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Chapter 4 Process design

Source: Joe Schwarz, www.joyrides.com

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process design

Process design
Supply network design Layout and flow Process technology Operations strategy Operations management

Design

Improvement

Job design

Product/service design

Planning and control

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Nature and purpose of the design activity

Products, services and the processes which produce them all have to be designed
Decisions taken during the design of a product or service will have an impact on the decisions taken during the design of the process which produces those products or services, and vice versa

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Design of products / services and design of processes are interrelated and should be treated together
Designing the product or service Designing the process

Products and services should be designed in such a way that they can be created effectively

Product / service design has an impact on the process design and vice versa

Processes should be designed so they can create all products and services which the operation is likely to introduce

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Design of the Product

Design of the Process

Design of the Service

Design of the Process

In manufacturing operations overlapping the activities of product and process design is beneficial

In most service operations the overlap between service and process design is implicit in the nature of service

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process mapping symbols derived from Scientific Management


Operation (an activity that directly adds value) Inspection (a check of some sort) Transport (a movement of something) Delay (a wait, e.g. for materials)

Process mapping symbols derived from Systems Analysis


Beginning or end of the process
Activity

Input or output from the process

Direction of flow

Storage (deliberate storage, as opposed to a delay)

Decision (exercising discretion)

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Designing processes
There are different process types Process types are defined by the volume and variety of items they process

Process types go by different names depending on whether they produce products or services

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Manufacturing process types


Process tasks
Diverse/ complex

Process flow High


Intermittent

Project Jobbing

Variety

Batch

Mass Continuous Low Volume High

Repeated/ divided

Continuous

Low

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Project processes

One-off, complex, large-scale products with high work content


Specially made, every one customized Defined start and finish: time, quality and cost objectives Many different skills have to be coordinated

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

A project process with a small part of the process map that would describe the whole process

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Jobbing processes

Very small quantities: one-offs, or only a few required


Specially made: high variety, low repetition, strangers, every one customized Skill requirements are usually very broad Skilled jobber, or team, completes whole product

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Preparing photolithography materials on a jobbing basis with a typical process map

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Batch processes Higher volumes and lower variety than for jobbing Standard products, repeating demand. But can make specials Specialized, narrower skills Set-ups (changeovers) at each stage of production

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

A batch process in a kitchen together with an illustrative process map

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Mass (line) processes Higher volumes than batch

Standard, repeat products (runners) Low and/or narrow skills No set-ups, or almost instantaneous ones

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

A mass process a packing process

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Continuous processes

Extremely high volumes and low variety: often single product Standard, repeat products (runners) Highly capital-intensive and automated
Few changeovers required Difficult and expensive to start and stop the process

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Part of a continuous process and a typical process map

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Service process types


Process tasks
Diverse/ complex

Process flow
High
Intermittent

Professional service

Variety

Service shop

Mass service
Repeated/ divided Continuous

Low

Low

Volume

High

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

A professional service Consultants planning how best to help their client

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

A service shop This health club offers some variety within a standard set of facilities and processes

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

A mass service This call centre can handle a very high volume of customer enquiries because it standardizes its process

Source: Royal Bank of Scotland Group

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Deviating from the natural diagonal on the productprocess matrix has consequences for cost and flexibility
Manufacturing operations process types
Volume Variety

Service operations process types None


More process flexibility than is needed so high cost

Project Jobbing

Professional service

Batch
Mass Continuous

Less process flexibility than is needed so high cost

Service shop

Mass service
None
The natural line of fit of process to volume/variety characteristics

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Deviating from the natural diagonal on the productprocess matrix has consequences for cost and flexibility
Volume Variety

None

Old process

Old process, new product

New process, new product

None

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Flow (layout), technology and job design are all influenced by process positioning
Flow Unorganized Technology Little / general Jobs Varied / high discretion
Volume

Variety

Custom furniture maker Machine tool maker Automobile factory

None

Predictable

Specialist

Routine / low discretion

None

Petrochemical refinery

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Flow (layout), technology and job design are all influenced by process positioning
Flow Unorganized Technology Little / general Jobs Varied / high discretion
Volume

Variety

None

Investment banking Customer service branch Bank call centre Credit card processing

Predictable

Specialist

Routine / low discretion

None

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process mapping symbols derived from Scientific Management


Operation (an activity that directly adds value) Inspection (a check of some sort)

Process mapping symbols derived from Systems Analysis


Beginning or end of the process
Activity

Transport (a movement of something)


Delay (a wait, e.g. for materials)

Input or output from the process

Direction of flow

Storage (deliberate storage, as opposed to a delay)

Decision (exercising discretion)

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Customized sandwich old process

Raw materials

Assembly

Stored sandwiches

Move to outlets

Stored sandwiches

Sell

Take payment

Standard sandwich process

Customer request

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Customized sandwich old process

Raw materials

Assembly

Take payment

Customer request

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

The operation of making and selling customized sandwiches


Prepare Sandwich materials and customers Assemble as required Take payment Customers assembled to sandwiches

Bread and base filling Assemble whole sandwich Use standard base? No Yes Customer request Assemble from standard base Stored bases Fillings

Outline process of making and selling customized sandwiches

Detailed process of assembling customized sandwiches

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Customized sandwich new process

Assemble whole sandwich Assembly of sandwich bases Use standard base?

