Process Analysis - Class Notes - Mod 2 - Part 1(1)
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Transcript of Process Analysis - Class Notes - Mod 2 - Part 1(1)
1
MGMT 361
Operations Management
(OM)
Process Analysis – part 1 (intro, process designs, process types)
Prof. Julia A. Kalish
Module 2 Overview • A ________ is any part of an organization that
takes inputs and transforms them into outputs that (hopefully) are of greater value to the organization than the original inputs.
• Because understanding how processes work is essential to ensuring the competitiveness of a company: Module 2 discusses: – the 3 basic types of production
– introduces flowcharting
– explains how to use Little’s law, and establishes techniques for performance measure calculations.
Module 2 - Process Analysis Mgmt 361 2
Module 2 Measuring Process Performance
• There is much variation in the way performance metrics are calculated in practice & are often calculated in the context of a particular process.
• Process performance metrics give the operations manager a gauge on how productively a process currently is operating and how productivity is changing over time.
• Typical Metrics: operation time, __________, velocity, cycle time, throughput rate, efficiency, _____________, and utilization.
Mgmt 361 Module 2 - Process Analysis 3
Reminder – make sure you check out terms in the Mod 2 content folder in Blackboard Learn
• Process • Cycle time • Utilization • Buffering • Blocking • Starving • Bottleneck • Make-to-order • Make-to-stock • Hybrid • Pacing • Productivity • Efficiency
• Run time • Setup time • Operation time • Flow time • Throughput rate • Process velocity • Throughput ratio • Value-added time • Total average value of
inventory • Inventory turn • Days-of-supply • Little’s law
Mgmt 361 Module 2 - Process Analysis 4
Definition of Process
A process is any part of an organization that takes inputs and transforms them into outputs that, it is hoped, are of greater value to the organization than the original inputs.
Output Input
Control
Operations
Process schematic
__________________ go through a process, transactions can be people, material, etc.
________________ require resources , these resources can include people, machines, etc.
Mgmt 361 Module 2 - Process Analysis 5
Process Flowcharting (AKA: Process (Flow) Diagram, Value Stream Mapping)
• Ideal methodology by which to begin analyzing a process.
• Used to present the major elements of a process.
• Basic elements: tasks (operations), flows of materials or customers, decision points, and storage areas or queues.
Resource Buffer
Transaction Information
Flow. Flow
Decision
__________________(order of operations)
Operation
Precedence
Mgmt 361 Module 2 - Process Analysis 6
Definitions • ____________ usually the position where
someone stands or is assigned to stand
• Stage a term used to indicate that multiple activities have been pulled together for analysis purposes.
• Queue used to refer to something that is “waiting in line”
• ______ Storage area between stages which allows stages to operate independently.
• Parallel occurring at the same time
Mgmt 361 Module 2 - Process Analysis 7
Single Stage
Stations in parallel, separate queue
2
Stations in parallel, single queue
3
1
In and above, there is a single stage with multiple stations.
Multi Stage
1
Process with buffer
2
3
Hybrid
Words station and stage will be used interchangeably when there is only one station at each stage.
Process types I
Which one better????
Mgmt 361 Module 2 - Process Analysis 8
Process types II
Make to stock Make to order Hybrid
Process activated to meet expected or forecast demand. Customer orders are served from target stocking level.
Make to stock Old Process at McDonald’s
Raw Mat.
Finished goods
Cook Assemble
Customer Order
Deliver
Mgmt 361 Module 2 - Process Analysis 9
Process types II – “Make to Order”
Make to order
Wendy’s Raw Matl.
Customer order
Assemble Cook Deliver
Mgmt 361 Module 2 - Process Analysis 10
Only activated in response to an actual order. Both work-in-process and finished goods inventory kept to a minimum.
“Hybrid”
Mgmt 361 Module 2 - Process Analysis 11
Burger King
Finished goods
Assemble
WIP Raw Matl. Cook
Assemble
Customer Order
Deliver Custom or Standard?
C
S
http://www.youtube.com/watch?v=CJMsFGH4eoQ
Combines the features of both make-to-order and make-to-stock.
To Analyze Process design:
1. First determine what operations are involved and how long it takes to perform each operation. (_____________)
2. Then determine the precedence relationship between operations (what goes before what).
3. The first two steps will help us draw a precedence diagram.
*We will use intuitive method for the time being to develop process designs. However, later we will see that we need to know the desired production capacity and any other constraints that we may have to consider.*
Mgmt 361 Module 2 - Process Analysis 12
Step1: We first determine operations involved (times in sec.)
