Course Structure

Introduction to OTM;
Managing the Overview
Transformation Process

Process Types; Advanced Recognizing

Operations Technologies;

DAO2703 OTM
Process Flows the Plant
Aggregate

Week 4
Production Planning Planning for
the Plant;
Inventory Material Require- Operations PP&C Cycle
Management ments Planning Scheduling
Operations Process Flow Just-In-Time Improving the
Analytics
Theory of
Systems Constraints Plant
Strategic
Operations Strategic
Considerations
Supply Chain
Management
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.
© Copyright National University of Singapore. All Rights Reserved.

Process Analysis Process Analysis: Capacity

A process is any part of an organization that takes inputs and Nova Cruz, Inc. is a producer of high-end kick
transforms them into outputs ideally of greater value to the scooter, known as the Xootr
organization than the original inputs
Components
A single-stage process: all the activities could be collapsed and Stage 1 Stage 2 Stage 3
Finished
Goods
analyzed using a single cycle time to represent the speed of the
process 13 minutes 11 minutes 8 minutes

Process Flow unit: the basic unit of analysis considered in

process analysis (Xootr, customer, patient, etc.)
A multiple-stage process: one that has multiple groups of activities that Activity/process time at each stage/station/step:
are linked through flows amount of time spent on the activity/process,
including changeover/setup and run time
Process capacity: the maximum number of flow
Stage 1 Stage 2 Stage 3 units (Xootrs) that move through the process in a
given unit of time
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.

Process Analysis: Resource Capacity Process Analysis: Bottleneck

Components
Finished
Stage 1 Stage 2 Stage 3 Goods Starving occurs when the activities in a resource must stop because there
is no work
13 minutes 11 minutes 8 minutes
Resource: the entity (stage/station/step) of a process that the flow unit (Xootr) has Stage 1 Stage 2 Stage 3
to visit as part of its transformation from input to output
13 minutes 11 minutes 8 minutes
Resource capacity: the number of flow units (Xootrs) that move through each
stage/station/step in a given unit of time
Stage 1: 1 unit/13 mins = 0.077 units/min Which stage(s) is(are) “starved?”
Stage 2: 1 unit/11 mins = 0.091 units/min
Blocking occurs when the activities in a resource must stop because there
Stage 3: 1 unit/8 mins = 0.125 units/min
is no place (if no buffer is available) to deposit the item just completed
Process capacity = min(Resource capacity 1, …, Resource capacity n)
Process capacity = min(0.077, 0.091, 0.125) units/min = 0.077 units/min (or 4.62 units/hr)
Resource with the lowest capacity (i.e., Stage 1) is the that decides the Stage 1 Stage 2 Stage 3
process capacity 140 minutes 180 minutes 120 minutes
Bottleneck: the resource with the lowest capacity and thus limits the capacity of the
process Which stage(s) is(are) “blocked” or “starved?”
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.
 Process Analysis: Flow Rate Process Analysis: Cycle Time
Components
Finished
Steady state: A process is said to be at steady state when it is not
Stage 1 Stage 2 Stage 3 Goods affected by either the start-up, changeover, or the shut-down activities

13 minutes 11 minutes 8 minutes Stage 1 Stage 2 Stage 3

2 minutes 2 minutes 2 minutes

Flow Rate (FR), also known as throughput: the number of flow units that
move through the process in a given unit of time Process capacity = 1 unit/2 mins (or 0.5 units/min), and if it is process-
constrained, FR = 0.5 units/min?
FR = min(process capacity, demand) assuming sufficient supply of inputs
Not for the first 6 minutes at the start of the workday (the process has just started)
If demand ≥ process capacity, production would be set to run at full speed
Not the last 6 minutes (or more) before the end of the workday
FR = process capacity (1 unit/13 mins = 0.077 units/min)
The process is process-constrained (or process-controlled)
Other than the above, the process is at steady state, and thus it does produce one
flow unit in every 2 minutes
If demand < process capacity, production would be set to run at the speed of
demand Cycle time (CT): the time between the completion of successive flow
FR = demand rate (< 0.077 units/min) units at steady state
1
The process is demand-constrained (or demand-controlled) CT =
FR
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.

