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OPM Lecture 5

This document discusses process analysis and choice in operations management. It provides an overview of different types of process arrangements including linear, jumbled, job shop, batch, line, continuous flow, and their characteristics and applications. Key metrics for analyzing processes like flow time, flow rate, inventory, and bottleneck activity are defined. Little's law, which relates average wait time, flow rate and inventory, is explained. Examples are given to illustrate how to apply Little's law to calculate average queue size.

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Mohammad Babar
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37 views

OPM Lecture 5

This document discusses process analysis and choice in operations management. It provides an overview of different types of process arrangements including linear, jumbled, job shop, batch, line, continuous flow, and their characteristics and applications. Key metrics for analyzing processes like flow time, flow rate, inventory, and bottleneck activity are defined. Little's law, which relates average wait time, flow rate and inventory, is explained. Examples are given to illustrate how to apply Little's law to calculate average queue size.

Uploaded by

Mohammad Babar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Operations & Producation

Management
Process Analysis
PROCESS CHOICE
• Choices for how work will flow for goods and services

• Two basic arrangements:


1 Linear

2 Jumbled
LINEAR ARRANGEMENT IN A HEALTH
CLINIC
JUMBLED ARRANGEMENT IN A
HEALTH CLINIC
IMPACT OF PROCESS CHOICE
• Cost
• Speed
• Flexibility
• Quality
• Customizability
PRODUCT-PROCESS MATRIX
PROJECT – ONE UNIT AT A TIME
JOB SHOP – SIMILAR FUNCTIONS/EQUIPMENT
GROUPED TOGETHER
Job Shop
• A job shop is a type of manufacturing process in which small batches
of a variety of custom products are made. In the job shop process
flow, most of the products produced require a unique set-up and
sequencing of process steps.
• Job shops are usually businesses that perform custom parts
manufacturing for other businesses. However, examples of job shops
include a wide range of businesses—a machine tool shop, a
machining center, a paint shop, a commercial printing shop, and other
manufacturers that make custom products in small lot sizes.
BATCH – SOMEWHAT STANDARDIZED JOB SHOP
OR A SOMEWHAT FLEXIBLE ASSEMBLY LINE
• Baked goods. Clothing. Computer chips. Computer software. Die- or
mold-making. Electrical goods.
LINE – DISCRETE UNITS MOVING
THROUGH SPECIALTY ACTIVITIES
CONTINUOUS FLOW – AUTOMATIC
TRANSFORMATION
PROCESS ARRANGEMENTS
PROCESS SELECTION RELATED TO
MARKET
In Class Question
• Take any fast food chain and another luxurious sit-down restaurant
that you are familiar with.
• Which type of process arrangement would you consider for the food
preparation process in the fast food chain restaurant and in the
luxurious sit-down restaurant?
PROCESS ARRANGEMENT
COMBINATIONS
• Exclusive process: Hospital specializing in one procedure, e.g.,
Shouldice hospital (Hernia Repair) AO and TO clinic
• Multiple process arrangements : Bakery making breads, pastries, and
sandwiches.
• Split process (Line and Job Shop): Monogrammed shirts, e.g., Polo
Ralph Lauren
• Distinct processes: Customized and standard motorcycles, e.g., Harley
Davidson
PRODUCT-PROCESS MATRIX
Important
• Process arrangements are related to

