O PERATİONS & L OGİSTİCS M ANAGEMENT İN A İR T RANSPORTATİON P ROFESSOR D AVİD G İLLEN (U NİVERSİTY OF B RİTİSH C OLUMBİA )& P ROFESSOR B ENNY M ANTİN (U NİVERSİTY OF W ATERLOO ) Air Transportation Systems and Infrastructure Strategic Planning Module 2-3 : 9-10 June 2014 Istanbul Technical University Air Transportation Management M.Sc. Program
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• Typically, we start with flow-charting a process. If shared resources can be clearly indicated on flow charts, we can further analyze bottlenecks, etc. Otherwise, we need to rearrange the flow chart in swim-lanes to understand how resources are shared. Gantt chart is most useful in analyzing bottlenecks of complicated systems.
• Choice of charts is an art.
PROCESS MAPPİNG: SOME NOTES
• There is no one way to draw a process map
• Get feedback from all the people involved in the
process to validate the process map
Do not map the process as you think it works
Map it as it actually works
• Process maps are surprisingly informative
Common response: “I never knew we did it that
way!”
• Starting point for process analysis, and a great tool
for brainstorming process improvements
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BASİC PROCESS ANALYSİS
SİNGLE STAGE PROCESS
Toast buns
Toaster
Worker 1
Capacity Rate
???
Flow Time
(Time that buns spend in the toaster)
10 sec
22
Basic Process Analysis Multiple Stage Process
Toast
buns
Add
dressings
Add meat
pattiesPackage Deliver
Place an
order
CashierWorker 1Toaster
Worker 2 Worker 3 Worker 4 Worker 5
8 sec 10 sec 8 sec 6 sec 2 sec 2 sec
450/hr 360/hr 450/hr 600/hr 1800/hr 1800/hr
Theoretical Flow Time of the whole process: 36
sec
Note: The theoretical
flow time ignores the
possibility of waiting;
so it is the lowest
possible flow time
Capacity rate of the whole process: 360 orders/hr
Flow Time of the whole process: ???
Capacity rate of the whole process: ???
23
GANTT CHART: MULTİPLE STAGE PROCESS
RESOURC
ES
ACTIVITIE
STime Span
Cashier Place an order
Worker1
ToasterToast buns
Worker 2 Add dressings
Worker 3Add meat
patties
Worker 4 Package
Worker 5 Deliver
Time
10s
8 s
6s
2s
8 s
2s
10s
8 s
6s
2s
8 s
2s
24
THE BOTTLENECK
• The resource with the lowest capacity rate
– The “slowest” resource (or the resource with the highest
“unit load”)
– Unit load: Total amount of time the resource works to
process each flow unit
• Determines the capacity rate of the entire process
• Increasing the capacity of non-bottleneck resources
does not increase the capacity rate of the process
25
INCREASİNG THE CAPACİTY RATE OF A PROCESS - WHAT İF WE ADD A CASHİER?
Toast
buns
Add
dressings
Add meat
pattiesPackage Deliver
Place an
order
CashiersWorker 1
ToasterWorker 2 Worker 3 Worker 4 Worker 5
8 sec 10 sec 8 sec 6 sec 2 sec 2 sec
900/hr
(2 * 450/hr)360/hr 450/hr 600/hr 1800/hr 1800/hr
Theoretical Flow Time of the whole process: 36
sec
Capacity rate of the whole process: 360 orders/hr
Theoretical Flow Time of the whole process: ???
Capacity rate of the whole process: ???
Place an
order
26
INCREASİNG THE CAPACİTY RATE OF A PROCESS - WHAT İF WE ADD A TOASTER?
Capacity rate of the whole process: 450 orders/hrCapacity rate of the whole process: ???
Toast bunsAdd
dressings
Add meat
pattiesPackage Deliver
Place an
order
CashierWorker 1
ToastersWorker 2 Worker 3 Worker 4 Worker 5
8 sec 10 sec 8 sec 6 sec 2 sec 2 sec
450/hr720/hr
(2 * 360/hr)450/hr 600/hr 1800/hr 1800/hr
Theoretical Flow Time of the whole process: 36 secTheoretical Flow Time of the whole process: ???
Toast buns
Which task is the bottleneck?
