OM Chap04

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 Job design Operations strategy Operations management
Design
Improvement
Product/service design
Planning and control
Key teaching objectives

What is process design? What objectives should process design have? How do volume and variety affect process design? How are processes designed in detail?
What is process design

To design is to conceive the looks, arrangement, and workings of something before it is created. Design is an activity that can be approached at different levels of detail First the position of the process according to its volume and variety characteristics must be defined. Eventually the details of the process must be analysed to ensure that it fulfils its objectives effectively. Process design and product/service design are interrelated Small changes in the design of products and services can have profound implications for the way the operation eventually has to produce them. Similarly, the design of a process can constrain the freedom of product and service designers to operate as they would wish
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 d services i which hich the operation is likely to introduce
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
Process design should reflect process objectives
micro performance flow objectives

Throughput rate (or flow rate) is the rate at which units emerge from the process, i.e. the number of units passing through the process per unit of time. Throughput time is the average elapsed time taken for inputs to move through the process and become outputs. The number of units in the p process ( (also called the work in process or in-process inventory), as an average over a period of time. The utilization of process resources is the proportion of available time that the resources within the process are performing useful work
Environmentally sensitive design

Both process and product/service designers have to take account of green issues. some fundamental issues:
The sources of inputs to a product or service. (damage rainforests, use child labour?) Quantities and sources of energy consumed in the process. The amounts and type of waste material that are created in the manufacturing processes. processes (waste be recycled, long-term impact on the environment ) The life of the product itself. If a product has a useful life of, say, twenty years, it will consume fewer resources than one that only lasts five years. The end-of-life of the product. (difficult to dispose,? Recycled as a source of energy?)
the volumevariety effect on process design

Low-volume operations processes often have a high variety of products and services, and high-volume operations processes often have a narrow variety of products and services. There is a continuum from low volume and high variety through to high volume and low variety Many manufacturing plants will have a large area, organized on a massproduction basis, in which it makes its high-volume best-selling products.
In another part of the plant it may also have an area where it makes a wide variety of products in much smaller volumes. The design of each of these processes is likely to be different. No one type of process design is best for all types of operation in all circumstances.
Manufacturing process types

Process tasks
Diverse/ complex
Process flow High

Intermittent
Project Jobbing
Variet ty
B t h Batch
Mass Continuous Low Volume High
Repeated/ divided
Continuous
Low
Project processes
Project processes are those which deal with discrete, usually highly customized products. Often the timescale of making the product or service is relatively long. Low volume and high variety are characteristics of project processes. p The activities involved in making the product can be illdefined and uncertain. Examples: shipbuilding, most construction companies, movie production companies, large fabrication operations such as those manufacturing turbo generators.
Project processes
The major construction site shown in this picture is a project process. Each product (project) is different and poses different challenges g to those running g the process (civil engineers).
Jobbing processes
Jobbing processes deal with very high variety and low volumes. In jobbing processes each product has to share the operations resources with many others. The resources of the operation will process a series of products but, although all the products will require the same kind of attention, each will differ in its exact needs. Examples: specialist toolmakers, furniture restorers, bespoke tailors, and the printer who produces tickets for the local social event. Jobbing processes produce more and usually smaller items than project processes
Jobbing processes
This craftsperson is using general purpose wood-cutting technology to make a product for an individual customer. The next product he makes will be different (although it may be similar), possibly for a different customer
Batch processes
Batch does not have quite the degree of variety associated with jobbing. Each time batch processes produce a product they produce more than one. The size of the batch could be just two or three, in which case the batch process would differ little from jobbing, especially if each batch is a totally novel product. The batch type of process can be found over a wide range of volume and variety levels. Examples: machine tool manufacturing, the production of some special gourmet frozen foods, manufacture of most of the component parts which go into mass-produced assemblies such as automobiles
Batch processes
In this kitchen, food is being prepared in batches. All batches go through the same sequence (preparation, cooking, storing), but each batch is a different dish
Mass processes
Mass processes are those which produce goods in high volume and relatively narrow variety An automobile plant, for example, might produce several thousand variants of car if every option of engine size, colour, extra equipment, etc. is taken into account. It is a mass operation because the different variants of its product do not affect the basic process of production. The activities in mass operation, are essentially repetitive and largely predictable. Examples:a television factory, most food processes and DVD production.
Mass processes
This automobile plant is everyones idea of a mass process. Each product is almost (but not quite) the same, and is made in large quantities.
Continuous processes
Continuous processes operate at even higher volume and often have even lower variety. They also usually operate for longer periods of time. Continuous processes are often associated with relatively inflexible, capital-intensive technologies with highly predictable flow. Examples: petrochemical refineries, electricity utilities, steel making and some paper making. products may be stored during the process Inspections are likely to form part of the process, although the control applied as a consequence of those inspections is often automatic rather than requiring human discretion
Continuous processes
This continuous water treatment process almost never stops (it only stops for maintenance) and performs a narrow range of tasks (filters impurities). Often we only notice the process if it goes wrong
Service process types

