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:
1. Honda transforms steel, rubber, and plastic into cars
2. McDonalds transforms meat, potatoes, and sauces
into packaged food
3. Dell transforms customer orders into PCs

Process Analysis
Lets 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

How can we analyze a process? Map it!

What are the relevant performance measures?

Process Flow Charts

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

Make-to-order vs. make-to-stock

Task 1

Task 2

FGI

Demand
Task 1

Task 2

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?

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?
Task 1

Task 2

Task 3

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?

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

Throughput rate =

1
Cycle Time

Capacity = throughput rate

Computing Cycle Times

Processing a fixed amount of work

Example: Producing 100 cars. On average, production takes

5 hours per car. It takes 50 hours to set up the production line.

Cycle Time =

Set-up Time + (Batch size) x (Time per unit)

Batch size

Computing Cycle Times

Setup time:
15 min

Production Time:
25min/unit

Question: What is the cycle time between points A and B

of the process, if we work in batches of 10?

What is a bottleneck?
Bottleneck is the
process stage with the
smallest throughput rate
(longest cycle time)
Which task is the bottleneck?

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?

3 units/hr

5 units/hr

2 units/hr

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

Throughput time =

WIP
Throughput rate

(Littles Law)

How do we analyze a complex process

1. Look at the process step by step
2. Determine throughput rate (i.e. capacity) of
each step
3. Identify the process bottleneck (smallest
processing rate, or largest cycle time).
4. The capacity of the process is equal to the
capacity of the bottleneck

Example : hammer production process

Description
1. Work begins at the machining center. Here two lines form
the heads of the hammers and place them in a buffer.
2. Handles are attached at the assembly step.
3. Finished hammers are sent to the next stage, where they
are packed and shipped.

machining
machining

WIP

assembly

WIP

pack and
ship

Lets analyze the hammer process

machining
machining

WIP

assembly

WIP

pack and
ship

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.

Step 1: Machining
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 2: Assembly
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 3: Pack and ship

Similar to machining:
30 + 100 2 = 230 min/100 units
Pack & ship capacity is:
100 / 230 = 0.43 units/min
= 26.09 units /hr

Hammer process: what is the capacity?

Process Step

Capacity (units/hr)

Machining

27.26

Assembly

25.50

Pack & Ship

26.09

Assembly is
the
bottleneck!

Some vocabulary
Buffering: Keep some inventory between stages
0

1/2

Starving: Stoppage of activity because of lack of material

1

0/2

Blocking: Stoppage of flow because there is no storage place

1
1

2/2

1
1

More Examples..
Lets study this make-to-stock system.
CT = 3s

CT = 1s

Task 1

Task 2

FGI

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?

More Examples..
CT = 3s

CT = 1s

Task 1

Task 2

FGI

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

More Examples..
Lets study this make-to-stock system:
CT = 1s

CT = 3s

Task 1

Task 2

FGI

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?

More Examples..
CT = 1s

CT = 3s

Task 1

Task 2

FGI

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

More Examples..
Lets study this make-to-stock assembly system:
CT = 3s

CT = 3s

Task 1

Task 2
CT = 4s
Task 3

Note: No buffer space between stations

Is any task starved or blocked?
What is the capacity of the process?

CT = 2s
Task 4

FGI

More Examples..
CT = 3s

CT = 3s

Task 1

Task 2
CT = 4s

CT = 2s
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).