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To Accompany Krajewski & Ritzman Operations Management: Strategy and Analysis, Seventh Edition © 2004 Prentice Hall, Inc. All rights reserved.

Process AnalysisProcess Analysis

Chapter 4Chapter 4



•• A process is how a company makes A process is how a company makes a product or service. a product or service.

•• Design considerations are:Design considerations are:•• Process StructureProcess Structure•• Customer InvolvementCustomer Involvement•• Vertical IntegrationVertical Integration•• Resource FlexibilityResource Flexibility•• Capital IntensityCapital Intensity



•• Process analysis is needed for process Process analysis is needed for process reengineering and process improvement reengineering and process improvement

•• Various process and data analysis tools Various process and data analysis tools are useful to inform decisionsare useful to inform decisions

•• Process analysis:Process analysis:•• The documentation and detailed understanding of The documentation and detailed understanding of

how work is performed, and how it can be how work is performed, and how it can be redesignedredesigned

•• The intent is to continually improve processesThe intent is to continually improve processes


A Systematic Approach to A Systematic Approach to Process AnalysisProcess Analysis

Implementchanges

6Redesignprocess

5

Documentprocess

3

Definescope

2

Evaluateperformance

4

Identify opportunity

1

Figure 4.2Figure 4.2


Identify OpportunitiesIdentify Opportunities•• Give particular attention to four core Give particular attention to four core

processesprocesses•• Supplier relationshipsSupplier relationships•• New service/product developmentNew service/product development•• Order fulfillmentOrder fulfillment•• Customer relationshipCustomer relationship

•• Look at strategic issuesLook at strategic issues•• Encourage employees who perform the Encourage employees who perform the

process or who are internal or external process or who are internal or external customers of the process to bring customers of the process to bring forward ideasforward ideas


Define ScopeDefine Scope

•• Establish the boundaries of the Establish the boundaries of the process to be analyzedprocess to be analyzed

•• Assign resources that match the Assign resources that match the scope of the processscope of the process

•• Design teams may be established Design teams may be established for large reengineering projectsfor large reengineering projects


Document ProcessDocument Process

•• List process inputs, suppliers List process inputs, suppliers (internal & external), outputs and (internal & external), outputs and customers (int. & ext.).customers (int. & ext.).

•• Document process steps / subDocument process steps / sub--processes using diagrams, tables, processes using diagrams, tables, charts, etc to make info accessiblecharts, etc to make info accessible

•• Note customer contact, complexity, Note customer contact, complexity, convergence and convergence and ““handhand--offsoffs””


Evaluate PerformanceEvaluate Performance

•• Identify metrics: performance measures Identify metrics: performance measures that are established for the process and that are established for the process and the steps within itthe steps within it

•• Create multiple measures ofCreate multiple measures of•• QualityQuality•• Customer satisfactionCustomer satisfaction•• Throughput timeThroughput time•• Cost Cost •• ErrorsErrors•• SafetySafety•• Other key competitive prioritiesOther key competitive priorities


Redesign ProcessRedesign Process

•• Uncover disconnects or gaps between Uncover disconnects or gaps between actual and desired performanceactual and desired performance

•• Find root causes of performance gapsFind root causes of performance gaps•• Design and document new processDesign and document new process


Redesign ProcessRedesign Process

•• Uncover disconnects or gaps between Uncover disconnects or gaps between actual and desired performanceactual and desired performance

•• Find root causes of performance gapsFind root causes of performance gaps•• Design and document new processDesign and document new process

•• Shift from analytical to creative thinkingShift from analytical to creative thinking•• Consider human side as well as numbersConsider human side as well as numbers•• Identify expected performanceIdentify expected performance


Implement ChangesImplement Changes

•• Widespread participation in analysis Widespread participation in analysis is essential, for commitment and is essential, for commitment and expertiseexpertise

•• View and manage implementation as a View and manage implementation as a project project

•• Seek input on implementation plan Seek input on implementation plan from all stakeholdersfrom all stakeholders


Process DocumentationProcess Documentation

•• FlowchartsFlowcharts–– Diagrams that trace the flow of information, Diagrams that trace the flow of information,

customers, equipment, or materials through the customers, equipment, or materials through the various steps of a process.various steps of a process.

