class2 - Operations Management Class 1: Course Overview and...

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1 Operations Management Class 1: Course Overview and Introduction to Processes Class 2: House building game and process design » Taxonomy of process types
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2 Learning Objectives: Class 2 How do we measure process performance? Importance of process design
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3 Measuring process performance Process Illustration 1: House building game Purpose: to use the exercise as a starting point to talk about process measures
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4 Efficiency and quality Process Efficiency Output/Input Process Utilization Capacity Used/Total Capacity Quality Defect rate Service levels » Percentage of flow units that spend more than x amount of time within the process
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5 We will also focus on these important process measures Flow Rate - The rate at which flow units flow through the process Also referred to as “Throughput Rate” Will differ depending on which portion of the process is viewed I prefer “the rate at which units leave the process” Flow Time - The time it takes for a flow unit to move through the process. This measures the time it takes for the process to convert an input to an output Inventory - The number of flow units within the process boundaries at any particular time Also referred to as “Work in Process” (WIP) Note: inventory could be a queue of patients at a hospital, a parking lot full of cars at a dealership, or a warehouse full of raw materials
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6 Process measures High Quality/Flexibility Trade-off Improvement Trade-off Innovation Low High Process efficiency Low New operations  frontier
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7 The importance of process design Process Illustration 2: Dealing with variety Purpose: to illustrate the importance of process design
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8 Readings Required: Taxonomy of process types (in course pack)
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class2 - Operations Management Class 1: Course Overview and...

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