D.

Anthony Chevers
SBCO 6240 - Production and Operations Management
 Lecture #3a –
Process Analysis
 Definitions & Purpose
 The Systematic Approach
 Documenting the Process
• Flowcharts
 Evaluating Performance
• Data Analysis Tools
 Key Performance Indicators
 Line Balancing
 Exercises
Lecture 3 – Business Process Analysis | 2
 Process Analysis
“Unless you change the process,
why would you expect the results to
change”
- Wisdom from Texas Instrument

Lecture 3 – Business Process Analysis | 3

 Definitions
 Process Analysis
• The systematic examination of all aspects
of a process to improve its operation –to
make it faster, more efficient, less costly or
more responsive to the customer.
• Each step of your process must add value
 Reengineering
• The total redesign of a process

Lecture 3 – Business Process Analysis |

 Process Analysis Terms
 Process: Is any part of an organization that
takes inputs and transforms them into
outputs.
 Cycle Time: Is the average successive time
between completions of successive units.
 Utilization: Is the ratio of the time that a
resource is actually activated relative to the
time that it is available for use.

Lecture 3 – Business Process Analysis |

 Purpose -Process
Analysis
 Efficiency
• It is the actual output attained to the standard output expected
• If the output of an operator is 120 piece per hour while the standard rate is 180
piece per hour
• The operator’s efficiency is:
• 120/180 x 100 = 66.67%
• Efficiency = Actual output/Expected x 100 [Utilization, doing the task right]
 Effectiveness
• It is the degree of accomplishment of objectives
• How well a set of results is accomplished reflects effectiveness [Ends]
• Whereas how the resources are utilized, refers to efficiency [Means]
• Example – Delivering a package three blocks away on foot instead of using an
expensive car may be an efficient method. But, if the package arrives too late
and the customer waiting to collect it has left, it is not an effective one.
• In your pursuit to win a semi final football match, you coach your players to play
dirty. They won the match but 80% of the players received red and yellow cards
and the coach is unable to select a winning team for the final game.
 Reason for analyzing process – effectiveness of conversion technique and
utilize resources more efficiently

Lecture 3 – Business Process Analysis |

Continuous Improvements
and Breakthroughs

Lecture 3 – Business Process Analysis |

 Examples
 Commercial Passenger flights Crew
• Earlier – 2 Pilots + 1 Flight Engineer
• Now – 2 Pilots [Computer replaces engineer]
• Future – 1 Pilot only
 Bottling Plant – 1986 = 24 men/line; 1999 = 8
men/line
 Alumina Plants (2002), cost/ton – Ja=US$155,
Australia=US$110
 Sugar industry (2007), cost/lb – Ja=US$0.26;
Cuba=US$0.12; Brazil=US$0.11
 Square Watermelons in Japan; Others?

Lecture 3 – Business Process Analysis |

Square Watermelon

Lecture 3 – Business Process Analysis |

 A Systematic Approach to Process
Analysis (Ritzman et al., 2007)
Define
scope
2
Identify Document
opportunity process
1 3

Implement Evaluate
changes performance
6 4
Redesign
process
5
Figure 4.2
Lecture 3 – Business Process Analysis |
Throughput is Controlled by
the Constraint, Process #3

Lecture 3 – Business Process Analysis |

 Process Flowcharting
Defined
 Process flowcharting is the use of a diagram
to present the major elements of a
process. The basic elements can include
tasks or operations, flows of materials or
customers, decision points, and storage
areas or queues.
 It is an ideal methodology by which to
begin analyzing a process.

Lecture 3 – Business Process Analysis |

 Flowchart Symbols

Tasks or operations Examples: Giving an

admission ticket to a
customer, installing a
engine in a car, etc.

Decision Points Examples: How much

change should be given
to a customer, which
wrench should be used,
etc.

Lecture 3 – Business Process Analysis |

Flowchart Symbols
(Continued)

Storage areas or Examples: Sheds,

queues lines of people waiting
for a service, etc.

Flows of materials Examples: Customers

or customers moving to the a seat,
mechanic getting a
tool, etc.

