Process Selection, Design ,

Analysis & Layouts

OBJECTIVES
• Definitions

• Types of Processes

• Process Selection & Design

• Process Flowcharting

• Process Improvement & Process Innovation

• Types of Processes
 Linking Product Design & Process Planning
How many to make?
Design Spec & Reqmnt (Forecast & orders)
Product Design

Functional Design

Product Design

Drg. & Spec of what to make?

Product Analysis (Ass’ly & flow )charting

Process Planning

Make or buy

Process Decision ( selection)

Route sheet & Opn Sheet Work place & tool design
(specs of how to manufacture)

Modification of process plans due to layout, quality preference

Mfg

& m/c availability

 From Function to Process

Product Development

Manufacturing
Purchasing
Accounting

Order Fulfillment

Sales
Supply Chain Management

Customer Service

Function Process

6-4
 Definitions
System: The controls that are applied to a process to ensure that
it is operating efficiently and effectively.
Process: Any activity or group of activities that takes an input,
adds value to it, and provides an output to an internal or
external customer. Processes use an organization's resources
to provide definitive results.
Business process: All service processes and processes that
support production processes (e.g., order process,
engineering change process, payroll process, manufacturing
process design). A business process consists of a group of
logically related tasks that use the resources of the
organization to provide defined results in support of the
organization's objectives.
The impact of strategic performance objectives
on process design objectives and performance
 Process Planning
• Process
– Group of related tasks with specific inputs &
outputs
• Process design
– tasks to be done & how they are coordinated
among functions, people, & organizations
• Process strategy
– an organization’s overall approach for physically
producing goods and services
• Process planning
– converts designs into workable instructions for
manufacture or delivery 6-7
 Process Strategy
• Vertical integration
– extent to which firm will produce inputs and control outputs of each
stage of production process
• Capital intensity
– mix of capital (i.e., equipment, automation) and labor resources used
in production process
• Process flexibility
– ease with which resources can be adjusted in response to changes in
demand, technology, products or services, and resource availability
• Customer involvement
– role of customer in production process
 Process Selection
• Projects
– one-of-a-kind production of a product to customer
order
• Batch production
– process many different jobs at the same time in
groups or batches
• Mass production
– produce large volumes of a standard product for a
mass market
• Continuous production
– used for very-high volume commodity products
Videos
Product-Process Matrix for Processes
The product–process matrix

Legal service,
Medical diagnosis
Tutorial

Charted travel
Teaching a class

Preaching, sermons
Mass retailers
Live shows
Cafeteria
TV, radio
Schmenner’s service matrix
James H. Gilmore & B. Joseph Pine II: HBR, January 1997
The change of process choice in a product life
cycle
Comparison
Mapping Processes & Layouts
The volume–variety process position of an operation influences its
layout and, in turn, the flow of transformed resources
Manufacturing Process/Functional Layout

7-22
Process layout in a functional approach
An example of a functional layout in a library showing
the path of just one customer
 A Product Layout

http://mdcegypt.com/pages/operation%20management/production%20and%20operation
%20management/facility%20layout/Group%20Technology/groub47.gif
Assembly line surgery
Product layout: The sequence of processes in paper-making;
each process will be laid out in the same sequence
A restaurant complex with all four basic layout types
The ground floor plan of a department store showing the
sports goods shop-within-a-shop retail ‘cell’
An army induction centre which uses a
product layout
 Summary of the layout options

http://mdcegypt.com/pages/operation%20management/production%20and%20operation%20management/facility%20layout/Group
%20Technology/Process%20choice%20and%20production%20layout.asp
 Comparison of Product
and Process Layouts
Product Process
• Workers
Workers  Limited skills  Varied skills
• Inventory
Inventory  Low in-process, high  High in-process, low
finished goods finished goods
• Storage
Storage space  Small  Large
• Material
Material handling
handling  Fixed path (conveyor)  Variable path (forklift)
• Aisles
Aisles  Narrow  Wide
• Scheduling
Scheduling  Part of balancing  Dynamic
• Layout
Layout decision  Line balancing  Machine location
• Goal
Goal  Equalize work at each  Minimize material
station handling cost
• Advantage
Advantage  Efficiency  Flexibility
 Fixed-Position Layouts
• Typical of projects
• Fragile, bulky, heavy items
• Equipment, workers & materials brought to site
• Low equipment utilization
• Highly skilled labor
• Typically low fixed cost
• Often high variable costs

