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OPSM 405 Service Operations Management
Class 17:
Wrap-up of process game
Process Analysis
Koç University
Zeynep [email protected]
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Original process flowchart
M M P C P M M C
Task times?Bottleneck?
Resource utilization? Cycle time? (Flow time)
Value adding time? (theoretical)
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Terminology
Flow Time (CT or T)The flow time (also called variously throughput time, cycle time) of a given routing is the average time from release of a job at the beginning of the routing until it reaches an inventory point at the end of the routing.
1 2 3 4
Flow time
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Throughput Rate (TH or R)The average output of a production process per unit time. At the firm level, it is defined as the production per unit time that is sold.
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Terminology
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Critical Path & Critical Activities
Critical Path: A path with the longest total cycle time.
Critical Activity: An activity on the critical path.
A B
C
D
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X-Ray Service Process
1. Patient walks to x-ray lab 2. X-ray request travels to lab by messenger 3. X-ray technician fills out standard form based on info. From
physician 4. Receptionist receives insurance information, prepares and
signs form, sends to insurer 5. Patient undresses in preparation of x-ray 6. Lab technician takes x-ray 7. Darkroom technician develops x-ray 8. Lab technician checks for clarity-rework if necessary 9. Patient puts on clothes, gets ready to leave lab 10. Patient walks back to physicians office 11. X-rays transferred to physician by messenger
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Example: X-Ray
32
1
4 765
11
109
start end
25%
75%7
20 6
5 3
6 12 2
20
3 7
transport
support
Value added
decisionMeasured actual flow time: 154 minutes
8
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Consider all possible paths
Path1: 1-4-5-6-7-8-9-10 50 Path 2: 2-3-4-5-6-7-8-9-10
69 Path 3: 1-4-5-6-7-8-11
60 Path 4: 2-3-4-5-6-7-8-11 79
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Levers for Reducing Flow Time
Decrease the work content of critical activities
– work smarter
– work faster
– do it right the first time
Move work content from critical to non-critical activities
– to non-critical path or to ``outer loop’’
Reduce waiting time.
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X-Ray revisitedResource Pool
Res. Unit Load
Load Batch
Theoretical Capacity of Res. unit
No of units in pool
Theoretical capacity of pool
Messenger 40 min/patient
1 1.5 patients/hr
6 9 Patient/hr
Receptionist 5 1 12 1 12
X-ray technician
16 1 3.75 4 15
X-ray lab 7.5 1 8 2 16
Darkroom technician
15 1 4 3 12
Darkroom 15 1 4 2 8
Changing room
6 1 10 2 20
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Utilizations given an observed throughput of 5.5 patients/hr
Resource pool Theoretical capacity
Patients/hr
Capacity utilization
Messenger 9 61.11
Receptionist 12 45.83
X-ray technician 15 36.67
X-ray lab 16 34.38
Darkroom technician 12 45.83
Darkroom 8 68.75
Changing room 20 27.50
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Levers for Increasing Process Capacity Decrease the work content of bottleneck activities
– work smarter– work faster– do it right the first time– change product mix
Move work content from bottlenecks to non-bottlenecks– to non-critical resource or to third party
Increase Net Availability– work longer– increase scale (invest)– increase size of load batches– eliminate availability waste
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Structuring The Service Enterprise
Example: Automobile’s Driver’s License Office
License Renewal TimesActivity Description Time (Sec) 1 Review application for correctness 15 2 Process and record payment 30
3 Check for violations and restrictions 60 4 Conduct eye test 40 5 Photograph applicant 20
6 Issue temporary license 30
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3 60
60
Present Flow Diagram
1 240
15
2 120
30
4 90
40
5 180
20
6 120
30
Activity
flow rate per hour
time (sec)
Flow time: sec
Throughput rate: per hour
What happens if you hire one more employee?
sec sec sec sec sec sec/hr /hr /hr /hr /hr /hr
Activity Activity Activity Activity Activity Activity
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Proposed Flow Diagram
Flow time: sec
Throughput rate: per hour
2 120
30sec/hr
Activity
5 180
20
6 120
30sec sec/hr /hr
Activity Activity
1,4 65
55sec/hr
Activity
3 60
60 sec/hr
Activity
1,4 65
55sec/hr
Activity
3 60
60 sec/hr
Activity
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Another Design
Flow time: sec
Throughput rate: per hour
1-5 22
165sec/hr
Activity
1-5 22
165sec/hr
Activity
1-5 22
165sec/hr
Activity
1-5 22
165sec/hr
Activity
1-5 22
165sec/hr
Activity
1-5 22
165sec/hr
Activity
6 120
30 sec/hr
Activity
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The role of task times: a balanced line
if task times are similar will have a balanced line
• in the absence of variability (deterministic) complete synchronization is possible
• in a balanced line idleness is minimized, though in the presence of variability full synchronization cannot be achieved
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The role of task times: an unbalanced line
if average task times are different will have an unbalanced line• will have idleness
in unbalanced case, slowest task determines output rate• bottleneck is busy
• idleness in other stages
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The role of variability
6/hr 6/hr
4 or 8/hr 4 or 8/hr
2 or 10 2 or 10
0 or 120 or 12
As variability increases, throughput (rate) decreases
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Compounding effect of variability and unbalanced task times
6/hr 4/hr
4 or 8/hr 2 or 6/hr
2 or 10 0 or 8
4/hr
3.5/hr
2.5/hr
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Resource interaction effects
6/hr 6/hr
4 or 8/hr 4 or 8/hr
2 or 10 2 or 10
0 or 120 or 12
6/hr
6/hr
6/hr
6/hr
6/hr
4 or 8/hr
2 or 10
0 or 12
6/hr
4.5/hr
3/hr
1.5/hr
In a serial process downstream resources depend on upstreamresources: can have temporary starvation (idleness)
As variability increases, the impact of resource interaction increases
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Want to eliminate as much variability as possible from your processes: how?
specialization in tasks can reduce task time variability standardization of offer can reduce job type variability automation of certain tasks IT support: templates, prompts, etc. incentives
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Want to reduce resource interference in your processes: how?
smaller lotsizes (smaller batches) better balanced line
• by speeding-up bottleneck (adding staff, changing procedure, different incentives, change technology)
• through cross-training eliminate steps buffers integrate work (pooling)
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The impact of task integration (pooling)
balances utilization... reduces resource interference... ...therefore reduces the impact of temporary
bottlenecks there is more benefit from pooling in a high utilization
and high variability process pooling is beneficial as long as
• it does not introduce excessive variability in a low variability system
• the benefits exceed the task time reductions due to specialization
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Examples of pooling in business
Consolidating back office work Call centers Single line versus separate queues
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Summary of fundamental process principles
identify and eliminate bottlenecks reduce as much variability as possible eliminate handoffs, improve communication to minimize
resource interference for high utilization processes build-in more slack