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Part Two DESIGN
All operations managers are designers, because design is the process of
satisfying people’s requirements through the shaping or configuring products,
services, and processes. This part of the book looks at how managers can
manage the design of the products and services they produce and the
processes that produce them. At the most strategic level ‘design’ means
shaping the network of operations that supply products and services. At a
more operational level it means the arrangement of the processes, technology
and people that constitute operations processes.
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Introduction Say you are a ‘designer’ and most people will assume that you are someone who is concerned with how a product looks. But the design activity is much broader than that and while there is no universally recognized definition of ‘design’, we take it to mean ‘the process by which some functional requirement of people is satisfied through the shaping or configuration of the resources and /or activities that compose a product, or a service, or the transformation process that produces them’. All operations managers are designers. When they purchase or rearrange the position of a piece of equipment, or when they change the way of working within a process, it is a design decision because it affects the physical shape and nature of their processes. This chapter examines the design of processes. Figure 4.1 shows where this topic fits within the overall model of operations management.
Chapter 4 Process design
Key questions ➤ What is process design?
➤ What objectives should process design have?
➤ How do volume and variety affect process design?
➤ How are processes designed in detail?
Figure 4.1 This chapter examines process design
Check and improve your understanding of this chapter using self assessment questions and a personalised study plan, audio and video downloads, and an eBook – all at www.myomlab.com.
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The quick-service restaurant (QSR) industry reckons that the very first drive-through dates back to 1928 when Royce Hailey first promoted the drive-through service at his Pig Stand restaurant in Los Angeles. Customers would simply drive by the back door of the restaurant where the chef would come out and deliver the restaurant’s famous ‘Barbequed Pig’ sandwiches. Today, drive-through processes are slicker and faster. They are also more common. In 1975, McDonald’s did not have any drive-throughs, but now more than 90 per cent of its US restaurants incorporate a drive-through process. In fact 80 per cent of recent fast-food growth has come through the growing number of drive-throughs. Says one industry specialist, ‘There are a growing number of customers for whom fast-food is not fast enough. They want to cut waiting time to the very minimum without even getting out of their car. Meeting their needs depends on how smooth we can get the process.’
The competition to design the fastest and most reliable drive-through process is fierce. Starbucks drive-throughs have strategically placed cameras at the order boards so that servers can recognize regular customers and start making their order even before it’s placed. Burger King has experimented with sophisticated sound systems, simpler menu boards and see-through food bags to ensure greater accuracy (no point in being fast if you don’t deliver what the customer ordered). These details matter. McDonald’s reckon that their sales increase one per cent for every six seconds saved at a drive-through, while a single Burger King restaurant calculated that its takings increased by 15,000 dollars a year each time it reduced queuing time by one second.
Menu items must be easy to read and understand. Designing ‘combo meals’ (burger, fries and a cola), for example, saves time at the ordering stage. Perhaps the most remarkable experiment in making drive-through process times slicker is being carried out by McDonald’s in the USA. On California’s central coast 150 miles from Los Angeles, a call centre takes orders remotely from 40 McDonald’s outlets around the country. The orders are then sent back to the restaurants through the Internet and the food is assembled only a few metres from where the order was placed. It may only save a few seconds on each order, but that can add up to extra sales at busy times of the day. But not everyone is thrilled by the boom in drive-throughs. People living in the vicinity may complain of the extra traffic they attract and the unhealthy image of fast food combined with a process that does not even make customers get out of their car, is, for some, a step too far.
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Operations in practice Fast-food drive-throughs1
What is process design?
To ‘design’ is to conceive the looks, arrangement, and workings of something before it is created. In that sense it is a conceptual exercise. Yet it is one which must deliver a solution that will work in practice. Design is also an activity that can be approached at different levels of detail. One may envisage the general shape and intention of something before getting down to defining its details. This is certainly true for process design. At the start of the process design activity it is important to understand the design objectives, especially at first, when the overall shape and nature of the process is being decided. The most common way of doing this is by positioning it according to its volume and variety characteristics. Eventually the details of the process must be analysed to ensure that it fulfils its objectives effectively.
Design happens before creation
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Figure 4.2 The design of products/services and processes are interrelated and should be treated together
Yet, it is often only through getting to grips with the detail of a design that the feasibility of its overall shape can be assessed. But don’t think of this as a simple sequential process. There may be aspects concerned with the objectives or the broad positioning of the process that will need to be modified following its more detailed analysis.
Process design and product /service design are interrelated
Often we will treat the design of products and services, on the one hand, and the design of the processes which make them, on the other, as though they were separate activities. Yet they are clearly interrelated. It would be foolish to commit to the detailed design of any product or service without some consideration of how it is to be produced. Small changes in the design of products and services can have profound implications for the way the operation eventually has to produce them. Similarly, the design of a process can constrain the freedom of product and service designers to operate as they would wish (see Fig. 4.2). This holds good whether the operation is producing products or services. However, the overlap between the two design activities is generally greater in operations which produce services. Because many services involve the customer in being part of the transformation process, the service, as far as the customer sees it, cannot be separated from the process to which the customer is subjected. Overlapping product and process design has implications for the organization of the design activity, as will be discussed in Chapter 5. Certainly, when product designers also have to make or use the things which they design, it can concentrate their minds on what is important. For example, in the early days of flight, the engineers who designed the aircraft were also the test pilots who took them out on their first flight. For this reason, if no other, safety was a significant objective in the design activity.
What objectives should process design have?
The whole point of process design is to make sure that the performance of the process is appropriate for whatever it is trying to achieve. For example, if an operation competed primarily on its ability to respond quickly to customer requests, its processes would need to be designed to give fast throughput times. This would minimize the time between customers
Process design and product /service design should be considered together
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requesting a product or service and their receiving it. Similarly, if an operation competed on low price, cost-related objectives are likely to dominate its process design. Some kind of logic should link what the operation as a whole is attempting to achieve and the performance objectives of its individual processes. This is illustrated in Table 4.1.
Operations performance objectives translate directly to process design objectives as shown in Table 4.1. But, because processes are managed at a very operational level, pro- cess design also needs to consider a more ‘micro’ and detailed set of objectives. These are largely concerned with flow through the process. When whatever are being ‘processed’ enter a process they will progress through a series of activities where they are ‘transformed’ in some way. Between these activities they may dwell for some time in inventories, waiting to be transformed by the next activity. This means that the time that a unit spends in the process (its throughput time) will be longer than the sum of all the transforming activities that it passes through. Also the resources that perform the processes activities may not be used all the time because not all units will necessarily require the same activities and the capacity of each resource may not match the demand placed upon it. So neither the units moving through the process, nor the resources performing the activities may be fully utilized. Because of this the way that units leave the process is unlikely to be exactly the same as the way they arrive at the process. It is common for more ‘micro’ performance flow objectives to be used that describe process flow performance. For example:
● Throughput rate (or flow rate) is the rate at which units emerge from the process, i.e. the number of units passing through the process per unit of time.
