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OPSM 405 Service Operations Management

Ko ç Un iversity. OPSM 405 Service Operations Management. Class 17: Wrap-up of process game Process Analysis. Zeynep Aksin zaksin @ku.edu.tr. Original process flowchart. M. M. P. C. P. M. M. C. Task times? Bottleneck? Resource utilization?

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OPSM 405 Service Operations Management

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  1. Koç University OPSM 405 Service Operations Management Class 17: Wrap-up of process game Process Analysis Zeynep Aksin zaksin@ku.edu.tr

  2. Original process flowchart M M P C P M M C Task times? Bottleneck? Resource utilization? Cycle time? (Flow time) Value adding time? (theoretical)

  3. Terminology Flow Time (CT or T) The flow time (also called variously throughput time, cycle time) of a given routing is the average time from release of a job at the beginning of the routing until it reaches an inventory point at the end of the routing. Flow time 1 2 3 4

  4. 1 2 3 4 Terminology Throughput Rate (TH or R) The average output of a production process per unit time. At the firm level, it is defined as the production per unit time that is sold.

  5. Critical Path & Critical Activities • Critical Path: A path with the longest total cycle time. • Critical Activity: An activity on the critical path. A B D C

  6. X-Ray Service Process • 1. Patient walks to x-ray lab • 2. X-ray request travels to lab by messenger • 3. X-ray technician fills out standard form based on info. From physician • 4. Receptionist receives insurance information, prepares and signs form, sends to insurer • 5. Patient undresses in preparation of x-ray • 6. Lab technician takes x-ray • 7. Darkroom technician develops x-ray • 8. Lab technician checks for clarity-rework if necessary • 9. Patient puts on clothes, gets ready to leave lab • 10. Patient walks back to physicians office • 11. X-rays transferred to physician by messenger

  7. Example: X-Ray 3 7 1 2 9 10 6 12 7 75% 4 5 6 7 8 start end 5 3 2 3 25% 11 20 6 20 transport support Value added decision Measured actual flow time: 154 minutes

  8. Consider all possible paths • Path1: 1-4-5-6-7-8-9-10 50 • Path 2: 2-3-4-5-6-7-8-9-10 69 • Path 3: 1-4-5-6-7-8-11 60 • Path 4: 2-3-4-5-6-7-8-11 79

  9. Levers for Reducing Flow Time • Decrease the work content of critical activities • work smarter • work faster • do it right the first time • Move work content from critical to non-critical activities • to non-critical path or to ``outer loop’’ • Reduce waiting time.

  10. X-Ray revisited

  11. Utilizations given an observed throughput of 5.5 patients/hr

  12. Levers for Increasing Process Capacity • Decrease the work content of bottleneck activities • work smarter • work faster • do it right the first time • change product mix • Move work content from bottlenecks to non-bottlenecks • to non-critical resource or to third party • Increase Net Availability • work longer • increase scale (invest) • increase size of load batches • eliminate availability waste

  13. Structuring The Service Enterprise Example: Automobile’s Driver’s License Office License Renewal Times Activity Description Time (Sec) 1 Review application for correctness 15 2 Process and record payment 30 3 Check for violations and restrictions 60 4 Conduct eye test 40 5 Photograph applicant 20 6 Issue temporary license 30

  14. Present Flow Diagram Activity Activity Activity Activity Activity Activity 6 120 30 4 90 40 5 180 20 2 120 30 1 240 15 3 60 60 /hr /hr /hr /hr /hr /hr sec sec sec sec sec sec Flow time: sec Throughput rate: per hour What happens if you hire one more employee? Activity flow rate per hour time (sec)

  15. Proposed Flow Diagram Activity Activity 1,465 55 3 60 60 /hr /hr sec sec Activity Activity Activity 6 120 30 5 180 20 2 120 30 /hr /hr /hr sec sec sec Activity Activity 1,465 55 3 60 60 /hr /hr sec sec Flow time: sec Throughput rate: per hour

  16. Activity Activity Activity Activity Activity Activity 1-522 165 1-522 165 1-522 165 1-522 165 1-522 165 1-522 165 /hr /hr /hr /hr /hr /hr sec sec sec sec sec sec Another Design Activity 6 120 30 /hr sec Flow time: sec Throughput rate: per hour

  17. The role of task times: a balanced line • if task times are similar will have a balanced line • in the absence of variability (deterministic) complete synchronization is possible • in a balanced line idleness is minimized, though in the presence of variability full synchronization cannot be achieved

  18. The role of task times: an unbalanced line • if average task times are different will have an unbalanced line • will have idleness • in unbalanced case, slowest task determines output rate • bottleneck is busy • idleness in other stages

  19. 6/hr 6/hr The role of variability 4 or 8/hr 4 or 8/hr 2 or 10 2 or 10 0 or 12 0 or 12 As variability increases, throughput (rate) decreases

  20. 6/hr 4/hr Compounding effect of variability and unbalanced task times 4/hr 3.5/hr 4 or 8/hr 2 or 6/hr 2 or 10 0 or 8 2.5/hr

  21. 6/hr 6/hr 6/hr 2 or 10 2 or 10 0 or 12 0 or 12 Resource interaction effects In a serial process downstream resources depend on upstream resources: can have temporary starvation (idleness) 6/hr 6/hr 4.5/hr 6/hr 4 or 8/hr 4 or 8/hr 4 or 8/hr 3/hr 6/hr 2 or 10 1.5/hr 6/hr 0 or 12 As variability increases, the impact of resource interaction increases

  22. Want to eliminate as much variability as possible from your processes: how? • specialization in tasks can reduce task time variability • standardization of offer can reduce job type variability • automation of certain tasks • IT support: templates, prompts, etc. • incentives

  23. Want to reduce resource interference in your processes: how? • smaller lotsizes (smaller batches) • better balanced line • by speeding-up bottleneck (adding staff, changing procedure, different incentives, change technology) • through cross-training • eliminate steps • buffers • integrate work (pooling)

  24. The impact of task integration (pooling) • balances utilization... • reduces resource interference... • ...therefore reduces the impact of temporary bottlenecks • there is more benefit from pooling in a high utilization and high variability process • pooling is beneficial as long as • it does not introduce excessive variability in a low variability system • the benefits exceed the task time reductions due to specialization

  25. Examples of pooling in business • Consolidating back office work • Call centers • Single line versus separate queues

  26. Summary of fundamental process principles • identify and eliminate bottlenecks • reduce as much variability as possible • eliminate handoffs, improve communication to minimize resource interference • for high utilization processes build-in more slack

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