OPSM 301 Operations Management Koç University OPSM 301 Operations Management Class 5: Business process flows House Building Game Zeynep Aksin zaksin@ku.edu.tr

Example: Hospital Emergency Room A hospital emergency room is currently organized so that all patients register through an initial check-in process. At his or her turn, each patient is seen by a doctor and then exits the process, either with a prescription or with admission to the hospital. Currently, 55 people per hour arrive at the ER, 10% of who are admitted to the hospital. On average, 7 people are waiting to be registered and 34 are registered and waiting to see a doctor. The registration process takes, on average, 2 minutes per patient. Among patients who receive prescriptions, average time spent with a doctor is 5 minutes. Among those admitted to the hospital, average time is 30 minutes. On average, how long does a patient spend in the ER? On average, how many patients are being examined by doctors? On average, how many patients are there in the ER? Assume the process to be stable; that is, average inflow rate equals average outflow rate.

Example: Emergency Room Flow units?

Little’s Law = 0.127 hrs = 7.6 min T = I/R = 34/55 hr I = RT = 55*2/60 = 1.83 patients.

On average how long does a patient spend in the ER? Two types of flow units: Potential admits Simple prescriptions Potential admits flow time=7.6 + 2 + 37.1 + 30 = 76.7 minutes Simple prescriptions flow time= 7.6 + 2 + 37.1 + 5 = 51.7 minutes. Average T = 10% * 76.7 + 90%*51.7 = 54.2 minutes.

On average how many patients are being examined by doctors? Potential admits: R = 5.5 patients/hr, T = 30 min = 0.5 hr I = RT = 5.5/hr*0.5 hr = 2.75 patients Simple prescription: R = 49.5 patients/hr, T = 5 min = (5/60) hr I = RT = 49.5*(5/60) = 4.125 patients

On average how many patients are there in the ER? total inventory in ER = inventory in buffer 1 + inventory in registration + inventory in buffer 2 + inventory with doctors = 7 + 1.83 + 34 + 6.865 = 49.695 patients.

Flow rate/Throughput R Relating operational measures (flow time T, throughput R & inventory I) with Little’s Law Flow rate/Throughput R [units/hr] Inventory I [units] ... ... ... ... ... Flow Time T [hrs] Inventory = Throughput x Flow Time I = R x T Inventory Turns = 1/ T

Inventory Turns examples (source Cachon and Terwiesch)

Key learnings: Little’s Law Relates three leading performance measures based on process flows: throughput, inventory, flow time Applies to processes in steady state Important to First determine process boundaries for analysis Then identify appropriate flow unit for your analysis

From measurement to analysis So far we have considered Measuring process flows-R, T, I Relating these measures through Little’s Law: I=RxT Next: understand what drives each measure What drives flow time? What drives throughput rate? What drives inventory?

Process = network of activities performed by resources Process Architecture is defined and represented by a process flow chart: Process = network of activities performed by resources 1. Process Boundaries: input output 2. Flow unit: the unit of analysis 3. Network of Activities & Storage/Buffers activities with activity times routes: precedence relationships (solid lines) 4. Resources & Allocation 5. Information Structure & flow (dashed lines) ........................................................................................................................................................................................................................................ ........................................................................................................................................................................................................................................ ........................................................................................................................................................................................................................................

Flowchart Symbols Tasks or operations Decision Points Examples: Giving an admission ticket to a customer, installing an engine in a car, etc. Examples: How much change should be given to a customer, which wrench should be used, etc. Decision Points 4

Flowchart Symbols Storage areas or queues Examples: Lines of people or cars waiting for a service, parts waiting for assembly etc. Examples: Customers moving to a seat, mechanic getting a tool, etc. Flows of materials or customers 4

House Building Game-Introduction

Only need a pen or pencil. KEEP DESKS CLEAR! Only need a pen or pencil. Please keep desks and aisles clear of notebooks, PCs, backpacks etc. Please do not disturb materials!

HouseBuilding.com: Manufacturing Operations Production Control (color sheets, log sheets, scissors) Base Punch (scissors) Roof Base Form (scissors) Base Weld (stapler) Final Assembly (tape) Quality Control Customer

Production Control Operating Procedures Prepare a batch of 4 units. Cut each sheet (one at a time) into two: roof and base. Write the batch number on the roof and the base. All items in the same batch have the same number. The numbers have to match in assembly. Repeat 4 times, which yields one batch When 4 units (one batch) are complete, “release” the batch. Put the batch in your out-basket: it’s ready for pickup by the trucker. Record release time for each batch. Release one batch each minute.

Truckers Operating Procedures Truckers are responsible for transporting work in process inventory between production steps. You can carry only one batch of 4 roofs or 4 bases at a time. Not both! Production Control (color sheets, log sheets, scissors) Base Punch (scissors) Roof Base Form (scissors) (scissors) Base Weld (stapler) Final Assembly (tape) Quality Control Customer

Roof Operating Procedures Cut the roof along double lines, one at a time. Fold roof along dotted line at top. Think quality! Work in batches of 4 units. When a batch is ready, call the trucker and send to Final Assembly. Ask trucker for inputs when needed.

Base Cut Operating Procedures Cut the base along double lines, one at a time. Think quality! Work in batches of 4 units When a batch is ready, call the trucker and send to Base Form. Ask trucker for inputs when needed.

Base Form Operating Procedures Fold the lines on the base (4 folds). Work in batches of 4 units When a batch is ready, call the trucker to send them to Base Weld. Ask trucker for inputs when needed

Base Weld Operating Procedures Staple base on top and bottom about 0.5 cm from the edge. Work in batches of 4 units. When a batch is ready, call the trucker to send them to Final Assembly. Ask trucker for inputs when needed.

Final Assembly Operating Procedures Tape the roof to the base (2 tapes). Work in batches of 4 units. When a batch is ready, send them to QA. (No trucker required.) Ask trucker for inputs when needed.

Quality Assurance Operating Procedures Check each batch if they conform to quality standards! If the house conforms to quality standards, put it on the market. Once on the market no more rework! Customers can reject houses Quality Standards Batch numbers must match. Folds and cuts should be along appropriate lines. Folds should be crisp and cuts should be straight. Roof should be centered and door should be visible. Top of base should be flush with roof. Staples and tape should be centered and parallel to the ground. Not too much tape. About 1 cm Staples about 0.5 cm from edge.

House Game Overview Quality Standards Batch numbers must match. Folds and cuts should be along appropriate lines. Folds should be crisp and cuts should be straight. Roof should be centered and door should be visible. Top of base should be flush with roof. Staples and tape should be centered and parallel to the ground. Not too much tape. About 1 cm. Staples about 0.5 cm from edge. Production Control (color sheets, log sheets, scissors) Base Punch (scissors) Roof Base Form (scissors) (scissors) Base Weld (stapler) Final Assembly (tape) Quality Control Customer

HouseBuilding.com: Operational Performance Flow time T Input Ri Output Ro Inventory I Sales R Quality Q = R/ Ro Team (color) House # 1 To - Ti = T House # 16 To - Ti = T