Today’s Agenda

• Process Fundamentals Introduction

© Wenge Zhu
 Chapter 2
Introduction to
Processes

2-1
 Introduction
You cannot manage what you cannot
measure

If you do not know how to measure a

process then it is difficult to know how
to improve a process.

2-3

© Wenge Zhu
 Process Definition, Scope,
and Flow Units

What should the manager measure to

determine if the process is performing
well?

• Process – A set of activities that take a

collection of inputs, perform some work or
activities with those inputs, and then yield a 2-4

set of output
© Wenge Zhu
 Process Definition, Scope,
and Flow Units
Managers face the same question everyday

• Is the process performing well?

• How can we make the process better?
– The first step measure the performance of the
employees
– Need a plan for making those employees better
at what they do

2-5

© Wenge Zhu
 Process Definition, Scope,
and Flow Units
• Process Flow Diagram
• Resources – group of people/equipment that
transforms inputs into outputs (See figure 2.1)

2-6

© Wenge Zhu
 Process Definition, Scope,
and Flow Units
Process – A set of activities that take a collection
of inputs, perform some work or activities with
those inputs, perform some work or activities with
those inputs, and then yield a set of outputs

Process flow diagram – A graphical way to

describe the process. It uses boxes to depict
resources, arrows to depict flows, and triangles to
depict inventory location. 2-7

© Wenge Zhu
 Process Definition, Scope,
and Flow Units

• Process Scope – The set of activities and

processes included in the process

• Flow Unit – the basic unit that moves

through a process.

2-8

© Wenge Zhu
 Check Your Understanding
Which of the following is an appropriate flow unit for a
roller coaster at an amusement park?
A . Seats on the roller coaster.
B. Riders.
C . Employees.
D . Miles per hour (as in the speed of the roller coaster).
E . Operating time (as in the number of hours operated
per day).

2-9

© Wenge Zhu
Check Your Understanding
Answer

The correct answer is?

B

Explain…

2-10

© Wenge Zhu
 Rules to Define Flow Unit
1. Choose flow unit that corresponds to what you
want to track and measure (with respect to the
process).

2. Stick with the flow unit you define.

3. Choose a flow unit that can be used to

measure and describe all of the activities within
the process. 2-11

© Wenge Zhu
 Key Process Metrics

Process Metric – something we can measure

(observe) that informs us about the performance and
capability of a process.
1. Inventory – number of units within a process.
2. Flow Rate – the rate at which flow units travel
through a process.
3. Flow time – the time a flow unit spends in a process,
from start to finish.

2-12

© Wenge Zhu
 Key Process Metrics
Inventory tells us how much “stuff” is in the
process
Inventory takes up space and cost money

Flow Rate - tells us how much time spends in

the process
More units flowing through a process is
generally more desirable because the point of
the process is to produce output. 2-13

© Wenge Zhu
 Check Your Understanding

Question:
Over the course of an eight - hour day, a dentist’s
office treats 24 patients. What is the flow rate of
patients in this dentist’s office per hour?

Answer Flow rate = 24 patients ÷ 8 hours = 3

patients per hour
2-14

© Wenge Zhu
 Little’s Law
Linking Process Metrics together

Little’s Law – the law that describes the

relationship between three key process metrics:

Inventory = Flow rate Multiplied by Flow time

I = R Multiplied by T

Flow Rate = R
2-15

Flow Time = T
© Wenge Zhu
 Little’s Law
Continued
If you know (or observe) any of the two key
process metrics, you can use Little’s Law to derive
the third

Inventory = Rate Multiplied by Time

I = R Multiplied by T
I = R(T)

Little’s Law tells us the average time a flow unit 2-16

spends in the process

© Wenge Zhu
Check Your Understanding

Question:
During a typical Friday, the West End Donut Shop serves
2400 customers during the 10 hours it is open.

Each customer spends (an average) 5-minutes in the shop.

On average, how many customers are in the shop

simultaneously?

2-17

© Wenge Zhu
Check Your Understanding
Answer

Answer for Flow Rate :

2,400 customers ÷ 10 hours = Flow Time (5minutes).
240 customers ÷ hour = Flow Time (5minutes).
4 customers ÷ minute = Flow time (5 minutes).

4 customers per minute multiplied by 5 minutes = 20

customers.

