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BA 328 - Ch5 - Process Selection, Design, and Analysis

This chapter discusses process selection, design, and analysis. It covers: 1) The four main types of processes used to produce goods and services. 2) Tools for process design like the product-process matrix and service positioning matrix. 3) Process mapping and value stream mapping to design and analyze processes. 4) Methods for improving process designs by increasing efficiency, flexibility, quality and decreasing costs, time and environmental impact.

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0% found this document useful (0 votes)
500 views16 pages

BA 328 - Ch5 - Process Selection, Design, and Analysis

This chapter discusses process selection, design, and analysis. It covers: 1) The four main types of processes used to produce goods and services. 2) Tools for process design like the product-process matrix and service positioning matrix. 3) Process mapping and value stream mapping to design and analyze processes. 4) Methods for improving process designs by increasing efficiency, flexibility, quality and decreasing costs, time and environmental impact.

Uploaded by

Beboy Torregosa
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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CHAPTER 5:

PROCESS
SELECTION, DESIGN
AND ANALYSIS
ROSSEMARE GABRIEL RACMA GERALDINE
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

LEARNING OBJECTIVES:

5-1 Describe the four types of processes used to produce goods and
services.

5.2 Explain the logic and use of the product-process matrix.


5.3 Explain the logic and use of service positioning matrix.

5.4 Describe how to apply process and value stream mapping for process design.
5-5 Explain how to improve process designs and analyze process maps.

5.6 Describe how to compute resource utilization and apply Little's law.
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-1 Process Choice Decisions


Three Major Types of Goods and Services

Custom or make-to-order Option or assemble-to-order Standard or make-to-


goods – generally goods – configuration of stock goods and
produced and delivered as standard parts, services – made
one of a kind or in small subassemblies, or services according to a fixed
quantities and are designed that can be selected by design and the
to meet specific customers’ customers from a limited set customer has no
specifications options from which to
choose
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-1 Process Choice Decisions


Four principal types of processes used to produce goods and services

1. Projects – large scale, 2. Job shop processes- 3. Flow shop processes- 4. Continuous flow
customized initiatives that organized around organized around a fixed process- create highly
consist of many smaller particular types of general- sequence of activities standardized goods and
tasks and activities that purpose equipment that and process steps to services, usually around
must be coordinated and are flexible and capable of produce a limited variety the clock in very high
completed to finish on time customizing work for of similar goods and volumes
and within budget ; often individual customers; services; often used for
used for custom goods and often used for custom or option-oriented and
services option type products since standard goods and
orders are processed in services
batches, and different
orders may require a
different sequence of
processing steps and
movements to different
work areas
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-1 Process Choice Decisions

A product life cycle is a characterization of product growth, maturity, and decline over time. A traditional
product life cycle consists of four phases: introduction, growth, maturity, and decline.
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-2 The Product-Process Matrix


This matrix was first proposed by Hayes and
Wheelwright, and is a model that describes
the alignment of process choice with the
characteristics of the manufactured good.
The most appropriate match between type of
product and type of process occurs along the
diagonal.
On the other hand, by selectively and
consciously positioning a business off the
diagonal (often called a positioning strategy),
a company can differentiate itself from its
competitors. However, it must be careful not
to get too far of the diagonal, or it must have
a market where high prices absorb any
operational efficiencies.
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-3 The Service-Positioning Matrix


Service-encounter activity sequence
Customer-routed services Provider-routed services

Customer - routed services are Provider - routed services Service-encounter activity


those that offer customers broad constrain customers to follow a sequence consists of all the
freedom to select the pathways very small number of possible process steps and associated
that are best suited for their and predefined pathways through service encounters necessary to
immediate needs and wants, the service system. complete a service transaction
and fulfill a customer’s wants
and needs.
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-4 Process Design


Four Hierarchal Levels of Work

Level 1: Task Level 2: Activity Level 3: Process Level 4: Value Chain

A task is a specific An activity is a group of A process includes Value chain – include


unit of work required tasks needed to create and manufacturing or acquiring the materials,
to create an output deliver an intermediate or fulfilling a customer- manufacturing and
final output order. assembly, distribution
and sale
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-4a Process and Value Stream Mapping


Value Stream Mapping Process Map Process Boundary Value Stream

It is a tool to identify A process map A process boundary is A value stream


the key areas here we (flowchart) describes the beginning or end of refers to all value-
can make process the sequence of all a process added activities
improvements process activities and involved in
It is a representation tasks necessary to create designing,
of all the value add and deliver a desired producing, and
things that customer output or outcome delivering goods
would play for pay and services to
e.g time with their customers
claims manager.
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-5 Process Analysis and Improvement


Management strategies to improve process designs usually focus on the ff.

• Increasing revenue by improving process efficiency in creating goods and services and delivery of the
customer benefit package
• Increasing agility by improving flexibility and response to changes in demand am customer expectation.
• Increasing product and/or service quality by reducing defects, mistakes, failures, or service upset.
• Decreasing costs through better technology or elimination of non-value- added activities.
• Decreasing process flow time by reducing waiting time or speeding up movement through the process and
value chain.
• Decreasing the carbon footprint of the task, activity, process, and/or value chain.

Reengineering and Creative Destruction


Reengineering- has been defined as "the fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in critical, contemporary measures of performance, such as cost ,
quality, service , and speed ".
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-6 Process Design and Resource Utilization


Utilization Computing Utilization in Two Ways

Utilization is the fraction of time a


workstation or individual is busy over
the long run.

Understanding resource utilization is an


important aspect of process design and
improvement.

If you know any three of the four variables in


Equation 7.2, you can solve for the 4th!
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-6 Process Design and Resource Utilization


Example Problem Solving Throughput and Bottlenecks

An inspection station for assembling printers receives The average number of entities completed per unit
40 printers/hour and has two inspectors, each of whom time the output rate-from a process is called
can inspect 30 printers per hour. What is the utilization throughput.
of the inspectors? What service rate would be required Throughput might be measured as parts per day,
to have a target utilization of 85 percent? transactions per minute, or customers per hour,
depending on the context.
A bottleneck is the work activity that effectively
The labor utilization at this inspection station is limits throughput of the entire process.
calculated to be 40/(2 x 30) = 67%. If the utilization
rate is 85%, we can calculate the target service rate by
solving the equation:
85% = 40/(2 x SR)
1.7 x SR = 40
SR = 23.5 printers/hour
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-6 Process Design and Resource Utilization


Exhibit 5.8: Utilization Analysis and Restaurant Order Posting and Fulfilllment Process
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-6 Process Design and Resource Utilization


Exhibit 5.9: Revised Utilization Analysis of restaurant Order Posting and Fulfilllment Process(4 chefs)

Exhibit 5.10: Revised Utilization Analysis of restaurant Order Posting and Fulfilllment Process(4 ovens)
CHAPTER 5 PROCESS SELECTION, DESIGN AND
ANALYSIS

5-6 Process Design and Resource Utilization


Exhibit 5.11: Simplified Restaurant Fulfillment Process

5-6a: Little's Law

• Little's Law is a simple formula that explains the relationship among flow time (T), throughput (R) and
work-in-process (WIP).
• WORK-IN-PROCESS = THROUGHPUT X FLOW TIME or WIP = R X T
• Flow time, or cycle time, is the average time it takes to complete one cycle of a process.
• Little's Law provides a simple way of evaluating average process performance.
• If we know any two of the three variables, we can compute the third using Little's Law.

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