ies 303 engineering management & cost analysis | dr. karndee prichanont, siit 1 ies 303 chapter...
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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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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,
____________________________________________
____________________________________________
____________________________________________
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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?
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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
________________________________________________
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IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT
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A Systematic Approach to Process Analysis
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2
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Figure 4.2Figure 4.2
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IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT
Flowchart of the Sales Process for a Consulting Company
Figure 4.3
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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
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IES 303 Engineering Management & Cost Analysis | Dr. Karndee Prichanont, SIIT
Flowchart of the Process Showing Handoffs Between Departments
Figure 4.5
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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
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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
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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
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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
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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
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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
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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
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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
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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.