Scribd
Upload
57 views12 pages

Process Analysis-Continued

The document discusses process and capacity analysis. It provides examples of analyzing processes at Ford and Mazda to determine bottlenecks. It discusses using Little's Law and business process reengineering to improve processes. BPR principles include eliminating non-value added activities, simplifying processes, and automating using tools like EDI and ERP systems. After implementing BPR, Ford was able to reduce its accounts department workload by 75% by streamlining purchasing order documentation. The document also covers classifying activities as value-added, non-value added and necessary non-value added. It provides guidance on capacity planning and improving capacity through process improvements and investment in the short and long run.

Uploaded by

Satish RAj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
57 views12 pages

Process Analysis-Continued

The document discusses process and capacity analysis. It provides examples of analyzing processes at Ford and Mazda to determine bottlenecks. It discusses using Little's Law and business process reengineering to improve processes. BPR principles include eliminating non-value added activities, simplifying processes, and automating using tools like EDI and ERP systems. After implementing BPR, Ford was able to reduce its accounts department workload by 75% by streamlining purchasing order documentation. The document also covers classifying activities as value-added, non-value added and necessary non-value added. It provides guidance on capacity planning and improving capacity through process improvements and investment in the short and long run.

Uploaded by

Satish RAj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 12

Process and Capacity Analysis

Continued
Recap
• Process vocabulary
• How to analyze a process
• How to determine the bottleneck
• Little’s Law
• Kirsten Cookie case – Unbuffered Deterministic Case – Make to
Order Production System
• Executive Shirts – Buffered Deterministic Case – Make to Stock
Production System
Accounts Department at an auto company …
Purchasing Order sent
to Vendor

Copy of Goods
purchasing order received
sent to Accounts

Receiving Document to
Accounts
Resources in Accounts department in Ford vs Mazda

Ford Mazda

500 people 5 people


Problems in Ford’s Purchasing process
• Large amount of documentation and paperwork
• Payment could not be settled with vendors until all documents
were matched
• Many resources were required to manage this whole process
• Mismatches and delays highly likely to occur which will delay
the final payment to vendors
• Ford being a big customer can afford to irate their suppliers.
Can others take this liberty?
Business Process Reengineering (BPR)
• “Fundamental Rethinking and Radical Redesigning of Business
Processes” – B Mahadevan
• When is BPR required
– Extensive information exchange, re-entering/correcting data and storing
redundant data
– Large investments in inventory to cope with uncertainty
– Large proportion of time spent on quality inspection and progress
monitoring
– Inadequate feedback
– Complex operations for simple operations (check industry standard TAT for
similar processes)
Classification of Activities
• Value-added activities (VA)
– Designing product/service
– Manufacturing product/Delivering service
• Non-value-added activities (NVA)
– Carrying large amounts of inventory
– Progress monitoring
– Correcting faulty or defective pieces
• Necessary but Non-value-added activities (NNVA)
– Quality inspection
– Regular maintenance
How to implement BPR
Understand Simplify the
Automate
the existing Process by
the Process
Process eliminating NVA

Process Mapping NVA Analysis EDI


Brainstorming “Should-be” ERP and other
“As-is” analysis analysis Internet tools

Source: Operations Management: Theory and Practice, 3e; B Mahadevan


After BPR was implemented in Ford…
Purchasing Order sent
to Vendor Happy
vendors

Store
Purchase
information
Goods
in Database
received
75%
reduction in
accounts
dept. load

Match against record


in Database
Capacity Planning
• Improvements in capacity in the short run can be done through
process improvements
• In the long run, one has to make an informed choice to invest in
capacity (machines, labour etc)
• How does investing in capacity help you?
– Output increases (not necessarily if you invest anywhere other than the
bottleneck)
– Increased utilization of resources
– Learning curve effect – More you produce better you get at it!
– Economies of Scale (till a point)
– Threat to an entrant (game theory)
Capacity Planning

Source: Operations Management: Theory and Practice, 3e; B Mahadevan


How to build up capacity – Aggregate Planning

Chase Production

Source: APICS Forum

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy