Managing Toward Perfection

Similar documents
Matching Supply with Demand

Finished goods available to meet Takt time when variations in customer demand exist.

Siegwerk Academy. Introduction to the Theory Of Constraints TOC

PLUS VALUE STREAM MAPPING

Process Mapping. You cannot improve a process until everyone agrees on what the process is.

Lecture 9 MBF2213 Operations Management Prepared by Dr Khairul Anuar. L9: Lean synchronization

"Value Stream Mapping How does Reliability play a role in making Lean Manufacturing a Success " Presented by Larry Akre May 17, 2007

Continuous Improvement Toolkit. Value Analysis

Continuous Improvement Toolkit

Michael A. Nolan t/a A MAN 4 Lean Innovation part of Pembroke Alliance

Key of Toyota management success By Yi Jiang

Lean for Internal Audit Overview

Lean Manufacturing Implementation in Small and Medium Industry

10 Steps to become a Lean Enterprise. Level 2 Lean Practitioner In Manufacturing Training Course. Step 1 - Part 2

LEARNING TO SEE an introduction to lean thinking

PRACTICE PROBLEM SET Topic 1: Basic Process Analysis

Lean Thinking - Doing More With Less

Lean Project Delivery Operating System

A PROPOSED FRAMEWORK FOR LEAN WAREHOUSING

Lean Means Speed. Alessandro Anzalone, Ph.D Hillsborough Community College, Brandon Campus

Optimizing Inplant Supply Chain in Steel Plants by Integrating Lean Manufacturing and Theory of Constrains through Dynamic Simulation

Lean Thinking. Continuous improvement is about removing stuff that get in the way of your things working well.

Eliminate Waste and. Increase Value

The Book of Value Stream Maps II

to Save Time and Money Presenter: Anita Patel Business & Finance Administrator Lake County Planning, Building & Development Department

Lean manufacturing concept: the main factor in improving manufacturing performance a case study

Lean Principles in Facility Management

JIT and Lean Operations. JIT/Lean Operations

The entire presentation kit is having 2 main directories as below. Just in Time. 01 Introduction

MANUFACTURING ERP SOFTWARE BUYERS GUIDE

Simulation of Lean Principles Impact in a Multi-Product Supply Chain

World Class Manufacturing SMED. Single-Minute Exchange of Die

Outline. Push-Pull Systems Global Company Profile: Toyota Motor Corporation Just-in-Time, the Toyota Production System, and Lean Operations

It s Not Easy Being Lean. C G Clark Consulting Group

Managerial Accounting and the Business Environment

Operations Management

Harold s Hot Dog Stand Part I: Deterministic Process Flows

Journal of American Science 2015;11(5) Implementation of Lean Logistics in Apparel Manufacturing

Historical Phases of Production

Lean Production Management In Design

Capital Markets Day. Lean production of the Kokkola zinc smelter. November Harri Natunen. Bildplatshållare. President Boliden Zinc Smelters

Activity on Arrow (AOA) network model to enable mold productivity optimization

Value Stream Mapping

Lean Six Sigma with Akron Children s Hospital

Lean Simulation. Medical Records Department. November 22, 2011 ISO 9001:2000

SEVEN (7) PRINCIPLES FOR IMPROVING WORKFLOW

Using Visual Management to Identify Office Waste

Copyright Infor. All Rights Reserved.

Lean Thinking: Examples and Applications in the Wood Products Industry

Lean Gold Certification Blueprint

CIPS Exam Report for Learner Community:

Lean and Agile Manufacturing as productivity enhancement techniques - a comparative study

Lean Enterprise Portfolio Management

An Action Plan for Lean Services

LEAN APPROACH IN MANUFACTURING

Scale. Becoming a Lean Enterprise with IBM and SAFe

Optimizing Inventory Control at PT. Total Pack Indonesia by Using Kanban System

An Introduction to Mining Business Improvement Initiatives Mapping the Steps to Increased Profits Mike Beare, Minex Conference 2009

Process 1 Process 2 Process 3

ISSN: ISO 9001:2008 Certified International Journal of Engineering Science and Innovative Technology (IJESIT) Volume 2, Issue 4, July 2013

OPERATING SYSTEMS. Systems and Models. CS 3502 Spring Chapter 03

Reviewed by Paul Harmon

Continuous Improvement

Production Scheduling

About TechSolve. Non-profit process improvement consulting firm

Introduction to Lean CAPTURE AND LEVERAGE THE LEAN ADVANTAGE. Introduction to Lean. Learning Objectives

HEADER BIDDING: A BYTE-SIZED OVERVIEW

Differential Analysis: Relevant Costs the Key to Decision Making

Politecnico di Torino. Porto Institutional Repository

Justifying Simulation. Why use simulation? Accurate Depiction of Reality. Insightful system evaluations

A Lean Logistic Framework: Applications in the Wood Fiber Supply Process

Differentiators that Make a Difference

Just-in-Time System. Dr S G Deshmukh

Service Operations Management

The Airbus Group Australia Pacific journey towards a sustainable Lean culture (6 years and counting ) Ken Millar Vice President Fixed Wing March 2016

NAME DATE CLASS. In the first column, answer the questions based on what you know before you study. After this lesson, complete the last column.

LEAN ADMINISTRATION.

DevOps: Accelerating Application Delivery. DevOps on IBM i: Barriers, Techniques, and Benefits to the Business

Just-In-Time (JIT) Manufacturing. Overview

Streamline: Progressions in Product Compliance (Part 1 of 4)

Strategic Sourcing Makes an Impact! David H. Vargas, Purchasing Manager Sikorsky Aircraft 203/ ;

Introduction to the Toyota Production System (TPS)

Blue Pear Ventures. Pitch Lesson

De-Mystifying Kanban:

BUSINESS PROGRAMS UNDERGRADUATE PURPOSE 7 HANDBOOK. Managing Capital Markets. School of Management, Business Programs

Lecture 11: CPU Scheduling

What is 5S principle? 5S Training of Trainers for Training Institutions Training material No. 13

Introduction to Lean Thinking January 12, 2016

MIT Manufacturing Systems Analysis Lecture 1: Overview

Improving Scrum with. Lean Thinking Nuno Rafael SGMUN 2016

Ch 26 Just-In-Time and Lean Production. What is Lean Production? Structure of Lean Production System. Activities in Manufacturing.

LeanView. User s Guide. For use with versions of LeanView.

LEAN ROUTE-TO-MARKET.

Lean Flow Enterprise Elements

EVALUATION OF THE USE OF TOOLS LEAN MANUFACTURING TOOLS IN A SUPPLY CHAIN OF THE BRAZILIAN PHARMACEUTICAL INDUSTRY

Westinghouse Waste Simulation and Optimization Software Tool 13493

reasons to invest in a CMMS

Make the difference with Lean Finance

LEAN PROCUREMENT.

LEAN CERTIFICATION BODY OF KNOWLEDGE RUBRIC VERSION 3.0

Transcription:

CHAPTER 3 Evaluating Process Capacity The maximum amount a process can produce in a given unit of time. Objective: to take a fairly technical and complex operation and simplify it to a level suitable for managerial analysis. Elements: preparing a process flow diagram, finding the capacity and bottleneck of the process, computing the utilization of various process steps, and computing a few other performance measures. Managing Toward Perfection A Toyota view: We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes. Source: James P. Womack, In Search of the Perfect Process. 2 Process Capacity 1

How to Create a Process Flow Diagram? A process flow diagram is a graphical way to describe the process and it will help us to structure the information we collect during the process improvement project. 3 5 1 7 8 2 4 6 Arrows Indicate the flow of the flow unit Multiple flow unit types possible (see Section 3.5) Inventory / Buffers Do NOT have a capacity; however, there might be a limited number of flow units that can be put in this inventory space at any moment of time Multiple flow unit types possible Activities Carried out by resources Add value and are required for completion of the flow unit May or may not carry inventory Have a capacity (maximum number of flow units that can flow through the activity within a unit of time) 3 Calculating times on paths through the network Determining the critical path through the network Theoretical flow time 1. Reduce the work content of an activity on the critical path Eliminate non-value-adding aspects of the activity ( work smarter ). Increasing the speed at which the activity is done ( work faster ), Acquire faster equipment Increase incentives to work faster Reduce the number of repeat activities ( do it right the first time ), and Change the product mix to produce products with smaller work content with respect to the specified activity. 2. Move some of the work content off the critical path. Move work from a critical path to a non-critical path, and Move work from a critical path to the outer loop (pre- or post processing). Anupindi, et al, Managing Business Process Flows 4 Process Capacity 2

Value Added vs. NVA Time Just track any work items as it flows through the process and classify the time into one of three categories: (1) value-added work, (2) waste that is required for business reasons, and (3) delays/waste. Then draw a timeline and mark off the time segments for each of these categories. In the example shown, the value-added work (shaded above the centerline) shows the buyer in this purchasing organization is only working the order for 14 minutes of the 4 day cycle. The majority of the time, delineated by white space, is idle queueing time. Lean Six Sigma by George, et al. 5 Productivity The Seven Sources of Waste 6 Process Capacity 3

