Session 4:

Process Analysis
 Reading Rehabilitation Hospital:
Implementing Patient-Focused Care
 Issues
• Care delivery around service lines rather than
functions of care providers

• Equivalence in a manufacturing setting

– Producing in an assembly line rather than job shop
– Product layout rather than process layout

• Is this is a good decision?

 Benefits of Service Lines
• Dedicated cross-functional resources
• Resources have expertise
• Limited coordination while providing care
• Shorter stay for patients/intense treatment for
a given stay duration
• Overall greater patient satisfaction
• Overall better quality
 Product-Process Matrix
Process Technology
(Flexibility)
Job Shop (High)
Jumbled flow C A
Process segments
ent ts)
loosely linked
c i co
s
fi
ef nit
y
In ortu
pp
Disconnected line flow
Jumbled flow but a o
dominant flow exists
hig
h
ent
( m
gn
li
ofA )
st s
Connected line flow
(e.g., assembly line)
one c o
Z k et
poc le
f - b
Continuous, automated,
out-
o
a si
fe
rigid line flow
h
Process segments tightly
linked B ( hig In D
Flow Shop (Low)
Standardized Products Customer Solutions Product
Commodity products Few Major Products Many Products One of a kind
High volume Low volume Concept
(Low) (High) (Variety)
Source: Mieghem 2008
Originally proposed by Hayes and Wheelwright
Caller 1
Caller 2
Caller 3
Caller 4
Caller 5
Caller 6
Caller 7
Caller 8
Caller 9
Caller 10 Time
7:00 7:10 7:20 7:30 7:40 7:50 8:00
Caller 11
Caller 12
 Caller 1 Caller 3 Caller 5 Caller 7 Caller 9 Caller 11
Arrival Service
Caller Time Time Caller 2 Caller 4 Caller 6 Caller 8 Caller 10 Caller 12
1 0 5
2 7 6 Time
3 9 7 7:00 7:10 7:20 7:30 7:40 7:50 8:00
4 12 6
5 18 5
6 22 2 3

Number of cases
7 25 4
2
8 30 3
9 36 4 1
10 45 2
11 51 2 0
2 min. 3 min. 4 min. 5 min. 6 min. 7 min.
12 55 3
Service times
 Caller 1
Caller 2
Caller 3 Service time
Caller 4
Caller 5
Caller 6
Caller 7 Wait time
Caller 8
Caller 9
Caller 10
Caller 11 7:00 7:10 7:20 7:30 7:40 7:50 8:00
Caller 12 5
4
3
Inventory 2
(Callers on
hold) 1
0
7:00 7:10 7:20 7:30 7:40 7:50 8:00
Time
 Limitations of Service Lines
• Loss of flexibility to allocate resources

• Loss of pooling benefits

• Idle time, loss of productivity

• Service lines are poor when demand is uncertain

– Under/over utilization of resources

• Neat classification not possible

 Structural Insights
• Change in Operations/Process could result in
change in Business strategy parameters
• Need to recognize these trade-offs
• Alignments of “products” and “processes” is
fundamental to serve the business strategy
Process Analysis
 Process parameters: examples
Kolkata Passport PGP@IIMC Dell
office
Flow unit Application for PGP student Computer
Passport

Flow rate Approved/rejected 462 per year 10,000 per day

applications = 3 lacs
per year
Flow time 6 months 2 years 10 days
Inventory 1.5 lacs pending 924 students 1,00,000 computers
applications
 Terms
• Flow unit
• Flow rate (Throughput)
• Flow time (Lead time)
• Process capacity
• Bottleneck
• Cycle time
• Process utilization (capacity utilization)
• Inventory (Raw materials, W-I-P, Finished goods)
 Key concepts
• Average inventory (I) = Average flow rate (R) x
average flow time (T)
• Inventory turns
– Number of times inventory is sold and replaced during
a specific period
– Accounting literature: COGS/avg. inventory
– COGS ~ Throughput
– Inventory turns = Throughput/Inventory = R/I = 1/T
– A firm with higher inventory turns has smaller flow
time!!
– Inputs get converted to outputs faster
 Key concepts
• Process capacity = min{R1, R2, ……, Rn}
Ri = Capacity of resource I
• Flow rate = min{Demand, Process capacity}
• Flow time = time spent in the process by a
flow unit
• Cycle time = time between two flow units
coming out of the process
• Cycle time = 1/ flow rate
 An example
• A doctor has the capacity to see 16 patients per
day. The demand rate is, however, 12 patients per
day. What is the flow rate?
– Flow rate = min[supply, demand] = min[16,12] = 12
patients/day
• What is the utilization?
– [Flow rate/capacity] = [12/16] = 75%
• The cycle time is [1/Flow rate] = [1/12]
day/patient. In a 10-hour day, cycle time =
[10/12] hour/patient