Professional Documents
Culture Documents
Sessions # 4 & 6
1. A pragmatic definition
A Business Process describes how something is
done in an organization
In general terms…
Business - Organizational entity that deploys resources to provide
customers with desired products and services
Resources
Process
1. Individual processes
– Carried out by a single individual
Make up
Make up
CEO
Buying a TV
commercial
Examples:
PROCURE-TO-PAY
ORDER-TO-CASH
RECORD-TO-REPORT
Process
Flow units Architecture Resources
Process Complexity
Information structure
• Specifies the information required for making decisions and performing
activities in a process
• Limited information availability is a common cause for process
inefficiencies
– Information enables coordination!
WIP
Inventory of Cloth
Inventory
& Other materials
Sleeves &
collar
Design stitching
Spreading Choice Cutting
Torso stitching
Assembly,
Pressing & buttons &
Inspection other
material
Inventory of
Shirts
Multistage process
Stage 1 Stage 2 Stage 3
• Make-to-order
– Only activated in response to an actual order
– Both work-in-process and finished goods inventory
kept to a minimum
– Response time is slow
• Make-to-stock
– Process activated to meet expected or forecast demand
– Customer orders are served from target stocking level
• Hybrid
– Combines the features of both make-to-order and make-
to-stock
Inspect &
Prepare Pre-treat Paint Dry
Pack
8 minutes 12 minutes 20 minutes 10 minutes
5 minutes
Every batch of four toys come out exactly in an interval of 20 minutes which is the cycle time
for the process
Inspect &
Prepare Pre-treat Paint Dry
Pack
7.5 pallets/hr 5 pallets/hr 3 pallets/hr 6 pallets/hr ??
12 pallets/hr
• The system can produce at the rate of 3 pallets per hour (12 toys)
• For a 8 hour operation the daily production is 24 pallets (96 toys)
• Capacity is unbalanced across different stages of the process
Given:
- Prepare stage ~ Break-up of 8 minutes
o Set-up (onetime) = 4 minutes and
o Pallet Loading time = 4 minutes
- The pre-treat and Inspect & Pack stages can accommodate only one batch at a
time
- The painting booth can hold up to 3 pallets during spraying
o Painting can happen for 1, 2 or 3 pallets at a time
- There are enough pallets in the system
- The only resource needed for drying is space, which is amply available
Inspect &
Prepare Pre-treat Paint
Pack
(8 minutes) (12 minutes) (20 minutes) Dry
(5 minutes)
7.5 pallets/hr 5 pallets/hr 3 pallets/hr
12 pallets/hr
Inspect &
Prepare Pre-treat Paint
Pack
(8 minutes) (12 minutes) (20 minutes) Dry
(5 minutes)
7.5 pallets/hr 5 pallets/hr 3 pallets/hr
12 pallets/hr
Pre-treat
(12 minutes)
Prepare 5 pallets/hr Inspect &
Paint
(4+ (3*4) = Pack
(20 minutes) Dry
16 minutes) (5 minutes)
11.25 pallets/hr Pre-treat 9 pallets/hr
12 pallets/hr
(12 minutes)
5 pallets/hr
Ways to address
• Never leave it idle AND Reduce strain on bottleneck
• Manage WIP Limits AND consider batch processing
• Add more people / resources
• Minimising downtime, setup and changeover time
• Eliminating non-value activities
• ….
A B C I
0.75
(10) (10) (10) (4)
0.25
What is the average flow time?
a) If no jobs are rejected and sent for rework.
b) If 25% of the jobs need rework but never more than once.
c) If 25% of the jobs need rework but reworked jobs are no different in
quality than ordinary jobs.
a. Flow Time = FTA + FTB+ FTC + FTI = 10+ 10+ 10+ 4 = 34 Minutes
b. Flow Time = FTA + (1+r)* {FTB+ FTC + FTI} = 10+ 1.25*{10+ 10+ 4} = 40 Minutes
c. Flow Time = FTA + (FTB+ FTC + FTI}/(1-r) = 10+ {10+ 10+ 4}/(1-0.25) = 42 Minutes
m
CT = p1T1+p2T2+…+pmTm= pi Ti
i 1
A 0.8 C
(10) (20)
0.2
B
(15)
A C E
(12) (20) (15)
D
(18)
What is the average flow time for the process segment?
Flow Time = FTA + Max{FTB+FTC+FTD} + FTE
= 12 + 20 + 15
= 47 Minutes
a. What is the current maximum output of the process assuming that no one works
overtime?
b. How long will the picking and packing operations have to work if we have a day
where the order taker works at his maximum capacity?
c. Given b, what is the maximum number of orders waiting to be picked?
d. Given b, what is the maximum number of orders waiting to be packed?
e. If we double to packing capacity (from 60 to 120 orders per hour), what impact does
this have on your answers in the parts b, c and d?
10/18/2018 Prof Kalyana C Chejarla
Process Analysis Cont’d
Example
Working Hours: 12
a. Maximum Output: Capacity of process* Working Hours = 60*12 = 720
Orders
b. Pick Order has to work for 1200/80= 15 Hours if order taker works at max
capacity and Pack order will take 1200/ 60= 20 Hours for the activity.
c. Orders accumulated before pick order is at rate of 20 per hour. Since orders
are taken for 12 hours; maximum number of orders waiting would be:
20*12= 240 Orders
d. Same as above
e. Bottleneck now is ‘Pick’ process
i. Order takers max capacity = 1200 units in a 12 hour shift.
ii. Picking will see inventory being built before it at the rate of 20 per hour for 12
hours (i.e, a max of 240 units) and then starts to slide down to zero in another
240/80 = 3 hours.
iii. There will not be any inventory build-up before ‘Pack’.
Lost Time
Actual (Scrap, Rework,
Operations Unnecessary Activities)
Time Moving Time
12
10
8
IN(t)
Jobs
6
OUT(t)
4
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
OUT(t) = IN(t)
OUT(t) > IN(t)
WIP(t)
WIP
t1 t2 t3
• Customer Flow: The above restaurant processes on average 1,500 customers per day (15
hours). On average there are 75 customers in the restaurant (waiting to place the order,
waiting for the order to arrive, eating etc.). How long does an average customer spend at
the restaurant and what is the average customer turnover?
λ (arrival rate) = 1500 customers per day i.e. 100 customers per hour,
L (Length of queue) = 75 customers,
W (Flow time) = L/ λ = (75 customers)/(100 customers per hour) = ¾ hr
• Job Flow: Shamshabad branch office of the New India insurance company processes 10,000
claims per year. The average processing time is 3 weeks. Assuming 50 weeks in a year,
what is the average number of claims “in process”.
λ (arrival rate) = 10000 claims /year,
W (Flow time) = (3 weeks )/(50 weeks /year),
L (Length) = λ * W = (10000 claims per year)* (3/50 years) = 600 claims
Little’s Law in Process Analysis Cont’d
Capacity (in terms of batches / hour) of Laundry System =Min {[60/3{Joe}], [(60/20)*5
{Washing}], [{(60/30)*7 {Drying}], [(60/10)*2{Ironing}]}
Bottleneck= Ironing
• TOC Methodology
1. Identify the system’s constraints
2. Determine how to exploit the constraints
– Choose decision/ranking rules for processing jobs in
bottleneck
3. Subordinate everything to the decisions in step 2
4. Elevate the constraints to improve performance
– For example, increasing bottleneck capacity through
investments in new equipment or labor
5. If the current constraints are eliminated return to step 1
– Don’t loose momentum, continuous improvement is
necessary!