Process Analysis

Topics: Costs, Flowchart, Variable cost Pages: 7 (1426 words) Published: February 4, 2013
PROCESS ANALYSIS
Elements of a process:
Process: Any part of an organization that takes inputs and transforms them into outputs that add value to the organization/customer. Some examples:
Product| Fast Food| Automobile| Hospital|
Inputs| Meat,tomato,onions,buns,equipment| Parts,labour,assembly line,energy| Equipment,doctors,nurses,technicians,patient| Process| Cooking and assembly| assembly| treatment|
Outputs| Burger| car| Healthy patient|
Class Discussion: Airlines, Haircut, voice BPO service
Process flow charting:
We need to understand how the activities of a process affect one another. The process flow chart is a diagrammatic tool which helps in analyzing a process. This diagram shows the basic elements of a process-tasks, flows, storage, decisions, start/end of a process. operation decision box storage material flow document
Patterns on process flow charts
-multi-stage process
-multi-stage process with buffer
-alternate paths
-simultaneous activities
Example of a simple flow process flow chart

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cust places order
o
Exercise: Draw a process flow chart for a product or service of your choice Made to stock process-fast food assemble
deliver
FG
cook
RM

cust places order
Made to order process-fast food
RM

deliver
assemble
cook

cust places order
assemble
WIP
RM
deliver
cook
Hybrid process-fast food

Measuring Process Performance(Metrics)
1.)Operation Time=Set Up Time+ Run Time
2.)Cycle Time= Average time between completion of units
3.)Throughput Time=time the unit spends on actually being worked + time spent waiting in a queue 4.)Value added time=time in which useful work is being done on the unit 5.)Process Velocity=Throughput Time/Value Added Time

6.)Throughput Rate=1/cycle time
7.)Efficiency=Actual Output/Standard Output
8.)Productivity=Output/Input
9.)Utilization=Time activated/Time Available
10.)Little's Law
Throughput Time=Work in Process/Throughput Rate
Example: An assembly line with 6 stations running with cycle time of 30 secs. Cycle time= 30 secs
Throughput time=30 secs x 6 stations= 180 secs=3 mins
Throughput rate=(60 secs/min /30 secs/unit)x60 mins/hour=120 units/hour Look at the impact of providing 2 buffer positions between every 2 successive stations Throughput time=16 positions x 30 secs cycle time=480 secs=8 mins Value added time=6 stations x 30 secs cycle time=180 secs=3 mins Process Velocity=8/3=2.66

WIP=Throughput time x throughput rate=8 mins x 2 units/min=16 units EXAMPLES OF PROCESS ANALYSIS
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Example 6.1: Bread Making Operation(Chase-Pages 200,201)-Excel worksheet -------------------------------------------------
Example 6.3: Planning a Transit Bus Operation in Delhi(Chase-Pages 204,205)-Excel worksheet -------------------------------------------------
Solved Problem: Page 210,211(Chase)-Excel worksheet
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Home work/discussion: Problems 2,5,7,8,9,10,11(Chase)
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READ CASE STUDY: Process Analysis at Arnold Palmer Hospital(HEIZER-Page 243,244)

LESSON 2: PROCESS STRATEGY We have studied Design of Goods and Services.
Now let us look at Production of Goods and Services.
Read the story of Dell Corporation:-
Strategic Premise: Sell a Custom PC directly to end Customers thus eliminating margings in the distribution chain.This innovative model helped Dell to grab the 1st position...
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