Process Fundamentals &

Process Flow Analysis

Course Instructor
Dr. N. Sambandam






_______________________________________________
NATIONAL INSTITUTE OF INDUSTRIAL ENGINEERING
Vihar Lake, Mumbai 400 087.


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What is a Process?
Every set of activities represents a process
Examples 1: Payroll processing, student
admission, recruitment processing,
customer complaint/ purchase order
processing, data processing by a
researcher etc.
Examples 2: assembly of a TV/computer,
Washing m/c, car, liquor processing, sugar
production etc.
Managers need to manage these processes
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From Function to Process
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Product Development
Order Fulfillment
Supply Chain Management
Customer Service
Function
Process
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97% NVA
3%
VA
Most Process Improvement
. . . Achieve this . . .
97% NVA
Teams Attack this . . .
Typical Value Stream Ratio of
Value-Added to Non-Value-Added Activity
. . . and Ignore this
Source: C. Fiore; Lean Strategies for Product Development, ASQ, 2003
Wheres
the Real
Opportunity?
The Process Improvement Pitfall
TYPES OF PRODUCTION
1. PROJECT
2. UNIT/BATCH
3. MASS
4. CONTINUOUS
PROCESSING OPERATIONS
1) BASIC PROCESSES - SHORT MOVEMENTS
2) SECONDARY PROCESSES - HIGH PRECISION
3) OPERATIONS TO ENHANCE PHYSICAL PROPERTIES - LARGE VOLUME OF
4) FINISHING OPERATIONS INFORMATION FOR PROCESSING.
FMS: IT IS A SYSTEM WHERE ADVANTAGES OF BATCH & PROCESS COMBINED
Customer order decoupling point
Raw
Materials
Components Semi
Finished
Finished
Goods
ENG PROD PROD PROD
SUPPLIER CLIENT
Production Based on Forecast
Stock Point
Production Based on
Customer Order
Engineer -to-Order
Make-to-Order
Assemble
-to-Order
Make to Stock
MANUFACTURING STRATEGY AND LEAD TIME
Design Purchase Manufacture Assembly Ship
Delivery Lead Time
Inventory Manufacture Assembly Ship
Delivery Lead
Time
Manufacture Inventory Assembly Ship
Delivery
Lead Time
Manufacture Inventory Assembly Ship
Delivery Lead Time
Engineer
to order
Make to
order
Assembly
to order
Make to
stock
PRODUCTS & VOLUMES (PV)
LAYOUT & MATERIAL FLOW (LF)
Manufacturing Outputs: D, C, Q, P, F, I
Products & Volumes: HV/U, HV/B, HV/MV,
LV/M, One product/very high volume
Layouts and Material Flow: PL, LL, CL, RL
Level of Manufacturing Capability: Infant,
Industry Average, Adult, World Class
Manufacturing Levers: HR, OS, PPC,
Sourcing, Process Tech., Facilities
COMPETITIVE ANALYSIS
Delivery Cost Quality
Performance
Flexibility
Innovativ
eness
1. Time
2. Reliability
Factory cost 1. Rework
2. Defects
3. Warranty
1. Standard
2. Advanced

Attributes
1. 22 weeks
2. 60%
440,00
Per unit
1. $2,000
2. 3 defects
3. 4%
1. 5
2. 3
Company
- current
1. 25 weeks
2. 50%
$35.000
Per unit
1. 4
2. 2
Market
1. 20 weeks
2. 70%
$40,000
Per unit
1. 5
2. 3
Strong
competitor
1. 17 weeks
2. 755
$37,000
Per unit
1. $1,000
2. 1.5 defects
3. No target
1. 5
2. 4
Company
- Target
O M M M
Market
Qualifying;
Order
winning
COMPETITIVE ANALYSIS
Product
Family
Cost
(Importa
nce)
Cost
(Current
level)
Quality
(Importa
nce)
Quality
(Current
Level)
Delivery
(Importa
nce)
Delivery
(Current
Level)
Flexibility
(Importa
nce)
Flexibility
(Current
Level)
cable
30 Very
strong
40 Weak 20 Even 10 weak
Printed
Circuits
20 Very
Weak
50 Even 20 Strong 10 Strong
Copper
Rod
20 Strong 40 Strong 30 Very
Strong
10 weak
A Flow Line for Production or
Service
Flow Shop or Assembly Line Work Flow


