Lecture 3: Process Analysis Part II

Instructor: Nooshin Salari

Office: RJC 225
Email: Salarin@mcmaster.ca

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Example

Consider a process consisting of the following activities (flow unit is a toy):

• Prepare: 30/hour
• Pre treat= 20/hour
• Paint= 12/hour
• Dry=20/hour
• I&P=60/hour

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Review: Process capacity
• Note: Process capacity is the minimum of
the capacities of the resources in the line

• Note
• Capacity of the system = capacity of the
bottleneck

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Resource capacity and bottleneck

• Not only can capacity be measured at the level of the overall process it also can be
measured at the level of the individual resources that can constitute the process
• Similar to how we define a process capacity, we define the capacity of a resource
as a maximum amount that resource can produce in a given time unit.
• As the completion of the flow units requires the flow units to visit every one of the
resources in the process the overall process capacity is determined by the resource
with the smallest capacity.
• We refer to that resource as the bottleneck. It provides the weakest link in the
overall process chain and as we know a chain is only as strong as its weakest link.

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Resource capacity and bottleneck

• We can write the process capacity as:

• Process capacity=minimum {capacity of resource1, …, capacity of resource N}
where there are a total of N resources
• The key to assessing the capacity of a process is discovering its bottleneck

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Bottleneck

• A resource on which the demand placed exceeds the capacity

• A bottleneck limits the ability of the process to meet its demand.

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Bottleneck

• In this example, lets assume that the demand placed on each resource is 80 units in
8 hours or 10/hour.

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Bottleneck

• What If the demand on this process is 100 units in 8 hours? What if it is 180 units
in 8 hours?

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Question

• Consider the following system, and find the cycle time, flow time and capacity of
the system

Station Station
Station A
B C
Process time of A Process time of A Process time of A
2 min / unit 4 min / unit 3 min / unit

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Example : Capacity Analysis- Subway

• 4 Ounces of meat is required for each sandwich (assume each customer is ordering
1 sandwich and each sandwich needs 1 loaf of bread)

• Determine the capacity, and bottleneck if demand is 8 sandwich in an hour.

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Question

• Which would increase the capacity of Subway the most: Increase 1) making bread
by 30%, 2) assembly by 20%, 3) meet cutting by 15%?

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Principles of Bottleneck Management

1. Release work orders to the system at the pace of the bottleneck

2. Lost time at the bottleneck represents lost time for the whole system

3. Increasing the capacity of a non-bottleneck station creates a false sense of

improvement.

4. Increasing the capacity of a bottleneck increases the capacity of the whole

system

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Constraint

• A bottleneck is a specific stage or resource in a process where capacity is the

lowest, directly restricting the flow of the system.

• A constraint is any factor that limits the overall performance, growth, or

achievement of a system's goals. It can be internal (within the organization) or
external (outside the organization).
oA company lacks skilled employees to meet demand for a new product.
o Government regulations limit the speed at which a pharmaceutical company can launch new
drugs.

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Constraint

• A constraint can become a bottleneck if it begins to affect the overall output and
productivity of a business process.

• Every Bottleneck is a Constraint, but Not Every Constraint is a Bottleneck:

✓A bottleneck is a type of constraint that exists specifically at the process level.
✓Constraints encompass broader limitations, including bottlenecks but also
factors like market conditions or company policies.

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Theory of Constraints

• The Theory of Constraints (TOC) is a management methodology that focuses on

identifying and addressing the most critical limiting factor (the "constraint") in a
system to improve its performance.

• Core Principles of the Theory of Constraints

✓ System Constraints: Every system has at least one constraint that determines
its maximum output.
✓ Focus on the Constraint: To improve overall performance, you must identify
and manage the constraint.
✓ Continuous Improvement: After addressing one constraint, another will
emerge, requiring ongoing refinement.
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Theory of Constraints
TOC employs a systematic approach to identify and manage
constraints:
1. Identify the Constraint: Determine the part of the system that
limits overall performance
2. Exploit the Constraint: Make the best use of the constraint
with existing resources.
3. Subordinate Other Processes: Align all other processes to
support the constraint.
4. Elevate the Constraint: If the constraint is still limiting,
investing in improvements
5. Repeat the Process: Once the constraint is resolved, identify
the next limiting factor and repeat the steps.
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Example: Car Manufacturing Plant

• Step 1: Identify the Constraint

• After analyzing the system, the managers notice that the painting station is the
bottleneck. This station has limited capacity (due to the drying time of paint), and
it is much slower than the other stations (engine assembly, body assembly, and
final inspection). As a result, cars are backing up, waiting to be painted.

