Lesson 6 Process Design

4.
Chapter 4
Process design
Shenval. Alamy
4.1
Slack, Chambers and Johnston, Operations Management, 6th Edition, Nigel Slack, Stuart Chambers, and Robert Johnston 2010
4.2
How many squares do you see?

4.2
4.3
Process design
Operations strategy Operations management
Supply network design

Layout and flow
Design
Improvement
Planning and control People, jobs and organization
Process technology
Product/ service design
4.3
4.4
Key Teaching Objectives

To demonstrate the broad relevance of the design issue to processes as well as products and services. To stress the importance of volume and variety in design. To introduce the concept of process types. To demonstrate the broad relevance and importance of the details of process design. To establish the idea that detailed process design must be connected to the overall objectives of the operation. To give experience in simple process mapping. To introduce Littles Law as a fundamental law of operations and process management. To introduce the implications of variability in process behaviour.
4.4
4.5
Nature and purpose of the design activity
Products, services and the processes which produce them all have to be designed.
Decisions taken during the design of a product or service will have an impact on the decisions taken during the design of the process which produces those products or services and vice versa.
4.5
4.6
The design of products/services and processes are interrelated and should be treated together
Products and services should be designed in such a way that they can be created effectively.
Product/service design has an impact on the process design and vice versa. Processes should be designed so they can create all products and services which the operation is likely to introduce.
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4.7
The overlap of activities is greater in service design
In manufacturing operations overlapping the activities of product and process design is beneficial. In most service operations the overlap between service and process design is implicit in the nature of service.
4.7
4.8
Designing processes
There are different process types. Process types are defined by the volume and variety of items they process. Process types go by different names depending on whether they produce products or services.
4.8
4.9
Manufacturing process types

Process tasks
Diverse/ complex
Process flow High

Intermittent
Project Jobbing
Variety
Batch
Mass Continuous Low Volume High
Repeated/ divided
Continuous
Low
4.9
4.10
Project processes
One-off, complex, large scale, high work content products Specially made, every one customized
Defined start and finish: time, quality and cost objectives

Many different skills have to be coordinated.
4.10
4.11
Jobbing processes
Very small quantities: one-offs, or only a few required Specially made. High variety, low repetition. Strangers every one customized Skill requirements are usually very broad Skilled jobber, or team, complete whole product.
4.11
4.12
Batch Processes
Higher volumes and lower variety than for jobbing

Standard products, repeating demand. But can make specials
Specialized, narrower skills Set-ups (changeovers) at each stage of production.

4.12
4.13
Mass (line) processes
Higher volumes than batch Standard, repeat products (runners) Low and/or narrow skills No set-ups, or almost instantaneous ones.
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4.14
Continuous processes
Extremely high volumes and low variety: often single product Standard, repeat products (runners) Highly capital-intensive and automated Few changeovers required Difficult and expensive to start and stop the process.
4.14
4.15
Service process types

Process tasks
Diverse/ complex
Process flow
High
Intermittent
Professional service
Variety
Service shop
Mass service
Repeated/ divided Continuous
Low
Low
Volume
High
4.15
4.16
Professional service; E.g. Consultancy
High levels of customer (client) contact. Clients spend a considerable time in the service process. High levels of customization with service processes being highly adaptable. Contact staff are given high levels of discretion in servicing customers. People-based rather than equipment-based.
4.16
4.17
Service shops ; E.g. Health Clubs / Gyms
Medium levels of volumes of customers.
Medium, or mixed, levels of customer contact

Medium, or mixed, levels of customization Medium, or mixed, levels of staff discretion.
4.17
4.18
Mass service; E.g. Account Management Centre
High levels of volumes of customers Low to medium levels of customer contact Low, or mixed, levels of customization Low, or mixed, levels of staff discretion.
4.18
4.19
Deviating from the natural diagonal on the productprocess matrix has consequences for cost and flexibility
Manufacturing operations process types Project Jobbing
Volume Variety
Service operations process types None Professional service
Batch
Mass
Less process flexibility than is needed so high cost
More process flexibility than is needed so high cost
Service shop
Continuous None
Mass service
The natural line of fit of process to volume/variety characteristics

4.19
4.20
Detailed Process Design
After the overall design of a process has been determined, its individual activities must be configured. The detailed design of a process involves:
identifying all the individual activities that are needed to fulfil the objectives of the process,
deciding on the sequence in which these activities are to be performed and who is going to do them.
4.20
4.21
Process Mapping
Process mapping 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). Mapping 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 are used to classify different types of activity

4.21
4.22
Process mapping symbols

Process mapping symbols derived from Scientific Management
Operation (an activity that directly adds value) Inspection (a check of some sort) Transport (a movement of something) Delay (a wait, e.g. for materials)
Process mapping symbols derived from Systems Analysis

Beginning or end of process Activity
Input or Output from the process
Direction of flow
Storage (deliberate storage, as opposed to a delay)
Decision (exercising discretion)
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4.23
How to produce a process map

Consult with the experts. These are the people managing and working with the process. Identify the boundaries. Where does the process begin? where does it end? Identify the participants. What roles are involved in the processes? Hand draw the process in front of the expert, getting then to confirm the steps. Identify the steps. What is done first? What is done next? By who? Identify the decision points. What are the alternatives? What determines which alternative is chosen? Draw an initial process flow. Draw and label the swim lanes (see next slide for details) using standard symbols. Check for completeness. Are all participants represented? Are all processes shown? Are there any alternatives that have not been considered? Refine and finalise. Review with the experts to ensure completeness.
4.23
4.24
Draw and label the swim lanes
Employee
Supervisor
Administration
The swim lanes represent the area of involvement of each participant who has a role in the processes being mapped. The participant may be an individual, a team, a department or an organisation.
4.24
4.25
Add in the process flows

1.1 Fill out expense form 1.2 Submit expense form
Employee
Supervisor
Administration Starting at top left with the start symbol. Draw processes along the swim lane, and use arrows to represent the sequence. Each process is given a number, and starts with a verb.
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4.26
Swap lanes and enter decision points

1.1 Fill out expense form 1.2 Submit expense form
Employee
1.4.1 notification to employee No 1.4 Expense s Valid? Yes

1.5 Submit authorised expense form
Supervisor
1.3 Receive expense form
Administration When a process is performed by a different participant switch lanes. If the next step depends on a decision show this as in the example above, labelling the alternatives and showing the steps that follow.
4.26
4.27
Complete the process map

Remove any unused swim lanes. Make sure there is one start point and all flows have an end point. Check that all decision points have all options labelled and have flow arrows to the next step.
Review with participants for verification.

An example of a completed process map is shown on the next slide.
4.27
4.28
Business process 1 Process expense claim

1.1 Fill out expense form 1.2 Submit expense form m
1.3 Receive expense form m
Employee
1.4.1 notification to employee No
1.8.1 notification to employee
1.4 Expenses
Valid? m
1.5 Submit authorised Yes expense form m
Supervisor
1.6 Receive expense form 1.8 Make payment m so l
Administration
1.7 Log expense form
4.28
M = manual
Slack, Chambers and Johnston, Operations Management, 6th Edition, Nigel Slack, Stuart Chambers, and Robert Johnston 2010 Sol = facilitated by solution
so l
4.29
Defining a Process (S-I-P-O-C)

SIPOC Diagram Defined
A SIPOC Diagram is a visual representation of a high-level process map; including suppliers & inputs into the process and outputs & customers of the process Visually communicates the scope of a project
4.29
4.30
SIPOC Defined
SIPOC is an acronym standing for 1. S = Supplier(s) 2. I = Input(s) & key requirements 3. P = Process 4. O = Output(s) & key requirements 5. C = Customer(s)
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4.31
How can SIPOC be used?

SIPOC Diagrams help a team and its sponsor(s) agree on project boundaries and scope A SIPOC helps teams verify that
inputs match outputs of upstream processes outputs match inputs of downstream processes
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4.32
SIPOC DIAGRAM EXAMPLE

