Transcript PPT - cchristopherlee

PROCESS SELECTION,
DESIGN, AND ANALYSIS
CHAPTER 7
DAVID A. COLLIER AND JAMES R. EVANS
OM3 Chapter 7 Process Selection, Design, and Analysis
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
LO1 Describe the four types of processes used to
produce goods and services.
LO2 Explain the logic and use of the product-process
matrix.
LO3 Explain the logic and use of the service-positioning
matrix.
LO4 Describe how to apply process and value stream
mapping for process design.
LO5 Explain how to improve process designs and
analyze process maps.
LO6 Describe how to compute resource utilization and
apply Little’s Law.
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i
CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
called to make an airline flight reservation just an hour ago.
The telephone rang five times before a recorded voice
answered. “Thank you for calling ABC Travel Services,” it said.
“To ensure the highest level of customer service, this call may
be recorded for future analysis.” Next, I was asked to select
from one of the following three choices: “If the trip is related
to company business, press 1. Personal business, press 2.
Group travel, press 3.” I pressed 1. I was then asked to select
from the following four choices: “If this is a trip within the
United States, press 1. International, press 2. Scheduled
training, press 3. Related to a conference, press 4.” Because I
was going to Canada, I pressed 2.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Now two minutes into my telephone call, I was instructed to
enter my 19-digit customer service number. The voice then
said: “Thank you. An operator will be with you shortly.” …Ten
minutes passed and then a real person answered the
telephone. “Please give me your 19-digit customer service
number… I only handle domestic reservations. I’ll transfer you.”
A few clicks later a message came on, saying: “All of our
international operators are busy. Please hold, as your business
is important to us.”
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
What do you think?
Describe a situation that
you have encountered in
which a process was
either well designed and
enhanced your customer
experience, or poorly
designed and resulted in
dissatisfaction.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions
Process design is an important operational
decision that affects the cost of operations,
customer service, and sustainability.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions – Types of Goods and
Services
• Custom, or make-to-order, goods and
services are generally produced and delivered as
one-of-a-kind or in small quantities, and are
designed to meet specific customers’
specifications.
 Examples include ships, weddings, certain
jewelry, estate plans, buildings, and surgery.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions – Types of Goods and
Services
• Option, or assemble-to-order, goods and
services are configurations of standard parts,
subassemblies, or services that can be selected by
customers from a limited set.
 Examples are Dell computers, Subway
sandwiches, machine tools, and travel agent
services.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions – Types of Goods and
Services
• Standard, or make-to-stock, goods and
services are made according to a fixed design,
and the customer has no options from which to
choose.
 Examples are appliances, shoes, sporting
goods, credit cards, online Web-based
courses, and bus service.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions – Types of Processes
• Projects are large-scale, customized initiatives that
consist of many smaller tasks and activities that
must be coordinated and completed to finish on
time and within budget.
 Characteristics: One-of-a-kind, large scale,
complex, resources brought to site; wide
variation in specs and tasks.
 Examples: Legal defense preparation,
construction, customer jewelry, consulting, and
software development.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions – Types of Processes
• Job shop processes are organized around
particular types of general-purpose equipment that
are flexible and capable of customizing work for
individual customers.
 Characteristics: Significant setup and/or changeover
time, batching, low to moderate volume, many routes,
many different products, high work-force skills, and
customized to customer’s specs.
 Examples: Many small manufacturing companies are
set up as job shops, as are hospitals, legal services,
and some restaurants.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions – Types of Processes
• Flow shop processes are organized around a
fixed sequence of activities and process steps, such
as an assembly line, to produce a limited variety of
similar goods or services.
 Characteristics: Little or no setup time, dedicated to
small range of goods or services that are similar,
similar sequence of process steps, moderate to high
volume.
 Examples: Assembly lines that produce automobiles
and appliances, production of insurance policies and
checking account statements, and hospital laboratory
work.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions – Types of Processes
• A continuous flow process creates highly
standardized goods or services, usually around the
clock in very high volumes.
