Professional Documents
Culture Documents
Process Analysis
PowerPoint Slides
by Jeff Heyl
41
Process Analysis
Processes may be the least understood
and managed aspect of a business
A firm can not gain a competitive
advantage with faulty processes
Processes can be analyzed and improved
using certain tools and techniques
Process analysis can be accomplished
using a six-step blueprint
42
A Systematic Approach
Define
scope
2
Identify
opportunity
1
Document
process
3
Implement
changes
6
Evaluate
performance
4
Redesign
process
5
Flowcharts
2)
Service blueprints
3)
Process charts
44
Flowcharts
Marketing
lead
Sales: Initial
conversation
with client
Sales and/or
consulting
drafts proposal
Sales
lead
Follow-up
conversation
between client
and sales
No
Consulting:
Initial
conversation
with client
Consulting
lead
Consulting
drafts
proposal
Follow-up
conversation
between client
and consulting
Line of visibility
Follow-up by
accounting,
sales, or
consulting
Client billed by
accounting,
sales, or
consulting
Yes
Approval
by
consulting?
Is
proposal
complete?
Yes
Nested Process
Client agreement
and service
delivery
Final invoice
created by
accounting, sales,
or consulting
No
No
Payment
received?
Yes
Finish
Flowcharts
Is
proposal
complete?
Final invoice
created by
accounting, sales,
or consulting
Verbal OK
from client
Form
completed by
sales or
consulting
Project
manager
assigned
Delivery of
service by
consulting
50% invoiced
by accounting,
sales, or
consulting
Letter of
agreement
signed
CUSTOMER
Order
completed
and submitted
100%
of credit
checked within
24 hours
Two
scheduling
errors per
quarter
Payment
sent
FINANCE
Yes
New
customer?
Credit
check
OK?
Yes
Production
scheduled
Order
Items
manufactured
Packages
assembled and
inventoried
Invoice
sent
Order
stopped
Order
picked
Product packages
Inventory
adjusted
Invoice
prepared
Payment
received
Notice of shipment
Production Control
and Manufacturing
Order
entered
No
Order cancellation
Order
Order
received
No
Assembly and
Shipping
Payment
Order
cancelled
Credit and
invoicing
PRODUCTION
Product
and invoice
received
Order
Order
generated
SALES
Flowcharts
Order
shipped
Process Charts
An organized way to document all the
activities performed by a person or group
Activities are typically organized into five
categories
Operation,
Transportation,
Inspection,
Delay,
Storage,
48
Process Charts
Step
No.
Time
(min)
Distance
(ft)
0.50
15.0
10.00
0.75
3.00
0.75
1.00
1.00
4.00
5.00
10
2.00
11
3.00
12
2.00
13
3.00
14
2.00
15
1.00
16
4.00
17
2.00
18
4.00
X
40.0
X
40.0
X
X
60.0
Return to bed in ER
X
X
X
180.0
X
60.0
200.0
200.0
Step Description
X
X
Walk to pharmacy
Pick up prescription
Leave the building
49
Process Charts
Step
No.