2-18
I = R Multiplied by T
© Wenge Zhu
 Review
Ten customers visit Candy Haven Bakery from
8am to 10am. The customers spend 10, 15, 20,
11, 8, 12, 5, 18, 29 and 32 minutes in the bakery.
What is the average flow rate of customers in this
bakery per hour?
A. 16.
B. 10.
C. 8.
D. 5.
2-19

© Wenge Zhu
 Review
Answer
Answer: D

Breakdown,
I = 10 customers ÷ 2hours (8am to 10am).
T = average of time all customers spent in bakery

2-20

© Wenge Zhu
 Today’s Agenda
• Process Fundamentals: Process Analysis
and Improvement

© Wenge Zhu
 Chapter 3
Process Analysis

3-1
 How to Draw a Process
Flow Diagram
The process flow diagram provides a visual chart
that represents the steps of a process.
Process Analysis – A rigorous framework for
understanding the detailed operations of a business.
• A framework that can be used for everyone
running a business.
• (process capacity) Determines how many flow units
can be processed per unit of time.
• (utilization) Determines how busy the resources of
the process are. 3-3

© Wenge Zhu
 Process Flow Diagram
The best way to begin any analysis of an operation is by
drawing a Process Flow Diagram.

Process flow diagram – A graphical way to describe

the process.

Arrows to
Boxes to depict depict Flows
resources
Triangles
to depict
Inventory 3-4

location
© Wenge Zhu
Flow Design (subway)

3-5

© Wenge Zhu
 Building a Sandwich
Flow Unit – The unit of analysis. We use arrows in a
process to capture the flow unit’s journey from input to
output.

Please note: in this situation the waiting customers are

considered inventory – why? 3-6

© Wenge Zhu
 Definitions
Upstream – The parts of the process that are at the
beginning of the process flow.

Downstream – The parts of the process that are at the

end of the process flow.

3-7

© Wenge Zhu
 A Complete Process Flow
Diagram
• Figure 3.2 Shows a Complete Process Flow Diagram

3-8

© Wenge Zhu
Alternative Process
Flow Diagrams

3-9

© Wenge Zhu
 Understanding the Process

• Process flow diagrams remain flexible so the

manager decides what aspects to study.
• Drawing the process flow design should
always be the first step in process analysis.
• Many different processes to analyze.
• Defining different flow units.

3-10

© Wenge Zhu
 Check Your Understanding
Airport security consists of the following steps
1. Verify ID and boarding pass
2. Searching the passenger for metal objects (Individual
security scan)
3. Running the carry-on luggage through X-ray machine
There is a long line of passengers before the first step, but
sometimes lines also build up at steps 2 and 3. Step 2 and
3 are parallel; that is customers go through the metal
detector while their luggage is in the X-ray machine. Draw
a process flow diagram of this process.
3-11

© Wenge Zhu
 Capacity for a One-Step
Process
Processing time – The time it takes a
resource to complete one unit flow.

• Must be concise for example there is a difference

between seconds and seconds/persons.
• Think in terms of averages.

3-12

© Wenge Zhu
Capacity for a One-Step
Process

3-13

© Wenge Zhu
Capacity for a One-Step
Process

3-14

© Wenge Zhu
 Capacity
Capacity – The maximum number of flow units that
can flow through that resource per unit of time

3-15

© Wenge Zhu
 Check Your Understanding
It takes a color printer 10-seconds to print a large poster.
What is the capacity of the printer expressed in posters
per hour?
(hint: how many seconds in an hour?)

Capacity = 1/10per second

= 360/hour

3-16

© Wenge Zhu
 Check Your Understanding
A call center has one operator who answers
incoming calls. It takes the operator 6-minutes to
answer one call. What is the capacity of the call
center expressed in calls per hour?

1/6 calls per minute =

X calls/hour
= 10/calls /per hour
3-17

© Wenge Zhu
 Process Capacity

Process capacity – The maximum flow rate a

process can provide per unit of time. The
process capacity determines the maximum
flow rate a process can provide per unit of
time. It thus determines the maximum supply
of the process

3-18

© Wenge Zhu
 How to Compute Flow Rate,
Utilization, and Cycle Time
Demand Rate – The number of flow units that
customers want per unit of time.