SIPOC DIAGRAM - High Level Cost Data Integrity Project
SIPOC Help
Supplier
Employees Contractors
Input
Employee Setup Data Contractor Setup Data
Process
Output
Active Employee Record Active Contractor Record
Customer
Project Manager and Team Project Manager and Team
Setup Resources
Employees & Contractors Contracting Officer
Planning Meeting Statement of Work
Assign Activities to Resources Assign Rates to Resources
Project Schedule Project Schedule
Payroll Department Contractors
Employee Pay Rates Contractor Pay Rates
Rate Table Rate Table
System Administrator System Administrator
Employees Contractors (Time & Materials)
Timesheets Timesheets
Enter Time Sheets
Labor Cost Report Labor Cost Report
Contractors (Fixed Priced)
Invoices
Enter Vendor Invoices Summarize and Report Costs
Contractor Cost Report
Project Manager and Team
Project Management System
Timesheet & Invoices
Monthly Performance Reports
CIO, Program Managers, VP Finance
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4.33
Map Analysis Elimination of Waste

Delays Duplication Unnecessary approvals Hand-offs Errors Uncertainties
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4.34
Process Design - Example

The retail catering operation of a large campus university has a number of outlets around the campus selling sandwiches. Most of these outlets sell standard sandwiches that are made in the universitys 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 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 diagrams below.
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4.35
Customized sandwich making process old process
Raw materials
Assembly
Stored sandwiches
Move to outlets
Stored sandwiches
Sell
Take payment
Standard sandwich process
Customer request
4.35
4.36
Customized sandwich Process old process (Continued)
Raw materials
Assembly
Take payment
Customer request
4.36
4.37
Customized sandwich - new process
Assemble whole sandwich Assembly of sandwich bases Use standard base?
No
Fillings
Take payment
Bread and base filling Stored bases
Yes Customer request Assemble from standard base
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4.38
Process Design - Example

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 below illustrates this for the new customized sandwich operation.
At the highest level the process can be drawn simply as an input transformationoutput process 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 customers request, is all contained in the general activity assemble as required.
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4.39
Higher level process map

Prepare Sandwich materials and customers Assemble as required Take payment Customers assembled to sandwiches
The operation of making and selling customized sandwiches
Bread and base filling Assemble whole sandwich Use standard base? No Yes Customer request Assemble from standard base Stored bases Fillings
The outline process of making and selling customized sandwiches
The detailed process of assembling customized sandwiches
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4.40
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 below shows the flow process chart which a 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 payables activities were combined with the cash-receipts 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 combination 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.
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4.41
Flow process charts for processing expense

1 2 3 4 5 Description of activity Report arrives Wait for processing Check expenses report Stamp and date report Send cash to receipt desk Wait for processing 1 2 3 4 5 6 7 8 9 Description of activity Report arrives Stamp and date report Check expenses report Attach payment voucher Wait for batching Collect retorts into batch Batch to audit desk
Check advance payment 7 8 Send to accounts receivable 9 Wait for processing 10 Check employee record 11 Send to account payable Attach payment voucher 12
13 14
15 16 17 18 19 20 21 22 23 24
Log report
Check against rules

Wait for batching Collect retorts into batch Batch to audit desk Wait for processing Batch of reports logged Check payment voucher Reports to batch control Batch control number Copy of reports to filing
Wait for processing Check reports and vouchers Reports to batch control 10 11 Batch control number Copy of reports to filing 12 Reports filed 13 14 Payment voucher to keying 15 Confirm payment Totals 5 5 2 2 1
Before After
Reports filed 25 Payment voucher to keying 26 Confirm payment Totals 7 8 5 5 1
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4.42
Throughput, cycle time and work-in-process

The new customized sandwich process has one advantage over the old process: it is faster in the sense that customers spend less time in the process. This brings in the following benefits:
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.
4.42
4.43
Throughput, cycle time and work-in-process

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 The above mathematical equation is called Littles law
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4.44
Littles law (a really quite useful law)

Throughput (TH) = Work In Process (WIP) x Cycle Time (CT)
Cycle time = 2 mins
WIP = 10 Throughput time = ? Throughput time = 10 2 mins Throughput time = 20 mins
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4.45
Littles law (a really quite useful law) (Continued)

A teacher needs to mark 500 exam scripts in 5 days (working 7 hours a day). It takes 1 hour to mark a script. How many markers are needed? Throughput time = 5 days 7 hours = 35 hours 35 hours = 500 scripts Cycle times Cycle time = 35 hours = 0.07 hours = 4.2 minutes 500 scripts
Number of markers = Work content = 1 hour = 14.29 Cycle time 0.07
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4.46
Throughput efficiency
Throughput efficiency is the work content of whatever is being processed as a percentage of its throughput time
Throughput efficiency =
Work content Throughput time
100
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4.47
Throughput efficiency Worked example