Lecture 3 – Business Process Analysis |

 Multistage Process

Stage 1 Stage 2 Stage 3

Lecture 3 – Business Process Analysis |

 Multistage Process
with Buffer

Buffer
Stage 1 Stage 2

Lecture 3 – Business Process Analysis |

 Flow Diagrams
Discuss
Customer Mechanic
needed
drops off makes
work with
car diagnosis*
customer*

* = Points critical to the success of the service

Lecture 3 – Business Process Analysis |

 Repair
authorized

Discuss
Customer Mechanic
needed
drops off makes
work with
car diagnosis*
customer*

Repair not authorized

Customer
departs
with car

* = Points critical to the success of the service

Lecture 3 – Business Process Analysis |

 Service visible to customer
Repair Parts
authorized available

Discuss
Customer Mechanic Check
needed Perform
drops off makes parts
work with work†
car diagnosis* availability†
customer*

Parts not
available

Order
Repair not authorized parts

Customer
departs
with car

* = Points critical to the success of the service

†
= Points at which failure is most often experienced
Lecture 3 – Business Process Analysis |
 Service visible to customer
Repair Parts
authorized available

Discuss
Customer Mechanic Check
needed Perform
drops off makes parts
work with work†
car diagnosis* availability†
customer*

Parts not
available

Inspect/
Order
Repair not authorized parts
test and
repair

Corrective
work
necessary

Customer Repair complete Perform

departs corrected
with car work

* = Points critical to the success of the service

†
= Points at which failure is most often experienced
Lecture 3 – Business Process Analysis |
 Service visible to customer Service not visible to customer
Repair Parts
authorized available

Discuss
Customer Mechanic Check
needed Perform
drops off makes parts
work with work†
car diagnosis* availability†
customer*

Parts not
available

Inspect/
Order
Repair not authorized parts
test and
repair

Corrective
work
necessary

Customer Repair complete Perform

departs corrected
with car work

* = Points critical to the success of the service

†
= Points at which failure is most often experienced
Lecture 3 – Business Process Analysis |
 Service visible to customer Service not visible to customer
Repair Parts
authorized available

Discuss
Customer Mechanic Check
needed Perform
drops off makes parts
work with work†
car diagnosis* availability†
customer*

Parts not
available

Inspect/
Order
Repair not authorized parts
test and
repair

Corrective
work
necessary

Customer Repair complete Perform

Collect Notify
departs corrected
payment customer
with car work

* = Points critical to the success of the service

†
= Points at which failure is most often experienced
Lecture 3 – Business Process Analysis |
A Process Flowchart of
Apple Processing

Lecture 3 – Business Process Analysis |

 More On Process
Management/Analysis

Lecture 3 – Business Process Analysis |

 Low volume, make- Volume and Process
to-order process Project process
• Selecting location for new Decisions for
• Less vertical plant in Europe
integration • Installing ERP for a Manufacturing
manufacturing firm’s business
• More resource processes
flexibility
• More customer
Process design choices

Job process
• Machining precision metal tubes
involvement • Internal consulting team at
• Less capital manufacturing firm
intensity/
automation
Batch process
• Forging process to make fittings for
High volume, make- pressure vessels access
• Producing a batch of textbooks at R.
to-stock process R. Donnelley’s plant

• More vertical
Line process
integration • Auto assembly
• Less resource • King Soopers bread
line
flexibility
• Less customer Continuous process
involvement • Oil refining process
• Borden’s pasta making
• More capital process
intensity/
automation
Low High
Volume
Lecture 3 – Business Process Analysis |
 Low volume,
customized-service
process Volume and Process
• Less vertical Decisions for Services
integration Project process
• Real estate process for leasing
• More resource and constructing facilities for large
flexibility insurance company
• Student team’s field project
• More customer
Process design choices

involvement
• Less capital Job process
• Customer service process at
intensity/ financial services firm
automation • General medical practice

High volume, Batch process

standardized-service • Order fulfillment process of
importer/distributor
process • Placing purchase orders at public
• More vertical relations agency
integration
Line process
• Less resource • Cafeteria line
flexibility • Teller line at bank
• Less customer
Continuous process
involvement • Power generation plant
• More capital • Providing telephone line
access
intensity/
automation
Low High
Volume
Lecture 3 – Business Process Analysis |
TQM Tools - Brainstorming &
Benchmarking

 Benchmarking
• A systematic procedure that measures a firm’s
processes, services and products against those of
industry leaders (Ritzman, 2007)
 Brainstorming session
• A time when a group of people, knowledgeable on
the process and its disconnects, propose ideas for
change in a rapid-fire manner (Ritzman, 2007)
• During the exercise, all ideas are captured and
discussed (throw mud on the wall!)

