4. Flow-Time Analysis Flow Time 1-Introduction Based on the book: Managing Business Process Flows

4. Flow-Time Analysis Competitive Advantages of a short flow time  Short response time both in production and in product design.  More responsive to changes in customer preferences and technological advancements.  Delayed differentiation, Postponement.  Moving from Made To Stock towards Make To Order.  Lower inventory costs, due to Little’s Law. Flow Time - Introduction2 Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Direct Method of Measuring Flow Time  Randomly sample flow units over an extended period of time.  Measure the flow time for each flow unit from entry to exit.  Compute the average of flow times.  During a given month, a sample of 50 applications was taken  The average flow time = 20.8 working days. Flow Time - Introduction3Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Indirect Methods of Measuring Flow Time  Count the number of units produced over an extended period of time.  R = number of units produced / duration of time period.  Count the number of units of inventory at random points during the time period. Compute the average inventory (I).  Compute flow time T =I/R 200 applications processed during 20 days; average throughput of R=200/20 = 10 applications per day. The number of waiting applications counted at 4 random points during these days added to 860. I= 860/4 =215. T = I/R  T = 215/10  flow time is 21.5 days vs 20.8 Flow Time - Introduction4Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Process : Network of activities performed by resources 1-2. Flow unit (input/output) : Unit of analysis– Level of detail 3. Network of Activities & Buffers  Define Process Boundaries  Activities with activity times  Buffers with waiting times  Routes: precedence relationships (solid lines) with throughputs 4. Resources & Allocation  Who does what? 5. Information Structure & flow (dashed lines) Key for capacity analysis Process Flow Chart Flow Time - Introduction5Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Flowcharting Activity Buffer Physical flow Event Information flow  See the total process; a systems view  Define flow units and process boundaries  Include only the key steps  Clarify the level of detail needed. Processes can be broken down into sub-activities. On the other hand, cascading allows several activities to be combined in a single sub-process  Depicts resources required to carry out activities  Identify the processes that need attention (weak points) Decision Flow Time - Introduction6Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Wondershed Inc: Narrative Representation 1.Separate the roof and the base sheets 2. Punch the base 3. Punch the roof 4. Form the base 5. Form the roof 6. Weld the base 7. Assemble base and roof 8. Inspect Flow Time - Introduction7Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis End Wondershed Inc. : Schematic Representation Start Separate Sheet Punch base Punch roof Form base Form roof Wed base Inspect Assemble Start Activity A Activity B Activity C End Flow Time - Introduction8Ardavan Asef-Vaziri, June, 2015 Buffer Activity

4. Flow-Time Analysis Theoretical Flow Time Activity Time: The time required by a typical flow unit to complete the activity. Tp for a single activity. Theoretical Activity Time. Tp net of any waste inside Tp Unless stated otherwise, we assume that an activity cannot be broken down into smaller activities that can be executed in parallel. What does that mean??? Pure Theoretical Flow Time: The minimum amount of time required for processing a typical flow unit without any waiting and without any waste inside Tp. Theoretical Flow Time: The minimum amount of time required for processing a typical flow unit without any waiting. Flow Time - Introduction9Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Critical Path Theoretical flow time of each path in the process flowchart = sum of the activity times of all activities on that path Critical Path: the longest path Critical Activities: activities that lie on the critical path Theoretical flow time of the process = Time of the theoretical critical path Activity Time 2Activity Time 1Activity Time 3 Activity Time 5Activity Time 4Activity Time 6 Sequential Activities Parallel Activities How many Paths? Activity Time 2Activity Time 1Activity Time 3 Activity Time 2Activity Time 1Activity Time 3 Flow Time - Introduction10Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Wondershed Inc. Theoretical Flow Time Path 1 (roof) Start  1  3  5  7  8  End = 80 min Path 2 (base) Start  1  2  4  6  7  8  End = 90 min Theoretical Flow Time = 90 min Flow Time - Introduction11Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Wondershed Inc. Flow Time Path 1 (roof) Start  1  3  5  7  8  End = 385 min Path 2 (base) Start  1  2  4  6  7  8  End = 370 min Flow Time = 385 min Flow Time - Introduction12Ardavan Asef-Vaziri, June, 2015

4. Flow-Time Analysis Flow Time Efficiencies in White Collar Processes Flow Time Efficiency = Theoretical Flow Time / Flow Time Flow Time Efficiency = 90/385 = 23.4% Flow Time - Introduction13Ardavan Asef-Vaziri, June, 2015