process analysis - class notes - mod 2 - part 1(1)

1

MGMT 361

Operations Management

(OM)

Process Analysis – part 1 (intro, process designs, process types)

Prof. Julia A. Kalish

Module 2 Overview • A ________ is any part of an organization that

takes inputs and transforms them into outputs that (hopefully) are of greater value to the organization than the original inputs.

• Because understanding how processes work is essential to ensuring the competitiveness of a company: Module 2 discusses: – the 3 basic types of production

– introduces flowcharting

– explains how to use Little’s law, and establishes techniques for performance measure calculations.

Module 2 - Process Analysis Mgmt 361 2

Module 2 Measuring Process Performance

• There is much variation in the way performance metrics are calculated in practice & are often calculated in the context of a particular process.

• Process performance metrics give the operations manager a gauge on how productively a process currently is operating and how productivity is changing over time.

• Typical Metrics: operation time, __________, velocity, cycle time, throughput rate, efficiency, _____________, and utilization.

Mgmt 361 Module 2 - Process Analysis 3

Reminder – make sure you check out terms in the Mod 2 content folder in Blackboard Learn

• Process • Cycle time • Utilization • Buffering • Blocking • Starving • Bottleneck • Make-to-order • Make-to-stock • Hybrid • Pacing • Productivity • Efficiency

• Run time • Setup time • Operation time • Flow time • Throughput rate • Process velocity • Throughput ratio • Value-added time • Total average value of

inventory • Inventory turn • Days-of-supply • Little’s law


Definition of Process

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 than the original inputs.

Output Input

Control

Operations

Process schematic

__________________ go through a process, transactions can be people, material, etc.

________________ require resources , these resources can include people, machines, etc.


Process Flowcharting (AKA: Process (Flow) Diagram, Value Stream Mapping)

• Ideal methodology by which to begin analyzing a process.

• Used to present the major elements of a process.

• Basic elements: tasks (operations), flows of materials or customers, decision points, and storage areas or queues.

Resource Buffer

Transaction Information

Flow. Flow

Decision

__________________(order of operations)

Operation

Precedence


Definitions • ____________ usually the position where

someone stands or is assigned to stand

• Stage a term used to indicate that multiple activities have been pulled together for analysis purposes.

• Queue used to refer to something that is “waiting in line”

• ______ Storage area between stages which allows stages to operate independently.

• Parallel occurring at the same time


Single Stage

Stations in parallel, separate queue

2

Stations in parallel, single queue

3

1

In and above, there is a single stage with multiple stations.

Multi Stage

1

Process with buffer

2

3

Hybrid

Words station and stage will be used interchangeably when there is only one station at each stage.

Process types I

Which one better????


Process types II

Make to stock Make to order Hybrid

Process activated to meet expected or forecast demand. Customer orders are served from target stocking level.

Make to stock Old Process at McDonald’s

Raw Mat.

Finished goods

Cook Assemble

Customer Order

Deliver


Process types II – “Make to Order”

Make to order

Wendy’s Raw Matl.

Customer order

Assemble Cook Deliver


Only activated in response to an actual order. Both work-in-process and finished goods inventory kept to a minimum.

“Hybrid”


Burger King

Finished goods

Assemble

WIP Raw Matl. Cook

Assemble

Customer Order

Deliver Custom or Standard?

C

S

http://www.youtube.com/watch?v=CJMsFGH4eoQ

Combines the features of both make-to-order and make-to-stock.

http://www.youtube.com/watch?v=CJMsFGH4eoQ

To Analyze Process design:

1. First determine what operations are involved and how long it takes to perform each operation. (_____________)

2. Then determine the precedence relationship between operations (what goes before what).

3. The first two steps will help us draw a precedence diagram.

*We will use intuitive method for the time being to develop process designs. However, later we will see that we need to know the desired production capacity and any other constraints that we may have to consider.*


Step1: We first determine operations involved (times in sec.)

Process design: Example 1—Envelop stuffing

Step 2: precedence diagram.

*Try to sketch one out on your own

2

1

4

3

5

We can perform operation (3) only after completing (1) and (2).

We can do (5) only after doing the other four operations.

Operation Time

1 Get material 30 s

2 Get envelop 2 s

3 Insert & seal 8 s

4 Paste label 5 s

5 Drop in the box 3 s

Next, we look at several process designs.


Envelope stuffing

5 workers

2 workers

3 workers

1

30

4

5

3

8

2

2

5

3

Process 1

1

30

2, 3, 4, 5

18

Process 2

1, 2

32

3, 4, 5

16 1, 2

32

Process 3

1:30

2:2

3:8

4:5

5:3 Potential Process Arrangements - Assume that we use one worker at each station.

Could one person do 1&3, second person the rest?

How about first person doing 2&4, second the rest?

Five people each responsible for one stage

Operation T

1 Get material 30

2 Get envelop 2

3 Insert & seal 8

4 Paste label 5

5 Drop in box 3 Mgmt 361 Module 2 - Process Analysis 14

Resource capacity: How much a resource (or stage) can produce in a given time [Q/T]

____________: Resource with smallest capacity

_________ __________: How much the process can produce in a given time [Q/T]

Determined by bottleneck capacity

To increase capacity of process add resources at bottleneck stage!