–– Flowcharts show how organizations produce Flowcharts show how organizations produce their outputs through a myriad of crosstheir outputs through a myriad of cross--functional work processes, allowing the design functional work processes, allowing the design team to see all the critical interfaces between team to see all the critical interfaces between functions and departments.functions and departments.


Flowchart of the Sales Process Flowchart of the Sales Process for a Consulting Companyfor a Consulting Company

Figure 4.3


Flowchart of Nested Flowchart of Nested SubprocessSubprocessof Client Agreement and Service of Client Agreement and Service

Delivery StepDelivery Step



Flowchart of the Process Showing Flowchart of the Process Showing Handoffs Between DepartmentsHandoffs Between Departments

Figure 4.5


Flow DiagramsFlow DiagramsService visible to customer

Customer departs with car

Repair not authorized

Repair authorized

Service not visible to customer

* = Points critical to the success of the service † = Points at which failure is most often experienced

Collect payment

Notify customer

Figure 4.6

Customer drops off

car

Mechanic makes

diagnosis*

Discuss needed

work with customer*

Order parts

Parts available

Checkparts

availability†

Perform work†

Parts not available

Inspect/ test and repair

Perform corrected

work

Corrective work necessary

Repair complete


Process DocumentationProcess Documentation

•• Service blueprintsService blueprints–– A special flowchart of a service process A special flowchart of a service process

that shows which of its steps has high that shows which of its steps has high customer contact.customer contact.

–– Special feature: line of visibility that Special feature: line of visibility that identifies which steps are visible to the identifies which steps are visible to the customer.customer.

–– Service blueprints should show the Service blueprints should show the extent and type of customer contact.extent and type of customer contact.


Service Blueprint of Consulting Service Blueprint of Consulting CompanyCompany’’s Inventory Appraisal s Inventory Appraisal

ProcessProcess

Figure 4.7


Process DocumentationProcess Documentation•• Process ChartsProcess Charts

–– Concentrates in more detail on a smaller Concentrates in more detail on a smaller number of steps that does a flowchart.number of steps that does a flowchart.

–– It is an organized way of documenting all of the It is an organized way of documenting all of the activities performed with a customer by an activities performed with a customer by an employee, a machine, at a workstation, or on employee, a machine, at a workstation, or on materials.materials.

–– Five categories:Five categories:»» OperationOperation»» TransportationTransportation»» InspectionInspection»» DelayDelay»» StorageStorage


Process ChartsProcess ChartsProcess: Emergency room admissionSubject: Ankle injury patientBeginning: Enter emergency roomEnding: Leave hospital

Step no.

Time (min)

Distance (ft)

Summary

Number of stepsActivity Time

(min)Distance

(ft)

Step description

Insert Step

Append Step

Remove Step

1 X Enter emergency room, approach patient window 2 X Sit down and fill out patient history3 X Nurse escorts patient to ER triage room4 X Nurse inspects injury5 X Return to waiting room

6 X Wait for available bed 7 X Go to ER bed8 X Wait for doctor9 X Doctor inspects injury and questions patient

10 X Nurse takes patient to radiology

11 X Technician x-rays patient12 X Return to bed in ER13 X Wait for doctor to return14 X Doctor provides diagnosis and advice15 X Return to emergency entrance area

16 X Check out17 X Walk to pharmacy18 X Pick up prescription 19 X Leave the building

0.50 1510.0 -0.75 403.00 -0.75 40

1.00 -1.00 604.00 -5.00 -2.00 200

3.00 -2.00 2003.00 -2.00 -1.00 604.00 -2.00 1804.00 -1.00 20

Transport 9 11 815 Operation 5 23 —

Inspect 2 8 —

Store — — —Delay 3 8 —



Evaluating PerformanceEvaluating Performance

•• Data analysis tools:Data analysis tools:–– Checklists: a form used to record the frequency Checklists: a form used to record the frequency

of occurrence of certain service or product of occurrence of certain service or product characteristics related to performance.characteristics related to performance.

