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8/8/2019 2process Analysis
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1
Chapter 2
Process ²
Selection and Design
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What is a TransformationProcess?
Defined
A transformation process is definedas a user of resources to transforminputs into some desired outputs
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Transformations
Physical--manufacturing
Locational--transportation
Exchange--retailing
Storage--warehousing
Physiological--health care
Informational--telecommunications
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Process Analysis
Process Flowcharting
Types of Processes
Process Performance Metrics
OBJECTIVES
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Process Analysis Terms
Process: Is any part of an organizationthat takes inputs and transforms them
into outputs
Cycle Time: Is the average successivetime between completions of successive units
Utilization: Is the ratio of the time that aresource is actually activated relative tothe time that it is available for use
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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 storageareas or queues
It is an ideal methodology by which tobegin analyzing a process
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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 shouldbe used, etc.
Purpose and Examples
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Examples: Sheds,
lines of people waiting
for a service, etc.
Examples: Customers
moving to a seat,
mechanic getting a
tool, etc.
Storage areas or
queues
Flows of
materials or
customers
Purpose and Examples
Flowchart Symbols
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Example: Flowchart of Student
Going to School
Yes
No
Goof
off
Go to
school
today?
Walk to
class
Drive to
school
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Types of Processes
Single-stage Process
Stage 1
Stage 1 Stage 2 Stage 3
Multi-stage Process
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Types of Processes (Continued)
Stage 1 Stage 2Buffer
Multi-stage Process with Buffer
A buffer refers to a storage area betweenstages where the output of a stage is placedprior to being used in a downstream stage
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Other Process Terminology
(Continued) Bottleneck
± Occurs when the limited capacity of aprocess causes work to pile up or becomeunevenly distributed in the flow of a
process ± If an employee works too slow in a multi-
stage process, work will begin to pile up infront of that employee. In this is case theemployee represents the limited capacitycausing the bottleneck.
Pacing ± Refers to the fixed timing of the movement
of items through the process
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Other Types of Processes
Make-to-order
± Only activated in response to an actual order
± Both work-in-process and finished goods
inventory kept to a minimum
Make-to-stock
± Process activated to meet expected or forecast demand
± Customer orders are served from targetstocking level
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Process Performance Metrics
Operation time = Setup time + Runtime
Throughput time = Average time for aunit to
move through thesystem
Velocity = Throughput time
Value-added time
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Process Performance Metrics
(Continued)
Cycle time = Average time betweencompletion of units
Throughput rate = 1 .
Cycle time
Efficiency = Actual output
Standard Output
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Cycle Time Example
Suppose you had to produce 600 units in 80hours to meet the demand requirements of aproduct. What is the cycle time to meet this
demand requirement?
Answer: There are 4,800 minutes (60minutes/hour x 80 hours) in 80 hours. So the
average time between completions would haveto be: Cycle time = 4,800/600 units = 8 minutes.
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Process Throughput Time
Reduction
Perform activities in parallel
Change the sequence of activities
Reduce interruptions
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Manufacturing andProcess SelectionDesign
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Types of Processes
Conversion (ex. Iron to steel)
Fabrication (ex. Cloth to clothes)
Assembly (ex. Parts tocomponents)
Testing (ex. For quality of products)
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Fabrication process
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Assembly process
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Process Flow Structures
Job shop (ex. Copy center making a singlecopy of a student term paper)
Batch shop (ex. Copy center making 10,000copies of an ad piece for a business)
Assembly Line (ex. Automobile manufacturer)
Continuous Flow (ex. Petroleummanufacturer)
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IV.
Continuous
Flow
III.
AssemblyLine
II.
Batch
I.
Job
Shop
LowVolume,
One of a
Kind
MultipleProducts,
Low
Volume
Few
Major Products,
Higher
Volume
High
Volume,High
Standard-
izationCommercial
Printer
FrenchRestaurant
Heavy
Equipment
AutomobileAssembly
Burger King
Sugar
Refinery
Flexibility (High)
Unit Cost (High)
Flexibility (Low)
Unit Cost (Low)
Exhibit
6.10
These are
the major
stages of
product
and
processlife cycles
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Break-Even Analysis A standard approach to choosing
among alternative processes or equipment
Model seeks to determine the point inunits produced (and sold) where we willstart making profit on the process or equipment
Model seeks to determine the point inunits produced (and sold) where totalrevenue and total cost are equal
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Break-Even Analysis (Continued)
This formula can be used to find any of its
components algebraically if the other parameters are known
Break-even Demand=
Purchase cost of process or equipment
Price per unit - Cost per unit
or
Total fixed costs of process or equipmentUnit price to customer - Variable costs per unit
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Break-Even Analysis (Continued)
Example: Suppose you want to purchase a newcomputer that will cost $5,000. It will be used toprocess written orders from customers who will pay$25 each for the service. The cost of labor, electricityand the form used to place the order is $5 per
customer. How many customers will we need to serveto permit the total revenue to break-even with our costs?