Process Measure: Process capacity

1

30

4

5

3

8

2

2

5

3

Process 1


Module 2 - Process Analysis

Defined in many different ways

Process Measure: Productivity

Measure

Total

Partial

Multifactor

Output Goods and services produced Input All resources used

Output Output Output Output Labor Capital Materials Energy

Output ______ Output_________ Labor + Capital + Energy Labor + capital + Materials

• Measuring in common units is difficult.

• Productivity is a relative measure – productivity increased from 2.7

units per labor hour to 3 units per labor hour.

• We will use output per labor hour as the productivity measure

in many examples.

_________________ = output / input

Mgmt 361 16

Example 2.1 envelop stuffing

5 workers, bottleneck: 1,

capacity: 120 units / hour



3 workers, bottleneck: both


1

30

4

5

3

8

2

2

5

3

Process. 1

1

30

2, 3, 4, 5

18 Process 2

1, 2

32

3, 4, 5

16 1, 2

32

Process 3

1,30

2,2

3,8

4,5

5,3

What information is needed for a comparison?


How was capacity calculated? • Remember capacity is determined by the

____________.

• Process 1 & 2 30 sec/unit

1/30 units/sec * 3600 sec/hour = 120 units / hour

• Process 3 stage one makes 2 units in 32 seconds, so 1 unit in 16 seconds: 16 sec/unit 1/16 units/sec * 3600 sec/hour = 225 units / hour


Example 2.1 -envelop stuffing



2 workers, bottleneck: 1, capacity:

120 units / hour

3 workers, bottleneck: both


1

30

4

5

3

8

2

2

5

3 Pr. 1

1

30

2, 3, 4, 5

18 Process 2

1, 2

32

3, 4, 5

16 1, 2

32

Process 3

1,30

2,2

3,8

4,5

5,3

Process Productivity=Capacity/#Workers

1

2

3

120/5=24 Units per hour per worker




Productivity = output / input

Which Process is Best ?

• Process 1 & 2 - which one better?

• ?

• 2 & 3 depends pay by hour &/or benefits?

• How many envelops need stuffed?


Process Productivity=Capacity/#Workers

1

2

3




1: 20 4: 40

5: 30 2: 50

3: 10 7: 20 6: 30

Task number : Time

Precedence Diagram – Example 2.2

*Think through what this means


Process Flow Diagrams

1: 20 4: 40

5: 30 2: 50

3: 10 7: 20 6: 30

Example 2.2 Task Number : Time

1

20

4

40

3

10

2

50

5

30

7

20

6

30 A

1: 20

2: 50 M1

2: 50 M2

3: 10

4: 40 P1

4: 40 P2

5: 30 7: 20 6: 30

B

2

50

6, 7

50

3, 4

50

1, 5

50 C

2, 3

60

7

20

5, 6

60

1, 4

60 D

Which One is Best?

Run some numbers.


Analyze Each Potential Arrangement

A B C D

Input (Workers, labor)

seconds /units total

seconds per unit for bottleneck

units per second (1/bottleneck)

units per min ((units/sec) x 60))

units per hour ((units/min) x 60))

capacity (units/time frame)

productivity (out/input) (capacity/input)



1: 20 4: 40

5: 30 2: 50

3: 10 7: 20 6: 30

Example 2.2 Task Number : Time

1

20

4

40

3

10

2

50

5

30

7

20

6

30 A

1: 20

2: 50 M1

2: 50 M2

3: 10

4: 40 P1

4: 40 P2

5: 30 7: 20 6: 30

B

2

50

6, 7

50

3, 4

50

1, 5

50 C

2, 3

60

7

20

5, 6

60

1, 4

60 D

7

9

4

4



A B C D

Input (Workers, labor) 7 9 4 4

seconds /units total 200 200 200 200

seconds per unit for bottle neck 50 30 50 60

units per second (1/bottleneck) 0.02 0.0333 0.02 0.0167

units per min ((units/sec) x 60)) 1.2 2 1.2 1

units per hour ((units/min) x 60)) 72 120 72 60

capacity (units/time frame)

productivity (out/input) (capacity/input)



A B C D

Input (Workers, labor) 7 9 4 4

seconds /units total 200 200 200 200

seconds per unit for bottle neck 50 30 50 60

units per second (1/bottleneck) 0.02 0.0333 0.02 0.0167

units per min ((units/sec) x 60)) 1.2 2 1.2 1

units per hour ((units/min) x 60)) 72 120 72 60

capacity (units/time frame) 72 120 72 60

productivity (out/input) (capacity/input) 10.29 13.3 18 15

Mgmt 361 Module 2 - Process Analysis 26 (72/7) (120/9) (72/4) (60/4)


Example 2.2

1

20

4

40

3

10

2

50

5

30

7

20

6

30 A

1: 20

2: 50 M1

2: 50 M2

3: 10

4: 40 P1

4: 40 P2

5: 30 7: 20 6: 30

B

2

50

6, 7

50

3, 4

50

1, 5

50 C

2, 3

60

7

20

5, 6

60

1, 4

60 D

Capacity units/hr

Productivity units/worker

A 72 10.29

B 120 13.3

C 72 18

D 60 15

Mgmt 361 Module 2 - Process Analysis

So which one is the BEST?