Capacity-constrained – The case in which demand

exceeds supply and the flow rate is equal to process
capacity.

Demand-constrained – The case in which process

capacity exceeds demand and thus the flow rate is
equal to the demand rate.
3-19

Throughput – A synonym for flow rate

© Wenge Zhu
 Utilization
• Utilization – The ratio between the flow rate
(how fast the process is currently operating) and
the process capacity (capturing how fast the
process could be operating if there was sufficient
demand). Lets review the situation as defined in
the text on page 48:

Utilization = Flow rate = 30 = 1

Capacity 30
3-20

© Wenge Zhu
 Cycle Time
Cycle time – The time between completing two consecutive
flow units

Cycle time = 1 = 0.0333 hour = 120 seconds

Flow rate Customer Customer

3-21

© Wenge Zhu
 Check Your Understanding
A primary care doctor has the capacity to see 16
patients per day. The demand rate is, however,
only 12 patients per day.
a.What is the flow rate?
b.What is the utilization of the doctor?
c.What is the cycle time, assuming a 10-hour
workday?

Answer 3-22

© Wenge Zhu
Check Your Understanding
Answer
We compute the flow rate as the minimum of demand
and process capacity:

3-23

© Wenge Zhu
 Cycle Time vs. Lead Time
• Cycle time -- 1/Flow rate. Cycle time is
expressed in units of time per unit

• Lead time – The time between when an order is

placed and when it is received. Process lead
time is frequently used as an alternative term for
flow time.

3-24

© Wenge Zhu
 Lead time – Cycle time
Don’t confuse the terms cycle time and lead
time.
Cycle time – 1/Flow rate.

Lead time – The time between when an order is

placed and when it is received. Lead time, is thus what we
previously defined as flow time.

Remember Little’s Law

3-28

© Wenge Zhu
 How to Analyze a Multistep Process
(Given Demand rate is 100 customers per hour see page 58)
What will be the flow rate of this process? Three employees, with the same
demand - one might argue that the flow rate will remain unchanged.
However, things are slightly more complicated than this now that we have
moved from one resource staffed by three employees to three resources
staffed with one employee each. Rather than having one processing time
of 120 seconds/customer, we now have three processing times. More
specifically, the processing times are

3-29

© Wenge Zhu
 Multistep Continued

Note that in a process with multiple resources, a process flow with multiple boxes that
are not in parallel.
Each resource has its own capacity.
To get from the resource's capacity to the overall capacity of the process -- that is to
compute the process capacity -- We define
process capacity equals Min{Capacity(i)} = 78.3 customers per hour.

3-30

© Wenge Zhu
 Bottleneck
In general, a resource might have utilization of less than
100 percent for one of two reasons:
1. A non bottleneck resource has, by definition,
some extra capacity relative to the bottleneck.
2. In the case of a demand-constrained process,
even the bottleneck would not be working at 100 percent.

If a process is constrained by demand, we might think of

demand being the bottleneck. In that case, one might
argue that no single resource in the process should be
called the bottleneck, even in a process that is demand-
constrained. So every process has a bottleneck, even if
the capacity constraint created by the bottleneck might not
be binding.
3-32

© Wenge Zhu
 Check Your Understanding
Question: Consider again the example of the three-
step airport security. The first step, verifying ID and
boarding pass, takes 30 seconds per passenger. The
second step, searching the passenger for metal
objects using a metal detector, takes 10 seconds per
passenger. The third step, running the carry on
luggage through an Xray machine, takes 60 seconds
per passenger. Assume that there are many
customers waiting in the process.

A) Which resource is the bottleneck? B) What is the

capacity of the process? C) What is the flow rate? D)
What is the utilization of the metal detector? E) What 3-33

is the cycle time?

© Wenge Zhu
Check Your Understanding
Continued

3-34

© Wenge Zhu
 Summary of Performance Metrics

• Metrics from observation

– Flow Time (T)
– Flow Rate (R)
– Inventory (I)
– Cycle Time (CT)
• Relationships
– 𝐼 = 𝑅 ∗ 𝑇 (little’s law)
1
– 𝐶𝑇 =
𝑅
© Wenge Zhu
 Summary of Performance Metrics

• Metrics from design

– Processing Time (PT)
– Capacity (CA)
• Relationship
1
– 𝐶𝐴 =
𝑃𝑇
𝑅
• Utilization: 𝑈𝑡𝑖𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 =
𝐶𝐴

© Wenge Zhu
 Summary
• In process analysis, we always assume
there is enough demand, therefore, we
assume flow rate = capacity (why?)

