Process Design and Analysis
Operations Management
Understanding how processes work is essential to ensuring the competitiveness of a company.
A process that does not match the needs of the firm will punish the firm every minute that the firm operates.
Process Analysis
A process is any part of an organization that takes inputs and transforms them into outputs that, it is hoped, are of greater value to the organization that the original inputs.
Process Analysis
Cycle time
Is the average time, of a repetitive process, between completions of successive units.
Example:
Assume the average player feeds coins into a Mechanical machine at a pace of one coin each 15 seconds.
Electronic machine, 10 seconds.
Process Analysis
Utilization
Is the ratio of the time a resource is actually activated relative to the time it is available for use.
Example:
The expected revenue from the mechanical and electronic machine is:
$144/day ($12/hour x 24 hours x 0.5)
$216/day ($18/hour x 24 hours x 0.5)
Process Flowcharting
Activities associated with a process often affect one another, so it is important to consider the simultaneous performance of a number of activities, all operating at the same time.
Understanding Processes
The first way to categorize a process is to determine whether it is a :
Understanding Processes
Bottleneck
A resource that limits the capacity of maximum output of the process.
Buffer
A storage area between stages where the output of a stage is placed prior to being used in a downstream stage.
Blocking
The activities in the stage must stop because there is no place to deposit the item just completed.
Starving
The activities in a stage must stop because there is no work.
Understanding Processes
Hybrid combines the features of both
Understanding Processes
Supplier
Company
Customer
Supplier
Company
Distributor
Customer
Pull
The supplier holds the inventory until the customer ask for a new product.
Dell
General Motors
Inventory as finished goods.
Pull
Push
Measuring Process Performance
Measuring Process Performance
Metrics often are calculated in the context of a particular process.
Metric | Description |
Productivity | Is the ratio of output to input. |
Efficiency | Is a ratio of the actual output of a process relative to some standard. Also means doing something at the lowest possible cost. |
Run time | Is the time required to produce a batch of parts. |
Setup time | Is the time required to prepare a machine to make a particular item. |
Operation time | Is the sum of the setup time and run time for a batch of parts that are run on a machine. |
Flow time | Is the average time it takes a unit to move through an entire process. |
Throughput rate | Is the output rate that the process is expected to produce over a period of time. |
Process velocity | Is the ratio of the value-Added time to the flow time. |
Value-Added time | Is the time in which useful work is actually being done on the unit. |
Production Process Mapping and Little’s Laws
A simplified way of thinking about material in a process is:
Production Process Mapping and Little’s Laws
Metric | Description |
Total average value of inventory | The total average investment in raw material, work-in-process, and finished good inventory. |
Inventory turn | A measure of the expected number of times inventory is replaced over a year. |
Days-of-supply | The number of days of inventory of an item. |
Little’s Law | A mathematical relationship between throughput rate, flow time, and the amount of work-in-process inventory. Work in Process = Throughput rate x Flow time Total inventory = inventory + Work in Process (Units) |
Process Flow Time Reduction
Flow time can sometimes be reduced without purchasing additional equipment. The following are some suggestions for reducing the flow time of a process that do not require new equipment.