–– Histograms and bar chartsHistograms and bar charts•• Histogram: summarizes data measured on a Histogram: summarizes data measured on a

continuous scale, showing the frequency distribution continuous scale, showing the frequency distribution of some characteristicof some characteristic

•• Bar chart: a series of bars representing the frequency Bar chart: a series of bars representing the frequency of occurrence of data characteristics measured on a of occurrence of data characteristics measured on a yesyes--andand--no basisno basis


Evaluating PerformanceEvaluating Performance•• Data analysis tools:Data analysis tools:

–– Pareto Charts: a bar chart on which the factors Pareto Charts: a bar chart on which the factors are plotted in decreasing order of frequency are plotted in decreasing order of frequency along the horizontal axis.along the horizontal axis.

–– Scatter diagrams: a plot of two variables Scatter diagrams: a plot of two variables showing whether they are related.showing whether they are related.

–– CauseCause--andand--effect diagram: relates a key effect diagram: relates a key disconnect to its potential causes. (i.e. A disconnect to its potential causes. (i.e. A fishbone diagram)fishbone diagram)

–– Graphs: various pictorial representations (e.g. Graphs: various pictorial representations (e.g. pie charts, line graphs, etc)pie charts, line graphs, etc)


Bar ChartBar Chart



Pareto ChartsPareto Charts



Checker Board AirlinesChecker Board AirlinesPassenger processing at gatePassenger processing at gate

Late cabin cleanersLate cabin cleaners

Unavailable cockpit crewUnavailable cockpit crew

Late cabin crewLate cabin crew

Personnel

Aircraft late to gateAircraft late to gate

Mechanical failuresMechanical failures

Equipment

Procedures

Waiting for late passengersWaiting for late passengers

Weight/balance sheet lateWeight/balance sheet late

Poor announcement of departuresPoor announcement of departures

Delayed checkDelayed check--in procedurein procedure

Delayed flight departures

Materials

Late food serviceLate food service

Late fuelLate fuel

Late baggage to aircraftLate baggage to aircraft

Contractor not providedContractor not providedupdated scheduleupdated schedule

WeatherWeather

Air traffic delaysAir traffic delays

Other

Figure 4.11Figure 4.11Source: Adapted from D. Daryl Wyckoff, “New Tools for Achieving Service Quality.” The Cornell Hotel and Restaurant Administration Quarterly, November 1984, pg. 89. © 1984 Cornell H.R.A. Quarterly. Used by permission. All rights reserved.



•• Data snooping:Data snooping:–– The power of the data analysis tools is The power of the data analysis tools is

greatest when they are used together.greatest when they are used together.–– Data snooping is the use of the tools to Data snooping is the use of the tools to

sift data, clarify issues and deduce sift data, clarify issues and deduce causes.causes.


Wellington Fiber Board Co.Wellington Fiber Board Co.Tools for Improving QualityTools for Improving Quality

Step 1Step 1——ChecklistChecklistStep 2Step 2——Pareto chartPareto chartStep 3Step 3——CauseCause--andand--effect diagrameffect diagramStep 4Step 4——Bar chartBar chart


Wellington Fiber Board Co.Wellington Fiber Board Co.ChecklistsChecklists

Headliner DefectsDefect type Tally Total

A. Tears in fabricB. Discolored fabricC. Broken fiber board

D. Ragged edgesTotal



Wellington Fiber Board Co.Wellington Fiber Board Co.ChecklistsChecklists

Headliner DefectsDefect type Tally Total

A. Tears in fabric //// 4B. Discolored fabric /// 3C. Broken fiber board //// //// //// ////

//// //// //// / 36D. Ragged edges //// // 7

Total 50



Wellington Fiber Board Co.Wellington Fiber Board Co.

