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
Task 1 Task 2
Demand
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?
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?
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
How do we measure capacity?
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
1

Cycle Time
Throughput rate =
Key
relationship
Capacity of a task is the physical limitation in terms of
how much can be processed at this task
Capacity = throughput rate
Computing Cycle Times
Processing a fixed amount of work
Cycle Time =
Set-up Time + (Batch size) x (Time per unit)
Batch size
Example: Producing 100 cars. On average, production takes
5 hours per car. It takes 50 hours to set up the production line.
Computing Cycle Times
Setup time:
15 min
A
B
Question: What is the cycle time between points A and B
of the process, if we work in batches of 10?
Production Time:
25min/unit
What is a bottleneck?
Which task is the bottleneck?
3 units/hr 5 units/hr 2 units/hr
Bottleneck is the
process stage with the
smallest throughput rate
(longest cycle time)
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(WI P): Average number of units in system
over a time interval. Measured as
units
WIP

Throughput rate
Throughput time =
Key
relationship
(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.
assembly
pack and
ship
machining
machining
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.
assembly
pack and
ship
machining
machining
Lets analyze the hammer process
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
1/2
Starving: Stoppage of activity because of lack of material
Blocking: Stoppage of flow because there is no storage place
1 0
0/2
1 1
2/2
1 1
More Examples..
CT = 3s CT = 1s
FGI Task 1
Task 2
Lets study this make-to-stock system.
What is the capacity of the process?
What is the throughput time?
What is the average WIP?
Is any task starved or blocked?
Note: No buffer space between stations, so upstream
station has to wait if downstream station is busy

More Examples..
CT = 3s CT = 1s
FGI Task 1
Task 2
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..
CT = 1s CT = 3s
FGI Task 1
Task 2
What is the capacity of the process?
What is the throughput time?
What is the average WIP?
Is any task starved or blocked?
Lets study this make-to-stock system:
Note: No buffer space between stations, so upstream
station has to wait if downstream station is busy

More Examples..
CT = 1s CT = 3s
FGI Task 1
Task 2
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..
CT = 3s CT = 3s
FGI
Task 1
Task 2
What is the capacity of the process?
Is any task starved or blocked?
Lets study this make-to-stock assembly system:
Note: No buffer space between stations

CT = 4s
Task 3
CT = 2s
Task 4
More Examples..
CT = 3s CT = 3s
FGI
Task 1
Task 2
CT = 4s
Task 3
CT = 2s
Task 4
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).