3

Process Analysis

Dr. Asil Oztekin

UMass Lowell
Manning School of Business
Operations & Information Systems
3 1

Process Analysis
Processes may be the least understood
and managed aspect of a business
A firm cannot gain a competitive advantage
with faulty processes
Either adapt the processes to the changing
needs of customers or cease to exist!

Quick-fix solutions fail to live up to

expectations over the long haul
Processes can be analyzed and improved
using certain tools and techniques
Process analysis can be accomplished
using a six-step blueprint
3 2

A Systematic Approach-process
analysis
Define
scope
2
Identify
opportunity
1

Document
process
3

Implement
changes
6

Evaluate
performance
4
Redesign
process
5

Process Analysis: documentation and detailed understanding of how work is performed and
how it can be redesigned
3 3

Step 1: identify opportunities

Managers must pay attention to four core
processes: 1.supplier relationship, 2.new
service/product development, 3.order
fulfillment, 4.the customer relationship
Each delivers value to customers: are they
satisfied or is there room for improvement?
Monitor customer satisfaction periodically
either with formal measurement system or
informal checks/studies
Suggestion system: voluntary system by
which employees submit their ideas on
process improvements reward via
money or special recognition
3 4

Step 2: define the scope

Establish the boundaries of the process to be
analyzed
too narrow: just part of one person vs. too
broad: stretches across the organization -trying to boil the ocean?!?!?
Resources assigned to reengineer or improve
a process should match the scope of the
process: 1) design team: knowledgeable, teamoriented individuals working in one or more
processes, do the process analysis, make
necessary changes 2) facilitators: knows
process methodology, guide and train the
design team 3) steering team: if process cuts
across several departments with managers
3 5

Step 3: document the process

Making a list of the processs inputs,
suppliers, outputs, and customers
Show them in a diagram with more detailed
breakdown in a table
Understand the different steps performed
in the process

Note the degree and type of customer

contact and process divergence at each

3 6

Step 4: evaluate the performance

Establish good performance measures to
evaluate a process clues to improve it
Metric: performance measures a good
start is specific competitive priorities e.g.
quality, customer satisfaction, time to
perform, cost, errors, safety environmental
measures, on-time delivery, flexibility
Metric ready, collect info on how the
process is performing on each

3 7

Step 5: redesign the process

Determine gaps between actual and
desired performance

Gapscaused by illogical, missing, or

extraneous steps
Design team is to find root causes of
performance gaps
Via critical thinking, generate a long list of
ideas for improvements
Justifiable ones reflected in a new process
design document as proposed

Clear before and after pictures and

how it will work
3 8

Step 6: implement changes

More than developing a plan and carrying it
out!
Many effectively redesigned processes
could not be implemented, why?
Widespread participation is essential, not
only because of the amount of work
involved but also for commitment
Easier if it is your own idea
Training and investment in new technology

3 9

Documenting The Process

Three effective techniques for
documenting and evaluating processes are
1) Flowcharts
2) Service blueprints
3) Process charts

They help you see how a process operates

and how well it is performing
Can help find performance gaps
3 10

Flowcharts
Traces the flow of information, customers,
equipment, or materials thru various steps of a
process
Various names: flow diagrams, process maps,
relationship maps, blueprints

No precise format, drawn with boxes

Process divergence an outgoing arrow
splits into two or more arrows
Use a key or legend
Communicate what is being tracked: info,
customer orders, materials and etc
Not much detail but bird eyes view of the
overall business

3 11

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

Figure 4.2 Flowchart of the Sales Process

for a Consulting Company
3 12

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

Figure 4.3 Flowchart of the Nested Sub-process of Client Agreement and Service Delivery

3 13

CUSTOMER

Order
completed
and submitted

100%
of credit
checked within
24 hours

Two
scheduling
errors per
quarter

Payment
sent

FINANCE

New
Yes
customer?

Credit
check
OK?

