ies 303 engineering management & cost analysis | dr. karndee prichanont, siit 1 ies 303 chapter...

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1 IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT IES 303 Chapter 4: Process Analysis Objectives: Introduce some practical tools used in designing and improving processes Week 4 Dec 1, 2005

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1

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

IES 303

Chapter 4: Process Analysis

Objectives: • Introduce some practical tools used in designing and improving processes

Week 4 Dec 1, 2005

2

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Process Analysis

Understanding how process work is essential to ensuring the competitiveness of a company

Example of 2 fast-food restaurants

If restaurant A can delivery a hamburger to customer

for $0.50 in direct costs and restaurant B costs $0.75,

____________________________________________

____________________________________________

____________________________________________

Example of 2 fast-food restaurants

If restaurant A can delivery a hamburger to customer

for $0.50 in direct costs and restaurant B costs $0.75,

____________________________________________

____________________________________________

____________________________________________

3

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Objectives of Process AnalysisTo be able to answer the following key questions:

How many customers can the process handle per hour?

How long will it take to serve a customer?

What change is needed in the process to expand capacity?

How much does the process cost?

What part of process should be improved or eliminated in order to reduce non-value added cost?

4

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Measuring Process Performance Productivity

Ratio of output to input

________________________________________________

Efficiency

Ratio of actual output of a process relative to some standard

________________________________________________

Throughput Time

________________________________________________

Utilization

________________________________________________

5

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

6

5

A Systematic Approach to Process Analysis

3

2

4

Figure 4.2Figure 4.2

1

6

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Flowchart of the Sales Process for a Consulting Company

Figure 4.3

7

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Flowchart of Nested Subprocess of Client Agreement and Service Delivery Step

Figure 4.4Figure 4.4

8

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Flowchart of the Process Showing Handoffs Between Departments

Figure 4.5

9

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Flow DiagramsService visible to customer

Customer departs with car

Repair not authorized

Repair authorized

Service not visible to customer

* = Points critical to the success of the service † = Points at which failure is most often experienced

Collect payment

Notify customer

Figure 4.6

Customer drops off

car

Mechanic makes

diagnosis*

Discuss needed

work with customer*

Order parts

Parts available

Checkparts

availability†

Perform work†

Parts not available

Inspect/ test and repair

Perform corrected

work

Corrective work necessary

Repair complete

10

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Process Charts

11

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Recommended readings “Work measurement at United Parcel Service

(UPS)” from Operations Management for Competitive Advantages, page 192

“Customer-Driven Service for McDonald’s – Self-ordering kiosks and environment” from Operations Management for Competitive Advantages, page 153 - 154

12

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Case Exercise

Select a process (service or manufacturing)

Example of service system: MK restaurant (dine-in or delivery)

SIIT registration process

Write a flow diagrams and/or process chart for its operations

13

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Pareto Charts

Figure 4.9Figure 4.9

Figure 4.10Figure 4.10

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IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Cause-and-Effect DiagramEx: Checker Board Airlines

Passenger processing at gatePassenger processing at gate

Late cabin cleanersLate cabin cleaners

Unavailable cockpit crewUnavailable cockpit crew

Late cabin crewLate cabin crew

Personnel

Aircraft late to gateAircraft late to gate

Mechanical failuresMechanical failures

Equipment

Procedures

Waiting for late passengersWaiting for late passengers

Weight/balance sheet lateWeight/balance sheet late

Poor announcement of departuresPoor announcement of departures

Delayed check-in procedureDelayed check-in procedure

Delayed flight departures

Materials

Late food serviceLate food service

Late fuelLate fuel

Late baggage to aircraftLate baggage to aircraft

Contractor not providedContractor not provided updated scheduleupdated schedule

Figure 4.11Figure 4.11

WeatherWeather

Air traffic delaysAir traffic delays

Other

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IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Tools for Improving Quality Tools for Improving Quality Wellington Fiber Board Co.

Step 1—Checklist Step 2—Pareto chart Step 3—Cause-and-effect diagram Step 4—Bar chart

16

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Wellington Fiber Board Co.

ChecklistsChecklists

Headliner Defects

Defect type Tally Total

A. Tears in fabric //// 4

B. Discolored fabric /// 3

C. Broken fiber board //// //// //// //////// //// //// / 36

D. Ragged edges //// // 7

Total 50Figure 4.12Figure 4.12

17

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Wellington Fiber Board Co.

Pareto ChartPareto Chart

CC

DDAA BB

100100

8080

6060

4040

2020

00

Cu

mu

lati

ve p

erce

nta

ge

Cu

mu

lati

ve p

erce

nta

ge

Nu

mb

er o

f d

efec

tsN

um

ber

of

def

ects

5050

4040

3030

2020

1010

00Defect typeDefect typeFigure 4.12Figure 4.12

18

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Wellington Fiber Board Co.

Cause-and-Effect DiagramCause-and-Effect Diagram

Figure 4.12Figure 4.12

Out of specificationOut of specification

Not availableNot available

Materials

HumidityHumidity

Schedule changesSchedule changes

Other

Machine maintenanceMachine maintenance

Machine speedMachine speed

Wrong setupWrong setup

Process

TrainingTraining

AbsenteeismAbsenteeism

CommunicationCommunication

People

Broken fiber

board

19

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Wellington Fiber Board Co.

Bar ChartBar Chart2020

1515

1010

55

00

Nu

mb

er

of

bro

ke

n f

ibe

r b

oa

rds

Nu

mb

er

of

bro

ke

n f

ibe

r b

oa

rds

FirstFirst SecondSecond ThirdThirdShiftShiftFigure 4.12Figure 4.12

20

IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT

Next weekCase: Jose’s Authentic Mexican Restaurant

Read and analyze the case: Jose’s Authentic Mexican Restaurant, textbook page 166

Answer the posted questions. Also perform and construct any applicable graphical displays in analyzing the problem.