Flow Time 3-Flow Time Reduction Levers Based on the book: Managing Business Process Flows

1. Flow Time 3-Flow Time Reduction Levers Based on the book: Managing Business Process Flows

2. Levers for Managing Flow Time • To reduce the flow time we must shorten the length of every critical path. • Flow time is the sum of two components—Waiting time and Activity time. • These two components have different natures and the levers available for managing each are distinct. • The main levers for reducing waiting times are • Managing congestion (Utilization and Variability) – Ch3 and Ch8. • Reducing Batch sizes and Safety stock – Ch6 and Ch7. • Synchronization – Ch10. Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 2

3. Reducing Theoretical Flow Time: Shorten the Length of Every Critical Path • Re-Structure - Moving work off the critical path • Move work off the critical path to a noncritical activity • Move work off the critical path to the outer loop (pre-processing or post-processing). • Eliminate - Reducing the work content of critical activities • Work smarter. Reduce non-value-adding part of the activity; Business Process Re-engineering. • Work Faster. Increase the speed of the activity. Better Methods, Training, Advanced Technology, Better Management. • Reduce the amount of extra work. Work right the first time; implement a robust quality management system. • Modify the product sequencing • Priority to the product that requires less processing time - Given market condition. Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 3

4. Reducing Theoretical Flow Time: Shorten the Length of Every Critical Path Whatever approach we take, it must be directed towards the critical path. Reducing the work content of noncritical activities does not reduce the theoretical flow time. Such reduction may still be useful for decreasing total processing costs, increasing process capacity, and reducing the potential for errors and defects. Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 4

5. 1. Restructure the Critical Path Move work off the critical path to a noncritical activity. So that critical activities are performed in parallel rather than sequentially. A :5 days B:5 days C:5 days A 1:3 days A 2:2 days C:5 days B:5 day Moving activities to the outer loop: perform them before or after the process. Instead of assembling a complete hamburger in MTO (make to order), shift towards MTS (made to stock), precook beef patties and keep them ready. Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 5

6. 2. Work Smarter; Reduce Non-Value-Adding Activities Value-adding activities increase the economic value of a flow unit from the perspective of the customer. Performing surgery, flying airplane, serving meals, manufacturing products, and dispensing loans are value-adding. Non-value-adding activities do not directly increase the value of a flow unit. Moving work or workers, setting up machines, scheduling activities or personnel, sorting, storing, counting, filling out forms, participating in meetings, obtaining approvals or maintaining equipment are non- value -adding. Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 6

7. 2. Reduce Non-Value-Adding Activities Non value adding activities come in two types; necessary or non-necessary. The second type should be eliminated outright. The first type activities can also be eliminated . A process with high fraction of defectives may require a sorting station to separate the defective from the good units. If the process capability is increased so that no defectives are produced, the sorting activity could be eliminated. The primary value-adding activity the accounts-payable (A/P) process is paying the bills in an accurate and timely fashion. The A/P department spends much of its time reconciling contradictory information, verifying, matching documents, and investigating discrepancies. Such activities do not add value but are still necessary. They can be eliminated if the process is modified. Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 7

8. 3. Work Faster; Increase the Speed of Operations • Increase the speed of operation - work faster. Technology, Method, Training, Incentive. The speed of a manual checkout counter can be increased by using bar codes with a scanner, adding a second worker to bag products, or proper incentives, coupled with training and better equipment so that checkout personnel work faster without increasing error rates or jeopardizing service quality. Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 8

9. 4. Do It Right in the First Time; Reduce the Amount of Rework Decreasing the amount of repeat work can often be achieved by process-improvement techniques such as statistical process control, method improvement and training. In data-processing, the goal is to input each piece of data just once; to avoid additional time (as well as cost and errors). Work content = Activity time × Average number of visits Activity time 10 min, rework 10%  number of visits 1.1 Work content = 1.1(10) = 11 min. Theoretical flow time is computed based on work content not based on Activity time Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 9

10. 5. Modifying the Product Sequencing • Modify the product sequencing - do the quickest thing first. Most processes involve a mix of products, characterized by different flow times for the various units of flow. If we give priority to flows unit that move through the process faster, the overall flow time of the process will decrease. • Product Blue needs two days, Product Red needs one day. • (1+3)/2 = 2.0 • (2+3)/2 = 2.5 • Of course, product mix is often dictated by the market, and even when the organization has some control over it, there may be other relevant factors, such as profitability, resource-utilization issues, and market considerations. Flow Time Levers Ardavan Asef-Vaziri, Sep. 2013 10