Process Management

By
Alok Kumar Singh

A.K.Singh, IMI, Delhi

 Process Management
 The objective is to create a process to produce
products that meets customer requirements within
cost and other managerial constraints.
How to produce a product or provide a service
that
 Meets or exceeds customer requirements
 Meets cost and managerial goals
 Has long term effects on
 Efficiency and production flexibility
 Costs and quality
A.K.Singh, IMI, Delhi
 Process, Volume, and Variety
(Product Process Matrix)
Volume
Low Repetitive Process High
Volume Volume
High Variety
one or few units Process Focus Mass Customization
per run, projects, job shops (difficult to achieve, but huge
(allows (machine, print, hospitals, rewards)
customization) restaurants) Dell Computer, Asian Paints
Variety

Changes in
Modules
modest runs, Repetitive
standardized (autos, motorcycles, home
modules appliances)
Hero, Maruti
Changes in
Attributes (such as
grade, quality, size, Poor Strategy Product Focus
thickness, etc.) (Both fixed and (commercial goods, steel,
long runs only variable costs glass)
are high) Power Plants
A.K.Singh, IMI, Delhi
 Process Strategies
Four basic strategies
1. Process focus
2. Repetitive focus
3. Product focus
4. Mass customization
Within these basic strategies there are many
ways they may be implemented.
For service process design
• Service Blueprint
A.K.Singh, IMI, Delhi
 Process Focus
 Facilities are organized around specific activities
or processes
 General purpose equipment and skilled
personnel
 High degree of product flexibility
 Typically high costs and low equipment
utilization
 Product flows may vary considerably making
planning and scheduling a challenge

A.K.Singh, IMI, Delhi

 Repetitive Focus

 Facilities often organized as assembly lines

 Characterized by modules with parts and
assemblies made previously
 Modules may be combined for many output
options
 Less flexibility than process-focused facilities
but more efficient

A.K.Singh, IMI, Delhi

 Product Focus
 Facilities are organized by product
 High volume but low variety of products
 Long, continuous production runs enable
efficient processes
 Typically high fixed cost but low variable
cost
 Generally less skilled labor

A.K.Singh, IMI, Delhi

 Mass Customization
 The rapid, low-cost production of goods and
service to satisfy increasingly unique
customer desires
 Combines the flexibility of a process focus
with the efficiency of a product focus
 Tightly controlled inventory management,
Tight schedules & Responsive supply-chain
partners.
 Collaborative (Lenskart), Adaptive (Havells
Switches), Cosmetic (All new …) , Transparent
(Services) A.K.Singh, IMI, Delhi
 Comparison of Processes
PROCESS FOCUS REPETITIVE FOCUS PRODUCT FOCUS MASS
(LOW-VOLUME, (MODULAR) (HIGH-VOLUME, CUSTOMIZATION
HIGH-VARIETY) LOW-VARIETY) (HIGH-VOLUME,
HIGH-VARIETY)

Small quantity and Long runs, usually Large quantity Large quantity and
large variety of a standardized and small large variety of
products product from variety of products
modules products

Broadly skilled Moderately trained Less broadly Flexible operators

operators employees skilled
operators

Instructions for Few changes in the Standardized job Custom orders

each Job instructions instructions requiring many
job instructions

High Inventory Low inventory Low inventory Low inventory

relative to the
value of the
product

A.K.Singh, IMI, Delhi

 Comparison of Processes
PROCESS FOCUS REPETITIVE FOCUS PRODUCT FOCUS MASS
(LOW-VOLUME, (MODULAR) (HIGH-VOLUME, CUSTOMIZATION
HIGH-VARIETY) LOW-VARIETY) (HIGH-VOLUME,
HIGH-VARIETY)

Finished goods are Finished goods are Finished goods Finished goods are
make to order Assemble to are make to between make
and not stored order. Stock as and Assemble-
forecasted to-order

Scheduling is Scheduling is Scheduling is Sophisticated

complex routine routine scheduling
accommodates
custom orders

Fixed costs are low Fixed costs are Fixed costs are Fixed costs tend to
and variable dependent on high and be high and
costs high flexibility of the variable costs variable costs
facility low low

A.K.Singh, IMI, Delhi

 Process Analysis and Design

 Is the process designed to achieve a

competitive advantage?
 Does the process eliminate steps that do
not add value?
 Does the process maximize customer
value?
 Will the process win orders?
 Crossover chart ???

