Chapter 7

Process Interruptions
Operations Management, 1st Edition
Gerard Cachon and Christian Terwiesch
7-1
 Learning Objectives
• Evaluate the following measures related to a batch process
• Capacity
• Utilization of a resource that has a setup time
• A “good” batch size that minimizes inventory while NOT
constraining the flow through a process
• Find the inventory at a resource that has a setup time
and is operated with a given batch size
• Impact of product variety and additional examples
involving batching
• Different approaches to improve a process with setup times

7-2
Batch Processes and Setup Time
Batch Process – A type of production in which units
are produced in batches instead of individually
Setup (time) – A series of activities (i) that are
required to produce units but (ii) for which the time to
complete these activities does not depend directly on
the number of units produced. It is also called
Changeover time or Switchover time
• A setup time is required to change production from
one type of product to another
Examples of Batch Processes
• Baking Cupcakes. Mixing bowl needs to be cleaned
when you switch from one flavour (e.g., chocolate) to
another (e.g., vanilla)
• Making clothes. Need to change the “dye” to obtain 7-3
clothes of different colours.
Example: Xootr

7-3
Process Flow Diagram for
Making Xootrs

Milling-steer support
Setup time 60 min
Processing time 1 min
Milling-Rib support
Setup time 60 min
Processing time 1 min
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Assembly
Processing time: 12 min. 3x workers.
Visualizing the Xootr Process Flow
Two ribs (one rib support)

Xootr
Steer support
Wheels

• Flow Unit is a Xootr (= 1 Rib Support + 1 Steer Support)

• Milling Machine Operating at Full Capacity
Production Cycle is 180 minutes when b = 30
Batch size b = 30 Setup for
steer support

Make steer support

0 60 90 150 180 Time (min)
Batch size b = 60 Setup for
rib support
0 60 120 180 240 Time (min) Make rib support
Batch size b = 90

0 60 150 210 300 Time (min)

 Batching Terms and
Definitions
Production cycle – A repeating sequence of
produced units that can include: setup time,
production time and idle time.
Batch – A collection of flow units
Batch Process – A type of production in which
units are produced in batches instead of
individually

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Capacity = (# of units processed) / (total time taken)
= b/time for a production cycle
Where b is the batch size
Time for a production cycle = b * unit processing time + setup
time. The term b * unit processing time is the (total) processing
time for b units.
• Thus, the capacity of resources with setup time will depend on
the batch size b and it is given by
Capacity (b) = b / (b * unit processing time + setup time)
• Is the capacity increasing or decreasing in b?
• It is increasing in b
• Why? Rewrite capacity as 1/(unit processing time + setup time/b)
Back to Xootr Example
• If we set batch size = 90 (Xootrs), we can apply the capacity
formula and obtain the milling station capacity as
Capacity (90) = 90 / [90 * (1 min +1 min) +(60 min + 60 min) ]=
0.3 Xootr / min
Capacity of Resource with Setup
Problem:

7-8
Check Your Understanding

7-10
Check Your Understanding

7-11
Example: Xootrs
• Recall that the capacity of the milling machine
Capacity (b) = b / [b * (1 min +1 min) +(60 min + 60 min) ]
=b/(2b+120) Xootr / min
• What is a “good” batch size?
Xootr: Capacity and Flow Rate of the process
Recall that there are 3 assembly workers and
the unit processing time is 12 minutes
Choosing a “Good” Batch Size in a
Process with Setups

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Example: Xootrs
• The capacity of the assembly workers is 0.25 / min. Suppose
the process is supply constrained, then we can choose a
“good” batch size such that the capacity of milling machine
equals (or is at least as large as) that of the bottleneck.
• Therefore,
Bottleneck (assembly workers) capacity = Target capacity
0.25 unit/min = b/(2b+120) unit / min
Solving for b, we get b=60
Alternatively, we can use the “target capacity formula” from the
previous slide and get
b = 0.25/min*(60min + 60min)/(1 – 0.25/min*2min) = 60
Idle Time and Utilization of a
Resource with Setups
A process with setup times cannot always be
producing, there will be downtime each time a
process requires a setup.

Another instance when production experiences a

nonproductive time is idle time.
• Idle time – Time not producing and not
performing a setup
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Idle Time and Utilization of a
Resource with Setups
Utilization is the % of time a resource is producing
output.

What is “Output rate when producing”?

It is 1/Unit processing time 7-13
How do utilization of milling machine
and flow rate change with batch size?
 Inventory in a Process
with Setups

Capacity and utilization increase as the batch size

gets larger.

Question:
Why not always operate with really large batches?

7-14
Impact of Batch Sizes on Inventory
Milling-steer support
Setup time 60 min
Processing time 1 min
Milling-Rib support
Setup time 60 min
Processing time 1 min
Assembly
Processing time: 12 min.
3x workers.
Xootr: Impact of Batch Sizes on Inventory
Batch Size of 60

Rate of Inventory Buildup = 1/1 – 0.25 = 0.75 units/minute

Rate of Inventory Depletion = Flow rate = 0.25 units/minute (Why?)

