Process Design and Analysis

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PROCESS

Process is a set of interrelated or interacting activities, which

transforms inputs into outputs

“If you cannot define what you are doing as a process, you do not
understand what you are doing.” -- W. Edwards Deming ..

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 STARTING AT THE TOP
Key business activities can be defined at different levels of the organization

New Product Demand Demand Customer

Level 1 process development Fulfillment Service
Generation

Level 2 process Ordering

Producing Packing Shipping
Materials

Level 3 process Mixing Filling Sealing Packing

◦ Level 1 = highest-level view of work in the organization

◦ Level 2 = work that flows across several departments or within an entire department or work area
◦ Level 3 = a detailed view of of a particular process

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FROM PRODUCT ATTRIBUTE TO PROCESS COMPETENCY
PRODUCT AND ITS ATTRIBUTE: Strategies for Competitive Advantage

1. Cost leadership – cheaper

2. Response – more responsive
3. Differentiation – better, or at least different
4. Product Quality –inherent characteristics of an
object fulfils the requirement
The four major strategies for competitive advantage are differentiation, cost leadership, response and product
quality . While it may be possible to compete on all four at once, most firms focus on one of these major
strategies
 FOUR DIMENSIONS OF
PROCESS COMPETENCY

Product Attribute Process Competency

(External) (Internal)
Cost Cost

Response time Flow time

Variety Flexibility

Quality Quality

5
5
 SIPOC

S C
U U
P S
P T
L Inputs Process Outputs O
I M
E E
R R
S S
◦ Applies to all kinds of work, whether repetitive in nature or “one-of-a-kind.”
◦ Having a high-level view of a process helps to:
◦ define project boundaries (starting and ending points);

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 SIPOC: Inputs

Ideas Process

◦ You may end up with 50–100 input variables at this point.

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 SIPOC: High-Level Process View

Process

A high-level view is often captured as a top-level flowchart

Step 1: Step 2: Step 3: Step 4:

Bottling Labeling Inspecting Packaging

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 SIPOC: OUTPUT

Process Information

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 QUESTIONS TO HELP WITH SIPOC

Inputs/Suppliers Outputs
• Where does the information or
material you work on come from?
Who are your suppliers? ◦ What product does this process make?
◦ What are the outputs of this process?
• What do they supply? ◦ At what point does this process end?
• Where do they affect the process
Customers
flow?
• What effect do they have on the
◦ Who uses the products from this process?
process and on the outcome?
◦ Who are the customers of this process?
Process steps
• What happens to each input?
• What conversion activities take
place?

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 Class Exercise 2.1

PROCESS MAP OF A PHOTOCOPYING

Time 5 minutes

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 SIPOC Example
Suppliers Inputs Process Outputs Customers
Manufacturer Copier Copies You

Office Supply
Company Paper File

Toner Making a Others

photocopy

Yourself Original

Power Company Electricity

Process Steps

Remove
Put original Adjust Press
Close Lid originals
on glass Settings START
and copies

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 LEAD TIME

Definitions of LT vary. There are two kinds

(a) The time between the placement of an order and delivery. This is also called
the “procurement LT.”
(b) The time between the preparation of the material and the completion of the
finished product. “manufacturing LT.”

(JIS Z 8141-1206)

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 TYPE OF PROCESS

MTS/ BTS (Make To Stock/ Build To Stock): Produce in anticipation of customer order

MTO/ BTO (Make To Order/ Build To Order): Produce in response to customer order

ATO/CTO (Assemble To Order / Configure To Order ): : Sub-assembly are made to stock and final assembly are made to order

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Flow time (for flow units): It includes the time that the unit spends actually being
worked on, together with the time spent waiting in a queue. This refers to the amount
of time that a flow unit takes to go through the entire process. In a coffee shop, the
amount of time that it takes a customer to enter and leave a shop would be the flow
time of a customer moving through the whole system. In a manufacturing process, the
flow time refers to the average amount of time that it takes to produce a product.

Cycle Time is the average amount of time you need in order to produce one unit. It is
the time it takes you to complete the production process of one product, from start to
finish.

Throughput Time refers to the average number of flow units that move through a
process per specific unit of time. It is also referred to as flow rate. An example is the
number of customers in a coffee shop served per hour or per day.

For example, during a specified period of time (once again, this is your Net Production
time, and let’s say it equals 60 minutes) you produce 5 units — 5 units per 60 minutes,
this is your Throughput Time.
We can further conclude that it takes you 12 minutes to produce one unit
during that 60 minutes (5 X 12 = 60) — 12 minutes per product, this is your Cycle Time.