27

Types of Processes • Single stage vs. multi-stage • Multi-stage processes often use buffers • Buffer a storage area between stages

(inventory of some sort) • Processes without a buffer often have problems

with blocking and starving • ___________ occurs when activities must stop

because there is no place to put the item just completed

• ___________ occurs when activities must stop because there is no work

• Bottleneck limits the capacity of a process and can create situation of blocking and starving in the system


Process Parameters:

Design

Capacity: Maximum rate

of transaction processing.

(Design) Cycle Time

= 1/( capacity).

Minimum Throughput

Time (TPT) – How fast a

transaction goes through

the process when the

process is empty.

Run time

Input Rate: transaction

arrival rate

Output Rate: Current rate

of processing

Actual Cycle Time

= 1 / (output rate)

Average TPT: Avg. time

for a transaction to go

through a stable process.

Average WIP: Avg.

number of transactions

in the process.

___________ parameters indicate what a process can achieve. _____ ____ parameters indicate what the current values are for a specific schedule. These values change with the schedule.


Run Time parameters

Design parameters

Example. 2.3: Process Parameters for a Single Machine

M1 4 min

(15 units/ hour)

Part A: A new component is scheduled every 4 minutes

M1 Job 1

4

Job 3

12

Job 4

16

Job 2

8

Input rate

Output rate

Actual CT

AverageTPT

WIP

= 1/4[u/min]*60[min/h] = 15 [units / hour]

= 1/4[u/min]*60[min/h] = 15 [units / hour]

= 1/15[hour/unit] *60[min/h] = 4 [min/unit]

= 4 [min]

= 1.0 [units] (TPT /CT) so 4/4 = 1

Cycle time =

Capacity =

Minimum TPT =

4 [min. / unit]

¼ [units/min.] * 60 [min / hour] = 15 [units/hour]

4 [min.]

Gantt Chart


Run Time parameters

Example 2.3 continued M1 4 min

Input rate

Output rate

Actual CT

TPT

WIP

Gantt Chart

Part B: A new component is scheduled every 10 minutes

M1 Job 2

10 14

Job 1

4

= 1/10 [u/ min]*60[min/h]= 6 [units / hour]

= 1/10 [u/ min]*60[min/h] = 6 [units / hour]

= 1/6 [hours/unit]*60[min/h] = 10 [min/unit]

= 4 [min]

= TPT/CT = 4/10= 0.4 [units]

Run Time parameters depend on ________________! Input rate = output rate IF process is stable.


Design Parameters

Capacity = 15 [units /hr] Cycle time = 4 [min/unit] Minimum TPT = 4 [min]

Part C: A new component is scheduled every 3 minutes.

Input rate

Output rate

= 20 [units / hour]

= 15 [units / hour] …cannot exceed capacity.

Run time parameters

There is a problem! Queue will build up as time progresses.

When the input rate is more than the capacity, number of transactions waiting to be processed will keep on increasing. The process will never become stable.

Example 2.3 M1 4 min

If Input > Capacity: _________ ___________ Mgmt 361 Module 2 - Process Analysis 32

Classic Example of what happens when Input > Capacity

• http://www.youtube.com/watch?v=HnbNcQlzV-4&feature=relatedFirefoxHTML\Shell\Open\Command


Summary of Example 3 Design Parameters

CT= 4 min/unit

Capacity=15 units/min

Min TPT=4 min

Run-time Parameters:

Schedule A: Actual CT=4 min/unit, Average TPT= 4 min

Downside? Upside?

Schedule B: Actual CT=10min/unit, Average TPT= 4min

Downside? Upside?

Schedule C: Actual CT= 4 min/unit, Average TPT= 4 min

Downside? Upside?


Capacities add for parallel machines. Do NOT add CT!!

Part (a): Capacity of M1 = (3600 / 10) or (1/10 *60 *60)

= 360 [units / hour],

Capacity of M2 = 225 [units / hour],

Capacity of M3 = 180 [units / hour].

System capacity = 765 [units / hour].

Cycle time = 1 / (Capacity) = 1/765= .0013072 /hr or 4.706 [sec / unit]

Example 2.4: Parallel Machines

Time in seconds

(a) For the single stage process shown to the left, what is the cycle time?

(b) If you need to produce 1165 units per hour, do you need an extra machine? If so, what should be the per unit processing time if this machine is used in parallel?

M1, 10

M2, 16

M3, 20

Part (b): Needed total capacity = 1165 units per hour.

We need extra machine with capacity = (1165 – 765) = 400 [units / hr].

Per-unit processing time on this extra machine = 3600 / 400 = 9 sec. M4, 9


process analysis - class notes - mod 2 - part 1(1)

Documents

process analysis mgmt

process types

process designs

definition of process

particular process

process performance

process flow diagram

measuring process performance