4.

Flow-Time Analysis

Flow Time
1-Introduction

Based on the book: Managing Business Process Flows

 4. Flow-Time Analysis

Competitive Advantages of a shorter flow time

Shorter response time (both in production and product design).

More responsive to changes in customer preferences and
technological advancements.
Delayed differentiation (Postponement).
Moving from the extreme of MTS towards MTO.
Lower inventory costs (due to Little’s Law).

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 4. Flow-Time Analysis

Lean Operations: The Real Cost of Inventory

Inventory adversely affects all competing edges (P/Q/V/T)
 Has cost:
 Physical carrying costs
 Financial costs
 Causes obsolescence:
 Due to market changes
 Due to technology changes
 Leads to poor quality:
 Feedback loop is long
 Hides problems:
 Unreliable suppliers.
 High defect rate.
 Long set-up times.
 Frequent machine breakdowns.
 Leads to long flow time
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 4. Flow-Time Analysis

Direct Methods of Measuring Flow Time

 Randomly sample flow units over an extended period of time.

 Measure the flow time for each flow unit from entry to exit.
 Compute the average of flow times.

 During a given month, a sample of 50 applications was taken

 The average flow time = 20.85 working days.

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 4. Flow-Time Analysis

Indirect Methods of Measuring Flow Time

 Count the number of units produced over an extended period of

time.
 R = number of units produced / duration of time period .
 Count the number of units of inventory at random points during the
time period. Compute the average inventory (I).
 Compute flow time T =I/R

200 applications processed during 20 days; average throughput

of R=200/20 = 10 applications per day. The number of
applications were counted at 4 random points during these
days, the average inventory (I) was 860/4 =215.

T = I/R  T = 215/10  flow time is 21.5 days

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 4. Flow-Time Analysis

Process Flow Chart

Process : Network of activities performed by resources

1-2. Flow unit (input/output): Unit of analysis– Level of detail
3. Network of Activities & Buffers
- Define Process Boundaries Key for capacity
analysis
- Activities with activity times
- Buffers with waiting times
- Routes: precedence relationships (solid lines) with throughputs
4. Resources & Allocation
- Who does what?
5. Information Structure & flow (dashed lines)
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 4. Flow-Time Analysis

Flowcharting

Physical flow
Activity Decision Event
Buffer
Information flow

 See the total process; a systems view

 Define flow units and process boundaries
 Include only the key steps
 Clarify the level of detail needed. Processes can be broken
down into sub-activities. On the other hand, cascading allows
several activities to be combined in a single sub-process
 Depicts resources required to carry out activities
 Identify the processes that need attention (weak points)

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 4. Flow-Time Analysis

Wondershed Inc: Narrative Representation

1. Separate the roof and the base

sheets
2. Punch the base
3. Punch the roof
4. Form the base
5. Form the roof
6. Sub-assemble the base
7. Assemble
8. Inspect

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 4. Flow-Time Analysis

Wondershed Inc. : Schematic Representation

Punch Form Sub assemble

base base base

Separate
Start
Sheet

Punch Form
Assemble Inspect End
roof roof

Activity Activity Activity

Start End
A B C

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 4. Flow-Time Analysis

Theoretical Flow Time

Entry Buffer Activity Exit

Theoretical Flow Time: The minimum amount of time required for

processing a typical flow unit without any waiting.
Activity Time: The time required by a typical flow unit to complete
the activity.
Unless stated otherwise, we assume that an activity cannot be broken
down into smaller activities that can be executed in parallel. What
does that mean???

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 4. Flow-Time Analysis

Critical Path

Activity Time 1 Activity Time 2 Activity Time 3 Sequential

Activities
Parallel
Sequential Activities
Activity Time 4 Activity Time 5 Activity Time 6
Activities

Theoretical flow time of each path in the process flowchart

= sum of the activity times of all activities on that path
Critical Path: the longest path
Critical Activities: activities that lie on the critical path
Theoretical flow time of the process = Time of the theoretical critical
path
Activity Time 1 Activity Time 2 Activity Time 3

How many Paths?

Activity Time 1 Activity Time 2 Activity Time 3

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 4. Flow-Time Analysis

Wondershed Inc. Theoretical Flow Time

Activity Activity Time (Work Content)

1 Separate 10
2 Punch the base 25
3 Punch the roof 20
4 Form the base 5
5 Form the roof 10
6 Subassemble the base 10
7 Assemble 10
8 Inspect 30

Path 1 (roof) Start  1  3  5  7  8  End

10 +20 +10 +10+30 = 80 min
Path 2 (base) Start  1  2  4  6  7  8  End
10 +25+5 + 10 +10+30 = 90 min
Theoretical Flow Time = 90 min
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 4. Flow-Time Analysis

Wondershed Inc. Flow Time

Activity Activity Time (Work Waiting Time Flow Time

1 Separate Content) 10 20 30
2 Punch the base 25 45 70
3 Punch the roof 20 90 110
4 Form the base 5 35 40
5 Form the roof 10 75 85
6 Subassemble the base 10 60 70
7 Assemble 10 45 55
8 Inspect 30 75 105

Path 1 (roof) Start  1  3  5  7  8  End

30 + 110 + 85 + 55 + 105 = 385 min
Path 2 (base) Start  1  2  4  6  7  8  End
30 + 70 + 40 + 70 + 55+ 105 = 370 min
Flow Time = 385 min
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 4. Flow-Time Analysis

Flow Time Efficiencies in White Collar Processes

Flow Time Efficiency = Theoretical Flow Time / Flow Time

Flow Time Efficiency = 90/385 = 23.4%
Industry Process Average Theoretical Flow Time
Flow Time Flow Time Efficiency
Life Insurance New Policy 72 hrs. 7 min. 0.16%
Application
Consumer New 18 days 2 hrs. 0.14%
Packaging Graphic
Design
Commercial Consumer 24 hrs. 34 min. 2.36%
Bank Loan
Hospital Patient 10 days 3 hrs. 3.75%
Billing
Automobile Financial 11 days 5 hrs 5.60%
Manufacture Closing
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