Lecture 3 – Business Process Analysis |

Cause-and-Effect Diagram
for Flight Departure Delays
(Ritzman, 2007)

Lecture 3 – Business Process Analysis |

 Discussion
 The operations manager, having a good
understanding of the process, suspected
that most of the flight delays were caused
by problems with materials. Consequently,
he had food service, fueling, and baggage-
handling operations examined. He learned
that there were not enough tow trucks for
the baggage-transfer operations and that
planes were delayed waiting for baggage
from connecting flights
 What are your thoughts?

Lecture 3 – Business Process Analysis |

 Data Analysis Tool –
Pareto Chart

 A bar chart on which the factors are plotted in decreasing order

of frequency along the horizontal axis (Ritzman, 2005)
 E.g. – The manager of a neighborhood restaurant is concerned
about the small numbers of customers patronizing his entity.
The number of complaints have been rising, and he would like
some means of finding out what issues to address and of
presenting the findings in a way his employees can understand
 The manager surveyed his customers over several weeks and
collected the following data:
• Complaint Frequency
• Discourteous server 12
• Slow service 42
• Cold dinner 5
• Cramped tables 20
• Smoky air 10
Total = 89
 Recommend improvements

Lecture 3 – Business Process Analysis |

 Pareto Chart

Pareto Chart - Restaurant Complaints

Frequency

50
40
30 Series1
20
10
0

Discourteou

Cold dinner
Smoky air
service

Cramped
Slow

s server
tables

Complaints

Lecture 3 – Business Process Analysis |

 Discussion
 It is clear to the manager and all employees
which complaints, if rectified, would cover most
of the quality problems in the restaurant.
 First, slow service will be addressed by training
the existing staff, adding another server and
improving the food preparation process.
 Second, removing some decorative, but
otherwise unnecessary, furniture from the dining
area and spacing the tables better will solve the
problem with cramped tables.
 The Pareto chart shows that these two problems,
if rectified, will account for 69.7% [(42+20)/89] of
the complaints
 What other recommendations are possible?

Lecture 3 – Business Process Analysis |

Seven Basic Quality Tools
Source: American Society for Quality

Lecture 3 – Business Process Analysis |

 Key Performance
Indicators
 Operation time = Setup time
Run time
 Throughput time = Average time for a
unit to move through the system
 Velocity = Throughput time
Value-added time
 Cycle time = Average time between
completion of units

Lecture 3 – Business Process Analysis |

 Key Performance
Indicators #2
 Throughput rate = 1
Cycle time
 Efficiency = Actual output
Standard output
 Productivity = Output
Input
 Utilization = Time activated
Time available

Lecture 3 – Business Process Analysis |

 Process Throughput
Time Reduction
 Perform activities in parallel
 Change the sequence of activities
 Reduce interruptions
 Others?

Lecture 3 – Business Process Analysis |

 Designing Line-Flow
Layouts
 Operations line is only as fast as its
slowest workstation.
 If the slowest station takes five minutes per
customer or unit, the line’s fastest possible
output is one customer or unit every five
minutes
 Line Balancing
• The assignment of work to stations in a line so as to
achieve the desired output rate with the smallest
number of workstations (Ritzman, 2007)

Lecture 3 – Business Process Analysis |

 Cycle Time Example
 Suppose you had to produce 600 units in 80
hours to meet the demand requirements of a
product. What is the cycle time to meet this
demand requirement?
 Solution: There are 4,800 minutes (60
minutes/hour x 80 hours) in 80 hours.
 The average time between completions
would be: Cycle time = 4,800/600 units = 8
minutes
 Cycle time is the maximum amount of time a
product is allowed to spend at each
workstation

