Process Flows and ShinMing Guo Supporting Facility NKFUST Process - - PDF document

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Process Flows and Supporting Facility

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 Process Flow Structures  Process Performance  Facility Layout  Servicescapes

Shin‐Ming Guo NKFUST

Definition of a Business Process

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Factory

wood metal guitars

University

students alumni Distribution center bulk items small parcels Calculate credit risk mortgage applications approved loans rejected loans

 A process is a set of activities that accepts inputs and

produces outputs.

 Processes can involve both goods and services.

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Services Process Structure

Process Type Service Example Characteristic Management Challenge Project Consulting One‐of‐a‐kind engagement Staffing and scheduling Job Shop Hospital Many specialized departments Balancing utilization and scheduling patients Batch Shop/Process Airline Group of customers treated simultaneously Pricing of perishable asset (seat inventory) Flow Line Cafeteria Fixed sequence of

• perations

Adjust staffing to demand fluctuations Continuous Process Electric Utility Uninterrupted delivery Maintenance and capacity planning

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Quality Flexibility Variety Variety vs. Cost Speed Flexibility Speed

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Project Shop

CEO Market Research Finance Operation Human Resource Manager Project A Manager Project B Manager Project C

Job Shop

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Small batches of customers with different service sequences

1 1 1 2 2 2 3 3 3 4 4 A B C D

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Batch Process and Continuous Flow

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A Flow Line at IKEA’s Cafeteria

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Process Flow Structures

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Job Shop Batch Process Worker‐paced line Machine‐paced line Continuous process

Low Volume (unique) Medium Volume (high variety) High Volume (lower variety) Very high volume (standardized) Utilization of fixed capital generally too low Unit variable costs generally too high Commercial Printer Apparel Production/Bakery High volume Auto assembly Oil refinery Low volume Auto Assembly Hospital, Department Store Airline Cafeteria Fast food Internet provider

Service Blueprint for High Contact Services

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Swim Lane Flowchart for Low Contact Services

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Graduate School Admissions

Process Performance Measures

• Cycle Time is the average time between completions of

successive units.

• Capacity is a measure of max. output per unit of time.
• Throughput rate is the actual output per unit of time.
• Bottleneck is the factor that limits production, usually the

slowest operation or the operation with heaviest load.

• Capacity Utilization is a measure of how much output is

actually achieved.

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Flow Lines and Cycle Time

• Process Cycle time = 1 min. Capacity = 60/hour.
• Direct labor content = 2.5 min. Direct Labor Utilization =

2.5/(5×1)=50%

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0.1 min 0.7 min 1.0 min 0.5 min 0.2 min 0.5min 0.5 min 0.5 min 0.5 min 0.5 min

 Process Cycle time = 0.5 min. Capacity = 120/hour.  Direct labor content = 2.5 min.  Direct Labor Utilization = 2.5/(5×0.5)=100%

Cycle Time Analysis of Playing Slot Machines

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Insert coin and pull Collect payout if win Machine spinning wait Play again The faster the customer plays, the more money the casino will earn.

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Process Performance Measures

• Throughput Time: time to complete a process from arrival to
• departure. It consists of processing times and possible delays.
• Wait Time: time spent in the system without receiving service.
• Work In Process (waiting line, inventory) number of flow

units in the process; or its average across a time period.

• Total Direct Labor Content: is sum of all the operations times.
• Direct Labor Utilization is a measure of the percentage of time

that workers are actually contributing value to the service.

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Throughput Time, WIP, and Wait

7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 11 10 9 8 7 6 5 4 3 2 1 Throughput Time

WIP WIP=Cumulative Inflow – Cumulative Outflow

Cumulative Inflow Cumulative Outflow Time

Patients

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Process with Multiple Types of Customers

• The flow may break up into multiple flows.
• Not all activities are required by all types.

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10/hr 3/hr 4/hr 4 3 2 30 4 2 2 20 12 10

Product Mix Affects the Process Capacity

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• No. of

Workers Available Capacity (minutes) Requested Capacity (Workload) Utilization

Senior Staff Intern Total

File

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60 3×4 10×3 4×2 50 83% Contact References

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120 3×30 90 75% Contact Employers

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180 3×20 10×12 180 100% School/Grade 2 120 4×10 40 33% Report

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60 3×4 10×2 4×2 40 67%

Current product mix: 3 senior/hr, 10 staff/hr, 4 intern/hr

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Process Performance for Retailing

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 Throughput rate = average daily sales  Throughput time = days of supply  Days of supply =  Inventory turn =

COst of Goods Sold

_______________________

average inventory value average daily sales average inventory value

________________________ Order Order Receipt Receipt On Shelf On Shelf Sales Sales

Comparing Kohl’s and Wal-Mart

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2011 2010 2009 2008 2007 Kohl’s Revenue 18391 17178 16389 16474 15544 Cost of Goods Sold 11359 10679 10332 10459 9890 Inventory 3036 2923 2799 2856 2588 Net Income 1114 991 885 1084 1109 Inventory Turn 3.74 3.65 3.69 3.66 3.82 Walmart Revenue 418952 405046 401244 374526 344992 Cost of Goods Sold 307646 297500 299419 280198 258693 Inventory 36318 33160 34511 35180 33685 Net Income 16389 14335 13118 12884 12036 Inventory Turn 8.47 8.97 8.68 7.96 7.68

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Design a process to improve flow rate. Design a process to offer more selections. Design a process to reduce wait times. Design a process to control inventory.

Product Layout: How to Allocate Work?

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Process cycle time = max. cycle time = 60 seconds Process Capacity = Capacity of the bottleneck = 60/hour

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Improved Layout of Driver’s License Office

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Process cycle time = max. cycle time = 30 seconds Process Capacity = Capacity of the bottleneck = 120/hour

Flexible Layout

• Process cycle time = 30 sec.
• Process Capacity = 120/hour
• No waiting in between.
• No need to repeat information.
• Flexible staffing.

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Environmental Psychology & Orientation

 Need for spatial cues to orient visitors  Place orientation (e.g., "Where am I?")  Function orientation (e.g., "How does this

• rganization work, and what do I do next?").

 Formula facilities draw on previous experience  Anxiety and a sense of helplessness can result if

spatial cues are not present.

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Place Orientation Function Orientation

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Environmental Dimensions of Servicescape

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Ambient conditions Background characteristics (temperature, music, illumination, scent) Spatial layout and functionality Circulation path of customers, groupings of merchandise Signs, symbols, and artifacts Carry special meaning or have social significance.

A Grocery Store’s Layout

• The entrance is designed to be inviting so it reinforces

a positive customer retail response.  Bakery, produce and florist at the front of the store.

• Stock the items shoppers buy most often at the back of

the store  meat, eggs, dairy and bread.

• Crafting an efficient floor plan with an expertly stocked

perimeter keeps shoppers moving through the entire store and pausing at strategic stops along the way.

• Pharmacy is located on the perimeter near the exit.
• Impulse Buys (Candy, Magazines, Etc.) are located by

the registers and exit

Supermarket Psychology

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Queue Structures

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Inflow Outflow Customers waiting Customers in service Inflow Outflow Customers waiting Customers in service

Signs, Symbols, and Artifacts

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Servicescape

Summary

A well‐designed service process leads to effective

• perations and better service.

Three performance measures

 High contact service: throughput rate, wait times  Retail service: inventory

Process analysis can identify the bottleneck and improve the throughput time. Facility layout improves the efficiency and minimizes the travel distance.

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