• Product versus process focus


• Made to stock versus made to order
• Stages in product life cycle
Process Flow Analysis
PROCESS
• A process is a collection of activities that takes one or more kinds of
inputs and creates outputs (or outcomes) that are of value to
customers external and internal to the organization. (Silver, 2004)
• Processes can be for manufacturing, service, or transactions
• Flow rate / throughput: number of flow units going through the
process per unit of time
• Flow Time: time it takes a flow unit to go from the beginning to the
end of the process
• Inventory: the number of flow units in the process at a given moment
in time
• Flow Unit Flow Unit: Customer or Sandwich
PROCESS FLOW ANALYSIS
• Flow unit
• Goods being produced (raw Material)
• Orders being fulfilled (order)
• Customers being provided service (Customer)
• Money flowing out and in(Money)
• Projects being completed(Project)
• Information being transformed (Informations)
• Key performance metrics(Flow time, flow rate, inventory )
FLOW TIME (T)
• Also known as throughput time
• Total time spent by a flow unit in a process, from start to end of
process:
Start and end are as determined by process analyst
Includes activities that make up the process
Includes waiting time or inventory between activities
Is the time of the longest path in case of parallel paths
• Measured in units of time, i.e., days, minutes, etc.
FLOW RATE (R)
• Number of flow units that flow out of the activity or through a specific
point in the process or entire process per unit of time
Is usually an average
• Measured in units of flow units per unit time, i.e., customers per day,
or pieces per minutes, etc.
• Reciprocal of flow rate, i.e., (1 ÷ R) is cycle time (CT)
Average time interval between two successful flow units departing the
activity or process
Flow units may depart in single units or in batches
BOTTLENECK ACTIVITY
• Activity in the process that has the lowest flow rate
• As cycle time is the reciprocal of flow rate, bottleneck is also the
activity with the longest cycle time
• Flow rate of any multi-activity process is determined by the flow rate
of the bottleneck activity
• Number of flow units within the process boundaries
Sum of the flow units at different stages in various levels of completion
and waiting between stages in the process
Usually assessed as an average of quantities observed at different
points in time
• Measured in units of flow unit in the process, e.g., customers, pieces,
etc.
UNDERLYING ASSUMPTIONS
• No waiting between activities
• Material is released into the system at the rate of the slowest activity
• Demand is equal to or exceeds flow rate
• Flow rate and cycle time apply when the system has reached steady
state
Little’s Law
• The average waiting time and the average number of items waiting
for a service in a service system are important measurements for a
manager. Little's Law relates these two metrics via the average rate of
arrivals to the system. This fundamental law has found numerous uses
in operations management and managerial decision making.
Brief History of Little’s Law
• In a 1954 paper Little's law was assumed true and used without proof.
first published by Philip M. Morse where he challenged readers to find
a situation where the relationship did not hold.
• John Little published in 1961 his proof of the law, showing that no
such situation existed. Little's proof was followed.
LITTLE’S LAW
• The average number of items in a system (I) is the product of the
average length of time an item spends in the system (T) and the
average flow rate of the system (R).
• I=T*R
• Same as I = T ÷ CT
• Consistency in measurement units across all elements is critical, i.e.,
pieces, minutes, and units per minute; alternatively, batches, hours,
and batches per hour.
• Formula for Little’s Law
• Mathematically, Little’s Law is expressed through the following
equation:

• Where:
• L – the average number of items in a queuing system
• λ – the average number of items arriving at the system per unit of
time
• W – the average waiting time an item spends in a queuing system
ASSUMPTIONS FOR LITTLE’S LAW
• Deterministic world
Only averages count
Everything acts as predicted
• Processes are stable
• Average arrival rate = Average departure rate
• Accept units in the system at the rate at which they depart the system
• Over the period of time the system is being observed
Average inventory in the system is constant
Average age of the inventory in the system is constant
• Little’s Law applies when system is in steady state
• I=T*R
Measure and manage two out of
• Flow time, Flow rate, Inventory
• For a given level of flow rate, the only way to reduce flow time is to
reduce inventory (and vice versa).
EXAMPLE APPLICATIONS
• Computing average response time for an order from
Average number of orders in the system
Average rate at which orders are being delivered
• Assessing average number of people waiting in line at airport security
based on
Average rate of passengers going through
Average time spent by the passengers in the line
Example of Little’s Law
• John owns a small coffee shop. He wants to know the average number of customers queuing in
his coffee shop, to decide whether he needs to add more space to accommodate more
customers. Currently, his queuing area can accommodate no more than eight people.
• John measured that, on average, 40 customers arrive at his coffee shop every hour. He also
determined that, on average, a customer spends around 6 minutes in his store (or 0.1 hours).
Given these inputs, John can find the average number of customers queuing in his coffee shop
by applying Little’s Law:

• I  =  40 x 0.1  =  4 customers

• Little’s Law shows that, on average, there are only four customers queuing in John’s coffee
shop. Therefore, he does not need to create more space in the store to accommodate more
queuing customers.
In class Question

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