27
ADDİNG A TOASTER: GANTT CHART
RESOURC
ES
ACTIVITIE
STime Span
Cashier Place an order
Worker1
Toaster 1Toast buns
Worker1
Toaster 2Toast buns
Worker 2 Add dressings
Worker 3Add meat
patties
Worker 4 Package
Worker 5 Deliver
Time
10s
8 s
6s
2s
8 s
2s
10s
8 s
6s
2s
8 s
2s
Worker 1 is not busy
all the time, and can
take care of 2 toasters
28
THİNKİNG İN TERMS OF “UNİT LOADS”
Unit Load: Total amount of time the resource works to process each flow unit
Resource Unit Load
(sec/unit)
Capacity
Rate
(units/min)
Capacity rate
(units/hr)
Cashier 8 7.5 450
Toaster 10 6 360
Worker 1 10 6 360
Worker 2 8 7.5 450
Worker 3 10 6 360
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INCREASİNG CAPACİTY (1)
INCREASE THE SİZE OF THE “RESOURCE POOL”
• One Toaster
Capacity rate: 360/hr
• Two Toasters
Working in Parallel
Capacity rate: 720/hr
Toast buns
10 sec
Toast buns
10 sec
Toast buns
10 sec
30
INCREASİNG CAPACİTY (2)
DECREASİNG THE UNİT LOAD
• This Toaster
Capacity rate: 360/hr
• Faster Toaster
Works twice as fast
Capacity rate: 720/hr
Toast buns
10 sec
Toast buns
5 sec
31
INCREASİNG THE CAPACİTY RATE OF A
PROCESS
• Increase the capacity rate of the bottleneck
• Some other resources may become a
bottleneck when capacity is added
– Important when we justify additional capacity
32
INCREASİNG THE CAPACİTY RATE OF A PROCESS
EXPAND THE RESOURCE POOL AT THE BOTTLENECK
Capacity rate of the whole process: 450 orders/hr
Toast bunsAdd
dressings
Add meat
pattiesPackage Deliver
Place an
order
CashierWorker 1
ToastersWorker 2 Worker 3 Worker 4 Worker 5
8 sec 10 sec 8 sec 6 sec 2 sec 2 sec
450/hr720/hr
(2 * 360/hr)450/hr 600/hr 1800/hr 1800/hr
Theoretical Flow Time of the whole process: 36 sec
Toast buns
33
Increasing the capacity rate of a process - Reduce Unit Load
at the BottleneckToast
buns
Add
dressings
Add meat
pattiesPackage Deliver
Place an
order
CashierWorker 1
ToasterWorker 2 Worker 3 Worker 4
Worker
5
Old Flow
Time8 sec 10 sec 8 sec 6 sec 2 sec 2 sec
Old
Capacity
Rate
450/hr 360/hr 450/hr 600/hr 1800/hr 1800/hr
Theoretical Flow Time : ??? Capacity rate of the process: ???
New Flow
Time8 sec 5 sec 8 sec 6 sec 2 sec 2 sec
New
Capacity
Rate
450/hr 720/hr 450/hr 600/hr 1800/hr 1800/hr
34
ANY OPERATİONAL BENEFİT OF REDUCİNG UNİT LOAD AT
NON-BOTTLENECKS?
Toast
buns
Add
dressings
Add meat
pattiesPackage Deliver
Place an
order
CashierWorker 1
ToasterWorker 2 Worker 3 Worker 4
Worker
5
Old Flow
Time8 sec 10 sec 8 sec 6 sec 2 sec 2 sec
Old
Capacity
Rate
450/hr 360/hr 450/hr 600/hr 1800/hr 1800/hr
Theoretical Flow Time : ??? Capacity rate of the process: ???
New Flow
Time4 sec 10 sec 6 sec 4 sec 1 sec 1 sec
New
Capacity
Rate
900/hr 360/hr 600/hr 900/hr 3600/hr 3600/hr
35
PROCESSES MAY BE UNBALANCED
• When the next stage is busy, the order cannot be
sent to the next stage after finishing the current
stage, unless an inventory buffer is introduced
Place an Order Toast buns
Flow Time 8 sec 10 sec
Capacity Rate 450/hour 360/hour
Process is “Blocked”
36
ANOTHER EXAMPLE
Add dressings Add meat patties
Flow Time 8 sec 6 sec
Capacity Rate 450/hour 600/hour
Process is “starved”
37
• The bottleneck is fully utilized while other resources are not
utilized
• If a buffer is provided at some upstream stage to the
bottleneck, inventory may build up at the buffer
• Inventory will not build up at the (immediately) downstream
stages to the bottleneck even if buffers are provided
• Shortening non-bottleneck tasks decreases flow time but does
not affect capacity rate
– Reducing flow time improves response time
BOTTLENECK CHARACTERİSTİCS
38
PROCESS ANALYSİS: MULTİPLE FLOW UNİTS
Resource Unit Load (minutes/unit)
Product A Product B Product C
1 2.5 2.5 2.5
2 1.5 2 2.5
3 12 0 0
4 0 3 3
5 3 3 3
• If you produce only Product A, what is capacity rate of the process (per hour)? Which resource is the bottleneck?
• If your product mix is 1 unit of A, 2 units of B and 2 units of C, what is your capacity rate? Bottleneck?
39
PROCESS ANALYSİS: MULTİPLE FLOW UNİTS
Resource Unit Load (minutes/unit)1
Product A Product B Product C 1A + 1B + 1C 1A+2B+2C
1 2.5 2.5 2.5 7.5 12.5
2 1.5 2 2.5 6 10.5
3 12 0 0 12 12
4 0 3 3 6 12
5 3 3 3 9 15
• When multiple flow units go through a process, the “product mix” needs to be considered while determining the unit load and the capacity
• The bottleneck depends on the product mix
c
40
• Flow diagrams are not easy to draw
• How to identify bottleneck?