© Wenge Zhu
 Time to Produce a Certain Quantity
• In subway restaurant, time to make 𝑄
units of sandwiches: = 𝐶𝑦𝑐𝑙𝑒 𝑇𝑖𝑚𝑒 ∗ 𝑄
• Anything wrong with the above
calculation?

© Wenge Zhu
 Example
• You are a manager of a company, where process
of products are made by customized order as
shown below, each step takes 10 minutes to
complete. A customer shows up request 40
products. Assume there is no other order, when
you can promise this customer to pick up his
order?
1 2 99 100

100 steps
© Wenge Zhu
 The Time to Produce
a Certain Quantity
Factors to consider

Worker paced: A process line in which each

resource is free to work at its own pace: If the
first resource finishes before the next one is
ready to accept the flow unit, then the first
resource puts the completed flow unit in the
inventory between the two resources.

3-35

© Wenge Zhu
 Factors to consider
Continued

Machine Paced: A process in which all steps are

connected through a conveyor belt and all of the
steps must work at the same rate even if some of
them have more capacity than others.

Time through the empty system: The time it takes

the first flow unit to flow through an empty
process; that is, a process that has not inventory.
3-36

© Wenge Zhu
 Check Your Understanding
Question: Recall the example of the three step airport
security from Check Your Understanding 3.1
The first step, verifying ID and boarding pass, takes 30
seconds per passenger. The second step, searching
the passenger for metal objects using a metal
detector, takes 10 seconds per passenger. The third
step, running the carry on luggage through an X-ray
machine, takes 60 seconds per passenger.
The process is empty at 7 a.m. in the morning when a
group of 30 passengers arrives.
How long will it take to serve all 30 passengers? 3-37

© Wenge Zhu
 Check Your Understanding
Answer: The process is empty and so we first have to
compute the time until the first customer is served.
The first customer will take 30 seconds at the
verification of her ID and then 60 seconds at the X ray
machine. Note that the time at the metal detector
does not matter because it happens in parallel with the
X ray machine. Thus, it takes 90 seconds = 1.5
minutes until the first customer is served.

From then onwards, we are serving a customer every

minute. Because we have 29 customers to serve, this 3-38

will take 29 minutes, for a total time of 1.5 + 29 = 30.5

minutes. © Wenge Zhu
Let’s Start with Two Examples

© Wenge Zhu
First Example: Laundry Process

Washer Dryer

Washer Dryer WIP

Folding
Clean Clothes
Washer Dryer

© Wenge Zhu
 Blocking and Starving

Washer Dryer
RMI WIP
Dirty Clothes Clean Clothes
20 min 30 min

Blocking-
An operation is blocked if it cannot finish and release its
job because the operation following it is full
Starving-
An operation is starved if it cannot receive a new job to
work on because the preceding operation has not yet
completed its processing, or the preceding operation is
empty
© Wenge Zhu
 Blocking and Starving

Washer Dryer
RMI WIP
Dirty Clothes Clean Clothes
30 min 20 min

Blocking-
An operation is blocked if it cannot finish and release its
job because the operation following it is full
Starving-
An operation is starved if it cannot receive a new job to
work on because the preceding operation has not yet
completed its processing, or the preceding operation is
empty
© Wenge Zhu
Bottlenecks & Parallel Operations

15/hr 15/hr 15/hr

2 min 3 min 4 min 2 min

Bottleneck

Bottleneck
10/hr 4 min 10/hr
20/hr
2 min 3 min 2 min
10/hr 4 min 10/hr
Parallel
Workstations
© Wenge Zhu
 Paralleling
• Multiple resources in one box
• When multiple resources are working in
parallel for the same job:
– Total capacity is the sum of capacity of each
resource
– Total cycle time should be calculated by capacity

© Wenge Zhu
 Washing Dirty Linen
Washer Dryer

RMI Washer Dryer WIP Folding

Dirty Clothes Clean Clothes
Washer Dryer
FGI
Each Washer takes 20 min Folded Clothes
Each Dryer takes 30 min
Folding 1 load takes 15 min
Which process is the bottleneck?
Define Bottleneck Pacing

