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

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:

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

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  1. Process Analysis“If you cannot describe what you are doing as aprocess, you do not know what you are doing.”W.E. Deming

  2. 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: • Honda transforms steel, rubber, and plastic into cars • McDonald’s transforms meat, potatoes, and sauces into packaged food • Dell transforms customer orders into PC’s

  3. Let’s 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 Process Analysis How can we analyze a process? Map it! What are the relevant performance measures?

  4. 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 Process Flow Charts

  5. FGI Task 1 Task 2 Task 1 Task 2 Make-to-order vs. make-to-stock 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?

  6. Task 1 Task 2 Task 3 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? • 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?

  7. 1 Cycle Time Throughput rate = How do we measure capacity? Capacity of a task is the physical limitation in terms of “how much can be processed at this task” 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 Key relationship Capacity = throughput rate

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

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

  10. 3 units/hr 5 units/hr 2 units/hr What is a bottleneck? Bottleneck is the process stage with the smallest throughput rate (longest cycle time) Which task is the bottleneck?

  11. 3 units/hr 5 units/hr 2 units/hr 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?

  12. WIP Throughput rate Throughput time = 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 Key relationship (Little’s Law)

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

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

  15. 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. WIP WIP machining pack and ship assembly machining Let’s analyze the hammer process…

  16. Look at one line. 200 units require: 80 + 200  4 = 880 minutes/200 units The throughput rate is: 200 / 880 = 0.227 units/minute = 13.63 units/hour But we have two identical lines, so for the machining step capacity is 2  13.63 = 27.26 units/hour. Step 1: Machining

  17. 1 unit requires 40 min processing time, so the throughput rate is: 1 unit / 40 min = 0.025 units/min = 1.5 units/hr 34 workers available, but 2 workers are required for each unit, so assembly capacity is: 17  1.5 = 25.5 units/hr Step 2: Assembly

  18. Similar to machining: 30 + 100  2 = 230 min/100 units Pack & ship capacity is: 100 / 230 = 0.43 units/min = 26.09 units /hr Step 3: Pack and ship

  19. Hammer process: what is the capacity? Assembly is the bottleneck!

  20. 0/2 1 0 2/2 1 1 Some vocabulary… Buffering: Keep some inventory between stages 1/2 0 1 Starving: Stoppage of activity because of lack of material Blocking: Stoppage of flow because there is no storage place 1 1

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

  22. CT = 3s CT = 1s Task 2 Task 1 FGI More Examples.. 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

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

  24. CT = 1s CT = 3s Task 2 Task 1 FGI More Examples.. 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

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

  26. More Examples.. CT = 3s CT = 3s Task 2 Task 1 CT = 2s CT = 4s Task 4 FGI Task 3 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).

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