7-33
 Break Even Analysis
Travis and Jeff own Up Right Paddlers, a new startup company with the goal of
designing, making, and marketing stand-up paddle boards for streams and rivers. A
new fitness craze, stand-up paddle boards are similar to surfboards in appearance, but
are used by individuals to navigate down rivers in an upright position with a single long
pole (or paddle), instead of sitting in tubes or rafts and floating down. The boards are
constructed from heavy duty raft material that is inflatable, rather than the fiberglass
material used in surfboards. Unlike surfboards that market for $500 to $1000 each,
paddle boards are typically sold for between $100 and $400.
Since Travis and Jeff are just starting out and the demand for paddle boards on the
East Coast has not been firmly established, they anticipate selling their product for
$100 each. Travis estimates the fixed cost for equipment and space will be $20,000,
and the material and labor costs will run $50 per unit. What volume of demand will be
necessary for Travis and Jeff to break even on their new venture?
 Process Selection
Jeff, the more optimistic of the two owners of UpRight Paddlers,
believes that demand for paddle boards will exceed the
breakeven point of 40 units calculated in Example 6.1. He
proposes spending $10,000 in fixed costs to buy more
automated equipment that would reduce the materials and
labor cost to $30 per board. The boards would sell for $100,
regardless of which manufacturing process is chosen. Compare
the two processes and determine for what level of demand each
process would be preferred. Label Travis’ proposal as Process A,
and Jeff’s proposal as Process B.
 Economic Aspects

a) The basic layout types have different fixed and variable cost characteristics which seem to determine which one to use.
b) In practice the uncertainty about the exact fixed and variable costs of each layout means the decision can rarely be made on cost
alone
Advantages and disadvantages of the basic layout types
 Process Analysis
• Systematic study of all aspects of a process
– make it faster
– more efficient
– less costly
– more responsive
• Basic tools
– process flowcharts
– diagrams
– maps
 Process Flowcharting Defined
• Process flowcharting is the use of a diagram to
present the major elements of a process
• The basic elements can include tasks or
operations, flows of materials or customers,
decision points, and storage areas or queues
• It is an ideal methodology by which to begin
analyzing a process
Some common process mapping symbols
 Process Plans

• Set of documents that detail manufacturing and

service delivery specifications
– assembly charts
– operations sheets
– quality-control check-sheets

6-43
Assembly Chart
Process Flowchart of Apple Processing
http://www.conceptdraw.com/samples/business-process-diagrams
 Online Ticket Service

http://www.smartdraw.com/software/flowchart-examples.htm
Medical Services Flowchart
 Shipping Process Flowchart

http://www.smartdraw.com/specials/images/examples/flowchart-example-shipping-process-flowchart.png
 Financial Accounting Process

http://conceptdraw.com/samples/business-process-diagrams-flow-charts
 Cross-Functional Flowchart — Credit Approval Process

http://conceptdraw.com/samples/business-process-diagrams-flow-charts
 Deployment Flowchart sample: Trading Process Diagram

http://conceptdraw.com/samples/business-process-diagrams-flow-charts
 Process Map
or Swimlane
Chart of
Restaurant
Service

Copyright 2011 John Wiley & Sons, Inc.

Source: Russell &Taylor
 Flow process charts for processing expense reports at
Intel before and after improving the process

Source: OM by Slack & Chambers

Process Charts
Summary
Process: Emergency room admission
Subject: Ankle injury patient Number Time Distance
Beginning: Enter emergency room Activity of steps (min) (ft)
Ending: Leave hospital
Operation 5 23 —
Insert Step Transport 9 11 815
Inspect 2 8 —
Append Step
Delay 3 8 —
Remove Step Store — — —