 Characteristics: Very high volumes in a fixed
processing sequence, high investment in system,
24-hour/7-day continuous operation, automated,
dedicated to a small range of goods or services.
 Examples: Chemical, gasoline, paint, toy, steel
factories; electronic funds transfer, credit card
authorizations, and automated car wash.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
OM3 Chapter 7 Process Selection, Design, and Analysis
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Choice Decisions
•
A product life cycle is a characterization of product
growth, maturity, and decline over time.
Four phases:




•
Introduction
Growth
Maturity
Decline and turnaround
A product’s life cycle has important implications in terms
of process design and choice. For example, new
products with low sales volume might be produced in a
job shop process; however, as sales grow and volumes
increase, a flow shop process might be more efficient.
OM3 Chapter 7 Process Selection, Design, and Analysis
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
The Product-Process Matrix
• The product-process matrix is a model that
describes the alignment of process choice with
the characteristics of the manufactured good.
 The most appropriate match between type of
product and type of process occurs along the
diagonal in the product-process matrix.
 As one moves down the diagonal, the emphasis
on both product and process structure shifts from
low volume and high flexibility, to higher volumes
and more standardization.
OM3 Chapter 7 Process Selection, Design, and Analysis
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.1
Characteristics
of Different
Process Types
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.2
Product-Process Matrix
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
The Service-Positioning Matrix
•
•
In the product-process matrix, product volume, the
number of products, and the degree of
standardization/customization determine the
manufacturing process that should be used. This
relationship between volume and process is not found in
many service businesses.
The Service-Positioning Matrix is similar to the
product-process matrix in that it suggests that the nature
of the customer’s desired service encounter activity
sequence should lead to the most appropriate service
system design and that superior performance results by
generally staying along the diagonal of the matrix.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
The Service-Positioning Matrix
• A pathway is a unique route through a service
system. Pathways can be customer- or
provider-driven, depending on the level of
control that the service firm wants to ensure.
• The service encounter activity sequence
consists of all the process steps and associated
service encounters necessary to complete a
service transaction and fulfill customer’s wants
and needs.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
The Service-Positioning Matrix
• Customer-routed services are those that
offer customers broad freedom to select the
pathways that are best suited for their
immediate needs and wants, from many
possible pathways through the service delivery
system.
 Examples include searching the Internet,
museums, health clubs, and amusement
parks.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
The Service-Positioning Matrix
• Provider-routed services constrain customers
to follow a very small number of possible and
predefined pathways through the service system.
 Examples are a newspaper dispenser and
logging on to a secure online bank account.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.3
The Service
Positioning Matrix
Source: Adapted from D. A.
Collier and S. M. Meyer, “A
Service Positioning Matrix,”
International Journal of
Production and Operations
Management, 18, no. 12, 1998,
pp. 1123–1244. Also see D. A.
Collier and S. Meyer, “An
Empirical Comparison of Service
Matrices,” International Journal of
Operations and Production
Management, 2000 (no. 5–6), pp.
705–729.
OM3 Chapter 7 Process Selection, Design, and Analysis
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Design – Four Levels of Work
• Task—a specific unit of work required to create
an output.
• Activity—a group of tasks (sometimes called a
workstation) needed to create and deliver an
intermediate or final output.
• Process—a group of activities.
• Value chain—a network of processes.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
“We divided the work;
but stood together.”
- Mr. John Ringling, Ringling Bros., Bamum & Bailey Circus, 1907
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.4 The Hierarchy of Work and Cascading Flowcharts for Antacid Tablets
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process and Value Stream Mapping
•
A process map (flowchart) describes the sequence of
all process activities and tasks necessary to create and
deliver a desired output or outcome.
 Process maps document how work either is, or should
be, accomplished, and how the transformation
process creates value.
•
A process boundary is the beginning or end of a
process.
 Makes it easier to obtain management support,
assign process ownership, and identify where
performance measures should be taken.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process and Value Stream Mapping
• In service applications, flowcharts generally
highlight the points of contact with the customer
and are often called service blueprints or
service maps.
