Process Analysis

“If you cannot describe what you are doing as a

process, you do not know what you are doing.
What is a process?

A process is a series of independent tasks that transforms

an input into output material of higher value for the organi
zation

Examples:
1. Honda transforms steel, rubber, and plastic into cars
2. McDonald’s transforms meat, potatoes, and sauces int
o packaged food
3. Dell transforms customer orders into PC’s
Process Analysis

Let’s 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

FGI
Task 1 Task 2

Demand

Task 1 Task 2

If demand is satisfied by FGI then the system is make-to-stock, ot

herwise 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 me

asure 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 throug
h each task? The process as a whole?
• What is the bottleneck? Which production step limits the pro
cess capacity?
• What is the throughput time? How long does it take to get thr
ough the system?
How do we measure capacity?
Capacity of a task is the physical limitation in terms of “ho
w much can be processed at this task”

Cycle Time: Average time for completion of a unit at a productio

n step or process. Does not include waiting. Measure
d as time/unit
Throughput Rate: Average number of units processed over a t
ime interval. Measured as units/time

1
Key Throughput rate =
relationship 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.

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

Cycle Time =
Batch size
Computing Cycle Times

Setup time: Production Time:

15 min 25min/unit

A B

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 WIP
Throughput time =
relationship Throughput rate

(Little’s Law)
How do we analyze a complex process…

1. Look at the process step by step

2. Determine throughput rate (i.e. capacity) of eac
h step
3. Identify the process bottleneck (smallest proces
sing rate, or largest cycle time).
4. The capacity of the process is equal to the capa
city of the bottleneck
Example : hammer production process

Description
1. Work begins at the machining center. Here two lines for
m 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 ar
e packed and shipped.

machining
pack and sh
assembly
ip
machining
Let’s analyze the hammer process…

machining
pack and sh
assembly
ip
machining

Process Data:
• machining: Set up 80 min. 4 min per unit processing. Batc
h size 200. Identical lines.
• assembly: Manual by two workers (no set up). Each hamm
er requires 40 min processing. 34 workers available.
• pack and ship: 30 min set up, 2 min per unit processing. L
ot 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 c
apacity is 2  13.63 = 27.26 units/hour.
Step 2: Assembly

• 1 unit requires 40 min processing time, so the through

put rate is:
1 unit / 40 min = 0.025 units/min
= 1.5 units/hr
• 34 workers available, but 2 workers are required for ea
ch 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
1/2
0 1

Starving: Stoppage of activity because of lack of material

0/2
1 0

Blocking: Stoppage of flow because there is no storage place

2/2
1 1

1 1
More Examples..
Let’s 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..
Let’s 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..
Let’s study this make-to-stock assembly system:

CT = 3s CT = 3s

Task 1 Task 2 CT = 2s
CT = 4s Task 4 FGI
Task 3

Note: No buffer space between stations

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

CT = 3s CT = 3s

Task 1 Task 2 CT = 2s
CT = 4s 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).