Process design. Process design. Process design. Operations strategy. Supply network design. Layout and flow Design. Operations management.

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1 Process design Source: Joe Schwarz, Process design Process design Supply network design Operations strategy Layout and flow Design Operations management Improvement Process technology Product/service design Job design Planning and control 1

2 Nature and purpose of the design activity Products, services and the processes which produce them all have to be designed Decisions taken during the design of a product or service will have an impact on the decisions taken during the design of the process which produces those products or services, and vice versa Design of products / services and design of processes are interrelated and should be treated together Designing the product or service Designing the process Products and services should be designed in such a way that they can be created effectively Product / service design has an impact on the process design and vice versa Processes should be designed so they can create all products and services which the operation is likely to introduce 2

3 Design of the Product Design of the Process Design of the Service Design of the Process In manufacturing operations overlapping the activities of product and process design is beneficial In most service operations the overlap between service and process design is implicit in the nature of service Process mapping symbols derived from Scientific Management Operation (an activity that directly adds value) Inspection (a check of some sort) Transport (a movement of something) Process mapping symbols derived from Systems Analysis Beginning or end of the process Activity Input or output from the process Delay (a wait, e.g. for materials) Direction of flow Storage (deliberate storage, as opposed to a delay) Decision (exercising discretion) 3

4 Designing processes There are different process types Process types are defined by the volume and variety of items they process Process types go by different names depending on whether they produce products or services Process tasks Diverse/ complex Process flow Intermittent Manufacturing process types High Project Jobbing Variety Batch Mass Repeated/ divided Continuous Low Low Volume Continuous High 4

5 Project processes One-off, complex, large-scale products with high work content Specially made, every one customized Defined start and finish: time, quality and cost objectives Many different skills have to be coordinated A project process with a small part of the process map that would describe the whole process 5

6 Jobbing processes Very small quantities: one-offs, or only a few required Specially made: high variety, low repetition, strangers, every one customized Skill requirements are usually very broad Skilled jobber, or team, completes whole product Preparing photolithography materials on a jobbing basis with a typical process map 6

7 Batch processes Higher volumes and lower variety than for jobbing Standard products, repeating demand. But can make specials Specialized, narrower skills Set-ups (changeovers) at each stage of production A batch process in a kitchen together with an illustrative process map 7

8 Mass (line) processes Higher volumes than batch Standard, repeat products ( runners ) Low and/or narrow skills No set-ups, or almost instantaneous ones A mass process a packing process 8

9 Continuous processes Extremely high volumes and low variety: often single product Standard, repeat products ( runners ) Highly capital-intensive and automated Few changeovers required Difficult and expensive to start and stop the process Part of a continuous process and a typical process map 9

10 Process tasks Diverse/ complex Repeated/ divided Process flow Intermittent Continuous Service process types Low Variety High Low Professional service Service shop Volume Mass service High A professional service Consultants planning how best to help their client 10

11 A service shop This health club offers some variety within a standard set of facilities and processes A mass service This call centre can handle a very high volume of customer enquiries because it standardizes its process Source: Royal Bank of Scotland Group 11

12 Deviating from the natural diagonal on the product process matrix has consequences for cost and flexibility Manufacturing operations process types Volume Variety Service operations process types Project Jobbing Batch Mass Continuous Less process flexibility than is needed so high cost None None More process flexibility than is needed so high cost Professional service Service shop Mass service The natural line of fit of process to volume/variety characteristics Deviating from the natural diagonal on the product process matrix has consequences for cost and flexibility Volume Variety Old process Old process, new product None New process, new product None 12

13 Flow (layout), technology and job design are all influenced by process positioning Flow Technology Jobs Volume Variety Unorganized Little / general Varied / high discretion Custom furniture maker None Machine tool maker Automobile factory Predictable Specialist Routine / low discretion None Petrochemical refinery Flow (layout), technology and job design are all influenced by process positioning Flow Technology Jobs Volume Variety Unorganized Little / general Varied / high discretion Investment banking None Customer service branch Bank call centre Predictable Specialist Routine / low discretion None Credit card processing 13

14 Process mapping symbols derived from Scientific Management Operation (an activity that directly adds value) Inspection (a check of some sort) Transport (a movement of something) Process mapping symbols derived from Systems Analysis Beginning or end of the process Activity Input or output from the process Delay (a wait, e.g. for materials) Direction of flow Storage (deliberate storage, as opposed to a delay) Decision (exercising discretion) Customized sandwich old process Raw materials Assembly Stored sandwiches Move to outlets Stored sandwiches Sell Take payment Standard sandwich process Customer request 14

15 Customized sandwich old process Raw materials Assembly Take payment Customer request The operation of making and selling customized sandwiches Sandwich materials and customers Prepare Assemble as required Take payment Customers assembled to sandwiches Use standard base? Customer request Bread and base filling No Yes Stored bases Assemble whole sandwich Fillings Assemble from standard base Outline process of making and selling customized sandwiches Detailed process of assembling customized sandwiches 15

