Process Analysis .pptx

operation management

1. Process Selection, Design , Analysis & Layouts

2. Definitions Types of Processes Process Selection & Design Process Flowcharting Process Improvement & Process Innovation Types of Processes OBJECTIVES

3. Linking Product Design & Process Planning Design Spec & Reqmnt Functional Design Product Design Drg . & Spec of what to make? Product Analysis ( Ass’ly & flow )charting Make or buy Process Decision ( selection) Route sheet & Opn Sheet (specs of how to manufacture) Work place & tool design Modification of process plans due to layout, quality preference & m/c availability How many to make? (Forecast & orders) Product Design Process Planning Mfg

4. From Function to Process 6- 4 Manufacturing Accounting Sales Purchasing Product Development Order Fulfillment Supply Chain Management Customer Service Function Process

5. Definitions System : The controls that are applied to a process to ensure that it is operating efficiently and effectively. Process : Any activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer. Processes use an organization's resources to provide definitive results. Business process : All service processes and processes that support production processes ( e.g., order process, engineering change process, payroll process, manufacturing process design ). A business process consists of a group of logically related tasks that use the resources of the organization to provide defined results in support of the organization's objectives.

6. The impact of strategic performance objectives on process design objectives and performance

7. Process Planning Process Group of related tasks with specific inputs & outputs Process design t asks to be done & how they are coordinated among functions, people, & organizations Process strategy an organization’s overall approach for physically producing goods and services Process planning converts designs into workable instructions for manufacture or delivery 6- 7

8. Process Strategy Vertical integration extent to which firm will produce inputs and control outputs of each stage of production process Capital intensity mix of capital (i.e., equipment, automation) and labor resources used in production process Process flexibility ease with which resources can be adjusted in response to changes in demand, technology, products or services, and resource availability Customer involvement role of customer in production process

9. Process Selection Projects one-of-a-kind production of a product to customer order Batch production process many different jobs at the same time in groups or batches Mass production produce large volumes of a standard product for a mass market Continuous production used for very-high volume commodity products

10. Videos

11. Product-Process Matrix for Processes

12. The product–process matrix Charted travel Teaching a class Preaching, sermons Mass retailers Live shows Cafeteria TV, radio Legal service, Medical diagnosis Tutorial

13. Schmenner’s service matrix

14. James H. Gilmore & B . Joseph Pine II : HBR , January 1997

15. The change of process choice in a product life cycle

16. Comparison

17. Mapping Processes & Layouts

18. The volume–variety process position of an operation influences its layout and, in turn, the flow of transformed resources

19. Manufacturing Process/Functional Layout 7- 22

20. Process layout in a functional approach

21. An example of a functional layout in a library showing the path of just one customer

22. A Product Layout http://mdcegypt.com/pages/operation%20management/production%20and%20operation%20management/facility%20layout/Group%20Technology/groub47.gif

23. Assembly line surgery

24. Product layout: The sequence of processes in paper-making; each process will be laid out in the same sequence

25. A restaurant complex with all four basic layout types

26. The ground floor plan of a department store showing the sports goods shop-within-a-shop retail ‘cell’

27. An army induction centre which uses a product layout

28. Summary of the layout options http://mdcegypt.com/pages/operation%20management/production%20and%20operation%20management/facility%20layout/Group%20Technology/Process%20choice%20and%20production%20layout.asp

29. Workers Inventory Storage space Material handling Aisles Scheduling Layout decision Goal Advantage Limited skills Low in-process, high finished goods Small Fixed path (conveyor) Narrow Part of balancing Line balancing Equalize work at each station Efficiency Process Varied skills High in-process, low finished goods Large Variable path (forklift) Wide Dynamic Machine location Minimize material handling cost Flexibility Product Comparison of Product and Process Layouts

30. Fixed-Position Layouts Typical of projects F ragile , bulky, heavy items Equipment, workers & materials brought to site Low equipment utilization Highly skilled labor Typically low fixed cost Often high variable costs 7- 33

31. Break Even Analysis Travis and Jeff own Up Right Paddlers, a new startup company with the goal of designing, making , and marketing stand-up paddle boards for streams and rivers. A new fitness craze, stand-up paddle boards are similar to surfboards in appearance, but are used by individuals to navigate down rivers in an upright position with a single long pole (or paddle), instead of sitting in tubes or rafts and floating down. The boards are constructed from heavy duty raft material that is inflatable , rather than the fiberglass material used in surfboards. Unlike surfboards that market for $500 to $ 1000 each, paddle boards are typically sold for between $100 and $400. Since Travis and Jeff are just starting out and the demand for paddle boards on the East Coast has not been firmly established , they anticipate selling their product for $100 each. Travis estimates the fixed cost for equipment and space will be $20,000, and the material and labor costs will run $50 per unit. What volume of demand will be necessary for Travis and Jeff to break even on their new venture?

