6 - Process-Flow Analysis

6 - Process-Flow Analysis - Operations Management...

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Unformatted text preview: Operations Management Operations Contemporary Concepts and Cases Chapter Six Process-Flow Analysis Outline of Chapter 6 Process Thinking The Process View of Business Measuring Process Flows Measuring Process Flows at Pizza USA Process Flowcharting Process Flow Analysis as asking questions Business Process Reengineering (BPR) 6-2 6- Process Thinking Process Thinking: all work can be seen as a process Definition of a “system” – Whole > sum of parts Application of systems thinking to businesses – “Can’t sell from an empty wagon.” – Defining system boundaries Role of “cross functional” teams in systems analysis – Systems thinking requires cross-functional teams Systems to include all affected functions. to 6-3 6- Measuring Process Flows Little’s Law – Relates number of items in the system to arrival Relates rate and length of time in the system. rate – Formula: I=TxR I = average number in the system T = average throughput time R = average flow rate into the process Assumes system is in a ‘steady state’ 6-4 6- Applications of Little’s Law Manufacturing Manufacturing Waiting lines Waiting Invoice processing Legal office transactions Accounts receivable processing Etc. 6-5 6- Measuring Process Flows Capacity of a system = capacity of the most Capacity constraining resource. constraining – This resource is called a ‘bottleneck.’ The flow rate of a process is the minimum of – – – 6-6 6- Supply Demand Capacity Process Flowcharting Process Flowcharting: creation of a visual diagram to Process describe a transformation process describe Also known as: – Process mapping – Flow-process charting – Service blueprinting – Value stream mapping 6-7 6- Process Flowcharting Purpose: to describe a process visually to find ways Purpose: of improving the current process. of – Find repetitive operations – Identify bottlenecks – Describe directions and distances of flows (people, Describe material and information) material – Reduce waste Required for certifications such as ISO9000. 6-8 6- Process Flow Analysis Might Change: Raw materials Product (output) design Job design Processing steps used Management control information Equipment or tools Suppliers i.e. Anything but customers may be i.e. changed!! changed!! 6-9 6- Steps in process flowchart analysis using the systems approach 1. Select a process to study 2. Form a team to analyze & improve the system 3. Specify the boundaries of the transformation Specify process process 4. Identify and sequence the operational steps 5. Identify the performance metrics 6. Draw the flowchart 6-10 6- Questions to Ask in ProcessFlow Analysis & Improvement What does the customer need?, operations are necessary? Can some operations does be eliminated, combined, or simplified? be Who is performing the job? Can the operation be redesigned to use less skill or less labor? Can operations be combined to enrich jobs? Where is each operation conducted? Can layout be improved? Where When is each operation performed? Is there excessive delay or storage? Are When some operations creating bottlenecks? How is the operation done? Can better methods, procedures, or equipment be How used? 6-11 6- Questions to Ask in ProcessFlow Analysis & Improvement Flow Balanced? Where is the bottleneck? Are all steps necessary? How jumbled is the flow? jumbled Time How long to produce one unit? Can it be reduced? Cycle time? Excessive set-up time? Excessive waiting time? set-up Quantity Theoretical production amount? How easy to change? How many units actually produced? units Quality Historical defect rate? Which step contributes to defect rate? Where do errors occur? Cost Cost to produce one unit? What are cost buckets for one unit? Can some of Cost the buckets be reduced or eliminated? 6-12 6- Business Process Reengineering Business (BPR) (BPR) BPR defined (Hammer and Champy, BPR 1993) 1993) BPR Philosophy Principles of BPR Success of BPR 6-13 6- BPR Defined BPR is “the fundamental rethinking BPR fundamental and radical redesign of business [or radical organizational] processes to achieve processes dramatic improvements in critical, dramatic contemporary measures of performance, such as cost, quality, service and speed.” service 6-14 6- BPR Defined This is in contrast to incremental This change or continuous improvement of an existing process. an “If I were recreating this company If today, given what I know and given current technology, what would it look like?” like?” 6-15 6- Principles of BPR Organize around outcomes Have the people who do the work, process Have their own information their Put the decision point where work is Put performed and build control into the process performed Eliminate unnecessary steps in the process 6-16 6- Summary Process Thinking The Process View of Business Measuring Process Flows Measuring Process Flows at Pizza USA Process Flowcharting Process Flow Analysis as asking questions Business Process Reengineering (BPR) 6-17 6- End of C hapte S r ix 6-18 6- ...
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