● Throughput time is the average elapsed time taken for inputs to move through the pro- cess and become outputs.
● The number of units in the process (also called the ‘work in process’ or in-process inventory), as an average over a period of time.
● The utilization of process resources is the proportion of available time that the resources within the process are performing useful work.
Chapter 4 Process design 89
Table 4.1 The impact of strategic performance objectives on process design objectives and performance
Operations performance objective
Quality
Speed
Dependability
Flexibility
Cost
Some benefits of good process design
• Products and services produced ‘on-specification’
• Less recycling and wasted effort within the process
• Short customer waiting time • Low in-process inventory
• On-time deliveries of products and services
• Less disruption, confusion and rescheduling within the process
• Ability to process a wide range of products and services
• Low cost / fast product and service change • Low cost / fast volume and timing changes • Ability to cope with unexpected events
(e.g. supply or a processing failure)
• Low processing costs • Low resource costs (capital costs) • Low delay and inventory costs (working
capital costs)
Typical process design objectives
• Provide appropriate resources, capable of achieving the specification of product of services
• Error-free processing
• Minimum throughput time • Output rate appropriate for demand
• Provide dependable process resources • Reliable process output timing and volume
• Provide resources with an appropriate range of capabilities
• Change easily between processing states (what, how, or how much is being processed)
• Appropriate capacity to meet demand • Eliminate process waste in terms of
– excess capacity – excess process capability – in-process delays – in-process errors – inappropriate process inputs
Process design should reflect process objectives
Throughput rate
Throughput time
Work in process
Utilization
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Environmentally sensitive design
With the issues of environmental protection becoming more important, both process and product/service designers have to take account of ‘green’ issues. In many developed countries, legislation has already provided some basic standards which restrict the use of toxic materials, limit discharges to air and water, and protect employees and the public from immediate and long-term harm. Interest has focused on some fundamental issues:
● The sources of inputs to a product or service. (Will they damage rainforests? Will they use up scarce minerals? Will they exploit the poor or use child labour?)
● Quantities and sources of energy consumed in the process. (Do plastic beverage bottles use more energy than glass ones? Should waste heat be recovered and used in fish farming?)
● The amounts and type of waste material that are created in the manufacturing processes. (Can this waste be recycled efficiently, or must it be burnt or buried in landfill sites? Will the waste have a long-term impact on the environment as it decomposes and escapes?)
● The life of the product itself. It is argued that if a product has a useful life of, say, twenty years, it will consume fewer resources than one that only lasts five years, which must therefore be replaced four times in the same period. However, the long-life product may require more initial inputs, and may prove to be inefficient in the latter part of its use, when the latest products use less energy or maintenance to run.
● The end-of-life of the product. (Will the redundant product be difficult to dispose of in an environmentally friendly way? Could it be recycled or used as a source of energy? Could it still be useful in third-world conditions? Could it be used to benefit the environment, such as old cars being used to make artificial reefs for sea life?)
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When Daimler-Chrysler started to examine the feasibility of the Smart town car, the challenge was not just to examine the economic feasibility of the product but also to build in environmental sensitivity to the design of the product and the process that was to make it. This is why environmental protection is now a fundamental part of all production activities in its ‘Smartville’ plant at Hambach near France’s border with Germany. The product itself is designed on environmentally compatible principles. Even before assembly starts, the product’s disassembly must be considered. In fact the modular construction of the Smart car helped to guarantee economical dismantling at the end of its life. This also helps with the recycling of materials. Over 85 per cent of the Smart’s components are recyclable and recycled material is used in its initial construction. For example, the Smart’s instrument panel comprises 12 per cent recycled plastic material. Similarly, production processes are designed to be ecologically sustainable. The plant’s environmentally friendly painting technique allows less paint to be used while maintaining a high quality of protection. It also involves no solvent emission and no hazardous waste, as well as the recycling of surplus material. But it is not only the use of new technology that contributes to the plant’s ecological credentials. Ensuring a smooth and efficient movement of materials within the plant also saves time, effort and, above all, energy. So, traffic flow outside and through
Short case Ecologically smart2
the building has been optimized, buildings are made accessible to suppliers delivering to the plant, and conveyor systems are designed to be loaded equally in both directions so as to avoid empty runs. The company even claims that the buildings themselves are a model for ecological compatibility. No construction materials contain formaldehyde or CFCs and the outside of the buildings are lined with ‘TRESPA’, a raw material made from European timber that is quick to regenerate.
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Designers are faced with complex trade-offs between these factors, although it is not always easy to obtain all the information that is needed to make the ‘best’ choices. For example, it is relatively straightforward to design a long-life product, using strong material, over-designed components, ample corrosion protection, and so on. But its production might use more materials and energy and it could create more waste on disposal. To help make more rational decisions in the design activity, some industries are experimenting with life cycle analysis. This technique analyses all the production inputs, the life-cycle use of the product and its final disposal, in terms of total energy used (and more recently, of all the emitted wastes such as carbon dioxide, sulphurous and nitrous gases, organic solvents, solid waste, etc.). The inputs and wastes are evaluated at every stage in its creation, beginning with the extraction or farming of the basic raw materials. The short case ‘Ecologically smart’ demonstrates that it is possible to include ecological considerations in all aspects of product and process design.
Process types – the volume–variety effect on process design
In Chapter 1 we saw how processes in operations can range from producing a very high volume of products or services (for example, a food canning factory) to a very low volume (for example, major project consulting engineers). Also they can range from producing a very low variety of products or services (for example, in an electricity utility) to a very high variety (as, for example, in an architects’ practice). Usually the two dimensions of volume and variety go together. Low-volume operations processes often have a high variety of products and services, and high-volume operations processes often have a narrow variety of products and services. Thus there is a continuum from low volume and high variety through to high volume and low variety, on which we can position operations. Different operations, even those in the same operation, may adopt different types of processes. Many manufacturing plants will have a large area, organized on a ‘mass-production’ basis, in which it makes its high-volume ‘best-selling’ products. In another part of the plant it may also have an area where it makes a wide variety of products in much smaller volumes. The design of each of these processes is likely to be different. Similarly, in a medical service, compare the approach taken during mass medical treatments, such as large-scale immunization programmes, with that taken for a transplant operation where the treatment is designed specifically to meet the needs of one person. These differences go well beyond their differing technologies or the processing requirements of their products or services. They are explained by the fact that no one type of process design is best for all types of operation in all circumstances. The differences are explained largely by the different volume–variety positions of the operations.