– Count the total amount of work per resource (also known as the “unit
load”)
• When multiple flow units go through a process, a “product
mix” needs to be considered while determining capacity
• The bottleneck depends on the product mix
• The bottlenecks can move as the product mix changes
PROCESS ANALYSİS: MULTİPLE FLOW UNİTS
41
• Some capacity is lost due to machine maintenance,
machine set-ups, etc.
• Example. Changing over from one product type to
another may require adjustments to the machine,
tools, etc (“set-ups”)
• Railways/London Underground shut down lines to
inspect and maintain track
THEORETİCAL VERSUS EFFECTİVE CAPACİTY
42
WHAT İNFORMATİON DO UNİT LOADS GİVE US?
Process with four tasks (A, B, C, D) each taking 5 minutes to complete
One worker does all four tasks
4 workers working in parallel (The resource pool has four resources)
• Unit Load (for each worker) = 20 min
• Capacity rate for each worker = 3 units/hour
• Capacity rate for the resource pool = 12 units/hour
A +B+C+D (20 min)
A +B+C+D (20 min)
A +B+C+D (20 min)
A +B+C+D (20 min)
Worker 1
Worker 2
Worker 3
Worker 4
43
WHAT İNFORMATİON DO UNİT LOADS GİVE US?
Now, suppose the work is redistributed among the four workers as follows:
• Unit Load (for each worker) = 5 min
• Capacity rate for each worker = 12 units/hour
• Capacity rate for the resource pool = 48 units/hour
Task A (5 min) Task B (5 min) Task C (5 min) Task D (5 min)
Worker 1 Worker 2 Worker 3 Worker 4
44
WHAT İNFORMATİON DO UNİT LOADS GİVE US?
• Unit Load tells you something about how work is organized
Small Unit Load
for Each
Resource
High Unit Load
for Each
Resource
Labor Skills Low High
Equipment
Specialization
High Low
Process Type Flow Shop Job Shop
45
• An Experiment in “humanistic” production at its Kalmar and
Uddevalla plants (late 1980s)
• Teams jointly assemble cars at a fixed location, no moving
assembly line
• Plants shut down in 1993-1994
• Recommended reading
– “Edges Fray on Volvo’s Brave New Humanistic World” New York
Times, July 7, 1991.
THE VOLVO EXPERİMENT
UTİLİZATİON
• Utilization gives us information about “excess capacity”
• The utilization of each resource in a process can be presented
with a utilization profile
%100rateoutput maximum
rateoutput Actual
RateCapacity
Rate Throughput n Utilizatio
• What is the optimal utilization of a resource?
Resource Capacity Rate
(units/hour)
Input Rate
(units/hour)
Utilization
1 6 4 66.67%
2 7 4 57.14%
3 8 4 50.00%
4 6 4 66.67%
5 5 4 80.00%
46
OPERATİONAL CHALLENGE
MİSMATCH BETWEEN DEMAND AND SUPPLY
• In any process, the input and output rates will vary over time
• A key operational challenge is matching supply and demand
– i.e., matching the input and output rates
• For a variety of reasons, a perfect match is not possible
– What are some of these reasons?
47
AN EXAMPLE: SECURİTY SCREENİNG AT YVR
48
Time
Input rate
(passengers/15 min slot)
Capacity rate
(passengers/15 min slot)
Excess
Demand
Excess
Capacity
6:15 7 15 0 8
6:30 10 15 0 5
6:45 8 15 0 7
7:00 12 15 0 3
7:15 9 15 0 6
7:30 16 15 1 0
7:45 14 15 0 1
8:00 19 15 4 0
8:15 22 15 7 0
8:30 17 15 2 0
8:45 13 15 0 2
9:00 11 15 0 4
9:15 12 15 0 3
9:30 8 15 0 7
9:45 10 15 0 5
10:00 7 15 0 8
TOTAL 195 240
Enough
capacity
for the
shift …
Data for a 4-hour shift in 15-min time slows: 7 arrive between 6:00 and 6:30 etc.
…but not
at all times
Do we have
enough
capacity?
SHORT-RUN VS. LONG-RUN AVERAGES
• Since the input and output rates may vary over time, both the short-run average and the long-run average rates provide useful information.
49
• Long-run average input rate must be less than the long-run average capacity rate
• Long-run average throughput rate
= Long-run average input rate
• Short-run average input rate can be greater than the short-run average capacity rate
But what would
this lead to?
Why?
Why?
RateCapacity
Rate Throughput n Utilizatio
IMPLİED UTİLİZATİON
• Implied utilization also allows us to capture the idea of
overtime
– Organizations often budget for a fixed amount of capacity, and work
overtime to meet excess demand
50
• To capture the idea that there may be excess demand in the short-run, another measure of utilization is often useful
RateCapacity
RateInput on UtilizatiImplied
SECURİTY SCREENİNG EXAMPLE REVİSİTED
• What is the capacity rate?
Note: In this example, the capacity rate is given. In practice, it
may not be obvious. Finding the capacity rate will involve
drawing a process flow map, identifying activities, times,