Yes

Production
scheduled

Items
manufactured

Packages
assembled and
inventoried
Order

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

Figure 4.4 Flowchart of the Order-Filling Process Showing Handoffs Between Departments
3 14

Service blueprints
A special flowchart that shows which steps
have high customer contact

A flowchart with a line of visibility which

steps are visible to customer (front office) and
which are not (back office)
Good design of service processes depends on
the type and amount of customer contact, line
of visibility is just one aspect
Each step is tagged with a number and an
accompanying table that describes the
customer contact at each numbered step

3 15

Service blueprints-contd.

3 16

Service blueprints-contd.

3 17

Process Charts
An organized way to document all the
activities performed by a person or group
of people at a workstation with a customer
or with certain materials

Uses a table, provides info about each step

Activities are typically organized into five
categories
Operation,

Transportation,
Inspection,
Delay,

Storage,

3 18

Process Charts-contd.
Operations: changes, creates, adds smth

Transportation: moves the subject (person,

tool, material, piece of equipment) from
one place to another (material handling)
Inspection: checks or verifies but does not
change

Delay: subject is held up awaiting for

further action (time spent waiting for ..,
idle times of ..)
Storage: smth is put
3 19

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

19

1.00

Enter emergency room, approach patient window

Sit down and fill out patient history

X
40.0

Nurse escorts patient to ER triage room

Nurse inspects injury

X
40.0

Return to waiting room

X
X

60.0

Nurse takes patient to radiology

Technician x-rays patient

Return to bed in ER

X
X

Walk to pharmacy
Pick up prescription

X
20.0

Return to emergency entrance area

Check out

X
180.0

Wait for doctor to return

Doctor provides diagnosis and advice

X
60.0

Wait for doctor

Doctor inspects injury and questions patient

200.0

Wait for available bed

Go to ER bed

200.0

Step Description

Leave the building

Figure 4.5 Process Chart for Emergency Room Admission

3 20

Summary

Process Charts

Activity

Number
of Steps

Time
(min)

5
23.00

9
11.00
Transport
Step Description
Enter emergency room, approach patient window
X
Inspect
2
8.00

Sit down and fill out patient history

X
Delay
to ER3triage room8.00
Nurse escorts patient
X
Nurse inspects injury
X
Store

Return to waiting room

Distance
(ft)

Operation

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

19

1.00

40.0

40.0

X
60.0

Nurse takes patient to radiology

Technician x-rays patient

X
200.0

Return to bed in ER

X
X

Return to emergency entrance area

Check out

X
180.0

Wait for doctor to return

Doctor provides diagnosis and advice

X
60.0

Wait for doctor

Doctor inspects injury and questions patient

X
200.0

Wait for available bed

Go to ER bed

X
X

Walk to pharmacy
Pick up prescription

X
20.0

815

Leave the building

Figure 4.5 Process Chart for Emergency Room Admission

3 21

Process Charts
The annual cost of an entire process can
be estimated
It is the product of
1) Time in hours to perform the process each
time
2) Variable costs per hour
3) Number of times the process is performed
each year
Annual
labor cost

Time to perform
the process in hours

Variable costs
per hour

Number of times process

performed each year

3 22

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 annual labor cost is
4 hrs/customer $25/hr 40 customers/yr = $4,000

3 23

Work Measurement Techniques

Process documentation would not be complete
until estimates of average time each step takes is
determined

Task time estimates are needed not just for

process improvement but also for capacity
planning, scheduling and etc.
How to formally estimate the average time each
step in a process would take
1) Time study method
2) Elemental standard data approach
3) Predetermined data approach
4) Work sampling method

Learning curve analysis is the 5th one and

appropriate for new products or processes
3 24

Time Study Method

Time study uses a trained analyst to conduct four
basic steps in setting a time standard for a
job/process
1.

Selecting the work elements (steps in a flowchart/process

chart) to be studied

2.

Timing the elements via stopwatch for several repetitions

3.

Determining the sample size

4.