Break-even Demand:
= Total fixed costs of process or equip.Unit price to customer ± Variable costs
=5,000/(25-5)
=250 customers
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Manufacturing Process Flow Design
A process flow design can be defined asa mapping of the specific processes thatraw materials, parts, and subassembliesfollow as they move through a plant
The most common tools to conduct a
process flow design include assemblydrawings, assembly charts, andoperation and route sheets
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Example: Assembly Chart (Gozinto)
A-2SA-2
4
5
6
7
Lockring
Spacer, detent spring
Rivets (2)
Spring-detent
A-5Component/Assy Operation
Inspection
From Exhibit 5.14
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Ser vice Process
Selection and Design
Chapter 2
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The Nature of Services
Service Strategy: Focus &A
dvantage Service-System Design Matrix
Service Blueprinting
Service Fail-safing Characteristics of a Well-Designed
Service Delivery System
OBJECTIVES
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The Nature of Ser vices
1. Everyone is an expert on services
2. Services are idiosyncratic
3. Quality of work is not quality of service
4. Most services contain a mix of tangible and intangible attributes
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Ser vice Generalizations
(Continued)5. High-contact services are experienced,
whereas goods are consumed
6. Effective management of servicesrequires an understanding of marketing and personnel, as well asoperations
7. Services often take the form of cyclesof encounters involving face-to-face,phone, Internet, electromechanical,and/or mail interactions
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Ser vice Businesses
Facilities-based services: Where the customer must go to the service facility
Field-based services: Where the productionand consumption of the service takes place inthe customer¶s environment
A service business is the management of organizations whose primary businessrequires interaction with the customer toproduce the service
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Internal
Ser vices
Defined
Internal Supplier
Internal Supplier
Internal
Customer External
Customer
Internal services is the
management of servicesrequired to support the
activities of the larger
organization. Services
including data processing,
accounting, etc
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The Customer Centered View
Exhibit 7.1
The
Customer
The Service
Strategy
The
People
The
Systems
A philosophical view that
suggests the organization
exists to serve the
customer, and thesystems and the
employees exist to
facilitate the process of
service.
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Ser vice Strategy: Focus and
AdvantagePerformance Priorities
Treatment of the customer
Speed and convenience of service delivery Price
Variety
Quality of the tangible goods
Unique skills that constitute the serviceoffering
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Ser vice-System Design Matrix
Exhibit 7.6
Mail contact
Face-to-face
loose specs
Face-to-face
tight specsPhone
Contact
Face-to-face
totalcustomization
Buffered
core (none)
Permeable
system (some)
Reactive
system (much)
High
LowHigh
Low
Degree of customer/server contact
Internet &
on-site
technology
Sales
Opportunity
Production
Efficiency
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Example of Ser vice Blueprinting
rush
shoes
pply
polish
ail
point
uollect
payment
lean
shoes aterials
(e.g., polish, cloth)
elect and
purchase
supplies
tandard
execution time
2 minutes
Total acceptable
execution time
5 minutes
30
secs
30
secs
45
secs
15
secs
Wrong
color ax
een by
customer 45
secs
ine o
visibility
Not seen by
customer but
necessary to
per ormance
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Ser vice Fail-safing
Poka-Yokes (A Proactive Approach) Keeping a
mistake from
becoming aservice defect
How can wefail-safe thethree Ts?
Task
TangiblesTreatment
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Information enhancement
R ely on gettinginformation to
where it can be
used to prevent
a mistake
A2
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Have we
compromisedone of the
3 Ts?
1. Task
2. Treatment
3. Tangible
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Basic functions
States of Defect Function
Defects
About to occur
(Prediction)
Occurred
(Detection)
Shut down
Control
Warning
Poka-Yoke
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50
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Three Contrasting Ser vice Designs
The production line approach (ex.McDonald¶s)
The self-service approach (ex. automaticteller machines)
The personal attention approach (ex.Ritz-Carlton Hotel Company)
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Characteristics of a Well-
Designed Ser vice System
1. Each element of the service systemis consistent with the operating f ocus of the firm
2. It is user-friendly
3. It is r obust
4. It is structured so that consi stent perf ormanc e by its people andsystems is easily maintained
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E l P i
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Ex ample - Processing errors
Before Improvement:
It was possible to insert the chassis inthe jig backwards. Correct operation
depended on the workers vigilance.