Process tasks
Diverse/ complex
Process flow High

Intermittent
Professional service
Varie ety
Service shop
Mass service
Repeated/ divided Continuous
Low
Low
Volume
High
Professional services
Professional services are high contact organizations where customers spend a considerable time in the service process. Such services provide high levels of customization, the service process being highly adaptable in order to meet individual customer needs. A great deal of staff time is spent in the front office and contact staff are given considerable discretion in servicing customers. Professional services tend to be people-based rather than equipmentbased, with emphasis placed on the process (how the service is delivered) rather than the product (what is delivered). Examples: management consultants, lawyers practices, architects, doctors surgeries, auditors, health and safety inspectors and some computer field service operations.
Professional services
Here consultants are preparing to start a consultancy assignment. They are discussing how they might approach the various stages of the assignment, from understanding the real nature of the problem through to the implementation of their recommended solutions. solutions This is a process map, although a very high level one. It guides the nature and sequence of the consultants activities.
Service shops
Service shops are characterized by levels of customer contact, customization, volumes of customers and staff discretion. Service is provided via mixes of front- and back-office activities. Examples: banks, highstreet shops, holiday tour operators, car rental companies, schools, most restaurants, hotels and travel agents. An equipment hire and sales organization may have a range of products displayed in front-office outlets, while back-office operations look after purchasing and administration. Essentially the customer is buying a fairly standardized product but will be influenced by the process of the sale which is customized to the customers individual needs.
Service shops
The health club shown in the picture has front-office staff who can give advice on exercise programmes and other treatments. To maintain a dependable service the staff need to follow defined processes every day
Mass services
Mass services have many customer transactions, involving limited contact time and little customization. Equipment based and product-oriented, with most value added in the back office and relatively little judgement applied by front-office staff. Staff are likely to have a closely defined division of labour and to follow set procedures. Examples: supermarkets, a national rail network, an airport, telecommunications services, libraries, television stations, the police service and the enquiry desk at a utility. One of the most common types of mass service is the call centres used by almost all companies that deal directly with consumers.
Mass services
This is an account management centre for a large retail bank. It deals with thousands of customer requests every day. Although each customer request is different, they are all of the same type involving customers accounts
The productprocess matrix

The productprocess matrix represent process choices on a matrix with the volumevariety as one dimension, and process types as the other. Most operations stick to the natural diagonal of the matrix, and few, are found in the extreme corners of the matrix. The diagonal of the matrix represents a lowest cost position for an operation. Operations which are on the right of the natural diagonal have processes which would normally be associated with lower volumes and higher variety. Operations that are on the left of the diagonal have adopted processes which would normally be used in a higher-volume and lower-variety situation
Deviating from the natural diagonal on the productprocess matrix has consequences for cost and flexibility
Detailed process design

Detailed design of a process involves identifying all the individual activities that are needed to fulfil the objectives of the process and deciding on the sequence in which these activities are to be performed and who is going to do them Process design is done using some simple visual approach such as process mapping Process mapping involves describing processes in terms of how the activities within the process relate to each other It identifies the different types of activity that take place during the process and show the flow of materials or people or information through the process
Process mapping symbols
A Process mapping example

The retail catering operation of a large campus university has a number of outlets around the campus selling sandwiches. Most of these outlets sell standard sandwiches that are made in the universitys central kitchens and transported to each outlet every day. However, one of these outlets is different; it is a kiosk that makes more expensive customized sandwiches to order. Customers can specify the type of bread they want and a very wide combination of different fillings. Because queues for this customized service are becoming excessive, the catering manager is considering redesigning the process to speed it up. This new process design is based on the findings from a recent student study of the current process which proved that 95 per cent of all customers ordered only two types of bread (soft roll and Italian bread) and three types of protein filling (cheese, ham and chicken). Therefore the six sandwich bases (2 types of bread 3 protein fillings) could be prepared in advance and customized with salad, mayonnaise, etc. as customers ordered them.
Customized sandwich old process
Raw materials
Assembly
Stored sandwiches
Move to outlets
Stored sandwiches
Sell
Take payment
Standard sandwich process
Customer request
Customized sandwich old process