Understand Sources of Wasted Capacity Poor use of capacity Waste of the Resource s time Overproduction Transportation Rework Over-processing Motion The seven sources of waste (Muda) Potential eighth source of waste: The waste of intellect Not orthogonal to each other Inventory Waiting Poor flow Waste of Customer s time Taichi Ohno, Chief Engineer at Toyota The first five sources are RESOURCE centric (and correspond to capacity): Ask yourself: What did I do the last 10 minutes? How much was value-add? Look around at the work-place (360 degree) what percentage of people are working? The last two sources are FLOW UNIT centric (and correspond to Flow Time and Inventory) Ask yourself: Did I really have to be here that long? 7 Source: Lean Learning Center, Value Stream Mapping Course Notes. 8 Process Capacity 4

Source: Lean Learning Center, Value Stream Mapping Course Notes. 9 Process Analysis Introduction / The three measures 10 Process Capacity 5

Processes: The Three Basic Measures Flow rate / throughput: number of flow units going through the process per unit of time Flow Time: time it takes a flow unit to go from the beginning to the end of the process Inventory: the number of flow units in the process at a given moment in time Flow Unit: Customer or Sandwich 11 Process Analysis Little s Law 12 Process Capacity 6

Processes: The Three Key Metrics 13 Little s law: It s more powerful than you think... What it is: Inventory (I) = Flow Rate (R) * Flow Time (T) How to remember it: - units Implications: Out of the three fundamental performance measures (I,R,T), two can be chosen by management, the other is GIVEN by nature Hold throughput constant: Reducing inventory = reducing flow time Given two of the three measures, you can solve for the third: Indirect measurement of flow time: how long does it take you on average to respond to an email? You write 60 email responses per day You have 240 emails in your inbox 14 Process Capacity 7

Little s law: Some remarks Not an empirical law Robust to variation, what happens inside the black box Deals with averages variations around these averages will exist Holds for every time window Shown by Professor Little in 1961 15 Process Analysis Finding the bottleneck 16 Process Capacity 8

3.2 Bottleneck, Process Capacity and Flow Rate (Throughput) Flow Rate R: Demand vs. Capacity Constrained Supply constrained Demand constrained Input Bottleneck (Capacity) Input Bottleneck (Capacity) Flow Rate Flow Rate Demand Excess capacity Excess capacity Demand Flow Rate=Min{Demand, Capacity} The overall process capacity is determined by the resource with the smallest capacity. We refer to that resource as the bottleneck. 17 Steps for basic process analysis with one type of flow unit 1.Find the capacity of every resource; if there are multiple resources performing the same activity, add their capacities together. 2.The resource with the lowest capacity is called the bottleneck. Its capacity determine the capacity of the entire process (process capacity). 3.The flow rate is found based on Flow Rate = Minimum {Available input, Demand, Process Capacity} We find the utilization of the process as Flow rate Process utilization = -------------------------------- Process capacity Similarly, we find the utilization of each resource as Flow rate Utilization of resource = -------------------------------- Capacity of resource 18 Process Capacity 9

Basic Process Vocabulary Processing times: how long does the worker spend on the task? Capacity=1/processing time: how many units can the worker make per unit of time If there are m workers at the activity: Capacity=m/activity time Bottleneck: process step with the lowest capacity Process capacity: capacity of the bottleneck Flow rate =Minimum{Demand rate, Process Capacity) Utilization =Flow Rate / Capacity Flow Time: The amount of time it takes a flow unit to go through the process Inventory: The number of flow units in the system 19 Process Analysis Multiple flow units 20 Process Capacity 10

Processes with Multiple Flow Units Foreign Dep. m=2 Contact 20 min/app faculty/ other persons Foreign acc. 3 cases per hour 11 cases per hour EZ form 4 cases per hour Regular File m=1 File 3 min/app Contact Department prior 1 employers m=3 15 min/app Print invoice Confirmation m=1 letter 2 min/app Benchmark Department 2 gradesm=2 8 min/app Approach 1: Adding up Demand Streams Process Capacity 11

Approach 2: A Generic Flow Unit ( Minute of Work ) Steps for Basic Process Analysis with Multiple Types of Flow Units 1. For each resource, compute the number of minutes that the resource can produce 2. Create a process flow diagram, indicating how the flow units go through the process 3. Create a table indicating how much workload each flow unit is consuming at each resource 4. Add up the workload of each resource across all flow units. 5. Compute the implied utilization of each resource as The resource with the highest implied utilization is the bottleneck Note: you can also find the bottleneck based on calculating capacity for each step and then dividing the demand at this resource by the capacity 24 Sources: MSWD 3e PPT, Terwiesch Coursera Notes and Others as Noted Process Capacity 12