Chapter 6: Process-Flow Analysis Notes

Chapter 6 Learning Objectives

  • LO 6.1: Describe process thinking and system boundaries.
  • LO 6.2: Explain how the process view of business is cross-functional.
  • LO 6.3: Construct a process flowchart for a given process.
  • LO 6.4: Analyze a process by asking a wide variety of questions informed by the process flowchart.
  • LO 6.5: Calculate process-flow capabilities using analytics.
  • LO 6.6: Explain the principles of process redesign.

Process Thinking

  • All work is a process.
  • All business functions utilize processes.
  • Definition of a System: A collection of interrelated elements where the whole system is greater than the sum of its parts.
  • Importance of applying systems thinking to business:
  • Define system boundaries.
  • Use cross-functional teams for analysis.
  • Include all affected functions.

Process View of Business

  • Emphasis on how different business operations interact, particularly in order fulfillment following a customer's request.

Process Flowcharting

  • Purpose: To create a visual diagram that represents a transformation process.
  • Also known as:
  • Process mapping
  • Flow-process charting
  • Service blueprinting
  • Systems flowchart
  • Steps involved:
  1. Visually describe the current process.
  2. Identify areas for improvement:
    • Find repetitive operations.
    • Identify bottlenecks.
    • Analyze flow directions and distances (people, materials, information).
    • Reduce waste.

Creating a Flowchart

  • Select a process to study, form a team for analysis.
  • Set process boundaries, sequence operational steps, and define performance metrics (e.g., time to complete each step).
  • Draw the flowchart using consistent symbols.
  • Common Flowchart Symbols:
  • Process: operation, activity or task.
  • Decision: evaluation (IF-THEN).
  • Flow: indicates materials, information, or customers.
  • Terminator: denotes START and END.

Example: Selecting a Supplier

  • Visual flowchart illustrating the supplier selection process, portraying Buyer actions and decision points to evaluate potential suppliers.

Service Blueprinting

  • Breakdown of activities involved in customer and associate interactions (e.g., selecting and altering a suit). Each participant, such as customer, sales associate, and tailor, has distinct "swim lanes" to clarify roles.

Flow-Process Chart Symbols

  • Operation: task or work activity.
  • Inspection: checking product quantity or quality.
  • Transportation: movement of materials.
  • Storage: inventory awaiting next operation.
  • Delay: interruption in sequence of operations.

Questions for Process-Flow Analysis

Flow
  • Is it balanced?
  • Where is the bottleneck?
  • Are all steps necessary?
  • How jumbled is the flow?
Time
  • How long to produce one unit?
  • Can time be reduced?
  • Is set-up time excessive?
  • Is waiting time excessive?
Quantity
  • What is the theoretical production amount?
  • How easy is it to change?
  • How many units are actually produced?
Quality
  • What’s the historical defect rate?
  • Which steps contribute to defects?
  • Where do errors occur?
Cost
  • What is the cost to produce one unit?
  • What are the cost buckets for one unit?
  • Can some cost buckets be reduced?

Measuring Process Flows

  • System Capacity: determined by the most constraining resource (bottleneck).
  • Flow Rate: minimum of supply, demand, and capacity.
  • Throughput Time: duration from the beginning of processing to completion.

Little’s Law

  • Formula: I = T x R
  • I: average number of items in the system.
  • T: average throughput time.
  • R: average flow rate.
  • Application: used for steady-state conditions.

Little’s Law Example

  • Calculation of the average number of people in line given flow rate and average time spent.
  • Explore variations in average processing rates and their impact on throughput.

Process Example: Pizza U.S.A.

  • Breakdown of activities to make a pizza, including times for each step from taking the order to baking and boxing.

Process Bottleneck

  • Identifying the slowest activity in a process that determines overall capacity.
  • For Pizza U.S.A., the oven is the bottleneck, setting the flow rate at 10 pizzas/hour.

Process Redesign Principles

  • Focus on outcomes rather than tasks.
  • Engage those who do the work to process their own information and limit handoffs.
  • Make decisions at the point of work, allowing for control within the process at the most immediate level.
  • Eliminate unnecessary steps to simplify and improve efficiency.

Chapter Summary

  • Review of learning objectives and key concepts covered throughout the chapter.