Raw materials Assembly Take payment
Customer request
To overcome complexity, processes are often mapped at a more aggregated level, called high-level process mapping, before more detailed maps are drawn. At a lower, or more detailed level, what is sometimes called an outline process map (or chart) identifies the sequence of activities but only in a general way.
Customized sandwich new process

The operation of making and selling customized sandwiches
Sandwich materials and customers Prepare Assemble as required Take payment Customers assembled to sandwiches
Bread and base filling Assemble whole sandwich Use standard base?
Outline process of making and selling customized sandwiches
No Yes Fillings
Customer request Assemble from standard base Stored bases
Detailed process of assembling customized sandwiches
Customized sandwich new process
Assemble whole sandwich Assembly of sandwich bases Use standard base? Take payment Fillings Bread and base filling Stored bases Yes Customer request Assemble from standard base
No
Flow process charts for processing expense reports at Intel before and after improving the process
Description of activity 1 2 3 4 5 6
Report arrives Wait for processing Check expenses report Stamp and date report
Description of activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Report arrives Stamp and date report Check expenses report Attach payment voucher Wait for batching Collect retorts into batch Batch to audit desk Wait for processing Check reports and vouchers Reports to batch control Batch control number Copy py of reports to filing Reports filed Payment voucher to keying Confirm payment
Totals 5 5 2 2 1
Send cash to receipt desk Wait for processing 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 Log report 13
14 15 16 17 18 19 20 21 22 23 24 25 26
Check against rules Wait for batching Collect retorts into batch Batch to audit desk Wait for processing Batch of reports logged Check payment voucher Reports to batch control Batch control number Copy of reports to filing Reports filed Payment voucher to keying Confirm payment
Totals 7 8 5 5 1
Using process maps to improve processes

In the case of the customized sandwich process, the new design maintains similar levels of flexibility (to offer the same variety) while improving the speed of service. The new process also increase the efficiency of the process because the sandwich bases could be assembled during periods of low demand.
The quality of the sandwiches would presumably not suffer, although pre-assembling the sandwich bases may detract from the fresh appearance and taste. The dependability of the new process: In the old process the response time was long but reasonably predictable. The new process, however, will deliver fairly quickly 95 per cent of the time but take longer if the sandwich is non-standard.
performance of the new customized sandwich process
Throughput, cycle time and work-in-process

In the new customized sandwich process, the customers spend less time in the process. However, the total amount of work needed to make and sell a sandwich has not reduced. The work content (the total amount of work required to produce a unit of output) has not changed but customer throughput time (the time for a unit to move through the process) has improved. The cycle time of the process, is the average time between units of output emerging from the process. When customers join the queue in the process they become work-in-process (WIP).
Throughput, cycle time and work-in-process

For example, the time to assemble and sell a sandwich (the work content) using the old process was two minutes and that two people were staffing the process during the busy period. Each person could serve a customer every 2 minutes, so on average a customer is emerging from the process every minute (cycle time). When customers join the queue in the process they become WIP. If the queue is 10 people long, when the customer joins it, she will have to wait 10 minutes to exit (Throughput time). Throughput time = Work-in-process Cycle time (Littles law) 10 minutes wait = 10 people in the system 1 minute per person
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
Littles law application

suppose it is decided that the average number of customers in the process should be limited to around ten and the maximum time a customer is in the process should be on average four minutes. If the time to assemble and sell a sandwich (from customer request to the customer leaving the process) has reduced to 1.2 minutes, how many staff should be serving? Throughput time = 4 minutes, WIP = 10, So, Cycle time =4/10=0.4 min That is, a customer should emerge from the process every 0.4 0 4 minute, on average. Given that an individual can be served in 1.2 minutes, Number of servers required =1.2/0.4 =3 In other words, three servers would serve three customers in 1.2 minutes. Or one customer in 0.4 minute
Worked example
Worked example
-Continued
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
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
In the example of the sandwich process, customer throughput time is minutes, but the work content of the task (serving the customer) is only . minutes. So, the item being processed (the customer) is only being worked on for ./ = per cent of its time (throughput efficiency)
Worked example
Value-added throughput efficiency

