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Business Processes Analysis Week 1

Business Processes Analysis Week 1. Process Analysis Terms. Process : Is any part of an organization that takes inputs and transforms them into outputs. Average Task Time : Is the average time needed to complete a business process step.

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Business Processes Analysis Week 1

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  1. Business Processes AnalysisWeek 1

  2. Process Analysis Terms • Process: Is any part of an organization that takes inputs and transforms them into outputs. • Average Task Time: Is the average time needed to complete a business process step. • Utilization: Is the ratio of the time that a resource is actually activated relative to the time that it is available for use.

  3. Inventory (I) • Definition--The stock of any item or resource (including people) used in an organization: • Raw materials • Finished products • Component parts • Supplies • Work in process

  4. Throughput Time (T) JOB ORDER RECEIVED Time X Total processing time for a job. = Time Y-Time X Many steps JOB COMPLETED Time Y

  5. Bottleneck • Slowest activity or operation in system. • Sets the pace for the system.

  6. Airplane Manufacturing Game

  7. Players (12 people) • 3 Assembly workers • 1 Conformance Inspector The following people need watches or phone clocks: • 3 Task timers (1 for each worker) • 4 Throughput timers (1 times each color) • 1 Takt Timer

  8. Task timers • For your designated task worker, record time that it takes to make each unit at that station. • From the minute a person picks up a new part to when they pass it to the next person. • After we finish first round: • find average task time, min and max times.

  9. Throughput (cycle) timers • Throughput time: total processing time for a job. • For each product made in your color group, record the time at which the work is started at Task 1 and finished at Task 3. • At the end, calculate the average throughput time for each airplane.

  10. Takt time (called cycle time in the note) • The German word for the baton that an orchestra conductor uses to regulate the speed, beat or timing at which musicians play. "Beat Time“ "Rate Time" “Heart Beat" • Takt Time as the rate or time that a completed product is finished. • If you have a Takt Time of two minutes that means every two minutes a complete product, assembly or machine is produced off the line. • Takt Timer: measure time between airplanes coming off Task 3.

  11. Other Jobs • Workers: When you finish your task, give your part to the next person in order of production (not heaped up). • Everyone should pick up the older part next (FIFO) • Conformance Inspector: • Test airplanes to make sure they fly • Measure location of paper clip. Is it within ¼ inch of center? • Stop process after 10 “good” units are made

  12. Questions (Class Observer/Consultants) • How well were the tasks balanced on the line? • Who had idle time? Why? • Takt time and cycle time? • How do the task times change as the simulation continues? • What are possible process improvements? • Can we achieve perfect line balance?

  13. Concepts gleaned • Bottleneck Vs. capacity of line • bottleneck process dictates capacity of system • Process Improvement • Learning effects • Variability • Quality Inspection (traditional) • Division of tasks versus line balancing • Throughput Time vs. Takt time

  14. Flow Rate (R) or Throughput Rate • Number of jobs that flow through the system per unit of time. • Rin: inflow rate (incoming into the system), • Rout: outflow rate (outgoing from the system), • Rin > Rout: inventory accumulates at the rate of Rin - Rout, • Rin < Rout: inventory depletes at the rate of Rout- Rin, • R: Average flow rate or throughput • Process Throughput rate R = 1 Takt Time

  15. Little’s Law • I = R * Twhere:I = average inventory or # of jobs within the process boundaries (jobs)R = throughput or flow rate (jobs/time)T = average flow time for a job within the process boundaries (time/job) or throughput time

  16. Airplane Application • T: Average Throughput time for planes? • R=Average flow rate (jobs through system/time) i.e. how many planes can we make per hour? I = R * T Average Inventory in Process ?

  17. OK Insurance Inc. (original process) • OK Insurance Inc. receives about 1000 insurance applications per 30 day month. On average, OK has 500 applications in process at various stages of the approval procedure. In response to sales rep complaints, they wanted to determine the average time for application processing.

  18. OK Insurance Inc. (process improvement?) • Set up a initial review team (IRT) to prescreen applications: A= looks excellent, B= needs more evaluation, & C=reject summarily. As go to A Team and Bs go to B Team • A=25%, B=25%, and C=50% of all applications. • 70% of As and 10% of Bs were approved after review. • At any given time, 200 applications were at IRT, 25 were at A team and 150 were at B team. • Did the process changes improve the service performance?

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