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Chapter 5

Process Analysis

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OBJECTIVES
 Process Analysis

 Process Flowcharting

 Types of Processes

 Process Performance Metrics

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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

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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

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Flowchart Symbols
Purpose and Examples
Tasks or operations Examples:
Examples: Giving
Givingan an
admission
admissionticket
ticket to
toaa
customer,
customer, installing
installingaa
engine
enginein
inaacar,
car, etc.
etc.

Decision Points Examples:

Examples: How
Howmuch
much
change
changeshould
shouldbebe
given
givento
toaacustomer,
customer,
which
whichwrench
wrenchshould
should
be
be used,
used, etc.
etc.

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Flowchart Symbols
Purpose and Examples
Storage areas or Examples:
Examples: Sheds,
Sheds,
queues lines
linesofof people
people waiting
waiting
for
for aaservice,
service, etc.
etc.

Flows of Examples:
Examples: Customers
Customers
materials or moving
moving to toaa seat,
seat,
customers mechanic
mechanicgetting
gettingaa
tool,
tool, etc.
etc.

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Example: Flowchart of
Student Going to School

Go to Yes
Drive to Walk to
school school class
today?

No

Goof
off

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Flowcharts
Marketing
lead
Follow-up
Sales: Initial Sales and/or conversation
conversation consulting drafts between client
with client proposal and sales
Sales
lead No Is proposal
complete?

Consulting: Follow-up
Consulting Initial Consulting conversation Yes
lead conversation with drafts between client
client proposal and consulting Nested Process
Client agreement
and service
delivery
Line of visibility

Follow-up by Client billed by Yes Approval Final invoice created

accounting, sales, accounting, sales, by by accounting, sales,
or consulting or consulting consulting? or consulting

No

No Payment Yes
received?
Finish Flowchart of the Sales Process for a
Consulting Company

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Flowcharts
CUSTOMER

100% Two scheduling

of credit checked errors per Product and
Order Payment
within 24 hours quarter invoice
generated sent
Order received

Payment
Order
SALES

Order
completed and
cancelled
submitted

Order cancellation
Order

Order New Yes Credit No Payment

FINANCE

customer? check OK?

received received

Yes Invoice Invoice

No prepared sent
Credit and
invoicing

Notice of shipment

Product packages
`
Order Inventory Production Items Order
entered adjusted scheduled manufactured stopped
PRODUCTION

Production Control
and Manufacturing

Packages
assembled and
inventoried Order Order
Order picked shipped
Assembly and
Shipping

Flowchart of the Order-Filling Process

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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.

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SOLUTION

Figure 4.14 – Flowchart of Telephone Ordering Process

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SOLUTION

Figure 4.14 – Flowchart of Telephone Ordering Process

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Types of Processes

Single-stage Process

Stage 1

Multi-stage Process

Stage 1 Stage 2 Stage 3

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 Types of Processes
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(Continued)

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
Multi-stage Process with Buffer
Buffer
Stage 1 Stage 2

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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 and 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

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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 case, the
employee represents the limited capacity
causing the bottleneck.
 Pacing
– Refers to the fixed timing of the movement
of items through the process
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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

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 Process Performance 21

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

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Process Performance
Metrics (Continued)
 Cycle time = Average time between
completion of units

 Throughput rate = 1 .
Cycle time
 Efficiency = Actual output
Standard Output

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Process Performance Metrics

(Continued)

 Productivity = Output
Input

 Utilization = Time Activated

Time Available

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Process Performance
Metrics

© 2007 Wiley
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Cycle Time Example

Suppose
Suppose you
you had
had to
to produce
produce 600
600 units
units in
in 80
80 hours
hours
to
to meet
meet the
the demand
demand requirements
requirements ofof aa product.
product.
What
What is
is the
the cycle
cycle time
time to
to meet
meet this
this demand
demand
requirement?
requirement?

Answer:
Answer: There
There are
are 4,800
4,800 minutes
minutes (60(60
minutes/hour
minutes/hour xx 80
80 hours)
hours) in
in 80
80 hours.
hours. So So the
the
average
average time
time between
between completions
completions would
would have
have
to
to be:
be: Cycle
Cycle time
time == 4,800/600
4,800/600 units
units == 88 minutes.
minutes.

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Process Throughput Time

Reduction

 Perform activities in parallel

 Change the sequence of activities

 Reduce interruptions

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Question Bowl

Which of the following are possible

examples of “cycle times”?
a. Time for each television to come off an
assembly line.
b. Time it takes for a stock purchase
c. Time it takes for an instructor to grade
an exam
d. Time it takes to build an automobile
e. All of the above

Answer: e. All of the above

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Question Bowl
Which of the following are used as
symbols in a Process Flowchart?
a. Decision points
b. Blocking
c. Starving
d. Bottleneck
e. All of the above

Answer: a. Decision points (A diamond

shaped symbol.)

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Question Bowl
Which type of process is configured as
follows?

1 2 3

a. Single-stage process
b. Multi-stage process
c. Make-to-order process
d. Make-to-stock process
e. All of the above
Answer: b. Multi-stage process

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Question Bowl

When an assembly line employee is

waiting for a unit of work to come
down the line so they can stop being
idle and get back to work, it is an
example of which of the following
process terms?
a. Buffering
b. Blocking
c. Starving
d. Bottleneck
e. All of the above
Answer: c. Starving
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Question Bowl
When a company waits until they have an
order for their product in hand before
beginning any production for that order, we
can characterize their operation as which of
the following processes?
a. Single-stage process
b. Multi-stage process
c. Make-to-order process
d. Make-to-stock process
e. All of the above

Answer: c. Make-to-order process

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Question Bowl
If the Run Time for a batch of parts is 45
minutes on a machine, and the Setup Time is
65 minutes, which of the following is the
Operation Time?
a. 75 minutes
b. 110 minutes
c. Only 45 minutes
d. 65/45 minutes or 1.44 hours
e. Can not be computed on the data above

Answer: b. 110 minutes ( Operation Time is the sum of

Run Time and Setup Time, or 65 + 45 = 110 minutes)

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Question Bowl

If the standard expected phone calls for a

telephone marketers is 24 per hour, and one
telephone marketer did 27 per hour, which of
the following can be used to describe their
Efficiency?
Answer: c. 112.5%
a. 88.8% (Ratio of actual
b. 100% performance/expected performance,
c. 112.5% or (27/24) x 100 = 110 minutes)
d. Well over 150%
e. Can not computed on the information given.

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End of Chapter 5

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