CC

DDAA BB

Pareto ChartPareto Chart100100

8080

6060

4040

2020

00

Cum

ulat

ive

perc

enta

geC

umul

ativ

e pe

rcen

tage

Num

ber o

f def

ects

Num

ber o

f def

ects

5050

4040

3030

2020

1010

00Defect typeDefect typeFigure 4.12Figure 4.12


Wellington Fiber Board Co.Wellington Fiber Board Co.CauseCause--andand--Effect DiagramEffect Diagram

Out of specificationOut of specificationNot availableNot available

Materials

HumidityHumiditySchedule changesSchedule changes

Other

Machine maintenanceMachine maintenanceMachine speedMachine speed

Wrong setupWrong setup

Process

TrainingTrainingAbsenteeismAbsenteeism

CommunicationCommunication

People

Broken fiber

board



Wellington Fiber Board Co.Wellington Fiber Board Co.Bar ChartBar Chart 2020

1515

1010

55

00

Num

ber o

f bro

ken

fiber

boa

rds

Num

ber o

f bro

ken

fiber

boa

rds

FirstFirst SecondSecond ThirdThirdShiftShiftFigure 4.12Figure 4.12



•• Simulation:Simulation:–– Looks at dynamic performance of system Looks at dynamic performance of system

over time.over time.–– Process is modeled to reproduce Process is modeled to reproduce

behaviourbehaviour of system.of system.–– Adjustments to model (Adjustments to model (““whatwhat--ifsifs””) will ) will

identify impacts of changes.identify impacts of changes.


Flowchart of BankFlowchart of BankEntranceEntrance BufferBuffer Work StationWork Station BufferBuffer

DoorDoor LineLine TellerTeller Served CustomersServed Customers

(a) Flowchart for one(a) Flowchart for one--teller bankteller bank

Work StationWork StationTeller 1Teller 1

EntranceEntrance BufferBuffer BufferBufferDoorDoor LineLine Served CustomersServed Customers

Work StationWork StationTeller 2Teller 2

(b) Flowchart for two(b) Flowchart for two--teller bankteller bank Figure 4.13Figure 4.13


Simulation Results of BankSimulation Results of Bank

ElementElement ElementElement StatisticsStatistics OverallOverallTypesTypes NamesNames MeansMeans

Entrance(s)Entrance(s) DoorDoor Service levelService level 0.900.90

Buffer(s)Buffer(s) LineLine Mean inventoryMean inventory 4.474.47Mean cycle timeMean cycle time 11.0411.04



SimulationSimulation

Figure 4.15(a)



Figure 4.15(b)



Figure 4.15(c)


Redesigning the ProcessRedesigning the Process

•• A questioning attitude: ask six A questioning attitude: ask six questions about each step in the questions about each step in the processprocess

–– What is being done?What is being done?–– When is it being done?When is it being done?–– Who is doing it?Who is doing it?–– Where is it being done?Where is it being done?–– How is it being done?How is it being done?–– How well does it do on the various metrics of How well does it do on the various metrics of

performance? performance?


Redesigning the ProcessRedesigning the Process•• Creativity can be stimulated by having a Creativity can be stimulated by having a

brainstorming session: brainstorming session: –– a time when a group of people, knowledgeable on the a time when a group of people, knowledgeable on the

process and its disconnects, propose ideas for change in process and its disconnects, propose ideas for change in a rapida rapid--fire manner.fire manner.

•• Benchmarking Benchmarking –– Systematic comparison of a firmSystematic comparison of a firm’’s processes, s processes,

services or products against industry leadersservices or products against industry leaders•• Planning: identify process, leader, performance measuresPlanning: identify process, leader, performance measures•• Analysis: measure gap, identify causesAnalysis: measure gap, identify causes•• Integration: establish goals and resource commitmentsIntegration: establish goals and resource commitments•• Action: develop teams, implement plan, monitor progress, Action: develop teams, implement plan, monitor progress,

return to step 1return to step 1

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K&R Chapter 4 - Process Analysisadfisher/7943-05/Chpt4/ch04.pdf · Process Analysis Chapter 4. ... Service Blueprint of Consulting Company’s Inventory Appraisal Process ... along