Process Analysis: Flow Time Process Analysis: Gantt Chart

Flow time (FT): the time a flow unit spends in the process, which Gantt chart: a graphical way to illustrate the durations of activities as
includes the time it is worked on at various resources as well as any well as potential dependencies between them
time it spends in the Work in process (WIP) inventory
What are the FT’s of the following processes (assuming process-constrained)? Stage 1 Stage 2 Stage 3
5 minutes 4 minutes 3 minutes
Stage 1 Stage 2 Stage 3
Activity
5 minutes 4 minutes 3 minutes

Stage 1
Stage 1 Stage 2 Stage 3
5 minutes 5 minutes 5 minutes Stage 2
Stage 3
Stage 1 Stage 2 Stage 3
5 minutes 3 minutes 4 minutes

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Time
Stage 1 Stage 2 Stage 3
4 minutes 3 minutes 5 minutes Unit 1 Unit 2 Unit 3
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.

Process Analysis: Gantt Chart Process Analysis: Capacity Utilization

Stage 1 Stage 2 Stage 3
Capacity utilization: the extent to which a resource/process uses its
4 minutes 3 minutes 5 minutes
capacity when supporting a given flow rate
FR
Process capacity utilization =
Activity Process capacity
FR
Resource capacity utilization =
Stage 1 Resource capacity
Stage 2 Components
Finished
Stage 3 Stage 1 Stage 2 Stage 3 Goods

13 minutes 11 minutes 8 minutes

If process-constrained, FR = process capacity and thus process capacity utilization

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Time
is 100%
Resource capacity utilization of Stage 1 =
Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Resource capacity utilization of Stage 2 =
Resource capacity utilization of Stage 3 =
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.
 Process Analysis: Capacity Utilization Improvement Using Line Balancing
Time Components Finished
Capacity utilizations of other resources (with assumptions):
Task Activity Stage 1 Stage 2 Stage 3 Goods
(secs)
1 Prepare Cable 32
2 Move Cable 25 13 minutes 11 minutes 8 minutes
3 Assemble Washer 100
Components 4 Apply Fork, Threading Cable End 66 Before Line Balancing
Finished 13 minutes • FR = 0.077 units/min
Stage 1 Stage 2 Stage 3 Goods 5 Assemble Socket Head Screws 114
11 minutes • CT = 13 mins
6 Steer Pin Nut 49 • Resource Utilization:
7 Brake Shoes, Spring, Pivot Bolt 66 • Stage 1 = 100%
8 Insert Front Wheel 100 8 minutes
11 minutes 8 minutes • Stage 2 = 84.62%
13 minutes 9 Insert Axle Bolt 30 • Stage 3 = 61.54%
10 Tighten Axle Bolt 43
Labor content 11 Tighten Brake Pivot Bolt 51
Labor utilization = = 12 Assemble Handle and Cap 118
Labor content+Total Idle Time 13 Assemble Brake Lever and Cable 110
14 Trim and Cap Cable 59 Stage 1 Stage 2 Stage 3
Machine utilization = 15 Place First Rib 33
After Line Balancing
16 Insert Axles and Cleats 96
Implications: 17 Insert Rear Wheel 135
•
•
FR = 0.091 units/min
CT = 11 mins
18 Place Second Rib and Deck 84 11 minutes
Available labor and equipment are not utilized efficiently 19 Apply Grid Tape 56
11 minutes 10 minutes • Resource Utilization:
• Stage 1 = 100%
Fairness issues may arise since some employees work harder than others 20
21
Insert Deck Fasteners
Inspect and Wipe Off
75
95
• Stage 2 = 90.91%
• Stage 3 = 100%
The process is not completely balanced (or synchronized) 22 Apply Decal and Sticker 20
23 Insert in Bag 43
24 Assemble Carton 114
25 Insert Xootr and Manual 94
26 Seal Carton 84 Stage 1 Stage 2 Stage 3
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.