After Improvement:
A guide pin was added, keyed to an
asymmetrical feature to the chassis.
This completely eliminates the danger
of backwards processing.
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E l O itt d P i
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Ex ample - Omitted Processing
Before Improvement:
The operator counted the holes as they
were drilled. However, the operator
sometimes made errors, and the
products with the wrong number of
holes were produced.After Improvement:
A counter was mounted on the drill press to
detect each hole as it is drilled. Along withthis, a limit switch was mounted on the jig to
detect when a part was removed before the
proper number of holes was drilled.
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Characteristics of a Well-
Designed Ser vice System
(Continued)5. It provides effective link s between the
back office and the front office so that
nothing falls between the cracks
6. It manages the evidenc e of servicequality in such a way that customers
see the value of the service provided
7. It is cost-effec tive
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Applying Behavioral Science to
Ser vice Encounters
1. The front-end and back-end of theencounter are not created equal
2. Segment the pleasure, combine the pain
3. Let the customer control the process
4. Pay attention to norms and rituals
5. People are easier to blame than systems
6. Let the punishment fit the crime inservice recovery
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Learning Cur ves
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Underlying Principles of Learning
Cur ves
1. Each time you perform a task ittakes less time than the last timeyou performed the same task
2. The extent of task time decreasesover time
3. The reduction in time will follow a
predictable pattern
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Drilling
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Example of a Learning Cur ve
Suppose you start aterm paper typingbusiness. You timeyourself on the first
paper, then the second,and so on.
Term
paper
1
2
3
4
5
6
Time (in
Minutes)
100
90
84.62
81.00
78.30
76.16
Note that only 90 of 100 minutes are used
in the secondrepetition. This is anexample of a 90%learning curve.
61Learning
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Learning
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Plotting the
Learning
Cur ve
All learning curves have this
downward sloping curve.
% Learning urve
Unit
P r o d u c t i o n
T
i m e ( M i n u t e s )
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Types of Learning
I ndivid u al Learning
Improvement when individuals gain askill or efficiency by repetition of a job
O rganizati onal Learning
Improvement from the groups of individuals from repetition and changes
in administration, equipment, andproduct design
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From Learning Cur ves to Performance
Improvement (Part 1)
Proper selection of workers
Proper training
Motivation
Work specialization
Do one or very few jobs at a time
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From Learning Cur ves to
Performance Improvement (Part 2)
Use tools or equipment that
assists or supports performance
Provide quick and easy access for
help
Allow workers to help redesign
their tasks
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Question Bowl
Learning improvement that takes place whenpeople repeat a process and gain skill or efficiency from their own experience can becharacterized by which of following terms?
a. O
rganizational learningb. Individual learning
c. Knowledge learning
d. All of the above
e. None of the aboveAnswer:
b. Individual learning
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Question Bowl
The first time a student types up a 15 page termpaper it takes 40 minutes. The second time
the student types up a term paper it only
takes 36 minutes. What ³unit improvement
factor´ learning curve should be used in thisexample?
a. 95%
b. 0.4564
c.
90%d. 88%
e. None of the above
Answer:c. 90% (36/40)
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Question Bowl
Use the ³Unit Improvement Factor´ table for this
problem. If it takes 1 hour to complete the 1st
repetition a job and a 75% learning curve
applies to this situation, what is the expected
time of the 40th
repetition of this job?a. 0.2163
b. 20 minutes
c. 12.978 minutes
d. 40 minutese. None of the above
Answer:
c.12
.978 minutes(0.2163x60 minutes)
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Question Bowl
Use the ³Unit Improvement Factor´ table for this problem. If it takes 20 minutes to perform
a brake job on an automobile the 1st time and
a 95% learning curve applies to this situation,
what is the expected time of the 100th
repetition of this job?
a. 15.533 minutes
b. 14.224 minutes
c. 13.978 minutesd. 10 minutes
e. None of the above
A
nswer:b. 14.224 minutes
(0.7112x20 minutes)
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