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Example: Car Manufacturing Plant

• Step 2: Exploit the Constraint

• The next step in TOC is to exploit the constraint, meaning making the best
possible use of the constraint’s current capacity. In this case, the plant might:
➢Optimize the painting process by introducing faster-drying paint, reducing
downtime, or rearranging work schedules to ensure the painting station operates
as efficiently as possible during its available hours.

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Example: Car Manufacturing Plant

• Step 3: Subordinate Other Processes

• The plant needs to subordinate the other operations to the pace of the constraint.
This means ensuring that the other workstations (engine assembly, body assembly,
and final inspection) do not produce more cars than can be painted.
• The aim of this step is to ensure that all resources are subordinated to the
constraint and facilitate keeping the constraint working at 100% capacity.
• This might involve slowing down these stations or reconfiguring the work
schedule so that parts and assemblies arrive at the painting station just in time,
rather than building up too many cars ahead of the bottleneck.

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Example: Car Manufacturing Plant

• Step 4: Elevate the Constraint

• If the constraint still limits the plant’s overall output, the next step is to elevate the
constraint. This means investing in improvements to increase the capacity of the
bottleneck. In this case, the company might:
✓Invest in a second painting booth or more advanced drying technology.
✓Hire more workers or upgrade the equipment at the painting station to improve
throughput.
✓Outsource the painting to a third party if it proves to be more cost-effective.

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Example: Car Manufacturing Plant

• Step 5: Repeat the Process

• Once the painting station’s capacity is increased, it may no longer be the
bottleneck. The plant will then analyze the next part of the system to identify the
new constraint. This process of continuous improvement helps the company
increase overall throughput.

• Outcome:
• By focusing on the constraint (the painting station), the plant can optimize the
flow of cars through the entire manufacturing process, reduce inventory waiting
time, increase throughput, and ultimately meet customer demand more efficiently.

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Question?

• What is the process capacity for a parallel process with the same machines
different operators?

M1
15 min/u

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Question?

• What is the process capacity for a parallel process with the same machines
different operators?

M1

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Flow Rate

• Flow rate, also known as throughput, is a key metric in operations management

that measures the rate at which a process delivers output.
• Flow Rate (Throughput):The average rate at which flow units pass a specific
point in the process. The maximum throughput rate is the process capacity.
• Flow rate=min{Available Input, Demand , Process Capacity}
• Note: We assume sufficient input is available unless stated otherwise.

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Utilization of resources

Actual Output
Utilization=
Design Capacity

• We can define utilization not only at the level of the entire process but also at the
level of the individual resources. The utilization of a resource is defined as
follows:

• Utilization of resources = flow rate/ capacity of resource

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Example

Consider the following 4 operations.

1. Find the bottleneck and utilization for each operation (focus on system’s
capacities and process flow rather than demand-driven performance).

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Question

• In our previous example the flow rate is equal to 7.5

• What if the demand is less or more than the process flow rate? Does the utilization
change?
1) Assume that demand is 7 units per hour
2) Assume that demand is 10 units/hour

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When Demand Is Less Than Process Capacity

• When Demand Is Less Than the Process Capacity: The bottleneck (and other
processes) will have lower utilization because the system operates below its
maximum potential to meet reduced demand.
• Utilization of the bottleneck:
𝑓𝑙𝑜𝑤 𝑟𝑎𝑡𝑒 𝑑𝑒𝑚𝑎𝑛𝑑
Utilization = =
𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑜𝑓 𝑟𝑒𝑠𝑜𝑢𝑟𝑐𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑜𝑓 𝑡ℎ𝑒 𝑏𝑜𝑡𝑡𝑙𝑒𝑛𝑒𝑐𝑘

• The bottleneck remains the same process (the one with the lowest capacity in the
system), but it no longer fully determines the system’s throughput because demand
is limiting.