Setting the final standard

Observe the average time, adjust for normal effort,

make allowances for breaks, unavoidable delays
and etc.
Some elements may be faster/slower than normal
The allowance is expressed as a
percent/proportion of the total normal time
3 25

Time Study of Revised Process

EXAMPLE 4.1

A process at a watch assembly plant has been

changed. The process is divided into three work
elements. A time study has been performed with the
following results. The time standard for process
previously was 14.5 minutes. Based on the new time
study, should the time standard be revised?
SOLUTION

The new time study had an initial sample of four

observations, with the results shown in the following
table. The performance rating factor (RF) is shown for
each element, and the allowance for the whole
process is 18 percent of the total normal time.
3 26

Time Study of Revised Process

Obs 1

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

Total Normal Time = 10.014

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

3 27

Elemental Standard Data Approach

If products/services are highly customized and
process divergence is great job processes
prevail and ESDA is needed.

ESDA: a database of standards compiled by a

firms analyst for basic elements, drawn later to
estimate the time required for a particular job
Works well if work elements within certain jobs are
similar to those in other jobs
If the time required for a work element depends on
the job variable characteristics, then an equation
that relates those characteristics to the time is
also kept in the database
As a subsequent step, time study should still be
used to compile normal times and allowances
3 28

Predetermined Data Approach

PDA divides each work element into a series of
motions that make up the element
Analyst then consults to a database which
contains the normal times for the micromotions
Micromotions can be reach, move, apply pressure
The normal time of a process would be the sum of
the times for the elements performed in the
process
PDA makes most sense for highly repetitive
processes with little process divergence and line
flows.

3 29

Work Sampling
Via randomized observations over time, work
sampling estimates the proportion of time spent
on different activities
Activities can be working on a service/product,
doing paperwork, waiting for maintenance, being
idle use this data to assess productivity,
estimate allowances needed to set standards for
other work measurement methods and spot areas
for process improvement
Best used for highly divergent and flexible-flow
processes

3 30

Work Sampling-contd.

z 2 p 1 p
n
e2
Figure 4.6 Work Sampling Study of Admission Clerk at Health Clinic Using OM Explorer

3 31

Learning Curves
Previous techniques are good if the process is
stable.
Learning curve analysis takes into account that
learning takes place on an ongoing basis e.g. new
products/services are introduced frequently
Learning effects e.g. instruction and repetition can
be anticipated via a learning curve: relationship
between processing time and the cumulative
quantity of a product produced
Time required to produce a unit decreases as
more units are processed
Learning curve depends on the learning rate and
the real or estimated time for the first unit
produced
3 32

Learning Curves-contd.
Figure 4.7 Learning Curve with 80% Learning Rate

140,000

Labor Hours per Unit

120,000
100,000
80,000
60,000
40,000
20,000
0|
0

20

40

60

80

100

120

Cumulative Units Produced

Time for the 2nd unit is 80% of the first (120,000*0.8=96,000) and the time for the 4th unit is the 80% of
the 2nd (96,000*0.8=76,800) learning rate deals with the doubling of the output total.

3 33

Learning Curve-contd.

Process time per unit (hr)

0.30
0.25
0.20
0.15

Learning curve

0.10
Learning
0.05 period

|
50

Standard time

|
|
|
100 150 200

|
|
250 300

Cumulative units produced

Figure I.1 Learning Curve, Showing the Learning Period
and the Time When Standards Are Calculated
3 34

Developing Learning Curves

Using a logarithmic model to draw a
learning curve, the direct labor required
for the nth unit, kn, is
k n = k 1n b
where
k1 = direct labor hours for the first unit
n = cumulative numbers of units produced
log r
b
log 2
r = learning rate (as decimal)
Doubling of the quantity reduces the time per unit by (1 r)
3 35

Using Learning Curves

EXAMPLE I.1

A manufacturer of diesel locomotives needs 50,000 hours to

produce the first unit. Based on past experience with similar
products, you know that the rate of learning is 80 percent.
a. Use the logarithmic model to estimate the direct labor
required for the 40th diesel locomotive

b. Draw a learning curve for this situation.

