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OPSM 501: Operations Management
Week 4:
Process analysis
Kristen’s Cookie
Koç University Graduate School of BusinessMBA Program
Zeynep [email protected]
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Mark your calendars: Plant visit to Mercedes Benz in Hadimkoy on 19/12
9:30-12:00 at plant
Departure very early from campus with pick-up stop from Ataturk Oto Sanayi
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Process Architecture is defined and represented by a process flow chart:
Process = network of activities performed by resources
1. Process Boundaries:– input– output
2. Flow unit: the unit of analysis
3. Network of Activities & Storage/Buffers– activities with activity times– routes: precedence relationships (solid lines)
4. Resources & Allocation
5. Information Structure & flow (dashed lines)
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Flowchart Symbols
Tasks or operations
Examples: Giving an admission ticket to a customer, installing an engine in a car, etc.
Decision Points
Examples: How much change should be given to a customer, which wrench should be used, etc.
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Flowchart Symbols
Storage areas or queues
Examples: Lines of people or cars waiting for a service, parts waiting for assembly etc.
Flows of materials or customers
Examples: Customers moving to a seat, mechanic getting a tool, etc.
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Recall:Terminology
Flow Time (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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Flow time in the House Game process?
Production Control(color sheets, log sheets, scissors)
(scissors)
Base Cut(scissors)
Final Assembly(tape)
Base Weld(stapler)
Quality Control
Customer
Roof Base Form
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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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Operational Measure: Flow TimeDriver: Activity Times, Critical Activity
(Theoretical) Flow Time
Critical Activity
Flow Time efficiency = TimeFlowAverage
TimeFlowlTheoretica
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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
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
– change product mix
Move work content from critical to non-critical activities
– to non-critical path or to ``outer loop’’
Reduce waiting time.
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Industry Process AverageFlow Time
TheoreticalFlow Time
Flow TimeEfficiency
Life Insurance New PolicyApplication
72 hrs. 7 min. 0.16%
ConsumerPackaging
New GraphicDesign
18 days 2 hrs. 0.14%
Commercial Bank ConsumerLoan
24 hrs. 34 min. 2.36%
Hospital Patient Billing 10 days 3 hrs. 3.75%
AutomobileManufacture
FinancialClosing
11 days 5 hrs 5.60%
Most time inefficiency comes from waiting: E.g.: Flow Times in White Collar Processes
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Flow rate (capacity) in the House Game process?
Production Control(color sheets, log sheets, scissors)
(scissors)
Base Cut(scissors)
Final Assembly(tape)
Base Weld(stapler)
Quality Control
Customer
Roof Base Form
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Tools: Gantt Chart
Gantt charts show the time at which different activities are performed, as well as the sequence of activities
Res
ourc
es
1
2
3
4
time
activities
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Example of a two-stage production line
A B
5 min 2 min
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Gantt Chart
A A A A
B B B B
5 10 15 20
7 12 17 22
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Example of a two-stage production line
A1
B
2 minA2
5 min
5 min
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Gantt Chart
A1 A1 A1 A1
B
5 10 15 20
7 12 17 22
A2A2A2A2
5 12 17 22
B
9
B B
14
B B
19
B B
24
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Example of a two-stage production line
A1
B
2 minA2
5 min
5 min
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Gantt Chart
A1 A1 A1 A1
B
5 10 15 20
7 12 17 22
A2A2A2A2
5 20
B
9
B B
14
B B
19
B B
24
10 15
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Theoretical Capacity
Theoretical capacity: The capacity (throughput rate) of a process under ideal conditions (units / time)
Effective capacity: The capacity that one expects of a process under normal working conditions (units/time)
Effective capacity < Theoretical capacity
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Effective Capacity (scheduled availability)
Effective capacity depends on the following– Number of shifts– Product variety– Maintenance – Idleness
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Realized Capacity (net availability)
Actual production or realized throughput rate– Usually lower than effective capacity.