© Wenge Zhu
Second Example: Mama Jones’
Pizza Process
Steps in the Process:
– Make the dough: 15 min (1 person)
– Put on the toppings: 10 min (1 person)
– Cook the pizza: 40 min (1 oven)
– Slice and box the pizza: 5 min (1 person)

Draw the Process Flow Diagram

© Wenge Zhu
 Mama Jones Pizza
15 min 10 min 40 min 5 min

Dough Toppings Oven Cut & Box

RMI FGI

Which operation is the Bottleneck?

Oven

What is the Process Cycle Time?

40 min

Rush Order Flow Time?

15+10 + 40+5=70 min

What is the capacity of the system?

=60/40=1.5 pizzas/hr

© Wenge Zhu
A Question for the Manager
Since your capacity is only 1.5 pizzas/hr, you are
asked to invest wisely in the expanding the resources

You have the choice of:

1. Getting another person to knead dough
2. Hire another person to add toppings
3. Buy another oven
4. Hire a second person to cut and box pizzas

What would you consider doing first and why?

© Wenge Zhu
 Process Improvement
40min

15min 10min Oven1 5min

Dough Toppings Cut & Box

RMI
Oven2
FGI
40min

Which operation is the Bottleneck?

Oven operation

What is the Process Cycle Time?

40/2=20

Rush Order Flow Time?

15+10+40+5=70min

What is the capacity of the system?

60/20=3pizzas/hr
© Wenge Zhu
 Utilization Calculated from Cycle Time
with Bottle-neck Pacing

𝐹𝑙𝑜𝑤 𝑅𝑎𝑡𝑒_𝑥
• 𝑈𝑡𝑖𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛_𝑅𝑒𝑠𝑜𝑢𝑟𝑐𝑒_𝑥 = =
𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦_𝑥
1
𝐶𝑦𝑐𝑙𝑒_𝑇𝑖𝑚𝑒_𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔_𝑇𝑖𝑚𝑒_𝑥
=
1/𝑃𝑟𝑜𝑐𝑒𝑠𝑠𝑖𝑛𝑔_𝑇𝑖𝑚𝑒_𝑥 𝐶𝑦𝑐𝑙𝑒_𝑇𝑖𝑚𝑒_𝑝𝑟𝑜𝑐𝑒𝑠𝑠

© Wenge Zhu
 Mama Jones Pizza process
revisited
40min

15min 10min Oven1 5min

Dough Toppings Cut & Box

RMI
Oven2
FGI
40min

Assuming b-neck pacing

What is the Utilization of the cut & box operation?
=(5/20)*100=25%
What is the Utilization of the toppings operation?
=(10/20)*100=50%
What is the Utilization of the ovens?
=(20/20)*100=100%
How much Idle Time does the dough operation experience in each cycle?
(20-15)=5 min
© Wenge Zhu
 Pizza Process revisited
How do these measures change if a third oven is added?
40min

Oven1
15min 10min 40min 5min

RMI
Dough Toppings Oven1 Cut & Box
40min
Process Cycle Time?: FGI
The new bottleneck is dough making; so process CT=15 min Oven2
Process Capacity?
=60/15=4 pizzas/hr
Rush Order Flow Time?
=15+10+40+5=70
Utilization of each operation (assuming b-neck pacing)?
Dough=(15/15)*100; Toppings=(10/15)*100; Oven=(40/45)*100; C&B=(5/15)*100

© Wenge Zhu
 Pizza Process: Contd.
How do all these measures change if a 3rd oven is added and we redefine the dough and toppings jobs?
40min

25min Oven1
Dough & Toppings 40min 5min

RMI Oven1 Cut & Box

Dough & Toppings 40min
Bottleneck? FGI
25min
Oven Oven2
Process Cycle Time?
40/3=13.33
Process Capacity?
60/13.33=4.5 pizzas/hr
Rush Order Flow Time?
=25+40+5=70
Utilization of each operation (assuming b-neck pacing)?
Dough+top=(12.5/13.33)*100; Oven=(13.33/13/33)*100; C&B=(5/13.33)*100
© Wenge Zhu