Process design: Example 1—Envelop stuffing
Step 2: precedence diagram.
*Try to sketch one out on your own
2
1
4
3
5
We can perform operation (3) only after completing (1) and (2).
We can do (5) only after doing the other four operations.
Operation Time
1 Get material 30 s
2 Get envelop 2 s
3 Insert & seal 8 s
4 Paste label 5 s
5 Drop in the box 3 s
Next, we look at several process designs.
Mgmt 361 Module 2 - Process Analysis 13
Envelope stuffing
5 workers
2 workers
3 workers
1
30
4
5
3
8
2
2
5
3
Process 1
1
30
2, 3, 4, 5
18
Process 2
1, 2
32
3, 4, 5
16 1, 2
32
Process 3
1:30
2:2
3:8
4:5
5:3 Potential Process Arrangements - Assume that we use one worker at each station.
Could one person do 1&3, second person the rest?
How about first person doing 2&4, second the rest?
Five people each responsible for one stage
Operation T
1 Get material 30
2 Get envelop 2
3 Insert & seal 8
4 Paste label 5
5 Drop in box 3 Mgmt 361 Module 2 - Process Analysis 14
Resource capacity: How much a resource (or stage) can produce in a given time [Q/T]
____________: Resource with smallest capacity
_________ __________: How much the process can produce in a given time [Q/T]
Determined by bottleneck capacity
To increase capacity of process add resources at bottleneck stage!
Process Measure: Process capacity
1
30
4
5
3
8
2
2
5
3
Process 1
Mgmt 361 Module 2 - Process Analysis 15
Module 2 - Process Analysis
Defined in many different ways
Process Measure: Productivity
Measure
Total
Partial
Multifactor
Output Goods and services produced Input All resources used
Output Output Output Output Labor Capital Materials Energy
Output ______ Output_________ Labor + Capital + Energy Labor + capital + Materials
• Measuring in common units is difficult.
• Productivity is a relative measure – productivity increased from 2.7
units per labor hour to 3 units per labor hour.
• We will use output per labor hour as the productivity measure
in many examples.
_________________ = output / input
Mgmt 361 16
Example 2.1 envelop stuffing
5 workers, bottleneck: 1,
capacity: 120 units / hour
2 workers, bottleneck: 1,
capacity: 120 units / hour
3 workers, bottleneck: both
capacity: 225 units / hour
1
30
4
5
3
8
2
2
5
3
Process. 1
1
30
2, 3, 4, 5
18 Process 2
1, 2
32
3, 4, 5
16 1, 2
32
Process 3
1,30
2,2
3,8
4,5
5,3
What information is needed for a comparison?
Mgmt 361 Module 2 - Process Analysis 17
How was capacity calculated? • Remember capacity is determined by the
____________.
• Process 1 & 2 30 sec/unit
1/30 units/sec * 3600 sec/hour = 120 units / hour
• Process 3 stage one makes 2 units in 32 seconds, so 1 unit in 16 seconds: 16 sec/unit 1/16 units/sec * 3600 sec/hour = 225 units / hour
Mgmt 361 Module 2 - Process Analysis 18
Example 2.1 -envelop stuffing
5 workers, bottleneck: 1,
capacity: 120 units / hour
2 workers, bottleneck: 1, capacity:
120 units / hour
3 workers, bottleneck: both
capacity: 225 units / hour
1
30
4
5
3
8
2
2
5
3 Pr. 1
1
30
2, 3, 4, 5
18 Process 2
1, 2
32
3, 4, 5
16 1, 2
32
Process 3
1,30
2,2
3,8
4,5
5,3
Process Productivity=Capacity/#Workers
1
2
3
120/5=24 Units per hour per worker
120/2=60 Units per hour per worker
225/3=75 Units per hour per worker
Mgmt 361 Module 2 - Process Analysis 19
Productivity = output / input
Which Process is Best ?
• Process 1 & 2 - which one better?
• ?
• 2 & 3 depends pay by hour &/or benefits?
• How many envelops need stuffed?