3 36

Using Learning Curves

SOLUTION

a. The estimated number of direct labor hours required to

produce the 40th unit is
k40 = 50,000(40)(log 0.8)/(log 2) = 50,000(40)0.322 = 50,000(0.30488)
= 15,248 hours

3 37

Using Learning Curves

b. Plot the first point at (1, 50,000). The second units labor time
is 80 percent of the first, so multiply 50,000(0.80) = 40,000
hours. Plot the second point at (2, 40,000). The fourth is 80
percent of the second, so multiply 40,000(0.80) = 32,000
hours. Plot the point (4, 32,000). The result is shown in
Figure I.2.
Direct labor hours per
locomotive (thousands)

50
40
30

20
10
0

40

80
120 160 200 240
Cumulative units produced

280

Figure I.2 The 80 Percent Learning Curve

3 38

Evaluating PerformanceData Analysis Tools

Metrics reveal a performance gaps and the
below help identify causes of problems
1) Checklists

2) Histograms and bar charts

3) Pareto charts
4) Scatter diagrams
5) Cause-and-effect diagrams
6) Graphs

3 39

Checklists
A form used to record the frequency of
occurrence of certain process failures
(performance shortfalls) e.g. error, delay,
waste, rework

Data collection via checklist is the 1st step

in the analysis of a metric
The characteristics may be measurable on
a continuous scale e.g. weight, length,
time, customer satisfaction on a 1-7 Likert
scale or on a yes-no basis e.g. customer
complaint, posting error
3 40

Histograms vs. Bar Charts

Checklist data histograms or bar charts

Histogram summarizes data from a

continuous scale, shows frequency
distribution of some process failures
(central tendency, and dispersion)
Bar chart is a series of bars representing
the frequency of occurrence of data
characteristics measured on a yes-no basis
Bar height indicates the number of times a
particular process failure was observed

3 41

Pareto Charts
Out of several process problems, we need
to decide which ones to attack first
A problem is caused by vital few of its
factors vital few-trivial many
Paretos 80-20 rule: 80% of the activity is
caused by 20% of its factors

By concentrating 20% of the factors (vital

few), managers can attack 80% of the
process failure problems (trivial many)
Percentages would change at each case
3 42

Pareto Chart for a Restaurant

EXAMPLE 4.2

The manager of a neighborhood restaurant is concerned about

the smaller numbers of customers patronizing his eatery.
Complaints have been rising, and he would like to find out what
issues to address and present the findings in a way his
employees can understand.
SOLUTION
The manager surveyed his customers over several weeks and
collected the following data:
Complaint

Frequency

Discourteous server

12

Slow service

42

Cold dinner

Cramped table

20

Atmosphere

10
3 43

Pareto Chart for a Restaurant

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

Figure 4.9 Bar Chart

3 44

Pareto Chart for a Restaurant

(42 + 20)
100% = 69.7%
89
100.0%

45
40

Failures

30

60.0%

25
40.0%

20
10

20.0%

Percent of Total

80.0%

35

5
0.0%

0
Slow
service

Cramped
tables

Discourteous
server

Atmosphere

Cold
dinner

Failure Name

Figure 4.10 Pareto Chart

3 45

Cause-and-effect diagram (fishbone)

Relates a key performance problem to its
potential causes by Ishikawa

Main performance problem the head,

major categories of potential causes
structural bones, likely specific causes
ribs
Update the chart as new causes become
apparent

3 46

Analysis of Flight Departure Delays

EXAMPLE 4.3

The operations manager for Checker Board Airlines at

Port Columbus International Airport noticed an increase
in the number of delayed flight departures.
SOLUTION

To analyze all the possible causes of that problem, the

manager constructed a cause-and-effect diagram, shown
in Figure 4.11. The main problem, delayed flight
departures, is the head of the diagram. He brainstormed
all possible causes with his staff, and together they
identified several major categories: equipment,
personnel, materials, procedures, and other factors that
are beyond managerial control. Several suspected causes
were identified for each major category.
3 47

