Chapter 5 Supporting Facility and Process Flows

Transcription

1 Chapter 5 Supporting Facility and Process Flows Process View of a Hospital Process Performance Inventory Turns Process Flow Structures 1 Definition of a Business Process A process is a set of activities that accepts inputs and produces outputs. Processes can involve both goods and services. wood metal Factory guitars students University alumni bulk items mortgage applications Distribution center Calculate credit risk small parcels approved loans rejected loans 2 1

2 Process flowcharting is the use of a diagram to present the major elements of a process. Basic elements include buffering allows the stages to operate independently The design of a product or services has a major impact on the process design. What operations are needed? What is the right sequence? 3 Process Analysis of Slot Machines Insert coin and pull wait Collect payout if win Play again Machine spinning The faster the customer plays, the more money the casino will earn. 4 2

3 Flowchart of Graduate School Admissions 5 Process Flow of Mortgage Service 3

4 Gantt Chart of Mortgage Service 7 Two Sides of the Same Coin From the perspective of the Server Why is there waiting time? Why is the resource under-utilized? limited supply and variable demand From the egocentric perspective of the customer Long wait time despite arriving on time. poor planning perception of low quality 8 4

5 Types of Services Processes Process Type Service Example Characteristic Project Consulting One-of-a-kind engagement Job Shop Hospital Many specialized departments Batch Airline Group of customers treated simultaneously Flow Cafeteria Fixed sequence of operations Continuous Electric Uninterrupted delivery Utility Management Challenge Staffing and scheduling Balancing utilization and scheduling patients Pricing of perishable asset (seat inventory) Adjust staffing to demand fluctuations Maintenance and capacity planning 9 Flow Line Discrete parts moving at a controlled rate, following the same sequence to build the product. Honda assembly line 3300 ft, 20 off-line branches 5

6 A Flow Line at IKEA s Cafeteria 11 Continuous Process Highly automated, integrated production line. Shutdowns and start-ups are expensive petroleum, chemicals, beverages 12

7 Batch Process and Continuous Flow Bread production 13 Job Shop Small batches of different products with different processing sequences Drilling work center 2 Assembly Painting work center Milling Lathe work center work center A B C D Raw materials 14 7

8 Process Flow Structures How to organize material or customer flow? Low Volume (unique) Medium Volume (high variety) High Volume (lower variety) Very high volume (standardized) Job Shop Commercial Printer Unit variable costs generally too high Hospital, Department Store Batch Process Apparel Production Airline Worker-paced line Machine-paced line Low volume Auto Assembly High volume Auto assembly Cafeteria Fast food Continuous process Utilization of fixed capital generally too low Oil refinery Internet provider 15 Process Analysis Terminology Cycle Time is the average time between completions of successive units. Bottleneck is the factor that limits production usually the slowest operation. Capacity is a measure of max. output per unit time. Capacity Utilization is a measure of how much output is actually achieved. Throughput Time is the time to complete a process from time of arrival to time of exit. 1 8

9 Process Analysis Terminology (cont.) Rush Order Flow Time is the time to go through the system without any queue time. Direct Labor Content is the actual amount of work time consumed. Total Direct Labor Content is the sum of all the operations times. Direct Labor Utilization is a measure of the percentage of time that workers are actually contributing value to the service. 17 Flow Lines and Cycle Time 0.1 min 0.7 min 1.0 min 0.5 min 0.2 min Process Cycle time = 1 min. Capacity = 0/hour. Direct labor content = 2.5 min. Direct Labor Utilization = 2.5/(5 1)=50% 0.5min 0.5 min 0.5 min 0.5 min 0.5 min Process Cycle time = 0.5 min. Capacity = 120/hour. Direct labor content = 2.5 min. Direct Labor Utilization = 2.5/(5 0.5)=0% 18 9

10 Process Performance for High Contact Services Work in Process (waiting line, inventory) Number of flow units in the process; or its average across a time period. Flow time (throughput time) The time it takes to go through the process. It consists of processing times and possible delays. Throughput Rate Amount of output per time unit. The capacity of the process is the maximum throughput rate. 19 Little s Law avg. WIP=throughput rate avg. throughput time throughput time WIP throughput rate 20

11 Inventory Turns (retail service) avg. Inventory = avg. sales rate avg. throughput time Inventory turn = Cost of Goods Sold average inventory value Days of supply = average inventory value average daily sales Throughput time = Days of Supply 21 Comparing Kohl s and Wal-Mart Kohl s Revenue Cost of Goods Sold Inventory Net Income Inventory Turn Walmart Revenue Cost of Goods Sold Inventory Net Income Inventory Turn

12 Design a process to improve flow rate. Design a process to offer more selections. Design a process to reduce wait times. Design a process to control inventory. 23 Product Layout: How to Allocate Work? Process cycle time = min. cycle time = 0 seconds Process Capacity = Capacity of the bottleneck = 0/hour 24 12

13 Improved Layout of Driver s License Office Process cycle time = min. cycle time = 30 seconds Process Capacity = Capacity of the bottleneck = 120/hour 25 Flexible Layout Process cycle time = 30 sec. Process Capacity = 120/hour No waiting in between. No need to repeat information. Flexible staffing. 2 13

14 Process Layout: Where to Locate Departments? A B C D E F A B C D E F A B C D E F Flow matrix Net flow Triangularized matrix 8 8 Description of attractions: A=killer whale, B=sea lions, C=dolphins, D=water skiing, E=aquarium, F=water rides. 27 Ocean World Theme Park (Proposed Layout) (a) Initial layout (b) Move C close to A Pair Flow distances Pair Flow distances A D B E C F AC A 30 x 2 = 0 B C CD 20 x 2 =40 AF DC x 2 = x 2 = 40 CF 8 x 2 =1 DF x 2 = 12 DF x 2 = 12 D E F AF x 2 = 12 Total 124 CE 8 x 2 = 1 Total 9 (c ) Exchange A and C (d) Exchange B and E and move F A C D B E F Pair Flow distances Pair Flow distances AE 15 x 2 = 30 A F AB 15 x 2 = 30 CF 8 x 2 = 1 AD 0 x 2 = 0 AF x 2 = 12 C E FB 8 x 2 = 1 AD 0 x 2 = 0 FD x 2 = 12 DF x 2 = 12 D B Total 58 Total

15 Case: Central Market 29 Summary A firm needs to have good products and good processes Three performance measures High contact service: throughput rate, wait times Retail service: inventory Process analysis can identify the bottleneck and improve the throughput time. Facility layout improves the efficiency and minimizes the travel distance