Process types
The position of a process on the volume–variety continuum shapes its overall design and the general approach to managing its activities. These ‘general approaches’ to designing and managing processes are called process types. Different terms are sometimes used to identify process types depending on whether they are predominantly manufacturing or service pro- cesses, and there is some variation in the terms used. For example, it is not uncommon to find the ‘manufacturing’ terms used in service industries. Figure 4.3 illustrates how these ‘process types’ are used to describe different positions on the volume–variety spectrum.
Project processes
Project processes are those which deal with discrete, usually highly customized products. Often the timescale of making the product or service is relatively long, as is the interval between the completion of each product or service. So low volume and high variety are characteristics of project processes. The activities involved in making the product can be ill-defined and uncertain, sometimes changing during the production process itself. Examples of project
Life cycle analysis
Volume–variety positions
Process types
Project processes
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processes include shipbuilding, most construc- tion companies, movie production companies, large fabrication operations such as those manufacturing turbo generators, and installing a computer system. The essence of project processes is that each job has a well-defined start and finish, the time interval between starting different jobs is relatively long and the trans- forming resources which make the product will probably have been organized especially for each product. The process map for project processes will almost certainly be complex, partly because each unit of output is so large with many act- ivities occurring at the same time and partly because the activities in such processes often involve significant discretion to act according to professional judgement.
Jobbing processes
Jobbing processes also deal with very high variety and low volumes. Whereas in project processes each product has resources devoted more or less exclusively to it, in jobbing processes each pro- duct has to share the operation’s resources with many others. The resources of the operation will process a series of products but, although all the products will require the same kind of attention, each will differ in its exact needs. Examples of jobbing processes include many precision engineers such as specialist tool- makers, furniture restorers, bespoke tailors, and the printer who produces tickets for the local social event. Jobbing processes produce more
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Figure 4.3 Different process types imply different volume–variety characteristics for the process
The major construction site shown in this picture is a project process. Each ‘product’ ( project) is different and poses different challenges to those running the process (civil engineers).
This craftsperson is using general purpose wood-cutting technology to make a product for an individual customer. The next product he makes will be different (although it may be similar ), possibly for a different customer.
Jobbing processes
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and usually smaller items than project processes but, like project processes, the degree of repetition is low. Many jobs will probably be ‘one-offs’. Again, any process map for a jobbing process could be relatively complex for similar reasons to project processes. However, jobbing processes usually produce physically smaller products and, although sometimes involving considerable skill, such processes often involve fewer unpredictable circumstances.
Batch processes
Batch processes can often look like jobbing processes, but batch does not have quite the degree of variety associated with jobbing. As the name implies, each time batch processes produce a product they produce more than one. So each part of the operation has periods when it is repeating itself, at least while the ‘batch’ is being processed. The size of the batch could be just two or three, in which case the batch process would differ little from jobbing, especially if each batch is a totally novel product. Conversely, if the batches are large, and especially if the products are familiar to the operation, batch processes can be fairly repetitive. Because of this, the batch type of process can be found over a wide range of volume and variety levels. Examples of batch processes include machine tool manufacturing, the production of some special gourmet frozen foods, and the manufacture of most of the component parts which go into mass-produced assemblies such as automobiles.
Mass processes
Mass processes are those which produce goods in high volume and relatively narrow variety – narrow, that is, in terms of the fundamentals of the product design. An automobile plant, for example, might produce several thousand variants of car if every option of engine size, colour, extra equipment, etc. is taken into account. Yet essentially it is a mass operation because the different variants of its product do not affect the basic process of production. The activities in the automobile plant, like all mass operations, are essentially repetitive and largely predictable. Examples of mass processes include the automobile plant, a television factory, most food processes and DVD production. Several variants of a product could be produced on a mass process such as an assembly line, but the process itself is unaffected. The equipment used at each stage of the process can be designed to handle several different types of components loaded into the assembly equipment. So, provided the sequence of com- ponents in the equipment is synchronized with the sequence of models moving through the process, the process seems to be almost totally repetitive.
Continuous processes
Continuous processes are one step beyond mass processes insomuch as they operate at even higher volume and often have even lower variety. They also usually operate for longer periods of time. Sometimes they are literally continuous in that their products are inseparable, being produced in an endless flow. Continuous processes are often associated with relatively inflexible, capital-intensive technologies with highly predictable flow. Examples of continuous
Batch processes
Mass processes
Continuous processes
Chapter 4 Process design 93
In this kitchen, food is being prepared in batches. All batches go through the same sequence (preparation, cooking, storing), but each batch is a different dish.
This automobile plant is everyone’s’ idea of a mass process. Each product is almost (but not quite) the same, and is made in large quantities.
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processes include petrochemical refineries, electricity utilities, steel making and some paper making. There are often few elements of discretion in this type of process and although products may be stored during the process, the predominant characteristic of most con- tinuous processes is of smooth flow from one part of the process to another. Inspections are likely to form part of the process, although the control applied as a consequence of those inspections is often automatic rather than requiring human discretion.
Professional services
Professional services are defined as high- contact organizations where customers spend a considerable time in the service process. Such services provide high levels of customization, the service process being highly adaptable in order to meet individual customer needs. A great deal of staff time is spent in the front office and contact staff are given considerable discretion in servicing customers. Professional services tend to be people-based rather than equipment-based, with emphasis placed on the process (how the service is delivered) rather than the ‘product’ (what is delivered). Professional services include management consultants, lawyers’ practices, architects, doctors’ surgeries, auditors, health and safety inspectors and some computer field service operations. A typical example would be OEE, a consultancy that sells the problem-solving expertise of its skilled staff to tackle clients’ problems. Typically, the problem will first be discussed with clients and the boundaries of the project defined. Each ‘product’ is different, and a high proportion of work takes place at the client’s premises, with frequent contact between consultants and the client.
Service shops
Service shops are characterized by levels of customer contact, customization, volumes of customers and staff discretion, which position them between the extremes of professional and mass services (see next paragraph). Service is provided via mixes of front- and back-office activities. Service shops include banks, high- street shops, holiday tour operators, car rental companies, schools, most restaurants, hotels and travel agents. For example, an equipment hire and sales organization may have a range of products displayed in front-office outlets, while back-office operations look after purchasing and administration. The front-office staff have
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Here consultants are preparing to start a consultancy assignment. They are discussing how they might approach the various stages of the assignment, from understanding the real nature of the problem through to the implementation of their recommended solutions. This is a process map, although a very high level one. It guides the nature and sequence of the consultants’ activities.
The health club shown in the picture has front-office staff who can give advice on exercise programmes and other treatments. To maintain a dependable service the staff need to follow defined processes every day.
This continuous water treatment process almost never stops (it only stops for maintenance) and performs a narrow range of tasks (filters impurities). Often we only notice the process if it goes wrong!
Professional services
Service shops
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some technical training and can advise customers during the process of selling the product. Essentially the customer is buying a fairly standardized product but will be influenced by the process of the sale which is customized to the customer’s individual needs.