Analysis of Flight Departure Delays

Equipment

Personnel

Aircraft late to gate

Other

Passenger processing at gate

Mechanical failures

Late cabin cleaners

Weather
Unavailable cockpit crew

Air traffic delays

Late cabin crew

Delayed
flight
departures
Late baggage to aircraft
Late fuel
Late food service
Contractor not provided
with updated schedule
Materials

Poor announcement of departures

Weight/balance sheet late
Delayed check-in procedure
Waiting for late passengers

Procedures

Figure 4.11 Cause-and-Effect Diagram for Flight Departure Delays

3 48

Data Analysis Tools

Tools can be used together for data
snooping to analyze data and determine
causes
Simulation can show how a process
changes over time
Process simulation is the act of
reproducing the behavior of a process
using a model that describes each step
3 49

Causes of Headliner Process Failures

EXAMPLE 4.4
The Wellington Fiber Board Company produces headliners, the
fiberglass components that form the inner roof of passenger
cars. Management wanted to identify which process failures
were most prevalent and to find the cause.

SOLUTION
Step 1: A checklist of different types of process failures is
constructed from last months production records.
Step 2: A Pareto chart is prepared from the checklist data.

Step 3: A cause-and-effect diagram for identifies several

potential causes for the problem.
Step 4: The manager reorganizes the production reports into a
bar chart according to shift because the personnel on
the three shifts had varied amounts of experience.
3 50

Causes of Headliner Process Failures

SOLUTION

Step 2. Pareto Chart

Figure 4.12 shows the sequential

application of several tools for
improving quality

50

Defect type

Tally

A. Tears in fabric

|| ||

B. Discolored fabric

|||

C. Broken fiber board

|||| |||| |||| ||||

|||| |||| |||| |

D. Ragged edges

Total

| ||| ||

36
7

Total

50

80

30

60

20

40

10

20

D
A

Cumulative Percentage

Step 1. Checklist

Number of Failures

40

100

B
0

Defect Failure
Figure 4.12 Application of the Tools
for Improving Quality
3 51

Causes of Headliner Process Failures

SOLUTION

Step 4. Bar Chart

Step 3. Cause-and-Effect Diagram

People

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

Figure 4.12 shows the sequential

application of several tools for
improving quality

15

10

0
First Second Third
Shift
Figure 4.12 Application of the Tools
for Improving Quality
3 52

Redesigning the Process

After a process is documented, metrics are
collected, and disconnects are identified,
the process analyst determines what
changes should be made
- Thorough examination diagnosis treatment

People directly involved in the process are

brought in to get their ideas and inputs

3 53

Generating Ideas: questioning and

brainstorming
Ideas can be uncovered by asking six
questions
1. What is being done?
2. When is it being done?
3. Who is doing it?

4. Where is it being done?

5. How is it being done?
6. How well does it do on the various metrics of
importance?

3 54

Generating Ideas
Brainstorming involves a group of people
knowledgeable about the process
proposing ideas for change by saying
whatever comes to mind creativity

Facilitator records the ideas on a flipchart

so that all can see
Participants cannot evaluate any of the
ideas during the session, create as many
ideas as possible no matter how farfetched they are

After brainstorming the design team

evaluates ideas and identifies those with
the highest payoff get real phase
3 55

Benchmarking- a long-term
continuous improvement
Benchmarking is a systematic procedure that
measures a firms processes, services, and
products against the leaders
Used to understand how outstanding
companies do things so that they can improve
their own businesses
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
3 56

Benchmarking
There are four basic steps

Step 1. Planning: identify the process to be benchmarked, the

performance measures, the firms to be compared against, and
collect data

Step 2. Analysis: determine the gap between the firms current

performance and the benchmarked firms, identify the causes
of significant performance gaps

Step 3. Integration: establish goals and obtain support of

managers who must provide resources for reaching goals

Step 4. Action: develop cross-functional teams who are most

affected by changes, develop action plans, implement plans,
monitor the progress, recalibrate benchmarks as you improve