32. Process Selection Jeff, the more optimistic of the two owners of UpRight Paddlers, believes that demand for paddle boards will exceed the breakeven point of 40 units calculated in Example 6.1 . He proposes spending $10,000 in fixed costs to buy more automated equipment that would reduce the materials and labor cost to $30 per board. The boards would sell for $100, regardless of which manufacturing process is chosen. Compare the two processes and determine for what level of demand each process would be preferred. Label Travis’ proposal as Process A, and Jeff’s proposal as Process B.

33. Economic Aspects The basic layout types have different fixed and variable cost characteristics which seem to determine which one to use. In practice the uncertainty about the exact fixed and variable costs of each layout means the decision can rarely be made on cost alone

34. Advantages and disadvantages of the basic layout types

35. Process Analysis Systematic study of all aspects of a process make it faster more efficient less costly more responsive Basic tools process flowcharts diagrams maps

36. Process Flowcharting Defined Process flowcharting is the use of a diagram to present the major elements of a process The basic elements can include tasks or operations, flows of materials or customers, decision points, and storage areas or queues It is an ideal methodology by which to begin analyzing a process

37. Some common process mapping symbols

38. Process Plans Set of documents that detail manufacturing and service delivery specifications assembly charts operations sheets quality-control check-sheets 6- 43

39. Assembly Chart

40. Process Flowchart of Apple Processing

41. http://www.conceptdraw.com/samples/business-process-diagrams

42. Online Ticket Service http://www.smartdraw.com/software/flowchart-examples.htm

43. Medical Services Flowchart

44. http://www.smartdraw.com/specials/images/examples/flowchart-example-shipping-process-flowchart.png Shipping Process Flowchart

45. Financial Accounting Process http://conceptdraw.com/samples/business-process-diagrams-flow-charts

46. Cross-Functional Flowchart — Credit Approval Process http://conceptdraw.com/samples/business-process-diagrams-flow-charts

47. Deployment Flowchart sample: Trading Process Diagram http://conceptdraw.com/samples/business-process-diagrams-flow-charts

48. Process Map or Swimlane Chart of Restaurant Service Copyright 2011 John Wiley & Sons, Inc. Source: Russell &Taylor

49. Flow process charts for processing expense reports at Intel before and after improving the process Source: OM by Slack & Chambers

50. Process Charts Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Step description Insert Step Append Step Remove Step 1 X Enter emergency room, approach patient window 2 X Sit down and fill out patient history 3 X Nurse escorts patient to ER triage room 4 X Nurse inspects injury 5 X Return to waiting room 6 X Wait for available bed 7 X Go to ER bed 8 X Wait for doctor 9 X Doctor inspects injury and questions patient 10 X Nurse takes patient to radiology 11 X Technician x-rays patient 12 X Return to bed in ER 13 X Wait for doctor to return 14 X Doctor provides diagnosis and advice 15 X Return to emergency entrance area 16 X Check out 17 X Walk to pharmacy 18 X Pick up prescription 19 X Leave the building 0.50 15 10.0 - 0.75 40 3.00 - 0.75 40 1.00 - 1.00 60 4.00 - 5.00 - 2.00 200 3.00 - 2.00 200 3.00 - 2.00 - 1.00 60 4.00 - 2.00 180 4.00 - 1.00 20 Transport 9 11 815 Operation 5 23 — Inspect 2 8 — Store — — — Delay 3 8 —

51. Operations Sheet for Plastic Part Part name Crevice Tool Part No. 52074 Usage Hand-Vac Assembly No. 520 Oper . No. Description Dept. Machine/Tools Time 10 Pour in plastic bits 041 Injection molding 2 min 20 Insert mold 041 #076 2 min 30 Check settings 041 113, 67, 650 20 min & start machine 40 Collect parts & lay flat 051 Plastics finishing 10 min 50 Remove & clean mold 042 Parts washer 15 min 60 Break off rough edges 051 Plastics finishing 10 min

52. Flowchart of the Process Showing Handoffs Between Departments

53. Service Blueprint of Consulting Company’s Inventory Appraisal Process

54. Process Analysis Terms Process : Is any part of an organization that takes inputs and transforms them into outputs Cycle Time : Is the average successive time between completions of successive units Utilization : Is the ratio of the time that a resource is actually activated relative to the time that it is available for use