Mass services
Mass services have many customer transac- tions, involving limited contact time and little customization. Such services may be equipment- based and ‘product’-oriented, with most value added in the back office and relatively little judge- ment applied by front-office staff. Staff are likely to have a closely defined division of labour and to follow set procedures. Mass services include supermarkets, a national rail network, an airport, telecommunications services, libraries, televi- sion stations, the police service and the enquiry desk at a utility. For example, rail services such as Virgin Trains in the UK or SNCF in France all move a large number of passengers with a variety of rolling stock on an immense infrastructure of railways. Passengers pick a journey from the range offered. One of the most common types of mass service is the call centres used by almost all companies that deal directly with consumers. Coping with a very high volume of enquiries requires some kind of structuring of the process of communicating with customers. This is often achieved by using a carefully designed enquiry process (sometimes known as a ‘script’).
The product–process matrix
Making comparisons between different processes along a spectrum which goes, for example, from shipbuilding at one extreme to electricity generation at the other has limited value. No one grumbles that yachts are so much more expensive than electricity. The real point is that because the different process types overlap, organizations often have a choice of what type of process to employ. This choice will have consequences to the operation, especially in terms of its cost and flexibility. The classic representation of how cost and flexibility vary with process choice is the product–process matrix that comes from Professors Hayes and Wheelwright of Harvard University.3 They represent process choices on a matrix with the
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This is an account management centre for a large retail bank. It deals with thousands of customer requests every day. Although each customer request is different, they are all of the same type – involving customers’ accounts.
Although the idea of process types is useful insomuch as it reinforces the, sometimes important, distinctions between different types of process, it is in many ways simplistic. In reality there is no clear boundary between process types. For example, many pro- cessed foods are manufactured using mass-production processes but in batches. So, a ‘batch’ of one type of cake (say) can be followed by a ‘batch’ of a marginally different cake ( perhaps with different packaging), followed by yet another, etc. Essentially this is still a mass process, but not quite as pure a version of mass processing as a manu- facturing process that only makes one type of cake. Similarly, the categories of service processes are likewise blurred. For example, a specialist camera retailer would normally be categorized as a service shop, yet it also will give, sometimes very specialized, tech- nical advice to customers. It is not a professional service like a consultancy of course, but it does have elements of a professional service process within its design. This is why the volume and variety characteristics of a process are sometimes seen as being a more realistic way of describing processes. The product–process matrix described next adopts this approach.
Critical commentary
Mass services
Product–process matrix
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Figure 4.4 Deviating from the ‘natural’ diagonal on the product–process matrix has consequences for cost and flexibility Source: Based on Hayes and Wheelwright4
volume–variety as one dimension, and process types as the other. Figure 4.4 shows their matrix adapted to fit with the terminology used here. Most operations stick to the ‘natural’ diagonal of the matrix, and few, if any, are found in the extreme corners of the matrix. However, because there is some overlap between the various process types, operations might be positioned slightly off the diagonal.
The diagonal of the matrix shown in Figure 4.4 represents a ‘natural’ lowest cost position for an operation. Operations which are on the right of the ‘natural’ diagonal have processes which would normally be associated with lower volumes and higher variety. This means that their processes are likely to be more flexible than seems to be warranted by their actual volume–variety position. Put another way, they are not taking advantage of their ability to standardize their processes. Because of this, their costs are likely to be higher than they would be with a process that was closer to the diagonal. Conversely, operations that are on the left of the diagonal have adopted processes which would normally be used in a higher-volume and lower-variety situation. Their processes will therefore be ‘over-standardized’ and prob- ably too inflexible for their volume–variety position. This lack of flexibility can also lead to high costs because the process will not be able to change from one activity to another as efficiently as a more flexible process.
Detailed process design
After the overall design of a process has been determined, its individual activities must be configured. At its simplest this detailed design of a process involves identifying all the individual activities that are needed to fulfil the objectives of the process and deciding on the sequence in which these activities are to be performed and who is going to do them.
The ‘natural’ diagonal
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There will, of course, be some constraints on this. Some activities must be carried out before others and some activities can only be done by certain people or machines. Nevertheless, for a process of any reasonable size, the number of alternative process designs is usually large. Because of this, process design is often done using some simple visual approach such as process mapping.
Process mapping
Process mapping simply involves describing processes in terms of how the activities within the process relate to each other. There are many techniques which can be used for process mapping (or process blueprinting, or process analysis, as it is sometimes called). However, all the techniques identify the different types of activity that take place during the process and show the flow of materials or people or information through the process.
Process mapping symbols
Process mapping symbols are used to classify different types of activity. And although there is no universal set of symbols used all over the world for any type of process, there are some that are commonly used. Most of these derive either from the early days of ‘scientific’ manage- ment around a century ago (see Chapter 9) or, more recently, from information system flowcharting. Figure 4.5 shows the symbols we shall use here.
These symbols can be arranged in order, and in series or in parallel, to describe any process. For example, the retail catering operation of a large campus university has a num- ber of outlets around the campus selling sandwiches. Most of these outlets sell ‘standard’ sandwiches that are made in the university’s central kitchens and transported to each outlet every day. However, one of these outlets is different; it is a kiosk that makes more expensive ‘customized’ sandwiches to order. Customers can specify the type of bread they want and a very wide combination of different fillings. Because queues for this customized service are becoming excessive, the catering manager is considering redesigning the process to speed it up. This new process design is based on the findings from a recent student study of the current process which proved that 95 per cent of all customers ordered only two types of bread (soft roll and Italian bread) and three types of protein filling (cheese, ham and chicken). Therefore the six ‘sandwich bases’ (2 types of bread × 3 protein fillings) could be prepared
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Figure 4.5 Some common process mapping symbols
Process mapping
Process blueprinting
Process analysis
Process mapping symbols
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in advance and customized with salad, mayonnaise, etc. as customers ordered them. The process maps for making and selling the standard sandwiches, the current customized sandwiches and the new customized process are shown in Figure 4.6.
Note how the introduction of some degree of discretion in the new process makes it more complex to map at this detailed level. This is one reason why processes are often mapped at a more aggregated level, called high-level process mapping, before more detailed maps are drawn. Figure 4.7 illustrates this for the new customized sandwich operation. At the highest level the process can be drawn simply as an input–transformation–output pro- cess with sandwich materials and customers as its input resources and satisfied customers ‘assembled’ to their sandwich as outputs. No details of how inputs are transformed into outputs are included. At a slightly lower, or more detailed level, what is sometimes called an outline process map (or chart) identifies the sequence of activities but only in a general way. So the activity of finding out what type of sandwich a customer wants, deciding if it can be assembled from a sandwich ‘base’ and then assembling it to meet the customer’s request, is all contained in the general activity ‘assemble as required’. At the more detailed level, all the activities are shown (we have shown the activities within ‘assemble as required’).
