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Process Analysis
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OBJECTIVES

What is Process Analysis?


A Systematic Approach to Process Analysis
Tools for Documenting a Process
Capacity-related Performance Metrics
Cycle Time, Throughput Rate, Throughput Time,
WIP, Capacity
Capacity Analysis
Littles Law:
Throughput Time = WIP Cycle Time
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What is a Process?

A process is any activity or group of activities


(or any part of an organization) that takes
inputs and transforms them into more
valuable outputs

Transformation
Inputs process Outputs

Resources
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What is Process Analysis?

Process analysis is the documentation and


detailed understanding of how work is
performed and how it can be redesigned
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A Systematic Approach for Process


Analysis

Identify Define Document


opportunity scope process
1 2 3

Implement Redesign Evaluate


changes process performance
6 5 4
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A Systematic Approach for Process


Analysis (Contd)
Identify opportunity
Customer satisfaction survey, customer
complaints, employee suggestions, strategic
issues
Define scope
Boundaries of the process to be analyzed
Document process
List elements of the process (e.g., inputs,
outputs, suppliers, customers, tasks, resources)
Describe how the process is performed
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A Systematic Approach for Process


Analysis (Contd)

Evaluate performance
Identify specific performance metrics
Collect and analyze performance data
Find gaps between actual and desired
performances
Identify and analyze the causes of the
performance gaps
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A Systematic Approach for Process


Analysis (Contd)

Redesign process
Generate ideas for improvements
Propose a new process
Implement changes
Training on new jobs and skills, investments in
new technologies
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Tools for Documenting a Process

Process flowchart (or process flow diagram)


Swim lane flowchart

Service blueprint
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Process Flowchart

A process flowchart is a diagram that traces


the flow of materials, customers, information,
or equipment through the various steps of a
process
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Process Flowchart Symbols

Examples: Installing
Task or an engine in a car ,
workstation giving an admission
ticket to a customer

Inventory, Examples: Finished-


storage area, goods inventory,
waiting line, or people waiting for a
service
waiting area
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Process Flowchart Symbols (Contd)

Flow of Examples: Finished


materials or goods moving to a
warehouse, customers
customers moving to a facility

Examples: Customer
Flow of order information,
information production order
information
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Process Flowchart Symbols (Contd)

Examples: Inspecting
whether a material is
Decision good or bad,
Point determining what type
of service a customer
wants at a bank
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Types of Processes

Single-stage process

Stage 1

Serial process

Stage 1 Stage 2 Stage 3


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Types of Processes (Contd)

Parallel process Assembly process

Stage 1

Stage 1

Stage 2
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Types of Processes (Contd)

Multi-stage process with storage area

Storage
Stage 1 area Stage 2
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Example of Process Flowchart:
Bread-Making Process

Bread-
making

Raw
WIP
Materials Packing

Bread-
Making
FGI
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Swim Lane Flowchart

A swim lane flowchart is a special type of


process flowchart that can be used to show
how the process flows across different
people or departments
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Example of Swim Lane Flowchart:
Graduate School Admission Process
Application Take GRE Request
Applicant References Wait
Form

Admissions No Send Letter


Create Folder Contact
Clerk Close Folder
Folder complete? Applicant

Graduate Denial Acceptance


Yes Batch Files
Secretary Letter Letter

Graduate Review Telephone


Advisor Files Interviews

No
Faculty Make
Panel selection

Graduate Yes
Dean Review Financial Aid
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Service Blueprint

A service blueprint is a special type of


process flowchart for service processes
A line of visibility can be used to show which
steps are visible to customers and which steps
are not
A line of interaction can be used to show
which steps are performed by customers and
which steps by employees
Fail-points can be used to show potential
steps where mistakes could occur
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Service Blueprint: Example of a Hotel

F F

F Possible fail-points
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Performance Metrics

Capacity-related metrics
E.g.) Capacity, cycle time, throughput time
Quality-related metrics
E.g.) Defective rate, customer satisfaction rate
Efficiency-related metrics
E.g.) Cost, productivity, capacity utilization
Flexibility-related metrics
E.g.) Time to change the process from one type of
product to another
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Capacity-related Performance
Metrics

Cycle time
Average time between completions of
successive units
How often does a unit drop off the end of the
process?
Throughput rate
Average number of units produced per unit time
1
Throughtput rate =
Cycle time
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Capacity-related Performance
Metrics (Contd)

Throughput time
Average time that a unit spends in the process
How long does a unit take between entering and
leaving the process?
Work-In-Process (WIP)
Average number of units in the process
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Capacity Analysis

