Operations Management Module 4 : Process Analysis S.Balachandran 2007 December 2007

December 2007© S.Balachandran2 of 23 In this session... Process TerminologyProcess Terminology Process FlowchartingProcess Flowcharting Types of ProcessesTypes of Processes Process Performance MetricsProcess Performance Metrics

December 2007© S.Balachandran3 of 23 Process Terms Process: A sequence of operational steps in any part of an organization that takes inputs and transforms them into outputsProcess: A sequence of operational steps in any part of an organization that takes inputs and transforms them into outputs Cycle Time: Average time between completions of successive steps in a processCycle Time: Average time between completions of successive steps in a process Utilization: Ratio of the time that a resource is actually activated relative to the time that it is available for useUtilization: Ratio of the time that a resource is actually activated relative to the time that it is available for use

December 2007© S.Balachandran4 of 23 Process Flowcharting Tasks or operations Decision Points Storage areas or queues Flows of materials or customers Inspection D Delay / Waiting

December 2007© S.Balachandran5 of 23 Types of Processes Single-stage Process Stage 1 Stage 2Stage 3 Multi-stage Process

December 2007© S.Balachandran6 of 23 Flowchart Example : Car Repair Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* * = Points critical to the success of the service

December 2007© S.Balachandran7 of 23 Flowchart Example : Car Repair Repair authorized Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Repair not authorized * = Points critical to the success of the service

December 2007© S.Balachandran8 of 23 Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Repair not authorized Service visible to customer Repair authorized * = Points critical to the success of the service Flowchart Example : Car Repair

December 2007© S.Balachandran9 of 23 Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Check parts availability † Order parts Parts available Parts not available Service visible to customer Repair authorized Repair not authorized Perform work † * = Points critical to the success of the service † = Points at which failure is most often experienced Flowchart Example : Car Repair

December 2007© S.Balachandran10 of 23 Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Check parts availability † Perform work † Order parts Inspect/ test and repair Perform corrected work Corrective work necessary Repair not authorized Parts not available Parts available Service visible to customer Repair authorized Repair complete * = Points critical to the success of the service † = Points at which failure is most often experienced Flowchart Example : Car Repair

December 2007© S.Balachandran11 of 23 Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Check parts availability † Order parts Service not visible to customer Repair not authorized Parts available Service visible to customer Repair authorized Perform work † Inspect/ test and repair Perform corrected work Corrective work necessary Parts not available Repair complete * = Points critical to the success of the service † = Points at which failure is most often experienced Flowchart Example : Car Repair

December 2007© S.Balachandran12 of 23 * = Points critical to the success of the service † = Points at which failure is most often experienced Customer drops off car Mechanic makes diagnosis* Discuss needed work with customer* Customer departs with car Collect payment Notify customer Check parts availability † Order parts Repair complete Repair not authorized Parts available Service visible to customer Repair authorized Service not visible to customer Perform work † Inspect/ test and repair Perform corrected work Corrective work necessary Parts not available Flowchart Example : Car Repair

December 2007© S.Balachandran13 of 23 Flowchart Example : Hospital 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) Transport Operation Inspect Store Delay Step description Insert Step Append Step Remove Step

December 2007© S.Balachandran14 of 23 Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital 1Enter emergency room, approach patient window 2Sit down and fill out patient history 3Nurse escorts patient to ER triage room 4Nurse inspects injury 5Return to waiting room 6Wait for available bed 7Go to ER bed 8Wait for doctor 9Doctor inspects injury and questions patient 10Nurse takes patient to radiology 11Technician x-rays patient 12Return to bed in ER 13Wait for doctor to return 14Doctor provides diagnosis and advice 15Return to emergency entrance area 16Check out 17Walk to pharmacy 18Pick up prescription 19Leave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport Operation Inspect Store Delay Step description Insert Step Append Step Remove Step Flowchart Example : Hospital