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?
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4.48
Throughput efficiency - example

WIP= 15,000 applications
Cycle time = Time producing Time producing = Number produced 8 hours 5000 = 480 minutes = 0.096 5000
From littles law; Throughput time = WIP Cycle time Throughput time = 15000 0.096 = 1440 minutes = 24 hours = 3 days of working Throughput efficiency = Work content Throughput time time = 25 1440 = 1.74 %
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 1.74 % of the time they are in the process.
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4.49
The Effect of Process Variability

Causes of variability in processes:
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
These sources of variation interact with each other to give 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.
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4.50
The Effect of Process Variability

The greater the variability in the process, the more the waiting time utilization deviates from the simple rectangular function of the no variability conditions: This phenomenon has important implications for the design of processes and it presents three options to process designers wishing to improve the waiting time or utilization performance of their processes: 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 utilization and short waiting times (point Z).
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4.51
Throughput time and capacity utilisation
Arrival Arrival 30 9 515 10 Processing 10 515 Processing frequency frequency 20 time time mins mins mins (demand) (demand) mins
Utilization Utilization = 33.33 50 100 % % %%% Q Q Q = = = 0infinity 0 Utilization= =100 <100% Q = >0
High
time Process length of queue Average throughput (or inventory)
High utilization but long throughput times
X
Low utilization but short throughput times
Y
X X
60%
Low
Reduce process Z variability

80%
20%
40%
100%
Capacity utilization
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4.52
Process utilization, waiting time and variability
Average number of units waiting to be processed
Average number of units waiting to be processed
High utilization but long waiting time Reduction in process variability Short waiting time but low utilization Y Z X
Decreasing variability
10 20 30 40 50 60 70 80 90 100 Utilization
10 20 30 40 50 60 70 80 90 100 Utilization
(a) Decreasing variability allows higher utilization without long waiting times.
(b) Managing process capacity and/or variability.
4.52

Lesson 6 Process Design

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4.

How many squares do you see?

Supply network design

Planning and control People, jobs and organization

Product/ service design

Key Teaching Objectives

Nature and purpose of the design activity

The overlap of activities is greater in service design

Manufacturing process types

Process flow High

Mass Continuous Low Volume High

Defined start and finish: time, quality and cost objectives

Higher volumes and lower variety than for jobbing

Specialized, narrower skills Set-ups (changeovers) at each stage of production.

Mass (line) processes

Service process types

Professional service; E.g. Consultancy

Service shops ; E.g. Health Clubs / Gyms

Medium levels of volumes of customers.

Medium, or mixed, levels of customer contact

Mass service; E.g. Account Management Centre

Service operations process types None Professional service

More process flexibility than is needed so high cost

The natural line of fit of process to volume/variety characteristics

Detailed Process Design

Process mapping symbols are used to classify different types of activity

Process mapping symbols

Process mapping symbols derived from Systems Analysis

Input or Output from the process

Decision (exercising discretion)

How to produce a process map

Draw and label the swim lanes

Add in the process flows

Swap lanes and enter decision points

1.4.1 notification to employee No 1.4 Expense s Valid? Yes

1.3 Receive expense form

Complete the process map

Review with participants for verification.

Business process 1 Process expense claim

1.4.1 notification to employee No

1.8.1 notification to employee

1.5 Submit authorised Yes expense form m

1.7 Log expense form

Defining a Process (S-I-P-O-C)

How can SIPOC be used?

SIPOC DIAGRAM EXAMPLE

Employees & Contractors Contracting Officer

Planning Meeting Statement of Work

Assign Activities to Resources Assign Rates to Resources

Project Schedule Project Schedule

Project Manager and Team Project Manager and Team

Payroll Department Contractors

Employee Pay Rates Contractor Pay Rates

Rate Table Rate Table

System Administrator System Administrator

Employees Contractors (Time & Materials)

Enter Time Sheets

Labor Cost Report Labor Cost Report

Project Manager and Team Project Manager and Team

Contractors (Fixed Priced)

Enter Vendor Invoices Summarize and Report Costs

Contractor Cost Report

Project Manager and Team

Project Management System