Line Balancing: Heuristic 1 Line Balancing: Heuristic 2

Incremental utilization heuristic (demand-constrained): Longest activity time heuristic (process-constrained):
1
Set FR = demand, then determine CT = 𝐹𝑅 Set CT = longest activity time among all activities
Total activity time (𝑇𝐴)
Determine the number of stages required, n =
Total activity time (𝑇𝐴) Determine the number of stages required, n =
𝐶𝑇
𝐶𝑇
Arrange the tasks to each stage (by trial and error) to maximize each stage’s Arrange the tasks to each stage (by trial and error) to maximize each stage’s
resource utilization resource utilization
Xootr example: suppose that demand = 0.06 units/min (< process capacity) Xootr example: suppose that demand > process capacity = 0.077 units/min
1 1 CT = 135 seconds/unit
FR = demand = 0.06 units/min; CT = = = 1000 seconds/unit Total activity time (𝑇𝐴) 1892 seconds
𝐹𝑅 0.06 units/min
Total activity time (𝑇𝐴) 1892 seconds
n= = = 14.0148 ≈ 15
𝐶𝑇 135 seconds/unit
n= = = 1.892 ≈ 2 (round up to next higher integer)
𝐶𝑇 1000 seconds/unit By trial and error, 19 stages are required in order for CT to be not more than 135
Arrange the tasks to each of the two stages (by trial and error), we get seconds at each stage

Components Finished
Stage 1 Stage 2
Goods
(Tasks 1 – 14) (Tasks 15 – 26)

963 seconds 929 seconds

© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.

Improvement Using Batch Production Process Analysis: Buffer & Inventory

Components Finished Inventory: the (average) number of flow units that are in the process (WIPs)
Stage 1 Stage 2 Goods
Buffer: a storage area between stages where the output of a stage is
Setup time = 8 minutes No setup is required placed prior to being used in a downstream stage (another word for
Runtime = 2 minutes Runtime = 3 minutes inventory, which is used if the role of buffer is to maintain a certain level of
Non-batch production: Batch production (batch size, Q = 8): flow rate (throughput)
8 1
Stage 1 is the bottleneck Process capacity = = units/min
1 8+ 8×2 3 Components
Process capacity = = 0.1 units/min Resource capacity at Stage 1 =
1
units/min Stage 1 WIP
Stage 2 WIP Stage 3
Finished
Goods
8+2
3
FT = (8 + 2 + 3) = 13 minutes (per unit) Resource capacity at Stage 2 =
1
units/min
3 13 minutes 15 minutes 8 minutes
Assuming process-constrained Line is (perfectly) balanced
FR = process capacity = 0.1 units/min A buffer would have to contain enough flow units to avoid starvation of the
1 1
FT = (24 + 24) = 48 minutes (per batch) downstream resource
CT = = = 10 minutes/unit Assuming process-constrained
𝐹𝑅 0.1 It should have enough space to prevent the upstream resource from being
1
FR = process capacity = units/min blocked
3
1 Buffers help to improve the flow rate (throughput)
© Copyright National University of Singapore. All Rights Reserved. CT = = 3 minutes/unit (24 minutes/batch) © Copyright National University of Singapore. All Rights Reserved.
𝐹𝑅
 Process Analysis: Little’s Law Process Analysis: Batch Production
Little’s Law: when a process is at steady state,
Components Finished
WIP Goods
Inventory = Flow Rate × Flow Time (i.e., I = FR × FT) Stage 1 Stage 2

Setup time = 8 minutes No setup is required

Xootr example: Runtime = 2 minutes Runtime = 3 minutes

Components
Stage 1 Stage 2 Stage 3
Finished
Goods
Non-batch production: Inventory Resource capacity at Stage 1

I = FR × FT = 0.1 × 13 = 1.3 units Resource capacity at Stage 2 Process capacity

0.50 100
13 minutes 11 minutes 8 minutes Batch production (Q = 8): 0.45 90
1 0.40 80
I = FR × FT = × 48 = 2 batches (or 16 units) 0.35 70
24

Invenotry
Capacity
0.30 (8, 0.3333) 60
Why choose a batch of size, Q = 8? 0.25 50

Implication: 0.20
0.15
40
30
Out of the three fundamental process performance measures (inventory, flow rate, 0.10
0.05
20
10
and flow time), two can be chosen by management, the other is GIVEN by the Little’s 0.00 0
Law (nature) 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49
Batch Size, Q
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.