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Figure 4.6 Process maps for three sandwich making and selling processes
High-level process mapping
Outline process map
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Using process maps to improve processes
One significant advantage of mapping processes is that each activity can be systematically challenged in an attempt to improve the process. For example, Figure 4.8 shows the flow process chart which Intel Corporation, the computer chip company, drew to describe its method of processing expense reports (claims forms). It also shows the process chart for the same process after critically examining and improving the process. The new process cut the number of activities from 26 down to 15. The accounts payable’s activities were combined with the cash-receipt’s activities of checking employees’ past expense accounts (activities 8, 10 and 11) which also eliminated activities 5 and 7. After consideration, it was decided to eliminate the activity of checking items against company rules, because it seemed ‘more trouble than it was worth’. Also, logging the batches was deemed unnecessary. All this com- bination and elimination of activities had the effect of removing several ‘delays’ from the process. The end-result was a much-simplified process which reduced the staff time needed to do the job by 28 per cent and considerably speeded up the whole process.
In the case of the customized sandwich process, the new design was attempting to offer as wide a range of sandwiches as were previously offered, without the slow service of the old
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Figure 4.7 The new customized sandwich process mapped at three levels
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process. In other words, it was maintaining similar levels of flexibility (to offer the same variety) while improving the speed of service. The new process would probably also increase the efficiency of the process because the sandwich ‘bases’ could be assembled during periods of low demand. This would balance the load on staff and so cost performance would improve. The quality of the sandwiches would presumably not suffer, although pre-assembling the sandwich bases may detract from the fresh appearance and taste. The dependability of the new process is less easy to assess. With the old process the time between requesting a sand- wich and its delivery was long but reasonably predictable. The new process, however, will deliver fairly quickly 95 per cent of the time but take longer if the sandwich is non-standard. Table 4.2 summarizes the performance of the new design.
Throughput, cycle time and work-in-process
The new customized sandwich process has one indisputable advantage over the old process: it is faster in the sense that customers spend less time in the process. The additional benefit this brings is a reduction in cost per customer served (because more customers can be served without increasing resources). Note, however, that the total amount of work needed to make and sell a sandwich has not reduced. All the new process has done is to move some of the work to a less busy time. So the work content (the total amount of work required to produce a unit of output) has not changed but customer throughput time (the time for a unit to move through the process) has improved.
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Figure 4.8 Flow process charts for processing expense reports at Intel before and after improving the process
Work content
Throughput time
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For example, suppose that the time to assemble and sell a sandwich (the work content) using the old process was two minutes and that two people were staffing the process during the busy period. Each person could serve a customer every two minutes, therefore every two minutes two customers were being served, so on average a customer is emerging from the process every minute. This is called the cycle time of the process, the average time between units of output emerging from the process. When customers join the queue in the process they become work-in-process (or work-in-progress) sometimes written as WIP. If the queue is ten people long (including that customer) when the customer joins it, he or she will have to wait ten minutes to emerge from the process. Or put more succinctly:
Throughput time == Work-in-process ×× Cycle time
In this case,
10 minutes wait = 10 people in the system × 1 minute per person
Little’s law
This mathematical relationship (throughput time = work-in-process × cycle time) is called Little’s law. It is simple but very useful, and it works for any stable process. For example, suppose it is decided that, when the new process is introduced, the average number of customers in the process should be limited to around ten and the maximum time a customer is in the process should be on average four minutes. If the time to assemble and sell a sand- wich (from customer request to the customer leaving the process) in the new process has reduced to 1.2 minutes, how many staff should be serving?
Putting this into Little’s law:
Throughput time = 4 minutes
and
Work-in-progress, WIP = 10
So, since
Throughput time = WIP × Cycle time
Cycle time =
Cycle time for the process = = 0.4 minute
That is, a customer should emerge from the process every 0.4 minute, on average.
4
10
Throughput time
WIP
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Table 4.2 Assessing the performance of the new customized sandwich process
Performance objective Change with new process Comments
Quality No change? Check to make sure that sandwich bases do not deteriorate in storage
Speed Faster for 95 per cent of customers
Dependability Less predictable delivery Need to manage customer expectations time regarding delivery time for non-standard
sandwiches
Flexibility No change
Cost Potentially lower cost Need to forecast the number of each type of sandwich ‘base’ to pre-assemble
Cycle time
Work-in-process
Little’s law
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Given that an individual can be served in 1.2 minutes,
Number of servers required = = 3
In other words, three servers would serve three customers in 1.2 minutes. Or one customer in 0.4 minute.
1.2
0.4
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Mike was totally confident in his judgement, ‘You’ll never get them back in time’, he said. ‘They aren’t just wasting time, the process won’t allow them to all have their coffee and get back for 11 o’clock.’ Looking outside the lecture theatre, Mike and his colleague Dick were watching the 20 business people who were attending the seminar queuing to be served coffee and biscuits. The time was 10.45 and Dick knew that unless they were all back in the lecture theatre at 11 o’clock there was no hope of finishing his presentation before lunch. ‘I’m not sure why you’re so pessimistic’, said Dick. ‘They seem to be interested in what I have to say and I think they will want to get back to hear how operations manage- ment will change their lives.’ Mike shook his head. ‘I’m not questioning their motivation’, he said, ‘I’m questioning the ability of the process out there to get through them all in time. I have been timing how long it takes to serve the coffee and biscuits. Each coffee is being made fresh and the time between the server asking each customer what they want and them walking away with their coffee and biscuits is taking 48 seconds. Remember that, according to Little’s law, throughput equals work-in-process multiplied by cycle time. If the work-in-process is the 20 managers in the queue and cycle time is 48 seconds, the total throughput time is going to be 20 multiplied by 0.8 minute which equals 16 minutes. Add to that sufficient time for the last person to drink their coffee and you must expect a total throughput time of a bit over 20 minutes. You just haven’t allowed long enough for the process.’ Dick was impressed. ‘Err . . . what did you say that law was called again?’ ‘Little’s law’, said Mike.
Worked example
Every year it was the same. All the workstations in the building had to be renovated (tested, new software installed, etc.) and there was only one week in which to do it. The one week fell in the middle of the August vacation period when the renovation process would cause minimum disruption to normal working. Last year the company’s 500 work- stations had all been renovated within one working week (40 hours). Each renovation last year took on average 2 hours and 25 technicians had completed the process within the week. This year there would be 530 workstations to renovate but the company’s IT support unit had devised a faster testing and renovation routine that would only take on average 11/2 hours instead of 2 hours. How many technicians will be needed this year to complete the renovation processes within the week?