A.K.Singh, IMI, Delhi

 Process Analysis and Design

 Flowcharts
 Shows the movement of materials, Product, People
 Time-Function/ Process Mapping
 A flow chart with time frame
 Value-Stream Mapping
 Where value is added in the entire supply chain
 Extends from the customer back to the suppliers
 Process Charts
 Uses Symbols, time and Distance
 Provides Structured way of analyze and record the activities
A.K.Singh, IMI, Delhi
 Flowchart

Frame tube Frame-building Frame Hot-paint

bending work cells machining frame painting
THE ASSEMBLY LINE
TESTING Engines and
Incoming parts transmissions
28 tests
Arrive on a JIT
schedule from a
Air cleaners Oil tank work cell 10-station work
cell in Milwaukee
Fluids and mufflers Shocks and forks

Fuel tank work cell Handlebars

Wheel work cell Fender work cell

Roller testing
Crating

A.K.Singh, IMI, Delhi

 “Baseline” Time-Function Map
Order Receive
Customer product product

Process
Sales order
Order

Production Wait
control

Product
Order

Plant A Print

Product
WIP

Warehouse Wait Wait Wait

Product
WIP
WIP
WIP

Plant B Extrude

Transport Move Move

12 days 13 days 1 day 4 days 1 day 10 days 1 day 0 day 1 day

Figure 7.4(a)
52 days
A.K.Singh, IMI, Delhi
Process Charts

A.K.Singh, IMI, Delhi

 Process Performance Matrices
• Run time : The time required to produce a batch of
Products
• Set Up Time : The time required to prepare machines
for producing another product.
• Operation Time : The sum of Run time and Setup time.
• Flow Time/ Lead time : Average time for one unit to
move through the system
• Cycle Time : Average time between completion of
successive Units
• Flow rate/ Throughput Rate : Min (Available Input Rate,
Demand Rate, Process Capacity )
• Utilization : could be for activity as well as process
A.K.Singh, IMI, Delhi
 A very useful relationship
Little’s Law:
Average WIP = (Flow Rate) x (Flow Time)

• Little’s Law is a fundamental law of system dynamics

• Gives good results for a variety of scenarios
• Flow Rate is in (Units/time).

Example: A facility can produce 200 units per week, and the
average lead time for production is 2 weeks. According to
Little’s law the average WIP = 200 x 2 = 400 units.

A.K.Singh, IMI Delhi

 Example 1
• Consider a Process having 3 activities/ resources . The other
details are given in table
– What is the Bottleneck of the Process
– What is the capacity of the process
– What is the flow rate if demand is 8 units/ hr and no restriction on
Supplies.
– What is the utilization of each resource if the demand is 8 units/ hr.
– What is the process Utilization
Activity/ Resource Processing Time No of Workers

1 10 2

2 6 1

3 16 3

A.K.Singh, IMI, Delhi

 Example 2

A B C

Processing 2 Min/ Unit 2 Min/ Unit 2 Min/ Unit

Time
What is the flow time ?
What is the cycle time ?
What is the throughput rate if there is no restriction on supply
and demand ?
What is the average WIP inventory ?
A.K.Singh, IMI, Delhi
 Example 3

A B C

Processing
Time 2 Min/ Unit 6 Min/ Unit 2 Min/ Unit

What is the flow time ?

What is the cycle time ?
What is the throughput rate if there is no restriction on supply and demand
?
What is the average WIP inventory ?
What will happen if number of worker for activity B is increased to 2.
What will happen if number of worker for activity B is increased to 3.
Is the decision also based on type of activity ?
A.K.Singh, IMI, Delhi
A.K.Singh, IMI, Delhi
A.K.Singh, IMI, Delhi