Mgmt 361 Module 2 - Process Analysis 20
Process Productivity=Capacity/#Workers
1
2
3
120/5=24 Units per hour per worker
120/2=60 Units per hour per worker
225/3=75 Units per hour per worker
1: 20 4: 40
5: 30 2: 50
3: 10 7: 20 6: 30
Task number : Time
Precedence Diagram – Example 2.2
*Think through what this means
Mgmt 361 Module 2 - Process Analysis 21
Process Flow Diagrams
1: 20 4: 40
5: 30 2: 50
3: 10 7: 20 6: 30
Example 2.2 Task Number : Time
1
20
4
40
3
10
2
50
5
30
7
20
6
30 A
1: 20
2: 50 M1
2: 50 M2
3: 10
4: 40 P1
4: 40 P2
5: 30 7: 20 6: 30
B
2
50
6, 7
50
3, 4
50
1, 5
50 C
2, 3
60
7
20
5, 6
60
1, 4
60 D
Which One is Best?
Run some numbers.
Mgmt 361 Module 2 - Process Analysis 22
Analyze Each Potential Arrangement
A B C D
Input (Workers, labor)
seconds /units total
seconds per unit for bottleneck
units per second (1/bottleneck)
units per min ((units/sec) x 60))
units per hour ((units/min) x 60))
capacity (units/time frame)
productivity (out/input) (capacity/input)
Mgmt 361 Module 2 - Process Analysis 23
Process Flow Diagrams
1: 20 4: 40
5: 30 2: 50
3: 10 7: 20 6: 30
Example 2.2 Task Number : Time
1
20
4
40
3
10
2
50
5
30
7
20
6
30 A
1: 20
2: 50 M1
2: 50 M2
3: 10
4: 40 P1
4: 40 P2
5: 30 7: 20 6: 30
B
2
50
6, 7
50
3, 4
50
1, 5
50 C
2, 3
60
7
20
5, 6
60
1, 4
60 D
7
9
4
4
Mgmt 361 Module 2 - Process Analysis 24
Analyze Each Potential Arrangement
A B C D
Input (Workers, labor) 7 9 4 4
seconds /units total 200 200 200 200
seconds per unit for bottle neck 50 30 50 60
units per second (1/bottleneck) 0.02 0.0333 0.02 0.0167
units per min ((units/sec) x 60)) 1.2 2 1.2 1
units per hour ((units/min) x 60)) 72 120 72 60
capacity (units/time frame)
productivity (out/input) (capacity/input)
Mgmt 361 Module 2 - Process Analysis 25
Analyze Each Potential Arrangement
A B C D
Input (Workers, labor) 7 9 4 4
seconds /units total 200 200 200 200
seconds per unit for bottle neck 50 30 50 60
units per second (1/bottleneck) 0.02 0.0333 0.02 0.0167
units per min ((units/sec) x 60)) 1.2 2 1.2 1
units per hour ((units/min) x 60)) 72 120 72 60
capacity (units/time frame) 72 120 72 60
productivity (out/input) (capacity/input) 10.29 13.3 18 15
Mgmt 361 Module 2 - Process Analysis 26 (72/7) (120/9) (72/4) (60/4)
Process Flow Diagrams
Example 2.2
1
20
4
40
3
10
2
50
5
30
7
20
6
30 A
1: 20
2: 50 M1
2: 50 M2
3: 10
4: 40 P1
4: 40 P2
5: 30 7: 20 6: 30
B
2
50
6, 7
50
3, 4
50
1, 5
50 C
2, 3
60
7
20
5, 6
60
1, 4
60 D
Capacity units/hr
Productivity units/worker
A 72 10.29
B 120 13.3
C 72 18
D 60 15
Mgmt 361 Module 2 - Process Analysis
So which one is the BEST?
27
Types of Processes • Single stage vs. multi-stage • Multi-stage processes often use buffers • Buffer a storage area between stages
(inventory of some sort) • Processes without a buffer often have problems
with blocking and starving • ___________ occurs when activities must stop
because there is no place to put the item just completed
• ___________ occurs when activities must stop because there is no work
• Bottleneck limits the capacity of a process and can create situation of blocking and starving in the system
Mgmt 361 Module 2 - Process Analysis 28
Process Parameters:
Design
Capacity: Maximum rate
of transaction processing.
(Design) Cycle Time
= 1/( capacity).
Minimum Throughput
Time (TPT) – How fast a
transaction goes through
the process when the
process is empty.