No
Fillings

Take payment

Bread and base filling Stored bases

Yes Customer request Assemble from standard base

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Flow process charts for processing expense reports at Intel before and after improving the process
1
2 3 4 5 6 Description of activity Report arrives Wait for processing Check expenses report Stamp and date report Send cash to receipt desk Wait for processing 1 2 3 4 5 6 7 8 9

Description of activity Report arrives


Stamp and date report Check expenses report Attach payment voucher Wait for batching Collect retorts into batch Batch to audit desk

Check advance payment 7 8 Send to accounts receivable 9 Wait for processing 10 Check employee record 11 Send to account payable Attach payment voucher 12
13 14 15 16 17 18 19 20 21 22 23 24 Log report Check against rules Wait for batching Collect retorts into batch Batch to audit desk Wait for processing Batch of reports logged

Wait for processing Check reports and vouchers Reports to batch control 10 11 Batch control number Copy of reports to filing 12 Reports filed 13 14 Payment voucher to keying 15

Confirm payment
Totals 5 5 2 2 1

Check payment voucher


Reports to batch control Batch control number Copy of reports to filing

Reports filed 25 Payment voucher to keying 26 Confirm payment Totals 7 8 5 5 1

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Littles law (a really quite useful law) Throughput (TH) = Work in process (WIP) Cycle time (CT)
Cycle time = 2 minutes

WIP = 10

Throughput time = ? Throughput time = 10 2 minutes = 20 minutes

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Littles law (a really quite useful law)

Throughput (TH) = Work in process (WIP) Cycle time (CT)


500 exam scripts need to be marked in 5 days (working 7 hours a day). It takes 1 hour to mark a script. How many markers are needed? Throughput time = 5 days 7 hours = 35 hours 35 hours = 500 scripts Cycle time Cycle time = 35 hours 500 scripts = 0.07 hours

Number of markers = Work content = 1 hour = 14.29 Cycle time 0.07

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Throughput efficiency

Throughput efficiency is the work content of whatever is being processed as a percentage of its throughput time

Throughput efficiency =

Work content Throughput time

100

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Arrival Arrival 30 9 515 10 Processing 10 515 Processing frequency frequency 20 time time mins mins mins (demand) (demand) mins

Utilization Utilization = 33.33 50 100 % % %% Utilization= <100 100%


High

Q Q Q = = = 0infinity 0 Q > 0

time Process length of queue Average throughput (or inventory)

High utilization but long throughput times

X
Low utilization but short throughput times

X X
Reduce process variability
80%

Low

20%

40%

60%

100%

Capacity utilization
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

The relationship between process utilization and number of units waiting to be processed for variable arrival and activity times
Average number of units waiting to be processed Average number of units waiting to be processed High utilization but long waiting time Reduction in process variability Short waiting time but low utilization Y Z X

Decreasing variability

10 20 30 40 50 60 70 80 90 100 Utilization

10 20 30 40 50 60 70 80 90 100 Utilization

(a) Decreasing variability allows higher utilization without long waiting times

(b) Managing process capacity and/or variability

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test


Throughput time The time for a unit to move through a process. Utilization The ratio of the actual output from a process or facility to its design capacity. Life cycle analysis A technique that analyzes all the production inputs, the life cycle use of a product and its final disposal in terms of total energy used and wastes emitted.

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test


Process types Terms that are used to describe a particular general approach to managing processes. In manufacturing these are generally held to be project, jobbing, batch, mass and continuous processes; in services they are held to be professional services, service shops and mass services.
Project processes Processes that deal with discrete, usually highly customized, products. Jobbing processes Processes that deal with high variety and low volumes, although there may be some repetition of flow and activities.

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test


Batch processes Processes that treat batches of products together, and where each batch has its own process route. Continuous processes Processes that are high volume and low variety; usually products made on continuous processes are produced in an endless flow, such as petrochemicals or electricity. Professional services Service processes that are devoted to producing knowledgebased or advice-based services, usually involving high customer contact and high customization. Examples include management consultants, lawyers, architects, etc.

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test


Service shops Service processes that are positioned between professional services and mass services, usually with medium levels of volume and customization. Mass services Service processes that have a high number of transactions, often involving limited customization, for example mass transportation services, call centres, etc. Productprocess matrix A model derived by Hayes and Wheelwright that demonstrates the natural fit between volume and variety of products and services produced by an operation on one hand, and the process type used to produce products and services on the other.

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test


Process mapping Describing processes in terms of how the activities within the process relate to each other (may also be called process blueprinting or process analysis). Process mapping symbols The symbols that are used to classify different types of activity, usually derived either from scientific management or from information systems flowcharting. High-level process mapping An aggregated process map that shows broad activities rather than detailed activities (sometimes called an outline process map).

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test


Work content The total amount of work required to produce a unit of output, usually measured in standard times. Throughput time The time for a unit to move through a process. Cycle time The average time between units of output emerging from a process.

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test


Work-in-process The number of units within a process waiting to be processed further (also called work-in-progress). Littles Law The mathematical relationship between throughput time, work-in-process and cycle time: Throughput time = work-in-process cycle time

Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007