Raw materials
or customer
Finished
item
Station
2
Station
3
Station
4
Material
and/or
labor
Station
1
Material
and/or
labor
Material
and/or
labor
Material
and/or
labor
A U-Shaped Production Line
1
2 3 4
5
6
7
8 9 10
In
Out
Workers
Process Layout
Process Layout - work travels
to dedicated process centers
Milling
Assembly
& Test
Grinding
Drilling
Plating
Functional Layout
Gear
cutting
Mill
Drill
Lathes
Grind
Heat
treat
Assembly
111
333
222
444
222
111
444
111 333
1111 2222
222
3333
111
444
111
Cellular Manufacturing Layout
-1111 -1111
222222222
- 2222
A
s
s
e
m
b
l
y

3333333333
- 3333
44444444444444
- 4444
Lathe
Lathe
Mill
Mill
Mill
Mill
Drill
Drill
Drill
Heat
treat
Heat
treat
Heat
treat
Gear
cut
Gear
cut
Grind
Grind
PV LF MATRIX















PV
Mfg outputs
LF
ML
Level of Mfg Capability Mfg outputs
JS
FMS
JIT
CF
SC
BF
Process Selection and System Design
Forecasting
Product and
service design
Capacity
planning
Facilities and
Equipment
Layout
Work
design
Process
selection
Technological
change
PRODUCT LIFE CYCLE
DEMAND
1
2
3
GROWTH STABILITY DECLINE
TIME
Process Analysis
Process Flowcharting
Types of Processes
Process Performance Metrics
OBJECTIVES
Process Analysis Terms
Process: Is any part of an
organization that takes inputs and
transforms them into outputs
Cycle Time: Is the average successive
time between completions of
successive units
Utilization: Is the ratio of the time
that a resource is actually activated
relative to the time that it is available
for use
Process Flowcharting
Defined
Process flowcharting is the use of a
diagram to present the major
elements of a process
The basic elements can include tasks
or operations, flows of materials or
customers, decision points, and
storage areas or queues
It is an ideal methodology by which to
begin analyzing a process
Flowchart Symbols
Tasks or operations Examples: Giving an
admission ticket to a
customer, installing a engine
in a car, etc.
Decision Points Examples: How much change
should be given to a
customer, which wrench
should be used, etc.
Purpose and Examples
Examples: Sheds, lines of
people waiting for a service,
etc.
Examples: Customers moving
to a seat, mechanic getting a
tool, etc.
Storage areas or
queues
Flows of materials or
customers
Purpose and Examples
Flowchart Symbols
Example: Flowchart of Student
Going to School
Yes
No
Goof
off
Go to
school
today?
Walk to
class
Drive to
school
Types of Processes
Single-stage Process
Stage 1
Stage 1 Stage 2 Stage 3
Multi-stage Process
Types of Processes (Continued)
Stage 1 Stage 2
Buffer
Multi-stage Process with Buffer
A buffer refers to a storage area between
stages where the output of a stage is
placed prior to being used in a
downstream stage
Other Process Terminology
Blocking
Occurs when the activities in a stage must stop
because there is no place to deposit the item just
completed
If there is no room for an employee to place a
unit of work down, the employee will hold on to it
not able to continue working on the next unit
Starving
Occurs when the activities in a stage must stop
because there is no work
If an employee is waiting at a work station and
no work is coming to the employee to process,
the employee will remain idle until the next unit
of work comes
Other Process Terminology
(Continued)
Bottleneck
Occurs when the limited capacity of a
process causes work to pile up or become
unevenly distributed in the flow of a
process
If an employee works too slow in a multi-
stage process, work will begin to pile up
in front of that employee. In this is case
the employee represents the limited
capacity causing the bottleneck.
Pacing
Refers to the fixed timing of the
movement of items through the process
Other Types of Processes
Make-to-order
Only activated in response to an actual
order
Both work-in-process and finished goods
inventory kept to a minimum
Make-to-stock
Process activated to meet expected or
forecast demand
Customer orders are served from target
stocking level
Process Performance Metrics
Operation time = Setup time + Run
time

Throughput time = Average time for
a unit to
move through the
system

Velocity = Throughput time
Value-added time
Process Performance Metrics
(Continued)
Cycle time = Average time between
completion of units


Throughput rate = 1 .
Cycle time

Efficiency = Actual output
Standard Output
Process Performance Metrics
(Continued)

Productivity = Output
Input

Utilization = Time Activated
Time Available

Cycle Time Example
Suppose you had to produce 600 units in 80
hours to meet the demand requirements of a
product. What is the cycle time to meet this
demand requirement?
Answer: There are 4,800 minutes (60
minutes/hour x 80 hours) in 80 hours. So the
average time between completions would have
to be: Cycle time = 4,800/600 units = 8 minutes.
Process Throughput Time
Reduction
Perform activities in parallel

Change the sequence of activities

Reduce interruptions