• Such flowcharts often show the separation
between the back office and the front office with
a “line of customer visibility.”
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.5
Automobile Repair Flowchart
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process and Value Stream Mapping
• The value stream refers to all value-added
activities involved in designing, producing, and
delivering goods and services to customers.
• A value stream map (VSM) shows the process flows
in a manner similar to an ordinary process map;
however, the difference lies in that value stream
maps highlight value-added versus non-value-added
activities and include costs associated with work
activities for both value- and non-value-added
activities.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process and Value Stream Mapping
Examples of non-value-added activities include:
• Transferring materials between two nonadjacent
workstations
• Overproducing
• Waiting for service or work to do
• Not doing work correctly the first time
• Requiring multiple approvals for a low cost
electronic transaction
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.6 Restaurant Order Posting and Fulfillment Process
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.7
Value Stream Map for
Restaurant Order
Posting and Fulfillment
Process
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Design Methodology
1. Define the purpose and objectives of the process.
2. Create a detailed process or value stream map that
describes how the process is currently performed.
3. Evaluate alternative process designs.
4. Identify and define appropriate performance
measures for the process.
5. Select the appropriate equipment and technology.
6. Develop an implementation plan to introduce the
new or revised process design.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Mapping Improves Pharmacy Service
Metro Health Hospital in Grand Rapids, Michigan, applied
process mapping reducing the lead time for getting the first
dose of a medication to a patient in its pharmacy services
operations. The lead time was measured from the time an
order arrived at the pharmacy to its delivery on the
appropriate hospital floor. A process improvement team
carefully laid out all the process steps involved and found
that it had a 14-stage process with some unnecessary steps,
resulting in a total lead time of 166 minutes.
(continued)
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Mapping Improves Pharmacy Service
During the evaluation process, the pharmacy calculated that
technicians were spending 77.4 percent of their time
locating products; when a pharmacist needed a technician
for clinical activities, the technician was usually off searching
for a drug. Overall, the pharmacy at Metro realized a 33percent reduction in time to get medications to patients,
and reduced the number of process steps from 14 to nine
simply by removing non-value-added steps. Patients have
experienced a 40-percent reduction in pharmacy-related
medication errors, and the severity of those errors has
decreased.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Analysis and Improvement
Strategies:
• Increasing revenue by improving process efficiency in creating
•
•
•
•
•
goods and services and delivery of the customer benefit
package.
Increasing agility by improving flexibility and response to
changes in demand and customer expectations.
Increasing product and/or service quality by reducing defects,
mistakes, failures, or service upsets.
Decreasing costs through better technology or elimination of
non-value-added activities.
Decreasing process flow time by reducing waiting time or
speeding up movement through the process and value chain.
Decreasing the carbon footprint of the task, activity, process
and/or value chain.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Analysis and Improvement
Questions to ask for process analysis:
•
•
•
•
Are the steps in the process arranged in logical
sequence?
Do all steps add value? Can some steps be eliminated
and should others be added in order to improve quality or
operational performance? Can some be combined?
Should some be reordered?
Are capacities of each step in balance; that is, do
bottlenecks exist for which customers will incur excessive
waiting time?
What skills, equipment, and tools are required at each
step of the process? Should some steps be automated?
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CHAPTER 7
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Process Analysis and Improvement
•
•
•
•
At which points in the system (sometimes called process
fail points) might errors occur that would result in
customer dissatisfaction, and how might these errors be
corrected?
At which point or points in the process should
performance be measured? What are appropriate
measures?
Where interaction with the customer occurs, what
procedures, behaviors, and guidelines should employees
follow that will present a positive image?
What is the impact of the process on sustainability? Can
we quantify the carbon footprint of the current process?
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Analysis and Improvement
• Reengineering has been defined as “the
fundamental rethinking and radical redesign of
business processes to achieve dramatic
improvements in critical, contemporary measures
of performance, such as cost, quality, service,
and speed.”
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PROCESS SELECTION, DESIGN, AND ANALYSIS
Process Design and Resource Utilization
• Utilization is the fraction of time a workstation
or individual is busy over the long run.