• Machine and equipment failures
• Quality problems
• Workforce losses
• Other uncertainties
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Operational Measure: CapacityDrivers: Resource Loads
(Theoretical) Capacity of a Resource
Bottleneck Resource
(Theoretical) Capacity of the Process
Capacity Utilization of a Resource/Process = Realized throughput [units/hr]
Theoretical capacity [units/hr]
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X-ray revisited
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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X-Ray revisitedResource Pool
Res. Unit Load
Load Batch
Theoretical Capacity of Res. unit
No of units in pool
Theoretical capacity of pool
Messenger 20+20 min/patient
1 60/40=1.5 patients/hr
6 1.5(6)=9 Patient/hr
Receptionist 5 1 60/5=12 1 12
X-ray technician
6+7.5+2.5 1 60/16=3.75 4 15
X-ray lab 6+0.25(6)=7.5
1 60/7.5=8 2 16
Darkroom technician
12+0.25(12)=15
1 60/15=4 3 12
Darkroom 12+0.25(12)=15
1 60/15=4 2 8
Changing room
3+3 1 60/6=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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A Recipe for Capacity Measurements
Resource Unit Load Resource Capacity Process Resource
(time/job) Unit Capacity # of units Total Capacity Utilization*
* assuming system is processing at full capacity
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Effect of Product Mix- Example
Resource pool
Unit Load (Physician)
Unit Load (Hospital)
Unit Load (60%-40% mix)
Mailroom clerk
0.6 1.0 0.76
Data-entry clerk
4.2 5.2 4.60
Claims processor
6.6 7.5 6.96
Claims supervisor
2.2 3.2 2.60
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Theoretical capacity for hospital claims
Resource Sch. availability
Unit Load min/claim
Th. Capacity resource
Number in pool
Th. Capacity pool
Mailroom clerk
450 1.0 450/1=450 1 450
Data entry clerk
450 5.2 450/5.2=86.5 8 692
Claims processor
360 7.5 360/7.5=48 12 576
Claims supervisor
240 3.2 240/3.2=75 5 375
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Theoretical capacity for 60%-40% mix
Resource Sch. availability
Unit Load min/claim
Th. Capacity resource
Number in pool
Th. Capacity pool
Mailroom clerk
450 0.76 592 1 592
Data entry clerk
450 4.60 98 8 784
Claims processor
360 6.96 51.7 12 621
Claims supervisor
240 2.60 92 5 460
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In summary
Throughput Process Capacity Effective Capacity Theoretical Capacity
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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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Example
10 min/unit2 min/unit 6 min/unit
•Flow time T = 2+10+6 = 18 min.
•System cycle time 1/R= 10 min.
•Throughput rate R= 6 units / hour
•Utilizations: R1: 2/10=20%
R2=100% (bottleneck)
R3=6/10=60%
R1 R2 R3
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Tools: Gantt Chart
Gantt charts show the time at which different activities are performed, as well as the sequence of activities
Res
ourc
es
1
2
3
4
time
activities
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R2
10 min/unitR1
2 min/unitR3
6 min/unit
R1
R2
R3
10 20 30 40 50 60
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
Three Workers
W1 W2 W3
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R1
R2
R3
10 20 30 40 50 60
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
Three Workers
Throughput time for an order of 5 units
System cycle time
Throughput time for a rush order of 1 unit
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R1
R2
R3
10 20 30 40 50 60
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
W1
W2
Two Workers
1 2 3 4 5
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More on multi-products and product-mix
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Announcement
Assignment 2: Individual problem solving– Will encourage you to read the Chapters– Will prepare you for the exam– Will help you review the process analysis module– There are simple solved questions which you can look at
first
If after serious attempts you are unable to solve, come to my office for hints and pointers.
Assigned problems: 2.5, 2.10, 3.5, 4.3 Due: Session 6-same due date as The Goal Can do first two this week