55. Other Process Terminology 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, the employee will hold on to it not able to continue working on the next unit 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

56. Other Process Terminology (Continued) Bottleneck Occurs 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 process, work will begin to pile up in front of that employee. In this is case the employee represents the limited capacity causing the bottleneck. Pacing Refers to the fixed timing of the movement of items through the process

57. Other Types of Processes 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

58. Process Performance Metrics Operation time = Setup time + Run time Throughput time = Average time for a unit to move through the system (time being worked on + time spent waiting) Throughput rate=o/p rate the process is expected to produce over a period of time= 1/CT Velocity = Throughput time Value-added time

59. Process Performance Metrics (Continued) Cycle time = Average time between completion of units Throughput rate = 1 Cycle time Efficiency = Actual output Standard Output

60. Process Performance Metrics (Continued) Productivity = Output Input Utilization = Time Activated Time Available

61. Types of Processes Single-stage Process Stage 1 Stage 1 Stage 2 Stage 3 Multi-stage (Sequential) Process

62. Types of Processes Parallel Processes Stage 1 Stage 1 Stage 1 Stage 2

63. Types of Processes (Continued) 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 Stage 1 Stage 2 Buffer Multi-stage Process with Buffer

64. Cycle Time Example Suppose you had to produce 600 units in 80 hours to meet the demand requirements of a product. What should the cycle time be to meet this demand requirement (or in other words what should be the maximum amount of time a unit can spend at the bottleneck activity)? Answer: 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 = 4,800/600 units = 8 minutes.

65. Bottleneck, Cycle Time and Throughput Rate & Time It takes 10 + 20 + max (15, 12) + 5 + 10 = 60 minutes to complete a loan application (throughput time). Unless more resources are added at step 2, the bank will be able to complete only 3 loan accounts per hour (note cycle time is 20 minutes), or 15 new load accounts in a five-hour day. 1. Check loan documents and put them in order (10 minutes) 2. Categorize loans (20 minutes) 3. Check for credit rating (15 minutes) 6. Complete paperwork for new loan (10 minutes) 4. Enter loan application data into the system (12 minutes) Customer 5. Is loan approved? (5 min) Yes No Bottleneck

66. Utilization Rates at the each station Utilization Rate = Throughput Rate/Capacity Rate Station 1: 3/6 = .5 (50%) Station 2: 3/3 = 1 (100%) Station 3: 3/4 = .75 (75%) Station 4: 3/5 = .6 (50%) Station 5: 3/12 = .25 (25%) Station 6: 3/6 = .5 (50%) 1. Check loan documents and put them in order (10 minutes) 2. Categorize loans (20 minutes) 3. Check for credit rating (15 minutes) 6. Complete paperwork for new loan (10 minutes) 4. Enter loan application data into the system (12 minutes) Customer 5. Is loan approved? (5 min) Yes No Bottleneck

67. Goods are received at dock Goods are inspected Goods are put in warehouse Warehouse supplies assembly floor Example: Receiving goods to warehouse High level view

68. Goods are received at dock Goods get inspected Contents match order? Somehow tell purchasing Goods are accepted? Incoming quality check no yes Receiving notifies warehouse to pick up yes Example: Receiving goods to warehouse: Detailed view no

69. Goods are received at dock Goods get inspected Contents match order? Receiving Purchasing Quality Assurance Warehouse Somehow tell purchasing Advise supplier of rejection Goods are accepted? Pick up goods from QA area Incoming quality check no no yes yes

70. Example: Receiving goods to warehouse Detailed view Receive Goods Inspect Goods (30) Match order? (10) Supervisor Report (5) Quality Check (45) Accept? (2) Goods 4 pick up Inform Purchasing Yes No Yes No What is the throughput time for good items? What is the capacity of each station? Where is the bottleneck? What is the cycle time? What is the throughput rate? If there are 15 orders coming in an 8 hr day, what would each stations utilization rate be?

71. Example: Receiving goods to warehouse Detailed view Receive Goods Inspect Goods (30) Match order? (10) Supervisor Report (5) Quality Check (45) Accept? (2) Goods 4 pick up Inform Purchasing Yes No No If we get 15 orders in an 8 hr day, what would the utilization rate be for each station? Quality Check (45) What is the throughput time for good items? What is the capacity of each station? Where is the bottleneck? What is the cycle time? What is the throughput rate? Yes

72. Cycle Time Example 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?

73. A bread making Opn

74. Little’s Law throughput time = work-in-process * cycle time It is simple but very useful and it works for any stable process Also look at Penny Fab simulation ppt