Executive Shirts

Sachin Jayaswal
Indian Institute of Management Ahmedabad
sachin@iimahd.ernet.in

Shirt Manufacturing
How

Hawaiian Shirts are made

Process Flow Measures

On average, how many flow units pass through the
process per unit time?
Throughput rate/Flow rate
On average, how much time does a typical flow unit
spend within process boundaries?
Average Flow Time/Throughput Time
On average, how many flow units are within
process boundaries at any point in time?
Average Inventory

Process Flow Measures

11
Cumulative
Inflow

10
9

Cumulative
Outflow

Patients

Flow Time

Inventory

5
4
3
2
1

Inventory=Cumulative Inflow Cumulative Outflow

0
7:00

8:00

9:00

10:00

11:00

12:00

13:00

Time (t)

14:00

15:00

16:00

17:00

18:00

Littles law

Inventory (I) = Flow Time (FT) * Flow Rate (R)

Number in system

Process Flow Measures

3

2
1
0

Time (t)

t1

t2

t3 t4

t5 t6

t7

1 3

4 2

I = [1(t2-t1) + 2(t3-t2)+ 1(t4-t3)+ 2(t5-t4)+ 3(t6-t5)+ 2(t7-t6)+ 1(T-t7)]/T

= [area under curve]/T

[area under curve] = (I) * (T)

[T+ t7 + t6 t5 t4 + t3 t2 t1] = (I) * (T)

Number in system

Process Flow Measures

3

2
1
0

Time (t)

t1

t2

t3 t4

t5 t6

t7

1 3

4 2

FT = [(t3-t1) + (t6-t2)+ (t7-t4)+ (T-t5)]/4

= [T+ t7 + t6 t5 t4 + t3 t2 t1]/ 4
= [area under curve]/N

[area under curve] = (FT) * (N)

Littles law
(I) * (T) = (FT) * (N)
(I) = (FT) * (N)/T

= (FT) * (R)
Inventory (I) = Flow Time (FT) * Flow Rate (R)

Process Flow Examples

Material Flow: The Jumbo King restaurant processes
an average of 5,000 Kg. of potato (for vada-pav) per
week. The typical inventory of raw potato is 2,500 kg.
What is the average flow time of potatoes in the
restaurant?
R= 5000, I=2500, T=I/R = 0.5 week

Process Flow Examples

Customer Flow: The above restaurant processes, on
average, 1,500 customers per day (15 hours). On
average, there are 75 customers in the restaurant
(waiting to place an order, waiting for the order to
arrive, eating etc.). How long does an average
customer spend at the restaurant?
R= 1500 per day i.e. 100 per hr
I = 75, T = I/R = 75/100 = hr

Process Flow Examples

Job Flow: Vastrapur branch office of the New India
insurance company processes 10,000 claims per year.
The average processing time is 3 weeks. Assuming 50
weeks in a year, what is the average number of claims
in process.

R = 10000 /year, T = 3/50 year

I = RT = 10000 * 3/50 = 600 claims

Process Flow Examples

Cash Flow: Z-Telekom sells Rs. 300 crores worth of

cellular equipment per year. The average accounts

receivable in the cellular group is Rs. 45 crores.
What is the average billing to collection process flow
time?
R = 300 per year, I = 45
T = I /R = 45/300 = 0.15 year

Process Flow Examples

Question: A general manager at a pharmaceutical

company states that her inventory turns three times a

year. She also states that everything that the
company buys gets processed and leaves the docks
within six weeks. Are these statements consistent?

T = 1/3 year = 17 weeks approx >> 6 weeks.

Inconsistent