class 3 - Operations Management Class 1: Course Overview...

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1 Operations Management Class 1: Course Overview and Introduction to Processes Class 2: House building game and process design Class 3: Process Analysis » Process Mapping » Bottleneck Analysis
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2 Summary of Class 1 and 2 Operations is the execution of buy, move, make , and sell processes Processes are often invisible Processes exist at many levels Several processes work in parallel To manage processes it is important to first define and measure process performance Efficiency, quality, inventory, flow time, etc. Process design should be matched to strategic goals By focusing on processes, truly successful organizations find innovative ways to design and manage processes that deliver value Execution should be in the organization’s culture
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3 Required readings Deep Change: How operational innovation can transform your company, by Michael Hammer, Harvard Business Review, April 2004 Taxonomy of process types (course pack)
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4 Learning Objectives: Class 3 Understand the following concepts: Capacity rate Flow time Bottlenecks Tool : Process Analysis Process mapping Capacity analysis (also called bottleneck analysis) Applications : McDonald’s Make-to-order system Kristen’s Cookie (assignment 1)
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5 Understanding stocks and flows
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6 Stocks and flows exercise
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7 Insights from stocks and flows exercise Average flows do not do not provide good information about average flows Stock levels can be very sensitive to changes in flow patterns Other insights?
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8 RESTAURANT Processes are complex: Example What is the “capacity” of a restaurant? What does it depend on? Why is it important?
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9 Understanding processes & making them visible A good tool for this is constructing a process flow diagram . This activity is called is process mapping . This means determining all activities in the process and how items flow through the process. Since most processes support multiple products and/or exceptions, there will usually not be a fixed routing of materials through the map, but a conditional routing depending on the product’s characteristics. In addition to the flow of materials, there is a flow of information to drive and control the process. Generating a map of a process can lead to new insights into how to manage the process.
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10 Process entities Flow units – the items that flow through the process they may be homogeneous or heterogeneous Activities – the transformational steps in the process Each activity takes some time to complete Resources – they perform the activities they have capacities Buffers – storage points for flow units they may have finite size
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Process Flow Diagram Elements Tasks, activities or operations Buffers: Queues or inventories Flows of materials Example - Bread Making Raw Material Finished Bread Bread Making Packing Packed Bread Note if different types of breads, the bread making and packing activity may differ for each . Decision Points
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class 3 - Operations Management Class 1: Course Overview...

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