Process Analysis: Batch Production Process Analysis: Batch Production

A Bread-Making Operation A Bread-Making Operation
Mix Proof Bake
Mix Proof Bake
Raw Process Time: Process Time: Process Time:
Finished
Materials ¾ hour/100 loaves ¾ hour/100 loaves 1 hour/100 loaves WIP Pack Goods
Process Time: Process Time: Process Time:
Raw ¾ hour/100 loaves ¾ hour/100 loaves 1 hour/100 loaves
Finished Process Time:
Materials
WIP Pack Goods Mix Proof Bake ¾ hour/100 loaves

Process Time: Process Time: Process Time:

Process Time: ¾ hour/100 loaves ¾ hour/100 loaves 1 hour/100 loaves

Mix Proof Bake

¾ hour/100 loaves
Which resource is the bottleneck within each baking line?
Mix Proof Bake
Process Time: Process Time: Process Time:
¾ hour/100 loaves ¾ hour/100 loaves 1 hour/100 loaves Process time ¾ hr ¾ hr 1 hr
Initial assumptions: (100 loaves)
The bakery sells only white bread What is the cycle time of the 1st baking line? 2nd baking line?
Two parallel baking lines, each equipped with a mixer, a proofer, and an oven
The two baking lines share a single packaging line
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.

Process Analysis: Batch Production Process Analysis: Batch Production

Mix Proof Bake
What is the flow time for the entire bread-making process?
Raw
Materials Cycle Time: 1 hour/100 loaves WIP Pack Finished
Goods Mix Proof Bake
Process Time:
Mix Proof Bake ¾ hour/100 loaves Raw Process Time: Process Time: Process Time:
Finished
Materials ¾ hour/100 loaves ¾ hour/100 loaves 1 hour/100 loaves WIP Pack Goods
Cycle Time: 1 hour/100 loaves
Process Time:
What is the cycle time for the entire baking-line operation? Mix Proof Bake ¾ hour/100 loaves

CT of the entire baking-line operation = Process Time: Process Time: Process Time:
¾ hour/100 loaves ¾ hour/100 loaves 1 hour/100 loaves

What is the cycle time for the entire bread-making process?

What is the (average) inventory in the bread-making operation?
Both Baking Lines Pack
Process time ½ hr ¾ hr
(100 loaves)
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.
 Process Analysis: Batch Production Process Analysis: Batch Production
Mix Proof Bake Mix Proof Bake
Process Time: Process Time: Raw
Raw Process Time: Finished
Materials ¾ hour/100 loaves ¾ hour/100 loaves 1 hour/100 loaves WIP Finished Materials WIP Pack Goods
Pack Goods

Process Time:
Process Time: Mix Proof Bake ¾ hour/100 loaves
Mix Proof Bake ¾ hour/100 loaves
Cycle Time: ½ hour/100 loaves
Process Time: Process Time: Process Time:
¾ hour/100 loaves ¾ hour/100 loaves 1 hour/100 loaves Cycle Time: ¾ hour/100 loaves

Suppose that the bakery is considering replacing some of its existing (i) purchasing the two new ovens will reduce the bottleneck time for the entire
equipment with more advanced and faster equipment. The choice is baking line operation from ½ hour/100 loaves to 3Τ8 hour/100 loaves but will not
between: increase the bakery’s overall capacity since the baking line operation is not the
bottleneck
(i) purchasing two new ovens that are each capable of baking a batch of 100
loaves in ¾ hour, or (ii) with the new packaging line, the bottleneck time for the entire bread-making
process
(ii) replacing the packaging line with a new one that is capable of packaging a
batch of 100 loaves in ½ hour Both Baking Lines Pack
Which option would allow the greatest increase in the bakery’s overall Process time ½ hr ½ hr
capacity?
© Copyright National University of Singapore. All Rights Reserved.
(100 loaves)
© Copyright National University of Singapore. All Rights Reserved.