Capacity = Maximum throughput rate

1
=
Minimum cycle time
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In the Next Examples

We will analyze:
Capacity
Minimum cycle time (Min CT)
Maximum throughput rate (Max TR)
Minimum throughput time (Min TT)
WIP, when production is scheduled to achieve
Min CT and Min TT
We will assume that there is no variability in
processing times (i.e., they are fixed)
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Example 1: Single-Stage Process

Stage 1

2 min/unit

Min CT =
Max TR =

Min TT =

WIP =
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Example 2: 2-Stage Serial Process

Stage 1 Stage 2

10 min/unit 8 min/unit

Min CT =
Max TR =

Min TT =

WIP =
WIP at Stage 1 =
WIP at Stage 2 =
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Example 2: 2-Stage Serial Process

Stage 1 Stage 2

10 min/unit 8 min/unit

Stage 1 1st unit 2nd unit 3rd unit 4th unit

Stage 2 1st unit 2nd unit 3rd unit 4th unit


CT CT CT

0 10 18 28 38 48
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Example 3: 2-Stage Serial Process

Stage 1 Stage 2

5 min/unit 6 min/unit

Min CT =
Max TR =

Min TT =

WIP =
WIP at Stage 1 =
WIP at Stage 2 =
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Example 3: 2-Stage Serial Process

Stage 1 Stage 2

5 min/unit 6 min/unit

Stage 1 1 2 3 4

Stage 2 1 2 3 4
CT CT CT

0 5 11 17 23 29
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Example 4: 3-Stage Serial Process

Stage 1 Stage 2 Stage 3


8 min/unit 10 min/unit 7 min/unit
Min CT = 10
Max TR = 6

Min TT = 25

WIP = 2.5
WIP at Stage 1 = .8
WIP at Stage 2 = 1
WIP at Stage 3 =.7
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Example 4: 3-Stage Serial Process

Stage 1 Stage 2 Stage 3


8 min/unit 10 min/unit 7 min/unit

Stage 1
Stage 2
Stage 3
CT CT CT

0 25 35 45 55
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Example 5: Parallel Process

Stage A
10 min/unit

Stage A
10 min/unit

Min CT = 5
Max TR = 12

Min TT = 10

WIP = 2
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Example 5: Parallel Process


Stage A
10 min/unit

Stage A
10 min/unit

Stage A

Stage A
CT CT CT

0 10 15 20 25
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Bottleneck of a Process

A bottleneck of a process is any factor that


limits the capacity of the process
The capacity of a process is determined by
its bottleneck
If a process consists of serial or assembly
processes, the bottleneck can be identified by the
slowest stage of the process.
For a process including parallel process, the same
principle can applied if they are viewed as equivalent
single stage processes.
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Example 3: Cycle Time, Throughput


Time, and Littles Law

Stage A
10 min/unit
Stage B
6 min/unit
Stage A
10 min/unit

Min CT =6
Min TT = 16

WIP =? Ask professor


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Bottleneck Analysis

If you want to increase the capacity of a process,


you need to identify its bottleneck and increase
the capacity of the bottleneck
Example: If you want to increase the capacity of
the following process, where would you put
some additional resources?

Stage 1 Stage 2

10 min/unit 8 min/unit
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Littles Law

Throughput time = WIP Cycle time


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Littles Law (Contd)

10 people

2 min/person
Waiting line

Suppose you have joined a waiting line and found:


There are 10 people waiting in line, including you

People leave the waiting line every 2 minutes

Then, what is your expected waiting time?


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Example 1: Littles Law

A large fast food restaurant processes on


average 100 customers per hour during the
peak time. On average, there are 45
customers inside (waiting to place an order,
eating, going back to counter to order more,
etc.) On average, how much time does a
customer spend in the facility?
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Example 2: Littles Law

A branch office of Travelers Insurance


Company processes 6,000 claims per year.
The average processing time is 2 weeks.
Assume 50 weeks per year. On average,
how many applications are in process?
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Example 3: Cycle Time, Throughput


Time, and Littles Law

Stage A
10 min/unit
Stage B
6 min/unit
Stage A
10 min/unit

Min CT =6
Min TT =16

WIP =2.67
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Example 3: Cycle Time, Throughput


Time, and Littles Law

Stage A 1 3

Stage A 2 4

Stage B 1 2 3 4
CT CT CT

0 10 16 22 28 34
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Reduction of Throughput Time

Reduce work-in-process inventory


Perform activities in parallel
Change the sequence of activities
Reduce interruptions

Throughput time = WIP Cycle time