Process Analysis If you cannot describe what you are doing as a process, you do not know what you are doing. W.E. Deming

What is a process? A process is a series of independent tasks that transforms an input into output material of higher value for the organization Examples: 1.Honda transforms steel, rubber, and plastic into cars 2.McDonalds transforms meat, potatoes, and sauces into packaged food 3.Dell transforms customer orders into PCs

Process Analysis Lets look at the black box in more detail… Why do we need to analyze the process? -To identify inefficient tasks -To spot possible effectiveness improvement tasks -To understand where value can be added How can we analyze a process? Map it! What are the relevant performance measures?

Process Flow Charts Graphical description of a process: –Holding: Raw Materials, RM Work in Process, WIP Finished Goods Inventory, FGI –Flow of material or work –Processing step –Decision point

Make-to-order vs. make-to-stock Task 1Task 2 FGI Task 1Task 2 Demand If demand is satisfied by FGI then the system is make-to-stock, otherwise it is a make-to order system Some examples… What are the tradeoffs?

What is its capacity? How many units per unit time go through each task? The process as a whole? What is the bottleneck? Which production step limits the process capacity? What is the throughput time? How long does it take to get through the system? Process Analysis: the performance measures Assume a process is in place. What do we need to measure in order to understand how efficient it is? Task 1Task 2Task 3

How do we measure capacity? Cycle Time: Average time for completion of a unit at a production step or process. Does not include waiting. Measured as time/unit Throughput Rate: Average number of units processed over a time interval. Measured as units/time 1 Cycle Time Throughput rate = Key relationship Capacity of a task is the physical limitation in terms of how much can be processed at this task Capacity = throughput rate

Computing Cycle Times Processing a fixed amount of work Cycle Time = Set-up Time + (Batch size) x (Time per unit) Batch size Example: Producing 100 cars. On average, production takes 5 hours per car. It takes 50 hours to set up the production line.

Computing Cycle Times Setup time: 15 min A B Question:What is the cycle time between points A and B of the process, if we work in batches of 10? Production Time: 25min/unit

What is a bottleneck? Which task is the bottleneck? 3 units/hr5 units/hr2 units/hr Bottleneck is the process stage with the smallest throughput rate (longest cycle time)

Capacity of a process The capacity of the process is: minimum throughput rate at any of the stages What is the capacity of this process? 3 units/hr5 units/hr2 units/hr

How do we measure throughput time? Throughput Time: Average time that a unit takes to go through the entire process (including waiting time). Measured as time Work in Process(WIP): Average number of units in system over a time interval. Measured as units WIP Throughput rate Throughput time = Key relationship (Littles Law)

How do we analyze a complex process… 1.Look at the process step by step 2.Determine throughput rate (i.e. capacity) of each step 3.Identify the process bottleneck (smallest processing rate, or largest cycle time). 4.The capacity of the process is equal to the capacity of the bottleneck

Example : hammer production process Description 1.Work begins at the machining center. Here two lines form the heads of the hammers and place them in a buffer. 2.Handles are attached at the assembly step. 3.Finished hammers are sent to the next stage, where they are packed and shipped. assembly pack and ship machining WIP

Process Data: machining: Set up 80 min. 4 min per unit processing. Batch size 200. Identical lines. assembly: Manual by two workers (no set up). Each hammer requires 40 min processing. 34 workers available. pack and ship: 30 min set up, 2 min per unit processing. Lot sizes of 100. assembly pack and ship machining WIP Lets analyze the hammer process…

Step 1: Machining Look at one line. 200 units require: = 880 minutes/200 units The throughput rate is: 200 / 880 = units/minute = units/hour But we have two identical lines, so for the machining step capacity is = units/hour.

Step 2: Assembly 1 unit requires 40 min processing time, so the throughput rate is: 1 unit / 40 min = units/min = 1.5 units/hr 34 workers available, but 2 workers are required for each unit, so assembly capacity is: = 25.5 units/hr

Step 3: Pack and ship Similar to machining: = 230 min/100 units Pack & ship capacity is: 100 / 230 = 0.43 units/min = units /hr

Hammer process: what is the capacity? Process StepCapacity (units/hr) Machining27.26 Assembly25.50 Pack & Ship26.09 Assembly is the bottleneck!

Some vocabulary… Buffering: Keep some inventory between stages 01 1/2 Starving: Stoppage of activity because of lack of material Blocking: Stoppage of flow because there is no storage place 10 0/2 11 2/2 11

More Examples.. CT = 3sCT = 1s FGITask 1 Task 2 Lets study this make-to-stock system. What is the capacity of the process? What is the throughput time? What is the average WIP? Is any task starved or blocked? Note: No buffer space between stations, so upstream station has to wait if downstream station is busy

More Examples.. CT = 3sCT = 1s FGITask 1 Task 2 Task 2 starved for 2s. each time. Throughput rate = 20 units/min at Task 1, 60 units/min at Task 2 Capacity (throughput rate) of process = 20 units/min Throughput time = 4 seconds = 1/15 min WIP = Throughput rate x Throughput time = 20 units/min x 1/15 min = 1.33 units

More Examples.. CT = 1sCT = 3s FGITask 1 Task 2 What is the capacity of the process? What is the throughput time? What is the average WIP? Is any task starved or blocked? Lets study this make-to-stock system: Note: No buffer space between stations, so upstream station has to wait if downstream station is busy

More Examples.. CT = 1sCT = 3s FGITask 1 Task 2 Task 1 blocked for 2s. each time. Throughput rate = 60 units/min at Task 1, 20units/min at Task 2 Capacity of process = 20 units/min Throughput time = 6 seconds = 0.1 min WIP = Throughput rate x Throughput time = 20 units/min x 0.1 min = 2 units

More Examples.. CT = 3s FGI Task 1 Task 2 What is the capacity of the process? Is any task starved or blocked? Lets study this make-to-stock assembly system: Note: No buffer space between stations CT = 4s Task 3 CT = 2s Task 4

More Examples.. CT = 3s FGI Task 1 Task 2 CT = 4s Task 3 CT = 2s Task 4 Tasks 1 and 2 are blocked by Task 3 for 1 second per product. Task 4 is starved for 2 seconds per product. The capacity of the process is 15 units/hour (limited by Task 3).