1/23 operations managment kristen’s cookie - lecture 4 (chapters 4 and 5) dr. ursula g. kraus
TRANSCRIPT
1/23
Operations Managment
Kristen’s Cookie - Lecture 4(Chapters 4 and 5)
Dr. Ursula G. Kraus
2/23
Review
• Process Characterization• Operational Measures:
Flow Time, Inventory and Throughput• Little’s Law• Flow Time Analysis
4/23
Agenda
• Capacity Analysis• Kristen’s Cookie Company• Resource Pools
5/23
Process Flow Measures
Flow Time (T): The average time a job spends in the process Inventory (I): The average number of jobs accumulated in
the process Throughput, or Flow Rate (R): The average rate at which
jobs flow through a process
Little’s Law
I = R x T
Source: Managing Business Process Flows (1999)
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OverproductionProducing too much,or producing too soon
ProcessingOver-processing
IntellectAny failure to fully utilise the time and talents of people
MotionAny motion that does not add value
ReworkAny repair
ConveyanceAny non-essential transport is waste
InventoryAny more than the minimum to get the job done
WaitingWaiting on parts, waiting for a machine to finish cycle
Eliminating “Muda” (Waste) to Reduce Flow Time
Muda
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Additional Levers for Reducing Flow Time
Decrease the work content of critical activities
– “work smarter”
– “work faster”
– “do it right the first time”
– change product mix
Move work content from critical to non-critical activities
– to non-critical path or to “outer loop”
8/23
Industry Process Average Flow Time
Theoretical Flow Time
Flow Time Efficiency
Life Insurance New Policy Application
72 hrs. 7 min. 0.16%
Consumer Packaging
New Graphic Design
18 days 2 hrs. 0.14%
Commercial Bank Consumer Loan
24 hrs. 34 min. 2.36%
Hospital Patient Billing 10 days 3 hrs. 3.75%
Automobile Manufacture
Financial Closing
11 days 5 hrs 5.60%
Most Time Inefficiency Comes from Waiting
Flow Times in White Collar Processes
10/23
Process Flow Measures
Flow Time (T): The average time a job spends in the process Inventory (I): The average number of jobs accumulated in
the process Throughput, or Flow Rate (R): The average rate at which
jobs flow through a process
Little’s Law
I = R x T
Source: Managing Business Process Flows (1999)
11/23
Operational Measures - Capacity
(Theoretical) Capacity of a Resource: Max. number of flow units that can be processed per time unit if it were fully utilized (max. flow rate)
Bottleneck Resource: Resource with min. theoretical capacity
(Theoretical) Process Capacity: The largest sustainable flow rate possible; theoretical capacity of its slowest (bottleneck) resource
Capacity utilization =
Source: Managing Business Process Flows (1999)
Flow Rate [units/hr]
Capacity [units/hr]
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Reasons for Reduced Capacity Utilization
Starvation: Idleness caused by a lack of material from an upstream resource
Blockage: Idleness because completed work cannot be passed to a downstream resource
Resource idleness: Time lost to starvation and blocking
Throughput Rate Theoretical Capacity (Flow Rate)
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Kristen's Cookies
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[Template] Kristen’s Cookies
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[Template] Kristen’s Cookies
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[Template] Kristen’s Cookies
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Average Flow Time consists of …
Theoretical Flow Time
(Processing Time)
+Waiting time
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Operational Measures – Flow Time
Activity Time, or Cycle time: Is the time required by a typical flow unit to complete an activity once
Work Content: Activity time multiplied by the avg. number of visits to that activity
(Theoretical) Flow Time: Min. time required for processing a typical flow unit through the whole process – without any waiting
Critical Path: The theoretical flow time of the longest path(s) in the process flow chart
Critical Activities: All activities on a critical path Flow Time Efficiency =
Source: Managing Business Process Flows (1999)
TimeFlowAverage
TimeFlowlTheoretica
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Example: Work Content & Flow Time
Work Content:
Activity time multiplied by the avg. number of visits to that activity
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Resources and Resource Pools
Resource Pool: A collection of interchangeable resources (resource units) that can perform an identical set of activities
Unit Load: The sum of all the work contents of all activities that utilize that resource unit
Source: Managing Business Process Flows (1999)
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Operational Measures – Capacity (of Resource Pools)
(Theoretical) Capacity of a Resource Unit: Max. number of flow units that can be processed per time unit if it were fully utilized (during its scheduled availability)
(Theoretical) Capacity of a Resource Pool: The theoretical capacity of all the resource units in that pool.
(Theoretical) Process Capacity: The theoretical capacity of its slowest resource pool
(Theoretical) Bottleneck Resource: Resource pool with min. theoretical capacity
Source: Managing Business Process Flows (1999)
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Example: PharmacyTask/Activity Resource Qty of
ResourceActivity Time/Pres.
Take Order Ord. Taker 1 2 min
Verify Insurance Assistant 1 8 min
Find stock Assistant 2 min
Fill container Pharmacist 2 8 min
Type/apply label Pharmacist 3 min
Accept payment Clerk 1 4 min
What is the maximum sustainable throughput for this system?
Where is the bottleneck? How can we address the problem?
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Levers for Managing Flow Rate Increase net availability Decrease resource idleness Manage supply/demand Increase theoretical capacity
– Increase scheduled availability of bottleneck resources
– Invest in bottleneck resources
– Increase size of load batches of bottleneck resources
– Decrease unit load on bottleneck resource pools Adjust product mix