Process Analysis: Batch Production Process Analysis: Batch Production

Croissant Manufacturing Croissant Manufacturing
What is the cycle time of the dough-making line?
RM: WIP:
Dough Mix Proof Roll & Cut Dough WIP:
RM:
Dough Mix Proof Roll & Cut Dough
Process Time: Process Time: Process Time:
5 min/50 croissants 15 min/50 croissants 5 min/50 croissants
Process Time: Process Time: Process Time:
Finished 5 min/50 croissants 15 min/50 croissants 5 min/50 croissants
Fill & Fold Bake Pack
Goods Finished
Process Time: Process Time: Process Time:
Fill & Fold Bake Pack
RM: Goods
WIP: 5 min/50 croissants 20 min/50 croissants 10 min/50 croissants
Filling Mix Filling Process Time: Process Time: Process Time:
Filling RM: WIP: 5 min/50 croissants 20 min/50 croissants 10 min/50 croissants
Filling Mix Filling
Process Time: Filling
10 min/50 croissants
Process Time:
10 min/50 croissants
Initial assumptions:
Making dough and mixing filling are done separately Mix Proof Roll & Cut
Both tasks (making dough and mixing filling) must be completed before
Process time (50 CROIS) 5 mins 15 mins 5 mins
croissants can be filled, folded, baked, and packed
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.

Process Analysis: Batch Production Process Analysis: Batch Production

Croissant Manufacturing Croissant Manufacturing
What is the cycle time of the combined dough-making and mix-filling What is the cycle time of the entire croissant-making process?
operations?
RM: WIP:
RM: WIP: Dough Dough
Mix Proof Roll & Cut
Dough Mix Proof Roll & Cut Dough
Process Time: Process Time: Process Time:
Process Time: Process Time: Process Time: 5 min/50 croissants 15 min/50 croissants 5 min/50 croissants
5 min/50 croissants 15 min/50 croissants 5 min/50 croissants
Cycle Time (Dough-Making): 15 min/50 croissants Finished
Finished Fill & Fold Bake Pack
Cycle Time (Dough-Making): 15 min/50 croissants Fill & Fold Bake Pack Goods
Goods
Process Time: Process Time: Process Time:
Process Time: Process Time: Process Time: RM: WIP: 5 min/50 croissants 20 min/50 croissants 10 min/50 croissants
RM: WIP: 5 min/50 croissants 20 min/50 croissants 10 min/50 croissants Filling Mix Filling
Filling Mix Filling Filling
Filling
Process Time:
Process Time: 10 min/50 croissants
10 min/50 croissants
Cycle Time (Dough-Making & Mix-Filling): 15 min/50 croissants

Dough Making Mix Filling Dough-Making & Mix-Filling Fill & Fold Bake Pack
Process time (50 CROIS) 15 mins 10 mins Process time (50 CROIS) 15 mins 5 mins 20 mins 10 mins
© Copyright National University of Singapore. All Rights Reserved. © Copyright National University of Singapore. All Rights Reserved.
 Process Analysis: Batch Production
Croissant Manufacturing
What is the flow time for the entire croissant-making process?

RM: WIP:
Dough Mix Proof Roll & Cut Dough

Process Time: Process Time: Process Time:

5 min/50 croissants 15 min/50 croissants 5 min/50 croissants
Finished
Fill & Fold Bake Pack
Goods
Process Time: Process Time: Process Time:
RM: WIP: 5 min/50 croissants 20 min/50 croissants 10 min/50 croissants
Filling Mix Filling
Filling
Process Time:
10 min/50 croissants

© Copyright National University of Singapore. All Rights Reserved.