Run time
Input Rate: transaction
arrival rate
Output Rate: Current rate
of processing
Actual Cycle Time
= 1 / (output rate)
Average TPT: Avg. time
for a transaction to go
through a stable process.
Average WIP: Avg.
number of transactions
in the process.
___________ parameters indicate what a process can achieve. _____ ____ parameters indicate what the current values are for a specific schedule. These values change with the schedule.
Mgmt 361 Module 2 - Process Analysis 29
Run Time parameters
Design parameters
Example. 2.3: Process Parameters for a Single Machine
M1 4 min
(15 units/ hour)
Part A: A new component is scheduled every 4 minutes
M1 Job 1
4
Job 3
12
Job 4
16
Job 2
8
Input rate
Output rate
Actual CT
AverageTPT
WIP
= 1/4[u/min]*60[min/h] = 15 [units / hour]
= 1/4[u/min]*60[min/h] = 15 [units / hour]
= 1/15[hour/unit] *60[min/h] = 4 [min/unit]
= 4 [min]
= 1.0 [units] (TPT /CT) so 4/4 = 1
Cycle time =
Capacity =
Minimum TPT =
4 [min. / unit]
¼ [units/min.] * 60 [min / hour] = 15 [units/hour]
4 [min.]
Gantt Chart
Mgmt 361 Module 2 - Process Analysis 30
Run Time parameters
Example 2.3 continued M1 4 min
Input rate
Output rate
Actual CT
TPT
WIP
Gantt Chart
Part B: A new component is scheduled every 10 minutes
M1 Job 2
10 14
Job 1
4
= 1/10 [u/ min]*60[min/h]= 6 [units / hour]
= 1/10 [u/ min]*60[min/h] = 6 [units / hour]
= 1/6 [hours/unit]*60[min/h] = 10 [min/unit]
= 4 [min]
= TPT/CT = 4/10= 0.4 [units]
Run Time parameters depend on ________________! Input rate = output rate IF process is stable.
Mgmt 361 Module 2 - Process Analysis 31
Design Parameters
Capacity = 15 [units /hr] Cycle time = 4 [min/unit] Minimum TPT = 4 [min]
Part C: A new component is scheduled every 3 minutes.
Input rate
Output rate
= 20 [units / hour]
= 15 [units / hour] …cannot exceed capacity.
Run time parameters
There is a problem! Queue will build up as time progresses.
When the input rate is more than the capacity, number of transactions waiting to be processed will keep on increasing. The process will never become stable.
Example 2.3 M1 4 min
If Input > Capacity: _________ ___________ Mgmt 361 Module 2 - Process Analysis 32
Classic Example of what happens when Input > Capacity
• http://www.youtube.com/watch?v=HnbNcQlzV-4&feature=relatedFirefoxHTML\Shell\Open\Command
Mgmt 361 Module 2 - Process Analysis 33
Summary of Example 3 Design Parameters
CT= 4 min/unit
Capacity=15 units/min
Min TPT=4 min
Run-time Parameters:
Schedule A: Actual CT=4 min/unit, Average TPT= 4 min
Downside? Upside?
Schedule B: Actual CT=10min/unit, Average TPT= 4min
Downside? Upside?
Schedule C: Actual CT= 4 min/unit, Average TPT= 4 min
Downside? Upside?
Mgmt 361 Module 2 - Process Analysis 34
Capacities add for parallel machines. Do NOT add CT!!
Part (a): Capacity of M1 = (3600 / 10) or (1/10 *60 *60)
= 360 [units / hour],
Capacity of M2 = 225 [units / hour],
Capacity of M3 = 180 [units / hour].
System capacity = 765 [units / hour].
Cycle time = 1 / (Capacity) = 1/765= .0013072 /hr or 4.706 [sec / unit]
Example 2.4: Parallel Machines
Time in seconds
(a) For the single stage process shown to the left, what is the cycle time?
(b) If you need to produce 1165 units per hour, do you need an extra machine? If so, what should be the per unit processing time if this machine is used in parallel?
M1, 10
M2, 16
M3, 20
Part (b): Needed total capacity = 1165 units per hour.
We need extra machine with capacity = (1165 – 765) = 400 [units / hr].
Per-unit processing time on this extra machine = 3600 / 400 = 9 sec. M4, 9
Mgmt 361 Module 2 - Process Analysis 35