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Demand-Constrained System

• A process is considered demand-constrained when the demand is lower than

the available supply and the process capacity.
• In this scenario, the production rate is determined by the demand, not the process
capacity.

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When Demand Is Less Than the Process Flow Rate

• Bottleneck Capacity = 100 units/hour.

• Demand = 60 units/hour.

• Utilization of the bottleneck=

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When Demand Is More Than the Process Capacity

➢When Demand Is More Than the Process Capacity : The bottleneck process will
reach full utilization (100%) because it operates at maximum capacity to meet
demand.
➢Non-bottleneck processes may also have higher utilization, but they cannot exceed
the flow dictated by the bottleneck.
➢The overall flow rate of the system is capped at the bottleneck capacity.
✓The bottleneck remains the same process, and its capacity limits the system’s
overall throughput.
✓In this case, unmet demand will accumulate as a backlog or queue.

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Capacity-Constrained System

• A process is Capacity-constrained when the demand exceeds the available

Capacity.

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When Demand Is More Than the Process Capacity

Bottleneck Capacity = 100 units/hour.

Demand = 150 units/hour.
System throughput = 100 units/hour (limited by the bottleneck).

Utilization of the bottleneck= Flow Rate/Capacity = 100/100 = 1.0, (100%).

Unmet demand = 150 - 100 = 50 , units/hour.

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Note!
• If Utilization = 1 : The
bottleneck is fully utilized,
operating at its maximum
capacity.

• If Utilization < 1 : The bottleneck

is underutilized, meaning it has
spare capacity.

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Example

• Two identical Sandwich lines

• Lines have workers and three operations
• All completed sandwiches are wrapped

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Example
• Each line deliver a sandwich every …….. seconds
• So the process time of the combined lines (two lines) is …….. ..seconds

In each line, ………………….….is the bottleneck.

The system bottleneck is…….……

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Example

• How long does it take to produce a sandwich in this process?

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Example

• What is the process Capacity?

• Capacity of the system = capacity of the bottleneck

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 Question
What is the throughput rate (flow rate) of the system?
How to speed up the sandwich making process?

demand rate = 1/20

sandwich/sec Bread Fill Toast
Throughput rate = ?
1/15 sandwich/sec 1/20 sandwich/sec 1/40 sandwich/sec
Take order Wrap
1/30 sandwich/sec 1/37.5 sandwich/sec
Bread Fill Toast
1/15 sandwich/sec 1/20 sandwich/sec 1/40 sandwich/sec

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Example

• Standard process for cleaning teeth

• Cleaning and examining X-rays can happen simultaneously
• Calculate the flow time and the bottleneck.

Question: How is it different from the previous example?

Example By: Mike von Massow

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Solution

• Cleaning path is ……….

• X-ray exam path is ………
• The flow time………
• Each patient is going to be there for ……….
• The bottleneck is the………
• The capacity in this case is …………… patient in one minute or …………patient
in an hour

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Example: Producing a remote-control car toy

20 sec 5 sec 5 sec

Assemble
car Install Install Add
wheels battery chip
Testin Package
g
Add Add 12 sec 15 sec
chip battery
Assemble 10 sec 5 sec
remote
What is the process flow time?
Which station is the bottleneck?
What is the capacity of each line? What is the capacity of the
process?
What is the utilization of each station?
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 Solution: What is the process flow time?

20 sec 5 sec 5 sec

Assemble Install Install Add
car wheels battery chip
Testin Package
g
Add Add 12 sec 15 sec
Assemble chip battery
remote 10 sec 5 sec
To assemble the 1st car, we need _____________ seconds

To assemble the 1st remote, we need ____________ seconds

To produce a car and a remote, we need ___________. seconds

Flow time = _________ seconds

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Observation

• In problems we discussed so far, there was only one flow unit. In other words,
there was only one unit type in the system.
• In reality, we may multiple unit types in the system. However this topic is not
covered in our course.

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Discussion

• A call center has a high call abandonment rate because some agents take too long
to resolve customer issues.
• What is your suggestion for the improvement?

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My suggestion

• Process Analysis:
• Collect data on average call duration and resolution times per agent.
• Identify agents who exceed the average resolution time.
• Solution:
• Provide additional training for underperforming agents to improve efficiency.
• Introduce a FAQ system or automated responses for common queries.

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