Collecting data can be a challenge

Some corporations and government
organizations have agreed to share data
3 57

Benchmarking by American Quality

and Productivity Center
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

Value of plant shipments per employee

Finished goods inventory turnover
Reject rate as percentage of total orders processed
Percentage of orders returned by customers due to quality problems
Standard customer lead time from order entry to shipment
Percentage of orders shipped on time

Figure 4.13 Illustrative Benchmarking Metrics by Type of Process

3 58

Benchmarking
New Service/Product Development Process

Percentage of sales due to services/products launched last year

Cost of generate new services/products process per $1,000 revenue
Ratio of projects entering the process to projects completing the process
Time to market for existing service/product improvement project
Time to market for new service/product project
Time to profitability for existing service/product improvement project

Supplier Relationship Process

Cost of select suppliers and develop/maintain contracts process per
$1,000 revenue
Number of employees per $1,000 of purchases
Percentage of purchase orders approved electronically
Average time to place a purchase order
Total number of active vendors per $1,000 of purchases
Percentage of value of purchased material that is supplier certified
Figure 4.13 Illustrative Benchmarking Metrics by Type of Process
3 59

Benchmarking
Customer Relationship Process

Systems cost of finance function per $1,000 revenue

Percentage of finance staff devoted to internal audit
Total cost of payroll processes per $1,000 revenue
Number of accepted jobs as percentage of job offers
Total cost of source, recruit, and select process per $1,000 revenue
Average employee turnover rate

Figure 4.13 Illustrative Benchmarking Metrics by Type of Process

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Managing Processes
Failure to manage processes is failure to
manage the business
Implementing a beautifully redesigned
process is only the beginning to
continually monitoring and improving
processes
Seven common mistakes
1. Not connecting with strategic issues
2. Not involving the right people in the right way

3. Not giving the design teams and process

analysts a clear charter and then holding them
accountable
3 61

Managing Processes
Seven common mistakes
4. Not being satisfied unless fundamental
reengineering changes are made
5. Not considering the impact on people
6. Not giving attention to implementation

7. Not creating an infrastructure for continuous

process improvement

3 62

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.

3 63

Solved Problem 1
SOLUTION

Figure 4.14 Flowchart of Telephone Ordering Process

3 64

Solved Problem 1
SOLUTION

Figure 4.14 Flowchart of Telephone Ordering Process

3 65

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.

3 66

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

21

2.30

Direct customer into service bay

Number
Time
ActivityRecord name and desired service
of Steps
(min)

X
X
0.30

Open hood, verify engine type, inspect hoses, check fluids

Recommend additional8services
Transport

X
X
X
X

InspectWalk to storeroom

Delay

X
40.0

0.30

Inspect for leaks

Walk to pit
X

Inspect for leaks

Clean and organize work area

X

Return to auto, drive from bay

X

X
X

0.70

Fill engine with oil, start engine

X

60.0

to service1pit
Carry filter(s)
Look up filter number(s)
1

5.00

Climb from pit, walk to automobile

80.0

Perform under-car services

X

40.0

420

Check filter number(s)

Store

5.50

Wait for customer decision

X
50.0

Distance
(ft)

7 area 16.50
Operation
in waiting
Walk to customer

70.0

Step Description

Summary

Park the car

Walk to customer waiting area
Total charges, receive payment

Figure 4.15 Process Chart for Changing Engine Oil

3 67

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.

3 68

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

Labels rumpled or missing

29

Total

60

Draw a Pareto chart to identify the vital defects.

3 69

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%

3 70

Solved Problem 4
7
100% = 11.67% of defects; the
60
cumulative percentage is
Lumps represent

78.33% + 11.67% = 90.00%

Defective seals represent

6
100% = 10.00% of defects; the
60

cumulative percentage is
10% + 90% = 100.00%
The Pareto chart is shown in Figure 4.16

3 71

Solved Problem 4
100
90%

36
78%

32
Frequency of Defects

100%

90
80

28

70

24

60

20

48%

50

16

40

12

30

20

10

Label

Fill

Mix

Seal

Cumulative Percentage of Defects

40

Figure 4.16 Pareto Chart

3 72