Process Analysis

Learning Objectives

• Process Analysis

• Process Flowcharting

• Types of Processes

• Process Performance Metrics

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.

Process Analysis Terms

• Two ways of computing resource utilization are;

Utilization = Resources Demanded/Resources Availability Utilization = Demand Rate/[Service Rate × Number of Servers]

• Consider the following example of process design which provides an analysis of the utilization of the restaurant order posting and fulfillment process . The resource utilization for work activities are computed assuming only one chef and two ovens as below:

Process Design & Resource Utilization

Work Activity #1 (Chef decides if order is accurate)

Work Activity #2 (Chef stages raw materials)

Work Activity #3 (Chef prepares side dishes)

Work Activity #4 (Oven operation)

Work Activity #5 (Chef assembles order)

Order arrival rate (given)

20 orders/hr 20 orders/hr 20 orders/hr 20 orders/hr 20 orders/hr

Time per order

1 minute 4 minutes 12 minutes 10 minutes 3 minutes

Number of resources

1 chef 1 chef 1 chef 2 ovens 1 chef

Output per time period

60 orders/hr 15 orders/hr 5 orders/hr 12 orders/hr 20 orders/hr

Resource utilization with 1 chef and 2 ovens

33 % 133 % 400 % 167 % 100%

Utilization Analysis of Restaurant Order Posting and Fulfillment Process

Process Design & Resource Utilization

• Whenever the utilization is calculated to be greater than 100 percent, the work will endlessly pile up before the workstation. Therefore this is clearly a poor process design and we need to add more resources.

• Since the chef is the highest skilled and paid employee, he must have highest labour utilization rate (although 100 percent may not possible). A logical question to consider is how many chefs are needed to bring the utilization down below 100 percent at work activity #3? This can be found by solving the equation;

(20 orders/hr)/[(5 orders/hr) × (X chefs)] = 1.00 or X = 4.00 chefs

Process Design & Resource Utilization

Work Activity #1 (Chef decides if order is accurate)

Work Activity #2 (Chef stages raw materials)

Work Activity #3 (Chef prepares side dishes)

Work Activity #4 (Oven operation)

Work Activity #5 (Chef assembles order)

Resource utilization with 4 chef and 2 ovens

8.33 % 33 % 100 % 167 % 25 %

With 4 chefs, the resource utilizations are recomputed as shown above. We see that the oven is still a problem, with a calculated 167 % utilization. To determine

how many ovens to have for a 100 percent utilization, we solve the equation:

(20 orders/hr)/[(6 orders/hr) × (Y ovens)] = 1.00Or Y = 3.33 ovens i.e. 4 ovens after rounding-off.

Thus, we have

Process Design & Resource Utilization

Work Activity #1 (Chef decides if order is accurate)

Work Activity #2 (Chef stages raw materials)

Work Activity #3 (Chef prepares side dishes)

Work Activity #4 (Oven operation)

Work Activity #5 (Chef assembles order)

Order arrival rate (given)

20 orders/hr 20 orders/hr 20 orders/hr 20 orders/hr 20 orders/hr

Time per order

1 minute 4 minutes 12 minutes 10 minutes 3 minutes

Number of resources

4 chef 4 chef 4 chef 4 ovens 4 chef

Output per time period

240 orders/hr 60 orders/hr 20 orders/hr 24 orders/hr 80 orders/hr

Resource utilization with 4 chef and 4 ovens

8.33 % 33 % 100 % 83 % 25 %

Revised Utilization Analysis of Restaurant Order Posting and Fulfillment Process

Process FlowchartingDefined

• 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.

Flowchart Symbols

Tasks or Operations

Decisions Points

Examples: Giving an admission ticket to a customer, installing a engine in a car, etc.

Examples: How much change should be given to a customer, which wrench should be used, etc.

Flowchart Symbols Continued…

Storage areas or queues (waiting lines)

Flows of materials or customers

Examples: Sheds, lines of people waiting for a service, etc.

Examples: Customers moving to a seat, mechanic getting a tool, etc.

Example: Flowchart of Game of Casino

Yes

Lose No

Win

Activate payout

Quit

Pay winnings

Insert coin into slot machine

Pull arm on slot machine

Types of Processes

Multistage process with buffer

• Blocking: occurs when the activities in the stage must stop because there is no place to deposit the item just completed

• Starving : occurs when the activities in the stage must stop because there is no work

• Bottleneck

Stage 1 Stage 2 Stage 3

Stage 1 Stage 2Buffer

Multistage Process

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.

• Hybrid processes -- Process that combine the features of both made-to-order and make-to-stock.• Pacing -- It refers to the fixing timing of the movement of items through the process

Process Performance Metrics

• Operation time = Setup time + Run time

• Throughput time = Average time for a unit tomove through the system

Throughput time• Velocity = ----------------------------- (throughput ratio) Value –added time

e.g.Consider a paced assembly line that has six stations and runs with a cycle time of 30 seconds. If the stations are

located one right after another and every 30 seconds parts move from one station

to the next, then the throughput time is 3 minutes.

Value-added time is the time in which useful work is actually being done on the units.

Process Performance Metrics (Continued)

• Cycle time = Average time betweencompletion of units

• Throughput rate = 1 .(units/hour)

Cycle time

• Efficiency = Actual output . Standard Output

Process Performance Metrics (Continued)

• Little’s Law: Throughput time = Work-in-process/Throughput rate.

• Productivity = Output Input

• Utilization = Time Activated Time Available

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?

• 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.

Process Throughput Time Reduction

• Perform activities in parallel.

• Change the sequence of activities.

• Reduce interruptions.