Last year : Work-in-progress (WIP) = 500 workstations
Time available (Tt ) = 40 hours Average time to renovate = 2 hours
Therefore throughput rate (Tr) = 1/2 hour per technician
= 0.5N where N = Number of technicians
Worked example
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Throughput efficiency
This idea that the throughput time of a process is different from the work content of whatever it is processing has important implications. What it means is that for significant amounts of time no useful work is being done to the materials, information or customers that are progressing through the process. In the case of the simple example of the sandwich process described earlier, customer throughput time is restricted to 4 minutes, but the work content of the task (serving the customer) is only 1.2 minutes. So, the item being processed (the customer) is only being ‘worked on’ for 1.2/4 = 30 per cent of its time. This is called the throughput efficiency of the process.
Percentage throughput efficiency == ×× 100
In this case the throughput efficiency is very high, relative to most processes, perhaps because the ‘items’ being processed are customers who react badly to waiting. In most material and information transforming processes, throughput efficiency is far lower, usually in single percentage figures.
Work content
Throughput time
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Little’s law: WIP = Tt × Tr 500 = 40 × 0.5N
N =
= 25 technicians
This year: Work-in-progress (WIP) = 530 workstations
Time available = 40 hours Average time to renovate = 1.5 hours
Throughput rate (Tr) = 1/1.5 per technician = 0.67N
where N = Number of technicians
Little’s law: WIP = Tt × Tr 530 = 40 × 0.67N
N =
= 19.88 technicians
530
40 × 0.67
500
40 × 0.5
A vehicle licensing centre receives application documents, keys in details, checks the information provided on the application, classifies the application according to the type of licence required, confirms payment and then issues and mails the licence. It is currently processing an average of 5,000 licences every 8-hour day. A recent spot check found 15,000 applications that were ‘in progress’ or waiting to be processed. The sum of all activities that are required to process an application is 25 minutes. What is the throughput efficiency of the process?
Worked example
➔
Throughput efficiency
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Value-added throughput efficiency
The approach to calculating throughput efficiency that is described above assumes that all the ‘work content’ is actually needed. Yet we have already seen from the Intel expense report example that changing a process can significantly reduce the time that is needed to complete the task. Therefore, work content is actually dependent upon the methods and technology used to perform the task. It may be also that individual elements of a task may not be considered ‘value-added’. In the Intel expense report example the new method eliminated some steps because they were ‘not worth it’, that is, they were not seen as adding value. So, value-added throughput efficiency restricts the concept of work content to only those tasks that are actually adding value to whatever is being processed. This often eliminates activities such as movement, delays and some inspections.
For example, if in the licensing worked example, of the 25 minutes of work content only 20 minutes were actually adding value, then
Value-added throughput efficiency = = 1.39 per cent
Workflow5
When the transformed resources in a process is information (or documents containing information), and when information technology is used to move, store and manage the information, process design is sometimes called ‘workflow’ or ‘workflow management’. It is defined as ‘the automation of procedures where documents, information or tasks are passed between participants according to a defined set of rules to achieve, or contribute to, an overall business goal’. Although workflow may be managed manually, it is almost always managed using an IT system. The term is also often associated with business process re-engineering (see Chapter 1 and Chapter 18). More specifically, workflow is concerned with the following:
● Analysis, modelling, definition and subsequent operational implementation of business processes;
● The technology that supports the processes; ● The procedural (decision) rules that move information or documents through processes; ● Defining the process in terms of the sequence of work activities, the human skills needed
to perform each activity and the appropriate IT resources.
20
1,440
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Work-in-progress = 15,000 applications
Cycle time = Time producing
= = = 0.096 minute
From Little’s law,
Throughput time = WIP × Cycle time
Throughput time = 15,000 × 0.096
= 1,440 minutes = 24 hours = 3 days of working
Throughput efficiency = = = 1.74 per cent
Although the process is achieving a throughput time of 3 days (which seems reasonable for this kind of process) the applications are only being worked on for 1.7 per cent of the time they are in the process.
25
1,440
Work content
Throughput time
480 minutes
5,000
8 hours
5,000
Time producing
Number produced
Value-added throughput efficiency
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The effects of process variability
So far in our treatment of process design we have assumed that there is no significant variability either in the demand to which the process is expected to respond or in the time taken for the process to perform its various activities. Clearly, this is not the case in reality. So, it is important to look at the variability that can affect processes and take account of it.
There are many reasons why variability occurs in processes. These can include: the late (or early) arrival of material, information or customers, a temporary malfunction or breakdown of process technology within a stage of the process, the recycling of ‘mis-processed’ materials, information or customers to an earlier stage in the process, variation in the requirements of items being processed. All these sources of variation interact with each other, but result in two fundamental types of variability.
● Variability in the demand for processing at an individual stage within the process, usually expressed in terms of variation in the inter-arrival times of units to be processed.
● Variation in the time taken to perform the activities (i.e. process a unit) at each stage.
To understand the effect of arrival variability on process performance it is first use- ful to examine what happens to process performance in a very simple process as arrival time changes under conditions of no variability. For example, the simple process shown in Figure 4.9 is composed of one stage that performs exactly 10 minutes of work. Units arrive at the process at a constant and predictable rate. If the arrival rate is one unit every 30 minutes, then the process will be utilized for only 33.33% of the time, and the units will never have to wait to be processed. This is shown as point A on Figure 4.9. If the arrival rate increases to one arrival every 20 minutes, the utilization increases to 50%, and again the units will not have to wait to be processed. This is point B on Figure 4.9. If the arrival rate increases to one arrival every 10 minutes, the process is now fully utilized, but, because a
Process variability
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Figure 4.9 The relationship between process utilization and number of units waiting to be processed for constant, and variable, arrival and process times
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unit arrives just as the previous one has finished being processed, no unit has to wait. This is point C on Figure 4.9. However, if the arrival rate ever exceeded one unit every 10 minutes, the waiting line in front of the process activity would build up indefinitely, as is shown as point D in Figure 4.9. So, in a perfectly constant and predictable world, the relationship between process waiting time and utilization is a rectangular function as shown by the red dotted line in Figure 4.9.
However, when arrival and process times are variable, then sometimes the process will have units waiting to be processed, while at other times the process will be idle, waiting for units to arrive. Therefore the process will have both a ‘non-zero’ average queue and be under-utilized in the same period. So, a more realistic point is that shown as point X in Figure 4.9. If the average arrival time were to be changed with the same variability, the blue line in Figure 4.9 would show the relationship between average waiting time and process utilization. As the process moves closer to 100% utilization the higher the average waiting time will become. Or, to put it another way, the only way to guarantee very low waiting times for the units is to suffer low process utilization.
The greater the variability in the process, the more the waiting time utilization deviates from the simple rectangular function of the ‘no variability’ conditions that was shown in Figure 4.9. A set of curves for a typical process is shown in Figure 4.10(a). This phenomenon has important implications for the design of processes. In effect it presents three options to process designers wishing to improve the waiting time or utilization performance of their processes, as shown in Figure 4.10(b):
● Accept long average waiting times and achieve high utilization (point X); ● Accept low utilization and achieve short average waiting times (point Y); or ● Reduce the variability in arrival times, activity times, or both, and achieve higher utiliza-
tion and short waiting times (point Z).