16 Customized sandwich new process Assemble whole sandwich Assembly of sandwich bases Use standard base? No Take payment Fillings Bread and base filling Customer request Yes Stored bases Assemble from standard base Flow process charts for processing expense reports at Intel before and after improving the process Description of activity Report arrives Wait for processing Check expenses report Stamp and date report Send cash to receipt desk Wait for processing 7 Check advance payment 8 Send to accounts receivable 9 Wait for processing 10 Check employee record 11 Send to account payable 12 Attach payment voucher 13 Log report 14 Check against rules 15 Wait for batching 16 Collect retorts into batch 17 Batch to audit desk 18 Wait for processing 19 Batch of reports logged 20 Check payment voucher Reports to batch control Batch control number 23 Copy of reports to filing 24 Reports filed 25 Payment voucher to keying 26 Confirm payment Totals Description of activity Report arrives Stamp and date report Check expenses report Attach payment voucher 5 Wait for batching 6 Collect retorts into batch 7 Batch to audit desk 8 Wait for processing 9 Check reports and vouchers 10 Reports to batch control 11 Batch control number 12 Copy of reports to filing 13 Reports filed 14 Payment voucher to keying 15 Confirm payment Totals

17 Little s law (a really quite useful law) Throughput (TH) = Work in process (WIP) Cycle time (CT) Cycle time = 2 minutes WIP = 10 Throughput time =? Throughput time = 10 2 minutes = 20 minutes Little s law (a really quite useful law) Throughput (TH) = Work in process (WIP) Cycle time (CT) 500 exam scripts need to be marked in 5 days (working 7 hours a day). It takes 1 hour to mark a script. How many markers are needed? Throughput time = 5 days 7 hours = 35 hours 35 hours = 500 scripts Cycle time Cycle time = 35 hours 500 scripts = 0.07 hours Number of markers = Work content = 1 hour = Cycle time

18 Throughput efficiency Throughput efficiency is the work content of whatever is being processed as a percentage of its throughput time Throughput efficiency = Work content Throughput time 100 Arrival frequency (demand) Processing mins mins mins mins time time Utilization Utilization = < % % % Q = > 0infinity 0 X High Process Average throughput length of queue time (or inventory) Low Low utilization but short throughput times X High utilization but long throughput times X 0 20% 40% 60% 80% 100% Capacity utilization X X X Reduce process variability X 18

19 The relationship between process utilization and number of units waiting to be processed for variable arrival and activity times Average number of units waiting to be processed Decreasing variability Average number of units waiting to be processed Short waiting time but low utilization Y High utilization but long waiting time Reduction in process variability Z X Utilization Utilization (a) Decreasing variability allows higher utilization without long waiting times (b) Managing process capacity and/or variability Key Terms Test Throughput time The time for a unit to move through a process. Utilization The ratio of the actual output from a process or facility to its design capacity. Life cycle analysis A technique that analyzes all the production inputs, the life cycle use of a product and its final disposal in terms of total energy used and wastes emitted. 19

20 Key Terms Test Process types Terms that are used to describe a particular general approach to managing processes. In manufacturing these are generally held to be project, jobbing, batch, mass and continuous processes; in services they are held to be professional services, service shops and mass services. Project processes Processes that deal with discrete, usually highly customized, products. Jobbing processes Processes that deal with high variety and low volumes, although there may be some repetition of flow and activities. Key Terms Test Batch processes Processes that treat batches of products together, and where each batch has its own process route. Continuous processes Processes that are high volume and low variety; usually products made on continuous processes are produced in an endless flow, such as petrochemicals or electricity. Professional services Service processes that are devoted to producing knowledgebased or advice-based services, usually involving high customer contact and high customization. Examples include management consultants, lawyers, architects, etc. 20

21 Key Terms Test Service shops Service processes that are positioned between professional services and mass services, usually with medium levels of volume and customization. Mass services Service processes that have a high number of transactions, often involving limited customization, for example mass transportation services, call centres, etc. Product process matrix A model derived by Hayes and Wheelwright that demonstrates the natural fit between volume and variety of products and services produced by an operation on one hand, and the process type used to produce products and services on the other. Key Terms Test Process mapping Describing processes in terms of how the activities within the process relate to each other (may also be called process blueprinting or process analysis). Process mapping symbols The symbols that are used to classify different types of activity, usually derived either from scientific management or from information systems flowcharting. High-level process mapping An aggregated process map that shows broad activities rather than detailed activities (sometimes called an outline process map). 21

22 Key Terms Test Work content The total amount of work required to produce a unit of output, usually measured in standard times. Throughput time The time for a unit to move through a process. Cycle time The average time between units of output emerging from a process. Key Terms Test Work-in-process The number of units within a process waiting to be processed further (also called work-in-progress). Little s Law The mathematical relationship between throughput time, work-in-process and cycle time: Throughput time = work-in-process cycle time 22