In work content of a task, It may be individual elements that are not value-added. Value-added throughput efficiency restricts the concept of work content to only those tasks that are actually adding value to whatever is being processed. This often eliminates activities such as movement, delays and some inspections. For example, if in the licensing worked example, of the 25 minutes of work content only 20 minutes were actually adding value, then Value-added throughput efficiency =20/1440 =1.39 per cent
Workflow
When the transformed resources in a process is information (or documents containing information), and when information technology is used to move, store and manage the information, process design is called workflow or workflow management. Workflow is defined as the automation of procedures where documents, information or tasks are passed between participants according to a defined set of rules to achieve, or contribute to, an overall business goal. Workflow is concerned with the following:
Analysis, modelling, definition and subsequent operational implementation of business processes; The technology that supports the processes; The procedural (decision) rules that move information or documents through processes; Defining the process in terms of the sequence of work activities, the human skills needed to perform each activity and the appropriate IT resources.
process variability
Two fundamental types of variability:
Variability in the demand for processing at an individual stage within the process, usually expressed in terms of variation in the inter-arrival times of units to be processed. Variation in the time taken to p perform the activities ( (i.e. process a unit) at each stage.
In a perfectly constant and predictable world, the relationship between process waiting time and utilization is a rectangular function (red dotted line)
The relationship between process utilization and number of units waiting to be processed for constant, and variable, arrival and process times The simple process is composed of one stage that performs exactly 10 minutes of work.
process variability
when arrival and process times are variable, the process will have both a non-zero average queue and be under-utilized in the same period. The blue line in Figure would show the relationship between average waiting time and process utilization The greater the variability in the process, the more the waiting time utilization deviates from the simple rectangular function of the no variability conditions
process variability
Three options to improve the waiting time or utilization performance of processes:
Accept long average waiting times and achieve high utilization (point X); Accept low utilization and achieve short average waiting times (point Y); Reduce the variability in arrival times, activity times, or both, and achieve higher utilization and short waiting times (point Z).
The only way to have both of these simultaneously is to reduce variability in its processes
The relationship between process utilization and number of units waiting to be processed for variable arrival and activity times
Average e number of units waiting to be processed Average e number of units waiting to be processed High utilization but long waiting time Reduction in process variability X
Decreasing variability
Short waiting time but low utilization Y
10 20 30 40 50 60 70 80 90 100 Utilization
10 20 30 40 50 60 70 80 90 100 Utilization (b) Managing process capacity and/or variability
(a) Decreasing variability allows higher utilization without long waiting times
Simulation in design
simulation is one of the most fundamental approaches to decision-making. managers can gain insights and explore possibilities through the formalized pretending involved in using simulation models. In designing the various processes within a football stadium, the architect could devise a computer-based model which would simulate the movement of people through the stadiums various processes according to the probability distribution which describes their random arrival and movement.
This could then be used to predict where the layout might become overcrowded or where extra space might be reduced.
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 d i capacity. design ity. 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.
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.
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.
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.
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).
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.
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

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Chapter 4 Process design

Source: Joe Schwarz, www.joyrides.com

Planning and control

Key teaching objectives

What is process design

Design of the Product

Design of the Process

Design of the Service

Design of the Process

Process design should reflect process objectives

micro performance flow objectives

Environmentally sensitive design

the volumevariety effect on process design

Manufacturing process types

Process flow High

Mass Continuous Low Volume High

Service process types

Process flow High

The productprocess matrix

Detailed process design

Process mapping symbols

A Process mapping example

Customized sandwich old process

Standard sandwich process

Customized sandwich old process

Customized sandwich new process

Outline process of making and selling customized sandwiches

Customer request Assemble from standard base Stored bases

Detailed process of assembling customized sandwiches

Customized sandwich new process

Using process maps to improve processes

performance of the new customized sandwich process

Throughput, cycle time and work-in-process

Throughput, cycle time and work-in-process

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

Littles law application

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

Value-added throughput efficiency

Short waiting time but low utilization Y

10 20 30 40 50 60 70 80 90 100 Utilization (b) Managing process capacity and/or variability

Key Terms Test

Key Terms Test

Key Terms Test

Key Terms Test

Key Terms Test

Key Terms Test

Key Terms Test

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