To analyse processes with both inter-arrival and activity time variability, queuing or ‘waiting line’ analysis can be used. This is treated in the supplement to Chapter 11. But, do not dismiss the relationship shown in Figures 4.9 and 4.10 as some minor technical phenomenon. It is far more than this. It identifies an important choice in process design that could have strategic implications. Which is more important to a business, fast throughput time or high utilization of its resources? The only way to have both of these simultaneously
The relationship between average waiting time and process utilization is a particularly important one
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Figure 4.10 The relationship between process utilization and number of units waiting to be processed for variable arrival and activity times
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is to reduce variability in its processes, which may itself require strategic decisions such as limiting the degree of customization of products or services, or imposing stricter limits on how products or services can be delivered to customers, and so on. It also demonstrates an important point concerned with the day-to-day management of process – the only way to absolutely guarantee a hundred per cent utilization of resources is to accept an infinite amount of work-in-progress and/or waiting time.
Simulation in design
Designing processes often involves making decisions in advance of the final process being created, and so the designer is often not totally sure of the consequences of his or her decisions. To increase their own confidence in their design decision, however, they will probably try to simulate how the process might work in practice. In some ways simulation is one of the most fundamental approaches to decision-making. Children play games and ‘pretend’ so as to extend their experience of novel situations; likewise, managers can gain insights and explore possibilities through the formalized ‘pretending’ involved in using simulation models. These simulation models can take many forms. In designing the various processes within a football stadium, the architect could devise a computer-based ‘model’ which would simulate the movement of people through the stadium’s various processes according to the probability distribution which describes their random arrival and movement. This could then be used to predict where the layout might become overcrowded or where extra space might be reduced.
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It may be the busiest international airport in the world, but it is unlikely to win any prizes for being the most loved. Long delays, overcrowding and a shortage of capacity has meant that Heathrow is often a cause of frustration to harassed passengers. Yet to the airlines it is an attractive hub. Its size and location give it powerful ‘network effects’. This means that it can match incoming passengers with outgoing flights to hundreds of different cities. Actually it is its attractiveness to the airlines that is one of its main problems. Heathrow’s runways are in such demand that they are almost always operating at, or close to, their maximum capacity. In fact, its runways operate at 99% of capacity. This compares with about 70% at most other large airports. This means that the slightest variability (bad weather or an unscheduled landing such as a plane having to turn back with engine
Short case Heathrow delays caused by capacity utilization6
trouble) causes delays, which in turn cause more delays. (See Figure 4.10 for the theoretical explanation of this effect.) The result is that a third of all flights at Heathrow are delayed by at least 15 minutes. This is poor when compared with other large European airports such as Amsterdam and Frankfurt, which have 21% and 24% of flights delayed respectively.
Simulation models
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Summary answers to key questions
Check and improve your understanding of this chapter using self assessment questions and a personalised study plan, audio and video downloads, and an eBook – all at www.myomlab.com.
➤ What is process design?
■ Design is the activity which shapes the physical form and purpose of both products and services and the processes that produce them.
■ This design activity is more likely to be successful if the complementary activities of product or service design and process design are coordinated.
➤ What objectives should process design have?
■ The overall purpose of process design is to meet the needs of customers through achieving appropriate levels of quality, speed, dependability, flexibility and cost.
■ The design activity must also take account of environmental issues. These include examination of the source and suitability of materials, the sources and quantities of energy consumed, the amount and type of waste material, the life of the product itself, and the end-of-life state of the product.
➤ How do volume and variety affect process design?
■ The overall nature of any process is strongly influenced by the volume and variety of what it has to process.
■ The concept of process types summarizes how volume and variety affect overall process design.
■ In manufacturing, these process types are (in order of increasing volume and decreasing variety) project, jobbing, batch, mass and continuous processes. In service operations, although there is less consensus on the terminology, the terms often used (again in order of increasing volume and decreasing variety) are professional services, service shops and mass services.
➤ How are processes designed in detail?
■ Processes are designed initially by breaking them down into their individual activities. Often common symbols are used to represent types of activity. The sequence of activities in a process is then indicated by the sequence of symbols representing activities. This is called ‘process mapping’. Alternative process designs can be compared using process maps and improved processes considered in terms of their operations performance objectives.
■ Process performance in terms of throughput time, work-in-progress, and cycle time are related by a formula known as Little’s law: throughput time equals work-in-progress multiplied by cycle time.
■ Variability has a significant effect on the performance of processes, particularly the relationship between waiting time and utilization.
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The Central Evaluation Unit (CEU) of the XIII Directorate evaluated applications from academics bidding for research grants available under the ‘cooperation and foundations’ scheme of the European Union. This scheme distributed relatively small grants (less than A100,000) to fund the early stages of cooperative research between universities in the European Union. Based in Brussels, the CEU’s objectives were to make decisions that were consistently in line with directory guide rules, but also to give as speedy a response as possible to applicants. All new applications are sent to the CEU’s applications processing unit (CEUPU) by University Liaison Officers (ULOs) who were based at around 150 universities around the EU. Any academic who wanted to apply for a grant needed to submit an application form (downloadable online) and other signed documentation through the local ULO. The CEUPU employs three ‘checkers’ with three support and secretarial staff, a pool of twelve clerks who are responsible for data entry and filing, ten auditors (staff who prepare and issue the grant approval documents), and a special advisor (who is a senior ex-officer employed part-time to assess non- standard applications).
Véronique Fontan was the manager in charge of the Central Evaluation Unit’s applications processing unit (CEUPU). She had been invited by the Directory chief execu- tive, Leda Grumman, to make a presentation to senior colleagues about the reasons for the success of her unit. The reason for her invitation to the meeting was, first, that the systems used for handling new grant applications were well proven and robust, and, secondly, that her operation was well known for consistently meeting, and in many cases exceeding, its targets.
Véronique set a day aside to collect some information about the activities of the CEUPU. She first reviewed her monthly management reports. The information system pro- vided an update of number of applications (by week, month and year), the number and percentage of applications approved, number and percentage of those declined, the cumulative amount of money allocated, and the value of applications processed during the month. These reports identified that the Unit dealt with about 200 to 300 applica- tions per week (the Unit operated a five-day 35-hour week) and all the Unit’s financial targets were being met. In addition most operational performance criteria were being exceeded. The targets for turnaround of an application, from receipt of an application to the applicant being informed (excluding time spent waiting for additional information from ULOs) was 40 working days. The average time taken by the CEUPU was 36 working days. Accuracy had never been an issue as all files were thoroughly assessed to ensure
Case study The Central Evaluation Unit
that all the relevant and complete data were collected before the applications were processed. Staff productivity was high and there was always plenty of work waiting for processing at each section. A cursory inspection of the sections’ in-trays revealed about 130 files in each with just two exceptions. The ‘receipt’ clerks’ tray had about 600 files in it and the checkers’ tray contained about 220 files.
