OPSM 405 Service Operations Management Class 17: Wrap-up of process game Process Analysis Koç University Zeynep Aksin [email protected].

OPSM 405 Service Operations Management

Class 17:

Wrap-up of process game

Process Analysis

Koç University

Zeynep [email protected]

Original process flowchart

M M P C P M M C

Task times?Bottleneck?

Resource utilization? Cycle time? (Flow time)

Value adding time? (theoretical)

Terminology

Flow Time (CT or T)The flow time (also called variously throughput time, cycle time) of a given routing is the average time from release of a job at the beginning of the routing until it reaches an inventory point at the end of the routing.

1 2 3 4

Flow time

Throughput Rate (TH or R)The average output of a production process per unit time. At the firm level, it is defined as the production per unit time that is sold.

1 2 3 4

Terminology

Critical Path & Critical Activities

Critical Path: A path with the longest total cycle time.

Critical Activity: An activity on the critical path.

A B

C

D

X-Ray Service Process

1. Patient walks to x-ray lab 2. X-ray request travels to lab by messenger 3. X-ray technician fills out standard form based on info. From

physician 4. Receptionist receives insurance information, prepares and

signs form, sends to insurer 5. Patient undresses in preparation of x-ray 6. Lab technician takes x-ray 7. Darkroom technician develops x-ray 8. Lab technician checks for clarity-rework if necessary 9. Patient puts on clothes, gets ready to leave lab 10. Patient walks back to physicians office 11. X-rays transferred to physician by messenger

Example: X-Ray

32

1

4 765

11

109

start end

25%

75%7

20 6

5 3

6 12 2

20

3 7

transport

support

Value added

decisionMeasured actual flow time: 154 minutes

8

Consider all possible paths

Path1: 1-4-5-6-7-8-9-10 50 Path 2: 2-3-4-5-6-7-8-9-10

69 Path 3: 1-4-5-6-7-8-11

60 Path 4: 2-3-4-5-6-7-8-11 79

Levers for Reducing Flow Time

Decrease the work content of critical activities

– work smarter

– work faster

– do it right the first time

Move work content from critical to non-critical activities

– to non-critical path or to ``outer loop’’

Reduce waiting time.

X-Ray revisitedResource Pool

Res. Unit Load

Load Batch

Theoretical Capacity of Res. unit

No of units in pool

Theoretical capacity of pool

Messenger 40 min/patient

1 1.5 patients/hr

6 9 Patient/hr

Receptionist 5 1 12 1 12

X-ray technician

16 1 3.75 4 15

X-ray lab 7.5 1 8 2 16

Darkroom technician

15 1 4 3 12

Darkroom 15 1 4 2 8

Changing room

6 1 10 2 20

Utilizations given an observed throughput of 5.5 patients/hr

Resource pool Theoretical capacity

Patients/hr

Capacity utilization

Messenger 9 61.11

Receptionist 12 45.83

X-ray technician 15 36.67

X-ray lab 16 34.38

Darkroom technician 12 45.83

Darkroom 8 68.75

Changing room 20 27.50

Levers for Increasing Process Capacity Decrease the work content of bottleneck activities

– work smarter– work faster– do it right the first time– change product mix

Move work content from bottlenecks to non-bottlenecks– to non-critical resource or to third party

Increase Net Availability– work longer– increase scale (invest)– increase size of load batches– eliminate availability waste

Structuring The Service Enterprise

Example: Automobile’s Driver’s License Office

License Renewal TimesActivity Description Time (Sec) 1 Review application for correctness 15 2 Process and record payment 30

3 Check for violations and restrictions 60 4 Conduct eye test 40 5 Photograph applicant 20

6 Issue temporary license 30

3 60

60

Present Flow Diagram

1 240

15

2 120

30

4 90

40

5 180

20

6 120

30

Activity

flow rate per hour

time (sec)

Flow time: sec

Throughput rate: per hour

What happens if you hire one more employee?

sec sec sec sec sec sec/hr /hr /hr /hr /hr /hr

Activity Activity Activity Activity Activity Activity

Proposed Flow Diagram

Flow time: sec

Throughput rate: per hour

2 120

30sec/hr

Activity

5 180

20

6 120

30sec sec/hr /hr

Activity Activity

1,4 65

55sec/hr

Activity

3 60

60 sec/hr

Activity

1,4 65

55sec/hr

Activity

3 60

60 sec/hr

Activity

Another Design

Flow time: sec

Throughput rate: per hour

1-5 22

165sec/hr

Activity

1-5 22

165sec/hr

Activity

1-5 22

165sec/hr

Activity

1-5 22

165sec/hr

Activity

1-5 22

165sec/hr

Activity

1-5 22

165sec/hr

Activity

6 120

30 sec/hr

Activity

The role of task times: a balanced line

if task times are similar will have a balanced line

• in the absence of variability (deterministic) complete synchronization is possible

• in a balanced line idleness is minimized, though in the presence of variability full synchronization cannot be achieved

The role of task times: an unbalanced line

if average task times are different will have an unbalanced line• will have idleness

in unbalanced case, slowest task determines output rate• bottleneck is busy

• idleness in other stages

The role of variability

6/hr 6/hr

4 or 8/hr 4 or 8/hr

2 or 10 2 or 10

0 or 120 or 12

As variability increases, throughput (rate) decreases

Compounding effect of variability and unbalanced task times

6/hr 4/hr

4 or 8/hr 2 or 6/hr

2 or 10 0 or 8

4/hr

3.5/hr

2.5/hr

Resource interaction effects

6/hr 6/hr

4 or 8/hr 4 or 8/hr

2 or 10 2 or 10

0 or 120 or 12

6/hr

6/hr

6/hr

6/hr

6/hr

4 or 8/hr

2 or 10

0 or 12

6/hr

4.5/hr

3/hr

1.5/hr

In a serial process downstream resources depend on upstreamresources: can have temporary starvation (idleness)

As variability increases, the impact of resource interaction increases

Want to eliminate as much variability as possible from your processes: how?

specialization in tasks can reduce task time variability standardization of offer can reduce job type variability automation of certain tasks IT support: templates, prompts, etc. incentives

Want to reduce resource interference in your processes: how?

smaller lotsizes (smaller batches) better balanced line

• by speeding-up bottleneck (adding staff, changing procedure, different incentives, change technology)

• through cross-training eliminate steps buffers integrate work (pooling)

The impact of task integration (pooling)

balances utilization... reduces resource interference... ...therefore reduces the impact of temporary

bottlenecks there is more benefit from pooling in a high utilization

and high variability process pooling is beneficial as long as

• it does not introduce excessive variability in a low variability system

• the benefits exceed the task time reductions due to specialization

Examples of pooling in business

Consolidating back office work Call centers Single line versus separate queues

Summary of fundamental process principles

identify and eliminate bottlenecks reduce as much variability as possible eliminate handoffs, improve communication to minimize

resource interference for high utilization processes build-in more slack