Time
(min)
Distance
(ft)
0.50
15.0
10.00
0.75
3.00
0.75
1.00
1.00
4.00
5.00
10
2.00
11
3.00
12
2.00
13
3.00
14
2.00
15
1.00
16
4.00
17
2.00
18
4.00
Activity
Operation
X
X
40.0
Transport
Inspect
X
60.0
Delay
X
X
200.0
Store
(ft)
5 to ER triage
23.00room
Nurse escorts patient
Nurse inspects injury
11.00
815
8.00
8.00
Return to bed in ER
X
X
X
X
X
180.0
(min)
60.0
of Steps
200.0
Number
TimepatientDistance
Enter emergency
room, approach
window
Sit down and fill out patient history
X
40.0
Summary
Step Description
X
X
Walk to pharmacy
Pick up prescription
Leave the building
4 10
Process Charts
The annual cost of an entire process can
be estimated
It is the product of
1)
2)
3)
Annual
labor cost
Time to perform
the process in hours
Variable costs
per hour
4 11
Process Charts
If the average time to serve a customer is
4 hours
The variable cost is $25 per hour
And 40 customers are served per year
The total labor cost is
4 hrs/customer $25/hr 40 customers/yr = $4,000
4 12
2)
3)
4)
4 13
4 14
Obs 2
Obs 3
Obs 4
Average
(min)
RF
Normal
Time
Element 1
2.60
2.34
3.12
2.86
2.730
1.0
2.730
Element 2
4.94
4.78
5.10
4.68
4.875
1.1
5.363
Element 3
2.18
1.98
2.13
2.25
2.135
0.9
1.922
The normal time for an element in the table is its average time,
multiplied by the RF. The total normal time for the whole
process is the sum of the normal times for the three elements,
or 10.01 minutes. To get the standard time (ST) for the process,
just add in the allowance, or
ST = 10.014(1 + 0.18) = 11.82 minutes/watch
4 15
Work Sampling
Learning Curves
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
|
20
40
60
80
100
120
4 17
Evaluating Performance
Chapter 5, Quality and Performance
Customer satisfaction measures
Error rate
Rework or scrap rate
Internal failure costs
Chapter 6, Capacity Planning; Supplement C, Waiting Lines; Supplement H,
Measuring Output Rates; Supplement I, Learning Curve Analysis
Processing time
Total time from start to finish (throughput time)
Setup time
Operating expenses
Capacity utilization
Average waiting time
Average number of customers or jobs waiting in line
Figure 4.8 Metrics for Flowcharts, Process Charts, and Accompanying Tables
4 18
Evaluating Performance
Chapter 7, Constraint Management
Cycle time
Idle time
Chapter 8, Lean Systems
Setup time
Average waiting time
Total time from start to finish (throughput time)
Waste
Figure 4.8 Metrics for Flowcharts, Process Charts, and Accompanying Tables
4 19
Checklists
2)
3)
Pareto charts
4)
Scatter diagrams
5)
Cause-and-effect diagrams
6)
Graphs
4 20
Frequency
Discourteous server
12
Slow service
42
Cold dinner
Cramped table
20
Atmosphere
10
4 21
Failures
Figure 4.9 is a bar chart and Figure 4.10 is a Pareto chart, both
created with OM Explorers Bar, Pareto, and Line Charts solver.
They present the data in a way that shows which complaints are
more prevalent (the vital few).
50
45
40
35
30
25
20
10
5
0
Discourteous
server
Slow
service
Cold
dinner
Cramped
tables
Atmosphere
Failure Name
4 22
100.0%
40
Failures
30
60.0%
25
40.0%
20
20.0%
10
Percent of Total
80.0%
35
0.0%
5
0
Slow
service
Cramped
tables
Discourteous
server
Atmosphere
Cold
dinner
Failure Name
4 23
4 24
Personnel
Other
Mechanical failures
Weather
Delayed
flight
departures
Procedures
4 26
50
100
40
80
Step 1. Checklist
Defect type
Tally
Total
A. Tears in fabric
|| ||
B. Discolored fabric
|||
D. Ragged edges
|||| ||
30
60
20
40
10
20
D
A
0
B
36
7
Total
Number of Failures
Cumulative Percentage
SOLUTION
50
Defect Failure
Figure 4.12 Application of the Tools
for Improving Quality
4 28
Materials
Training
Out of specification
Absenteeism
Not available
Communication
Humidity
Machine
maintenance
Schedule change
Machine speed
Other
Wrong setup
Process
Broken
fiber
board
20
Number of Broken Fiber Boards
15
10
4 30
Generating Ideas
Ideas can be uncovered by asking six
questions
1.
2.
3.
4.
5.
6.
4 31
Generating Ideas
Brainstorming involves a group of people
knowledgeable about the process
proposing ideas for change by saying
whatever comes to mind
After brainstorming the design team
evaluates ideas and identifies those with
the highest payoff
4 32
Generating Ideas
Benchmarking is a systematic procedure
that measures a firms processes, services,
and products against another firm
Competitive benchmarking is based on
comparisons with a direct competitor
Functional benchmarking compares areas
with those of outstanding firms in any
industry
Internal benchmarking compares an
organizational unit with superior
performance with other units
4 33
Benchmarking
There are four basic steps
Step
1. Planning
Step
2. Analysis
Step
3. Integration
Step
4. Action
4 34
Benchmarking
Customer Relationship Process
Total cost of enter, process, and track orders per $1,000 revenue
System costs of processes per $100,000 revenue
Value of sales order line item not fulfilled due to stockout, as percentage of
revenue
Average time from sales order receipt until manufacturing logistics is
notified
Average time in direct contact with customer per sales order line item
Order Fulfillment Process
Benchmarking
New Service/Product Development Process
Benchmarking
Customer Relationship Process
Managing Processes
Failure to manage processes is failure to
manage the business
Seven common mistakes
1.
