.8%b. 100%c. 112.5%d. Well over 150%
Can not computed on the information givene. Can not computed on the information given.
Answer: c. 112.5% (Ratio of actual performance/expected performance, or (27/24) x 100 = 110 minutes)
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