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Process-Flow Analysis: Operations Management

This document discusses key concepts in operations management including process thinking, measuring process flows using tools like Little's Law, process flowcharting to visualize processes, using process-flow analysis to identify improvement opportunities, and business process reengineering to radically redesign processes.

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Dominique B
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109 views

Process-Flow Analysis: Operations Management

This document discusses key concepts in operations management including process thinking, measuring process flows using tools like Little's Law, process flowcharting to visualize processes, using process-flow analysis to identify improvement opportunities, and business process reengineering to radically redesign processes.

Uploaded by

Dominique B
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Process-Flow Analysis

Operations Management
Outline
• Process Thinking
• The Process View of Business
• Measuring Process Flows
• Process Flowcharting
• Process-Flow Analysis as Asking
Questions
• Business Process Reengineering (BPR)
Process Thinking
• Process Thinking: all work can be seen as a
process
• Definition of a “system”
– Whole > sum of parts
• Application of systems thinking to businesses
– Defining system boundaries
• Role of “cross-functional” teams in systems
analysis
– Systems thinking requires cross-functional
teams to include all affected functions
Figure 1: Process View of Business
Measuring Process Flows
• Little’s Law
– Relates number of items in the system to
arrival rate and length of time in the
system
– Formula:
I=TxR
I = average number of things in the system
T = average throughput time
R = average flow rate into the process
Assumes system is in a ‘steady state’
Applications of Little’s Law
• Manufacturing
• Waiting lines
• Invoice processing
• Legal office transactions
• Accounts receivable processing
• Etc.
Measuring Process Flows
• Capacity of a system = capacity of the most
constraining resource
– This resource is called a ‘bottleneck.’

• The flow rate of a process is the minimum of:


–Supply
–Demand
–Capacity
Process Flowcharting
• Process Flowcharting: creation of a
visual diagram to describe a transformation
process

• Also known as:


Process mapping
Flow-process charting
Service blueprinting
Value stream mapping
A bottleneck is a resource that limits
the capacity of the entire system. The
bottleneck is found by taking minimum
of the capacity of all the resources
required in the process.
Process Flowcharting
• Purpose: to describe a process visually to
find ways of improving the current process.
– Find repetitive operations
– Identify bottlenecks
– Describe directions and distances of
flows (people, material and information)
– Reduce waste
• Required for certifications such as ISO9000
Process Flow Analysis Might Change:
• Raw materials
• Product (output) design
• Job design
• Processing steps used
• Management control information
• Equipment or tools
• Suppliers
• i.e. Anything but customers may be
changed!!
Steps in process flowchart analysis
using the systems approach
1. Select a process to study
2. Form a team to analyze & improve
the system
3. Specify the boundaries of the
transformation process
4. Identify and sequence the
operational steps
5. Identify the performance metrics
6. Draw the flowchart
Symbols for Flow-Process Chart
Operation (a task or work activity)

Inspection (an inspection of the product for


quantity or quality)

Transportation (a movement of material from


one point to another)

Storage (an inventory or storage of materials


awaiting the next operation)

Delay (a delay in the sequence of


operations)
Questions to Ask in Process-Flow
Analysis & Improvement
• What does the customer need? What operations are necessary?
Can some operations be eliminated, combined, or simplified?

• Who is performing the job? Can the operation be redesigned to


use less skill or less labor? Can operations be combined to enrich
jobs?

• Where is each operation conducted? Can layout be improved?


• When is each operation performed? Is there excessive delay or
storage? Are some operations creating bottlenecks?

• How is the operation done? Can better methods, procedures, or


equipment be used?
Questions to Ask in Process-
Flow Analysis & Improvement
• Flow Balanced? Where is the bottleneck? Are all steps
necessary? How jumbled is the flow?

• Time How long to produce one unit? Can it be reduced? Cycle


time? Excessive set-up time? Excessive waiting time?

• Quantity Theoretical production amount? How easy to


change? How many units actually produced?

• Quality Historical defect rate? Which step contributes to defect


rate? Where do errors occur?

• Cost Cost to produce one unit? What are cost buckets for one
unit? Can some of the buckets be reduced or eliminated?
Cycle of Service for an Airline

Customer requests
schedule information
Leaves Makes
Airport reservation

Receive
Baggage Arrives at
airport

Departs
Plane Checks
baggage and
Receives checks in for
in-flight flight
service

Proceeds to gate
Boards and security check
aircraft
Receives
boarding pass
Business Process Reengineering
(BPR)
• BPR is “the fundamental rethinking
and radical redesign of business [or
organizational] processes to
achieve dramatic improvements in
critical, contemporary measures of
performance, such as cost, quality,
service and speed.”
BPR Defined
• This is in contrast to incremental
change or continuous
improvement of an existing
process.
• “If I were recreating this company
today, given what I know and
given current technology, what
would it look like?”
BPR Philosophy
Does the reengineering consultant see the
glass as half full or half empty?

Neither.
It’s the wrong size of glass!
Or, should it be a glass? …or a liquid?
Principles of BPR
• Organize around outcomes, not tasks
• Have the people who do the work process
their own information
• Put the decision point where work is
performed, and build control into the
process
• Eliminate unnecessary steps in the
process
The Success of BPR
• According to Hammer & Champy, 50-70%
of organizations attempting BPR do not
achieve the results they expected. Why?
• Because they make one or more of the 17
common mistakes
BPR Mistakes
• Trying to fix a process instead of changing it
• Not focusing on business processes
• Focusing only on the process redesign
• Neglecting people’s values & beliefs
• Settling for minor results
• Quitting too early
• Constraining the scope of the problem &
effort
• Letting corporate culture & mgmt attitudes
get in the way
• Trying to reengineer from the bottom up
BPR Mistakes (cont.)
• Assigning a leader who doesn’t understand BPR
• Skimping on the resources
• Not making BPR a top corporate priority
• Trying to do too much at once & dissipating resources
• Concentrating only on design & not implementation
• Trying to keep everyone happy
• Pulling back if people resist
• Dragging out the effort & taking too long

Source: Hammer & Champy, Reengineering the Corporation, chapter 14.


Summary
• Process Thinking
• The Process View of Business
• Measuring Process Flows
• Process Flowcharting
• Process-Flow Analysis as Asking
Questions
• Business Process Reengineering (BPR)

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