2.
3.
4 38
Managing Processes
Seven common mistakes
4.
5.
6.
7.
4 39
Solved Problem 1
Create a flowchart for the following telephone-ordering process
at a retail chain that specializes in selling books and music
CDs. It provides an ordering system via the telephone to its
time-sensitive customers besides its regular store sales.
The automated system greets customers, asks them to choose
a tone or pulse phone, and routes them accordingly.
The system checks to see whether customers have an existing
account. They can wait for the service representative to open a
new account.
Customers choose between order options and are routed
accordingly.
Customers can cancel the order. Finally, the system asks
whether the customer has additional requests; if not, the
process terminates.
4 40
Solved Problem 1
SOLUTION
Solved Problem 1
SOLUTION
Solved Problem 2
An automobile service is having difficulty providing oil changes
in the 29 minutes or less mentioned in its advertising. You are
to analyze the process of changing automobile engine oil. The
subject of the study is the service mechanic. The process
begins when the mechanic directs the customers arrival and
ends when the customer pays for the services.
SOLUTION
Figure 4.15 shows the completed process chart. The process is
broken into 21 steps. A summary of the times and distances
traveled is shown in the upper right-hand corner of the process
chart.
The times add up to 28 minutes, which does not allow much
room for error if the 29-minute guarantee is to be met and the
mechanic travels a total of 420 feet.
4 43
Solved Problem 2
Step
No.
Time
(min)
Distance
(ft)
0.80
50.0
1.80
2.30
0.80
0.60
0.70
0.90
1.90
0.40
10
0.60
11
4.20
12
0.70
13
2.70
14
1.30
15
0.50
16
1.00
17
3.00
18
0.70
19
0.30
20
0.50
Operation
X
X
X
X
X
420
5.00
0.70
0.30
Walk to pit
X
60.0
5.50
80.0
16.50
40.0
Recommend
Transport
additional8services
Wait for customer decision
4
InspectWalk to storeroom
1
Delay Look up filter
number(s)
Check filter number(s) 1
Store Carry filter(s)
to service pit
X
40.0
Distance
(ft)
50.0
Summary
Number
Time
ActivityRecord name and desired service
of Steps
(min)
X
70.0
Step Description
0.30
Figure
4.15
Process Chart
for Changing Engine
Oil
21
2.30
X
Total charges, receive payment
4 44
Solved Problem 3
What improvement can you make in the process shown in
Figure 4.14?
SOLUTION
Your analysis should verify the following three ideas for
improvement. You may also be able to come up with others.
a. Move Step 17 to Step 21. Customers should not have to wait
while the mechanic cleans the work area.
b. Store small inventories of frequently used filters in the pit.
Steps 7 and 10 involve travel to the storeroom.
c. Use two mechanics. Steps 10, 12, 15, and 17 involve running
up and down the steps to the pit. Much of this travel could
be eliminated.
4 45
Solved Problem 4
Vera Johnson and Merris Williams manufacture vanishing
cream. Their packaging process has four steps: (1) mix, (2)
fill, (3) cap, and (4) label. They have had the reported defects
analyzed, which shows the following:
Defect
Lumps of unmixed product
Over- or underfilled jars
Jar lids did not seal
Frequency
7
18
6
29
Total
60
4 46
Solved Problem 4
SOLUTION
Defective labels account for 48.33 percent of the total number
of defects:
29
100% = 48.33%
60
Improperly filled jars account for 30 percent of the total number
of defects:
18
100% = 30.00%
60
The cumulative percent for the two most frequent defects is
48.33% + 30.00% = 78.33%
4 47
Solved Problem 4
7
of defects; the
100% = 11.67%
60
cumulative percentage is
Lumps represent
6
of defects; the
100% = 10.00%
60
4 48
Solved Problem 4
100
90%
36
Frequency of Defects
32
100%
90
80
78%
28
70
24
60
20
50
16
48%
40
12
30
20
10
Label
Fill
Mix
40
Seal
4 50