Step Time Distance

no. (min) (ft)
Step description

1 0.50 15 X Enter emergency room, approach patient window

2 10.0 - X Sit down and fill out patient history
3 0.75 40 X Nurse escorts patient to ER triage room
4 3.00 - X Nurse inspects injury
5 0.75 40 X Return to waiting room
6 1.00 - X Wait for available bed
7 1.00 60 X Go to ER bed
8 4.00 - X Wait for doctor
9 5.00 - X Doctor inspects injury and questions patient
10 2.00 200 X Nurse takes patient to radiology
11 3.00 - X Technician x-rays patient
12 2.00 200 X Return to bed in ER
13 3.00 - X Wait for doctor to return
14 2.00 - X Doctor provides diagnosis and advice
15 1.00 60 X Return to emergency entrance area
4.00 -
16 X Check out
2.00 180
17 X Walk to pharmacy
4.00 -
18 X Pick up prescription
1.00 20
19 X Leave the building
Operations Sheet for Plastic Part
Part name Crevice Tool
Part No. 52074
Usage Hand-Vac
Assembly No. 520

Oper. No. Description Dept. Machine/Tools Time

10 Pour in plastic bits 041 Injection molding 2 min
20 Insert mold 041 #076 2 min
30 Check settings 041 113, 67, 650 20 min
& start machine
40 Collect parts & lay flat 051 Plastics finishing 10 min
50 Remove & clean mold 042 Parts washer 15 min
60 Break off rough edges 051 Plastics finishing 10 min
Flowchart of the Process Showing Handoffs Between Departments
 Service Blueprint of Consulting
Company’s Inventory Appraisal Process
 Process Analysis Terms
• Process: Is any part of an organization that
takes inputs and transforms them into outputs
• Cycle Time: Is the average successive time
between completions of successive units
• Utilization: Is the ratio of the time that a
resource is actually activated relative to the
time that it is available for use
 Other Process Terminology

• Blocking
– Occurs when the activities in a stage must stop because there
is no place to deposit the item just completed
– If there is no room for an employee to place a unit of work
down, the employee will hold on to it not able to continue
working on the next unit
• Starving
– Occurs when the activities in a stage must stop because there
is no work
– If an employee is waiting at a work station and no work is
coming to the employee to process, the employee will remain
idle until the next unit of work comes
 Other Process Terminology (Continued)

• Bottleneck
– Occurs when the limited capacity of a process
causes work to pile up or become unevenly
distributed in the flow of a process
– If an employee works too slow in a multi-stage
process, work will begin to pile up in front of that
employee. In this is case the employee represents
the limited capacity causing the bottleneck.
• Pacing
– Refers to the fixed timing of the movement of
items through the process
 Other Types of Processes

• Make-to-order
– Only activated in response to an actual order
– Both work-in-process and finished goods inventory
kept to a minimum
• Make-to-stock
– Process activated to meet expected or forecast
demand
– Customer orders are served from target stocking
level
 Process Performance Metrics

• Operation time = Setup time + Run time

• Throughput time = Average time for a unit to move through the

system
(time being worked on + time spent waiting)

• Throughput rate=o/p rate the process is expected to

produce over a period of time= 1/CT

• Velocity = Throughput time

Value-added time
Process Performance Metrics (Continued)

• Cycle time = Average time between

completion of units

• Throughput rate = 1
Cycle time

• Efficiency = Actual output

Standard Output
Process Performance Metrics (Continued)

• Productivity = Output
Input

• Utilization = Time Activated

Time Available
 Types of Processes

Single-stage Process

Stage 1

Multi-stage (Sequential) Process

Stage 1 Stage 2 Stage 3

 Types of Processes

Parallel Processes
Stage 1

Stage 1 Stage 2

Stage 1
 Types of Processes (Continued)
A buffer refers to a storage area between stages
where the output of a stage is placed prior to being
used in a downstream stage

Multi-stage Process with Buffer

Buffer

Stage 1 Stage 2
 Cycle Time Example

Suppose
Supposeyouyouhad
hadtotoproduce
produce600
600units
unitsin
in80
80hours
hourstoto
meet
meetthe
thedemand
demandrequirements
requirementsof ofaaproduct.
product. What
What
should
shouldthe
thecycle
cycletime
timebebeto
tomeet
meetthis
thisdemand
demand
requirement
requirement(or(orin
inother
otherwords
wordswhat
whatshould
shouldbe
bethe
the
maximum
maximumamount
amountof oftime
timeaaunit
unitcan
canspend
spendat
atthe
the
bottleneck
bottleneckactivity)?
activity)?

