31 terms

4 - Process Design

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Key Messages
Processes are everywhere, usually hierarchical, and are analytically tractable.
Core business processes
manufacturing, product development, supply chain, after-sales service
Support processes
HR, Finance, IT, Marketing, Management
Volume-variety positions
Process tasks are either diverse/complex or repeated/divided. Process flow is either intermittent or continuos. (DIAGRAM)
The product-process matrix (H&W)
Demonstrates the natural lowest cost position for an operation by the natural line of fit.
- Products on the right have lower volumes/higher variety, meaning they have much too flexible processes leading to higher cost than necessary
-Products on the left have higher volumes/lower variety meaning they are likely not flexible enough leading to higher cost
Product/service
A service is often a process - overlap of activities (service and process design) is greater than product.
Process design objective: Quality
error-free processing capable of achieving requirements.
Process design objective: Speed
minimum throughput time, output rate appropriate for demand.
Process design objective: Flexibility
provide resources with an appropriate range of capabilities, change easily between processing states.
Process design objective: Cost
appropriate capacity for demand, eliminate product waste.
Throughput rate
Rate at which products emerge from the process.
Throughout time
average elapsed time taken for inputs to be transformed into outputs.
Work in process
the number of units in the process as an average over a period of time.
Utilization of process resources
The proportion of available time that resources within the process are performing useful work.
Product process types
Project, jobbing, batch, mass, continuos, professional
Project process:
discrete, highly customized products. Low volume, high variety such as a construction.
Jobbing process:
Is low volume/high variety but unlike project, it shares resources with other processes. The same attention needed to products but each differs in exact needs. Ex: specialist toolmakers, ticket printers (Many one-off jobs).
Batch process:
Found over a larger range go volume and variety because of the size of batches such as a gourmet kitchen - same processes with different dishes.
Mass process:
High volume, low variety that offers different variants of a product that don't affect its process such as an automobile plant.
Continuos process:
Even higher volume, lower variance and operates for longer periods of time such a water treatment process.
Professional process:
High contact organizations where customers spend a considerable time in the service process. Ex: consultancy service
Critical analysis of process types
These types can overlap, seeing as mass production can occur in batches (cake)
RACI Chart
Roles and responsibility matrix that assigns Responsible, Accountable, Consulted, and Informed to different departments involved in the process.
Business Process Management (BPM)
Hammer, argues that a lot of work does not add value and despite criticism many aspects are valueless such as the cross-silo approach.
Cross-silo approach (Hammer)
A quality process - maximized value, documents design, simple yet flexible, speedy, provides real-time feedback, customer focused - in a quality environment - actively owned and managed, supported by technology, performed by in-process trained people.
Little's Law
Throughput time = work-in-process x cycle time
- works for any stable process
Cycle time
the average time between units of output emerging from the process.
Throughput efficiency
the work content of whatever is being processed as a percentage of its throughput time
TE = (Work content/Throughput time) x100
Process Variability
- In demand for processing at individual stage within the process, usually expressed in terms of variation in the inter-arrival times of units to be processed.
- In time taken to perform each stage
- Neither are constant in real world
Waiting line analysis
Used to analyze processes with both inter-arrival and activity time variability.
Important choice in process design that could have strategic implications: fast throughput time or high resource utilization?
- The only way to have both is to reduce variability in the process
- Highlights important point regarding day-to-day management of processes.
100% Utilization
The only way to guarantee 100% use of resources is to accept and infinite amount of work-in-process and/or waiting time.
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