PROCESSES

1
PROCESSES

• Processes
• What are they
• How do we improve them
• Products
• How do we improve them
• Next Time
• Brief discussion of case 5.1
• Exercise - Problem 5-9

2
Process

• Def. - A process is a collection of activities
  that transforms inputs into an output that offers
  value to the customers.
• Metrics - Techniques for measuring performance
• Capacity - The volume of output that a process
  can produce
• Bottleneck - The lowest-capacity operation in a
  process.

3
Process
Inputs
Outputs
Process
5 Types of activities (Rouge Steel) 1. Operation
- a change or transformation to an input 2.
Transportation - moving an object 3. Inspection
- Check results of another activity 4. Delay -
Waiting 5. Storage - putting item in inventory
control
4
Inputs

• Materials
• Energy
• Information
• Management
• Technology
• Facilities
• Labor
• Drivers

5
Capacity

• The volume of output a process can produce
• Bottleneck-lowest capacity operation in a process
• Make 15 tons per day
• Truck handles 20 tons per run
• Bad product can lower capacity
• Examples

6
Output

• Goods
• Services
• Information

7
Questions to Ask

• Is there a standard process?
• Where is the confusion?
• Where is the complexity?
• Where is the variability?
• What activities that are currently done?
  sequentially that could be done in parallel?
• Why are we doing what we are doing?

8
Process Flow Analysis

• Used to map and improve processes
• (Ex. 5-9 Bagel Shop)
• Steps
• 1. Identify and categorize process activities
• Figure out the steps
• 2. Document the process as a whole
• Draw your picture
• 3. Analyze the process and identify
  opportunities for improvement
• What can be changed for the better?
• 4. Recommend appropriate changes
• 5. Implement the changes

9
Analyzing your flows

• Some common-sense guidelines
• Set boundaries
• what do you want to look at
• Identify Needed Level of Detail
• Be consistent in your analysis
• Establish the Criteria
• Include ALL Steps
• What are these guidelines really saying?

10
Maximizing Value of Your Processes

• 1. Set Standards
• set criteria for judging the value that current
  processes give to customers (customer survey or
  benchmark)
• 2. Evaluate the process (5 whys)
• V, NV, W or ?
• 3. Determine the disposition of specific
  activities
• Keep, Combine, Rethink, Eliminate
• 4. Determine the position of the remaining
  activities
• critical path does it add to lead time??

11
Business Process Reengineering

• A technique for implementing radical change in a
  process by defining the sequence of activities
  that most effectively deliver the output that
  customers want.
• Vision statement
• Impact statement
• Large improvement
• Principles-
• Combine activities
• Minimize checking and control
• Question 7 on p233
• Taco Bell

12
Benchmarking

• def - Comparing a companys own practices against
  similar practices of firms recognized as the most
  effective at some task.
• Product
• Process
• Best Practices
• Strategic
• Exhibit 5.27 on p. 226