Utilization (U) =
Resources Used
Resources Available
[7.1]
or
Utilization (U) =
Demand Rate
[Service Rate × Number
of Servers]
[7.2]
OM3 Chapter 7 Process Selection, Design, and Analysis
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.6 Restaurant Order Posting and Fulfillment Process
OM3 Chapter 7 Process Selection, Design, and Analysis
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.8 Utilization Analysis of Restaurant Order Posting
and Fulfillment Process
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.9 Revised Utilization Analysis of Restaurant Order Posting
and Fulfillment Process (4 chefs)
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.10 Revised Utilization Analysis of Restaurant Order Posting
and Fulfillment Process (4 ovens)
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Solved Problem
An inspection station for assembling printers receives 40
printers/hour and has two inspectors, each of whom can inspect
30 printers per hour. What is the utilization of the inspectors?
What service rate would be required to have a target utilization of
85 percent?
Solution
The labor utilization at this inspection station is calculated to be
40/(2 × 30) = 67%. If the utilization rate is 85%, we can
calculate the target service rate by solving the equation:
85% = 40/(2 × SR)
1.7 × SR = 40
SR = 23.5 printers/hour
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CHAPTER 7
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Process Design and Resource Utilization
• The average number of entities completed per unit time—
the output rate—from a process is called throughput.
– Throughput might be measured as parts per day,
transactions per minute, or customers per hour,
depending on the context.
•
A bottleneck is the work activity that effectively limits
throughput of the entire process.
– Identifying and breaking process bottlenecks is an
important part of process design and improvement,
and will increase the speed of the process, reduce
waiting and work-in-process inventory, and use
resources more efficiently.
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Exhibit 7.11 Simplified Restaurant Fulfillment Process
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
OM3 Chapter 7 Process Selection, Design, and Analysis
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CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Little’s Law
•
Flow time, or cycle time, is the average time it takes
to complete one cycle of a process.
•
Little’s Law is a simple formula that explains the
relationship among flow time (T ), throughput (R ), and
work-in-process (WIP ).
Work-In-Process = Throughput × Flow Time
or
WIP = R × T
[7.3]
•
If we know any two of the three variables, we can
compute the third.
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CHAPTER 7
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Solved Problem
Suppose that a voting facility processes an average of
50 people per hour and that, on average, it takes 10
minutes. What is the average number of voters in the
process? for each person to complete the v
Solution
WIP = R  T
= 50 voters/hr  (10 minutes/60 minutes per hour)
= 8.33 voters
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CHAPTER 7
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Solved Problem
Suppose that the loan department of a bank takes an
average of 6 days (0.2 months) to process an
application and that an internal audit found that about
100 applications are in various stages of processing at
any one time. Using Little’s Law, we see that T = 0.2
and WIP = 100. What is the throughput? the v
Solution
R = WIP/T = 100 applications/0.2 months
= 500 applications per month
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52
CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Solved Problem
Suppose that a restaurant makes 400 pizzas per week,
each of which uses one-half pound of dough, and that
it typically maintains an inventory of 70 pounds of
dough. In this case, R = 200 pounds per week of
dough and WIP = 70 pounds. What is the average flow
time?
Solution
T = WIP/R = 70/200
= 0.35 weeks, or about 21/2 days.
OM3 Chapter 7 Process Selection, Design, and Analysis
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
53
CHAPTER 7
PROCESS SELECTION, DESIGN, AND ANALYSIS
Hopewell Hospital Pharmacy Case Study
1. Draw the process flowchart, including processing times
and capacities for each work activity, and total time per
prescription.
2. As a baseline measure, what is the labor utilization if 36
prescriptions arrive between 8 and 9 am on Monday and
four pharmacists are on duty?
3. Clearly identify and evaluate one alternative process
design, and discuss the advantages and disadvantages of
it. Also consider how you will design and group the work
activities for medical technicians and pharmacists.
4. What are your final recommendations?
OM3 Chapter 7 Process Selection, Design, and Analysis
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
54