December 2007© S.Balachandran15 of 23 Flowchart Example : Hospital Figure 3.8 Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital XEnter emergency room, approach patient window XSit down and fill out patient history XNurse escorts patient to ER triage room XNurse inspects injury XReturn to waiting room XWait for available bed XGo to ER bed XWait for doctor XDoctor inspects injury and questions patient XNurse takes patient to radiology XTechnician x-rays patient XReturn to bed in ER XWait for doctor to return XDoctor provides diagnosis and advice XReturn to emergency entrance area XCheck out XWalk to pharmacy XPick up prescription XLeave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport Operation Inspect Store Delay Step description Insert Step Append Step Remove Step

December 2007© S.Balachandran16 of 23 Flowchart Example : Hospital Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital XEnter emergency room, approach patient window XSit down and fill out patient history XNurse escorts patient to ER triage room XNurse inspects injury XReturn to waiting room XWait for available bed XGo to ER bed XWait for doctor XDoctor inspects injury and questions patient XNurse takes patient to radiology XTechnician x-rays patient XReturn to bed in ER XWait for doctor to return XDoctor provides diagnosis and advice XReturn to emergency entrance area XCheck out XWalk to pharmacy XPick up prescription XLeave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport Operation523— Inspect28— Store——— Delay38— Step description Insert Step Append Step Remove Step

December 2007© S.Balachandran17 of 23 Flowchart Example : Hospital Process: Emergency room admission Subject: Ankle injury patient Beginning: Enter emergency room Ending: Leave hospital XEnter emergency room, approach patient window XSit down and fill out patient history XNurse escorts patient to ER triage room XNurse inspects injury XReturn to waiting room XWait for available bed XGo to ER bed XWait for doctor XDoctor inspects injury and questions patient XNurse takes patient to radiology XTechnician x-rays patient XReturn to bed in ER XWait for doctor to return XDoctor provides diagnosis and advice XReturn to emergency entrance area XCheck out XWalk to pharmacy XPick up prescription XLeave the building Step no. Time (min) Distance (ft) Summary Number of steps Activity Time (min) Distance (ft) Transport Operation523— Inspect28— Store——— Delay38— Step description Insert Step Append Step Remove Step

December 2007© S.Balachandran18 of 23 Process Flow Terms BufferingBuffering −Storage area between process stages where output of a stage is placed prior to being used in a downstream stage BlockingBlocking –Occurs when the activities in a process 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 StarvingStarving –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

December 2007© S.Balachandran19 of 23 Process Flow Terms BottleneckBottleneck –Occurs when the limited capacity of a process step causes work to pile up or become unevenly distributed in the flow of a process –If an employee or machine works too slow in a multi- stage process, work will begin to pile up in front of that employee or machine. In this case the employee represents the limited capacity causing the bottleneck. PacingPacing –Refers to the fixed timing of the movement of items through the process (e.g., Conveyor Belt in Assembly Line)

December 2007© S.Balachandran20 of 23 Generic Process Types Make-to-orderMake-to-order –Only activated in response to an actual order –Inventory : both work-in-process and finished goods kept to a minimum Make-to-stockMake-to-stock –Process activated to meet expected or forecast demand –Customer orders are served from target stocking level

December 2007© S.Balachandran21 of 23 Process Performance Metrics Operation time = Setup time + Run timeOperation time = Setup time + Run time Throughput time = Average time for a unit to move through the systemThroughput time = Average time for a unit to move through the system Velocity = Throughput timeVelocity = Throughput time Value-added time Value-added time Cycle time = Average time between completion of unitsCycle time = Average time between completion of units Throughput rate = 1.Throughput rate = 1. Cycle time Cycle time Efficiency = Actual outputEfficiency = Actual output Standard Output Standard Output Productivity = OutputProductivity = Output Input Input Utilization = Time ActivatedUtilization = Time Activated Time Available Time Available

December 2007© S.Balachandran22 of 23 Performance Metrics - Linkages

December 2007© S.Balachandran23 of 23 Reducing Throughput Time Eliminate unnecessary activitiesEliminate unnecessary activities Perform activities in parallelPerform activities in parallel Change the sequence of activitiesChange the sequence of activities Reduce interruptions and delaysReduce interruptions and delays Reduce duration of bottleneck activitiesReduce duration of bottleneck activities Use Flowcharts to analyse Process