Takt Time = Net Production Time/Customer Demand, Takt time is the maximum
amount of time each resource in a process can dedicate to converting a flow unit
from an input into an output
Cycle Time = Net Production Time/Number of Units made
Lead Time (manufacturing) = The time between the preparation of the material and
the completion of the finished product. 8/30/2023 28
PROCESS PERFORMANCE MEASUREMENT

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 1. Exercise on Airport Operation

Personal
Screening
(30 sec)

Retrieving
prepare for
Bags
screening & deposit
(60 sec)
all bags
(30 sec)

X-ray
Screening
(1.5 trays)

(60 sec)

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 MANAGING THEORITICAL FLOW TIME

1. MOVE THE WORK CONTENT OFF THE CRITICAL PATH ( WORK IN PARALLEL)

2. ELIMINATE NON-VALUE ADDING ACTIVITY ( WORK SMARTER)

3. REDUCE THE AMOUNT OF REWORK ( DO IT RIGHT FIRST TIME)

4. INCREASE THE SPEED OF OPERATION ( WORK FASTER)

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 Little’s Law
For any stable process average inventory equals throughput multiplied by average flow time

Average Inventory (I) = Average Flow Rate (R ) X Average Flow Time (T)

Flow Time: It indicates the time needed to convert inputs into outputs and includes any time spent by a flow
unit waiting for processing activities to be performed.
Flow Rate: Number of flow units that flow through a specific point in the process per units time
(throughput rate)/Average Flowrate or Throughput Rate (R): Average no of flow units that flow through
(into or out of) the process per unit of time.
Inventory: When the inflow rate exceeds the outflow rate, the number of flow units inside the process
increases. Inventory is the total number of flow units present within process boundaries (WIP)

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 Home Work
1. A branch office of an insurance company processes 10,000
claims per year. Average processing time is three weeks. We
want to know how many claims are being processed at any
given point. Assume that the office works 50 weeks per year.

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Design of good and services
 New Products Fail
According to professor Clayton Christensen (Harvard Business
School), there are over 30,000 new products introduced every
year, and 95 percent fail.

According to Professor Inez Blackburn (University of Toronto), the

failure rate of new grocery store products is 70 to 80 percent.

https://www.inc.com/marc-emmer/95-percent-of-new-products-fail-here-are-6-steps-to-make-sure-yours-dont.html
Why do products fail in the market?
Failure to Understand Consumer Needs and Wants
Targeting the Wrong Market
Incorrect Pricing
Prolonged Development or Delayed Market Entry
Poor Execution
Weak Team and Internal Capabilities

https://community.uservoice.com/blog/why-products-fail/
http://www.baddesigns.com/examples.html
Product Design
What the Customer What Marketing described
wanted

What Engineering designed

What Manufacturing built

QUALITY FUNCTION DEPLOYMENT

Quality Function Deployment

◦ Uses the voice of the customer to build a design tool:

◦ House of quality

QFD: An approach that integrates the “voice of the

customer” into the product and service
development process.
Quality Function Deployment
Identify customer wants
Identify how the good/service will satisfy customer wants
Relate customer wants to product hows
Identify relationships between the firm’s hows
Develop importance ratings
Evaluate competing products
House Of Quality
Tradeoff
Matrix
Importance Product
characteristics

Customer Relationship Competitive

requirements matrix assessment

Technical assessment and

target values
House of Quality Example
Correlation:
X Strong positive
Positive
X X
X X
X Negative
* Strong negative

Accoust. Trans.
Engineering

Force on level

Force needed
Force needed
Competitive evaluation

to close door

to open door
Characteristics

resistance

resistance
Door seal
X = Us

Window
A = Comp. A

ground

Water
Customer B = Comp. B
(5 is best)
Requirements 1 2 3 4 5

X AB
Easy to close 7
Stays open on a hill 5 X AB

Easy to open 3 XAB

A XB
Doesn’t leak in rain 3
No road noise 2 X A B

Evaluation 63 63 45 27 6 27 Relationships:

level to 7.5 ft/lb

Reduce energy
Strong = 9

Reduce energy
Reduce force
current level

current level
current level
to 7.5 ft/lb.
Medium = 3
Target values

Maintain

Maintain
Maintain
Small = 1

to 9 lb.
5 B
BA BA
X B B BXA X
Technical evaluation 4
A A X
3
(5 is best) 2
X
X A
1

An Automotive Door
 VALUE ANALYSIS (VA)

❑Value Analysis can be defined as the organized and systematic

approaches to provide a required function at the lowest cost consistent
with specific performance, quality and reliability.

❑Shortage of materials during World War II

❑General Electric company found that many of the substitutes have better
or equal performance at less cost.
❑Lawrence D. Miles launched an effort to make the concept systematic for
US defence products
❑Establishment of Society of American Value Engineers “SAVE” in 1959
VE/VA
The value of a function is defined as the relationship of cost to
performance

Valuemax = Performancemax / Costmin

Valuemax = Functionmax / Resourcesmin

 VE/VA
◦Value enhancement (what are the possible ways for value
addition for the products)

◦Material substitution (how to select and use the alternate

materials for the product under consideration).

◦Cost reduction (how much reduction in total product cost

with value enhancement and material substitution).
Cost Reduction of a Bracket
via Value Engineering