Batch Size of 180

Maximum Inventory
Calculations

Average inventory = Maximum inventory / 2

Why? Because inventory linearly increases from 7-15

zero to the maximum and then decreases to zero

Example: Xootrs
• When batch size is set to 180,
Maximum inventory = 180 * 1 * [(1/1) - 0.25] = 135 units
Average inventory = 135/2=67.5 units

• 67.5 units of what? Both steer support and rib support

• Or average inventory 67.5 Xootrs
• Important to understand the right flow units

• You cannot do this

• Average inventory = 0.5*180*2*(1/2 – 0.25) = 45 Xootrs
• Why? Because steer support and rib support do not peak at the
same time
 Setup Times and Product Variety

• Setup times often occur due to change in production

from one type of output to another e.g., Xootr
• Impact of Product variety
• Small batches lead to frequent switchovers which leads to
low capacity
• Large batches generate greater capacity but may result in
excess inventory

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Made in a large pot. Set up time for any soup variety = 30 minutes.
Processing rate (output rate when processing) for any soup variety = 300 gal./hour
Demand for the varieties are given. How to get the other values?
Soup Example (Contd.): Scenario I in Detail
• What are the batch sizes for chicken and tomato soups so that
the capacity matches with the demand?
• Suppose the batch size for chicken and tomato soups are x and
y gallons (gal.) respectively. That implies

• Solving these two equations gives x = 240 and y = 180

• Is there an easier way to get x and y?
• Yes. It uses the fact that both chicken and tomato soups have the
same processing time.
• Time for a production cycle depends only on “total batch size” x + y
• How to get x + y? Use the target capacity formula
• Total batch size = 175*(0.5 + 0.5)/(1 – 175/300) = 420 gal.
• How to get x and y?
• Proportionately allocate the total batch size based on demand
• Chicken batch size (x) = 100/(100 + 75)*420 = 240 gal.
• Tomato batch size (y) = 75/(100 + 75)*420 = 180 gal.
Soup Example (Contd.): Scenario I in Detail
• How do we calculate the other measures?
• Utilization = Flow Rate/(Output rate when processing)
= 175/300 = 58% (approx.)
• How do we find the average inventory? Apply the formula
• Average inventory of chicken soup = ½ *240*(1 – 100/300) = 80 gal.
• Average inventory of tomato soup = ½ *180*(1 – 75/300) = 67.5 gal.
• Total average soup inventory = 80 + 67.5 = 147.5 gal.
• Important: You cannot do this
• Total average inventory = ½ * 420 * (1 – 175/300) = 87.5 gal.
• Can you see what is the problem?
Soup Example (Contd.): Key Takeaways
• A fundamentally different example from Xootr
• In Xootr example, two different components (ribs and steer support)
were made in the machine but the final product was just Xootr
• In the soup example, two (or more) different products are made using
the same resource
• Given the demand, you should know how to find the minimum
batch sizes so that you can satisfy the demand
• Average inventory first has to be found separately for the
different products, and then combined to find the total
• Impact of Variety (Scenarios II and III)
• In Scenario II, the total demand increases due to onion soup while in
Scenario III, it remains the same as Scenario I
• Analysis similar to Scenario I can be done for Scenarios II and III (try it
and see for yourself if you can get all the numbers shown earlier)
• Much larger batches sizes in Scenarios II and III compared to I
• Total average inventory increases by about a whopping 140% in
Scenario II (from 147.5 to 355.1 gal) and 67% (from 147.5 to 245.9 gal)
in Scenario III
• That is the “cost” of having more variety; inventory increases quite
significantly. Be prepared for it!
Check Your Understanding

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 Why Have Setup Times:
The Printing Press
The Printing Press illustrates the trade-off between
setups and processing times.
Without set up time:
• The written word could not be mass produced
• Once set up, many pages could be mass produced
• Sharing of knowledge benefitted the masses
• Without the printing press no Renaissance period
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 Reduce Variety or Reduce
Setups : SMED
Ford example – any color as long as it is black

Single-Minute Exchange of Die (SMED)

• “Single-Minute” does NOT mean 1 minute, it means
less than 10 minutes
• A goal to reduce the setup time to a single-digit
number of minutes

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 Reduce Variety or Reduce
Setups : SMED
Internal setups – Activities that can only be done during
the actual setup, for example, when the machine is not
producing

External setups – Activities that can be done while

production continues to occur.

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Smooth the Flow : Heijunka at Toyota

• Concern about how batching influenced the efficiency of

upstream suppliers.
• Mixed-model assembly: An assembly process in which
production resembles the true rate of demand, even
over a short time horizon.
• Heijunka (Toyota term) – Leveling production by reducing
variation in the work schedule that arises from either
demand variation or the desire to run production or
transports in large batches.
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 Learning Objectives
• Evaluate the following measures related to a batch process
• Capacity
• Utilization of a resource that has a setup time
• A “good” batch size that minimizes inventory while NOT
constraining the flow through a process
• Find the inventory of a resource that has a setup time
and is operated with a given batch size
• Impact of product variety and additional examples
involving batching
• Different approaches to improve a process with setup times

7-2