Processing grant applications The processing of applications is a lengthy procedure requiring careful examination by checkers trained to make assessments. All applications arriving at the Unit are placed in an in-tray. The incoming application is then opened by one of the eight ‘receipt’ clerks who will check that all the necessary forms have been included in the application. This is then placed in an in-tray pending collection by the coding staff. The two clerks with special responsibility for coding allocate a unique identifier to each application and code the information on the application into the informa- tion system.
The application is then given a front sheet, a pro forma, with the identifier in the top left corner. The files are then placed in a tray on the senior checker’s secretary’s desk. As a checker becomes available, the senior secretary provides the next job in the line to the checker. In the case of about half of the applications, the checker returns the file to the checkers’ secretaries to request the collection of any information that is missing or additional information that is required. The secretaries then write to the applicant and return the file to the ‘receipt’ clerks who place the additional information into the file as it arrives. Once the file is complete it is returned to the checkers for a decision on ➔
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the grant application. The file is then taken to auditors who prepare the acceptance or rejection documents.
These documents are then sent, with the rest of the file, to the two ‘dispatch’ clerks who complete the documents and mail them to the ULO for delivery to the academic who made the application. Each section, clerical, coding, checkers, secretarial, auditing or issuing, have trays for incoming work. Files are taken from the bottom of the pile when someone becomes free to ensure that all documents are dealt with in strict order.
Véronique’s confidence in her operation was some- what eroded when she asked for comments from some university liaison officers and staff. One ULO told her of frequent complaints about the delays over the process- ing of the applications and she felt there was a danger of alienating some of the best potential applicants to the point where they ‘just would not bother applying’. A second ULO complained that when he telephoned to ascertain the status of an application, the CEUPU staff did not seem to know where it was or how long it might be before a decision would be made. Furthermore he felt that this lack of information was eroding his rela- tionship with potential applicants, some of whom had already decided to apply elsewhere for research funding. Véronique reviewed the levels of applications over the last few years which revealed a decline of five per cent last year and two per cent the year before that on the
number of applications made. Véronique then spent about ten minutes with four of the clerks. They said their work was clear and routine, but their life was made difficult by university liaison officers who rang in expecting them to be able to tell them the status of an application they had submitted. It could take them hours, sometimes days, to find any individual file. Indeed, two of the ‘receipt’ clerks now worked full-time on this activity. They also said that university liaison officers frequently complained that decision-making seemed to be unusually slow, given the relatively small amounts of money being applied for. Véronique wondered whether, after all, she should agree to make the presentation.
Questions
1 Analyse and evaluate the processing of new applications at the CEUPU: – Create a process map for new applications – Calculate the time needed to process an individual
application cycle time for the process – Calculate the number of people involved in the
processing of an application – Explain why it is difficult to locate an individual file.
2 Summarize the problems of the CEUPU process.
3 What suggestions would you make to Véronique to improve her process?
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These problems and applications will help to improve your analysis of operations. You can find more practice problems as well as worked examples and guided solutions on MyOMLab at www.myomlab.com.
Read again the description of fast-food drive-through processes at the beginning of this chapter. (a) Draw a process map that reflects the types of process described. (b) What advantage do you think is given to McDonald’s through its decision to establish a call centre for remote order-taking for some of its outlets?
A laboratory process receives medical samples from hospitals in its area and then subjects them to a number of tests that take place in different parts of the laboratory. The average response time for the laboratory to complete all its tests and mail the results back to the hospital (measured from the time that the sample for analysis arrives) is 3 days. A recent process map has shown that, of the 60 minutes that are needed to complete all the tests, the tests themselves took 30 minutes, moving the samples between each test area took 10 minutes, and double-checking the results took a further 20 minutes. What is the throughput efficiency of this process? What is the value-added throughput efficiency of the process? (State any assumptions that you are making.) If the process is rearranged so that all the tests are performed in the same area, thus eliminating the time to move between test areas, and the tests themselves are improved to halve the amount of time needed for double-checking, what effect would this have on the value-added throughput efficiency?
A regional government office that deals with passport applications is designing a process that will check applications and issue the documents. The number of applications to be processed is 1,600 per week and the time available to process the applications is 40 hours per week. What is the required cycle time for the process?
3
2
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For the passport office, described above, the total work content of all the activities that make up the total task of checking, processing and issuing a passport is, on average, 30 minutes. How many people will be needed to meet demand?
The same passport office has a ‘clear desk’ policy that means that all desks must be clear of work by the end of the day. How many applications should be loaded onto the process in the morning in order to ensure that every one is completed and desks are clear by the end of the day? (Assume a 7.5-hour (450-minute) working day.)
Visit a drive-through quick-service restaurant and observe the operation for half an hour. You will probably need a stop watch to collect the relevant timing information. Consider the following questions.
(a) Where are the bottlenecks in the service (in other words, what seems to take the longest time)? (b) How would you measure the efficiency of the process? (c) What appear to be the key design principles that govern the effectiveness of this process? (d) Using Little’s law, how long would the queue have to be before you think it would be not worth joining
the queue?
6
5
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Chopra, S., Anupindi, R., Deshmukh, S.D., Van Mieghem, J.A. and Zemel, E. (2006) Managing Business Process Flows, Prentice-Hall, Upper Saddle River NJ. An excellent, although mathematical, approach to process design in general.
Hammer, M. (1990) Reengineering work: don’t automate, obliterate, Harvard Business Review, July–August. This is the paper that launched the whole idea of business processes and process management in general to a wider managerial audience. Slightly dated but worth reading.
Hopp, W.J. and Spearman, M.L. (2001) Factory Physics, 2nd edn, McGraw-Hill. Very technical so don’t bother with it if you aren’t prepared to get into the maths. However, there is some fascinating analysis, especially concerning Little’s law.
Smith, H. and Fingar, P. (2003) Business Process Manage- ment: The Third Wave, Meghan-Kiffer Press, Tampa, Fla. A popular book on process management from a BPR perspective.
Selected further reading
www.bpmi.org Site of the Business Process Management Initiative. Some good resources including papers and articles.
www.bptrends.com News site for trends in business process management generally. Some interesting articles.
www.bls.gov/oes/ US Department of Labor employment statistics.
www.fedee.com /hrtrends Federation of European Employers guide to employment and job trends in Europe.
www.iienet.org The American Institute of Industrial Engineers site. This is an important professional body for process design and related topics.
www.opsman.org Lots of useful stuff. www.waria.com A Workflow and Reengineering Association
web site. Some useful topics.
Useful web sites
Now that you have finished reading this chapter, why not visit MyOMLab at www.myomlab.com where you’ll find more learning resources to help you make the most of your studies and get a better grade?
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