Lecture 3 – Business Process Analysis |

 Assembly Line Balancing
Line balancing is usually done to minimize imbalance between
machines or personnel while meeting a required output from the line

To balance a line, management must know the tools, equipment,

work methods used, time required for each assembly task and
precedence relationship among the activities:

Procedure
• Draw the precedence diagram in sequence & note times
• Group tasks into work stations to meet production rate [3 steps]
• Calculate line efficiency
Equations
• Cycle time = prod. time available per day / prod. units per day
• Mini. # of workstations = ∑ time for all tasks / cycle time
• Efficiency = ∑ of task times / (# of workstations x assigned cycle time)
Station guidelines [3]  Cycle time; Mini # of stations; Precedence

Lecture 3 – Business Process Analysis | 39

 Exercise
Real Fruit Snack Strips are made from a mixture of
dried fruit, food colouring, preservatives, and
glucose. The mixture is pressed out into a thin

Real fruit Sna

sheet, imprinted with various shapes, rolled, and
packaged. The precedence and time requirements
for each step in the assembly process are given
below. To meet demand, Real Fruit needs to
produce 6,000 fruit strips every 40-hour week.

preservatives
Design an assembly line with the fewest number of
workstations that will achieve the production quota
without violating precedence constraints.

Lecture 3 – Business Process Analysis | 40

 Solution
B

A D

Cycle Time = 40 hours x 60 minutes/hour =

2,400 = 0.4 minute6,000 units 6,000

# of Stations = 0.1 + 0.2 + 0.3 + 0.4 =

1.0 = 2.5 stations
0.4 0.4
Lecture 3 – Business Process Analysis | 41
Detailed Solution

Lecture 3 – Business Process Analysis |

 Workstation & Efficiency

0.1 A D 0.3
0.4

Our assembly line consists of 3 workstations

Efficiency = 0.1 + 0.2 + 0.3 + 0.4 = 1.0

= 83.30% 3(0.4)
1.2
Lecture 3 – Business Process Analysis | 43
 Exercise

Green Grass, I
an assembly lin
Using the follow
precedence dia
Lecture 3 – Business Process Analysis | 44
 Solution
(a) First convert the desired output rate
(2,400 units per week) to an hourly rate
[2,400/40]=60 units per hour]
Cycle time=1/60 hour/unit = 1 minute/unit

(b) Minimum# of stations = 244

D H 20
seconds/60 40
seconds=4.067 or 5 stations
(c) Efficiency
B of a five-station solution =
E 6
30
[244/5(60)]x100=81.3%
A F I 18
40 25
C 50
G 15
Lecture 3 – Business Process Analysis | 45
 # of workstations?? Wrong?

Stations 40 20
D
H

E 6
B
30
I 18
A F
25
40
C 50
G 15

Lecture 3 – Business Process Analysis | 46

 Discussion Questions &
Case
 Continuous improvement recognizes that many small
improvement add up to sizable benefits. Will continuous
improvement take a company at the bottom of an industry to the
top? Explain.
 To give utilities an incentive to spend money on new pollution-
control technology, the EPA proposes that flue gas emission limits
be changed to require slightly cleaner stacks than the older
technology is capable of producing. To comply, some utilities will
install the new technology. Some will not. Utilities that reduce
emissions below the new requirements will receive “credits,”
which they can sell to utilities that choose not to install the
pollution-control technology. These utilities can then continue
business as usual, so long as they have purchased enough
credits to accounts for the extra pollution they create. The price of
the credits will be determined by the free market. Form sides and
discuss the ethical, environmental and political issues and trade-
offs associated with this proposition
 Case – Custom Molds, Inc.

Lecture 3 – Business Process Analysis | 47

Process Analysis

Lecture 3 – Business Process Analysis | 48

Case: Zephtrex Fabric

Lecture 3 – Business Process Analysis | 49

 NEXT LECTURE:
Productivity

D. Anthony Chevers
delroy.chevers@uwimona.edu.jm
DOMS, Room #28

50