Answer:
Answer: There
There areare 4,800
4,800 minutes
minutes (60
(60 minutes/hour
minutes/hour xx
80
80 hours)
hours) in
in 80
80 hours.
hours. So So the
the average
average time
time
between
between completions
completions would
would have
have to
to be:
be: Cycle
Cycle time
time
== 4,800/600
4,800/600 units
units == 88 minutes.
minutes.
 Bottleneck, Cycle Time and Throughput
Rate & Time
Customer No

3. Check for 5. Is Yes

credit rating loan
(15 minutes) approved?
(5 min)
1. Check loan 2. 6. Complete
documents and Categorize paperwork for
put them in loans Bottleneck new loan
order (20 (10 minutes)
(10 minutes) minutes)
4. Enter loan
application data
into the system
(12 minutes)

It takes 10 + 20 + max (15, 12) + 5 + 10 = 60 minutes to complete a loan application

(throughput time). Unless more resources are added at step 2, the bank will be able to
complete only 3 loan accounts per hour (note cycle time is 20 minutes), or 15 new load
accounts in a five-hour day.
 Utilization Rates at the each station

Customer No

3. Check for 5. Is Yes

credit rating loan
(15 minutes) approved?
(5 min)
1. Check loan 2. 6. Complete
documents and Categorize paperwork for
put them in loans Bottleneck new loan
order (20 (10 minutes)
(10 minutes) minutes)
4. Enter loan
application data
into the system
(12 minutes)

Utilization Rate = Throughput Rate/Capacity Rate

Station 1: 3/6 = .5 (50%) Station 2: 3/3 = 1 (100%) Station 3: 3/4 = .75 (75%)
Station 4: 3/5 = .6 (50%) Station 5: 3/12 = .25 (25%) Station 6: 3/6 = .5 (50%)
 Example: Receiving goods to warehouse
High level view

Warehouse
Goods are Goods are
Goods are supplies
received at put in
inspected assembly
dock warehouse
floor
 Goods are Contents no Somehow
Goods get tell
received at match
inspected purchasing
dock order?

yes no

Incoming
Goods are
quality
accepted?
check

yes
Receiving
notifies
warehouse
Example: Receiving goods to to pick up

warehouse: Detailed view

 Receiving Purchasing Quality Assurance Warehouse

Goods are
received at
dock

Goods get
inspected

Contents yes Incoming

match quality
order? check

no

Somehow Advise no yes Pick up

tell Goods are
supplier of goods from
purchasing accepted?
rejection QA area
Example: Receiving goods to warehouse
Detailed view
What is the throughput time for good items?
Receive What is the capacity of each station?
Goods Where is the bottleneck?
What is the cycle time?
What is the throughput rate?
Inspect
Goods (30) If there are 15 orders coming in an 8 hr day, what
would each stations utilization rate be?

Match Yes Quality

order? (10) Check (45)

No

No Yes
Inform Supervisor Accept? Goods 4
Purchasing Report (5) (2) pick up
Example: Receiving goods to warehouse
Detailed view What is the throughput time for good items?
What is the capacity of each station?
Where is the bottleneck?
Receive
Goods What is the cycle time?
What is the throughput rate?

Goods 4
Inspect Quality pick up
Goods (30) Check (45)
Yes
Yes
Match Quality Accept?
order? (10) Check (45) (2)

No
No

Inform Supervisor
Purchasing Report (5) If we get 15 orders in an 8 hr day, what would the
utilization rate be for each station?
 Cycle Time Example

Suppose
Supposeyouyouhad
hadto
toproduce
produce600
600units
unitsinin80
80hours
hoursto
to
meet
meetthe
thedemand
demandrequirements
requirementsof
ofaaproduct.
product. What
Whatisis
the
thecycle
cycletime
timeto
tomeet
meetthis
thisdemand
demandrequirement?
requirement?
A bread making Opn
 Little’s Law
• throughput time = work-in-process * cycle time
• It is simple but very useful and it works for any
stable process

– Also look at Penny Fab simulation ppt