MAN4504 Chapter 3 Notes

MAN4504 Operations Management Chapter 3 Process Analysis How to Draw a Process Flow Diagram The process flow diagram provides a visual chart representing the steps of a process. Process Analysis is a rigorous framework for understanding a business's detailed operations. A framework that can be used by everyone running a business Process capacity: the number of flow units that can be processed per unit of time Utilization: the ratio between the flow rate and the process capacity Process Flow Diagram The best way to begin any analysis of an operation is by drawing a Process Flow Diagram. A process flow diagram is a graphical way to describe the process. Boxes to depict Resources Arrows to depict Flows Triangles toilepict Inventory Flow Design Activity Greet customer Cut lead Add met Add cheese Add Add tomato Add cucumbers Add pokies Add games peppe Add hot peppers Wag and bag Offer fish wine meal Offer cockpits MAN4504 Operations Management Chapter 3 Process Analysis Building a Sandwich Flow Unit: the unit of analysis. Arrows capture the flow unit's journey from input to output. Arrows for flow, triangles for inventory, and boxes for activities. Waiting customers Station 1 Please note: In this situation, the waiting customers are considered inventory. Why? Definitions Upstream: the parts of the process that are at the beginning of the process flow. Downstream: the parts of the process that are at the end of the process flow A Complete Process Flow Diagram Waiting customers Station 1 Station 2 Station 3 Alternative Process Flow Diagrams Understanding the Process Process flow diagrams remain flexible so the manager can decide which aspects to study. Drawing the process flow diagram should always be the first step in process analysis. Many different processes exist to analyze. Defining different flow units (i.e., not just the customer as the flow unit) is possible. MAN4504 Operations Management Chapter 3 Process Analysis Check Your Understanding Airport security consists of the following steps: 1. Verifying 11D and boarding pass 2. Searching the passenger for metal objects (security scan) 3. Running the carry-on luggage through the X-ray machine There is a long line of passengers before the first step, but sometimes lines also build up at Steps 2 and 3. Steps 2 and 3 are parallel; customers go through the metal detector while their luggage is in the X-ray machine. Draw a process flow diagram of this process. Answer: Airport Security Waiting travellers Verification of ID Metal detector X-ray machine Capacity for a One-Step Process Process time: the time it takes a resource to complete one flow unit It must be concise; for example, there is a difference between seconds and seconds per person Think in terms of averages Capacity for a One-Step Process Activity Times of a Sandwich, Leading to a 120-second per customer Processing Time. Activity Lane Gret Tanker Get tad Aatm At one A letter Typical Processing Times Add numbers Activity Processing Time Adil picks Cardiac surgery (de utile-bypass procedure) Four hours/patient All peppers Installation of a rearview mirror in automotive assembly 50 seconds/vehicle Adi Vlack dress Undertaking a simple small business loan 40 minutes/loan Adi at Peppas Simple traction call in a bank's call center Five nannies/transaction Primary care encounter 15 minutes/patient Offer frame Offer monks MAN4504 Operations Management Chapter 3 Process Analysis Capacity Capacity is the maximum number of flow units that can flow through a resource per unit of time. Check Your Understanding It takes a colour printer 10 seconds to print a large poster. What is the capacity of the printer expressed in posters per hour? (Hint: how many seconds in an hour?) Answer Capacity 1 poster/10 seconds 360 posters/hour Process Capacity Process capacity is the maximum flow rate a process can provide per unit of time, which determines its maximum supply. The process capacity is the smallest capacity of all resources in the process. How to Compute Flow Rate, Utilization, and Cycle Time Demand Rate: The number of flow units that customers want per unit of time Capacity-constrained: The case in which demand exceeds supply and the flow rate equals the process capacity. Demand-constrained: The case in which process capacity exceeds demand, and thus, the flow rate equals the demand rate. Throughput: A synonym for flow rate; the number of flow units flowing through the process per unit of time. Utilization Utilization is the ratio between the flow rate (how fast the process is currently operating) and the capacity (how fast the process could operate if there were sufficient demand). Cycle Time Cycle time is the time between completing two consecutive flow units. Cycle Time versus Lead Time Cycle time: 1/Flow rate; cycle time is expressed in time per unit Lead time is when an order is placed and when it is received. Process lead time is frequently used as a synonym for flow time. Bottleneck The bottleneck is the resource with the lowest capacity in a process. Understanding the location of the bottleneck is critical for improving a process. Take the example of airport security. Typically, airport security consists of three steps: 1. Verifying ID and boarding pass 2. Searching the passenger for metal objects using some form of a scanner or metal detector 3. Running the carry-on luggage through an X-ray machine MAN4504 Operations Management Chapter 3 Process Analysis Most of us associate airport security with long waiting times, and all too often, a long queue greets us when we arrive at the airport- a line of passengers who wait before the first step. In general, a resource might have utilization of less than 100 per cent for one of two reasons: 1. A non-bottleneck resource has, by definition, some extra capacity relative to the bottleneck 2. In the case of a demand-constrained process, even the bottleneck would not be working at 100 per cent. If a process is constrained by demand, we might think demand is the bottleneck. In that case, one might argue that no single resource in the process should be called the bottleneck. It is easier to refer to the resource with the lowest capacity as the bottleneck, even in a demand-constrained process. So, every process has a bottleneck, even if the capacity constraints created by the bottleneck might not be binding. The Time to Produce a Certain Quantity Worker-paced: A process line in which each resource can work at its own pace. If the first resource finishes before the next one is ready to accept the flow unit, the first resource puts the completed flow unit in the inventory between the two resources. Factors to Consider Machine paced: A process in which all steps are connected through a conveyor belt, and all steps must work at the same rate even if some have more capacity than others. Time through the empty system: The time it takes the first flow unit to flow through an empty process, a process with no inventory.