Process Analysis II

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Outline
Types of Processes
Kristin
Benihana
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Operations -- Prof. Juran 3
IV.
Continuous
Flow
III.
Assembly
Line
II.
Batch
I.
Job
Shop
Low
Volume,
One of a
Kind
Multiple
Products,
Low
Volume
Few
Major
Products,
Higher
Volume
High
Volume,
High
Standard-
ization
Commercial
Printer
French Restaurant
Heavy
Equipment
Automobile
Assembly
Burger King
Sugar
Refinery
Flexibility (High)
Unit Cost (High)
Flexibility (Low)
Unit Cost (Low)
These are
the major
stages of
product and
process life
cycles
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Process Flow Structures
Continuous Flow (ex. Petroleum manufacturer)
Assembly Line (ex. Automobile manufacturer)
Batch shop (ex. Copy center making 10,000 copies of
an ad piece for a business)
Job shop (ex. Copy center making a single copy of a
student term paper)
Extreme Case: Project (ex. Legal Counsel for a
Criminal Trial)
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Operations -- Prof. Juran 5
Kristins Cookies
Order
Entry
Wash Bowl, Mix Ingredients
Resource: Self
Capacity: 3
Cycle Time: 6 minutes
Fill Tray
Resource: Roommate
Capacity: 1
Cycle Time: 2 minutes
Bake
Resource: Oven
Capacity: 1
Cycle Time: 9 minutes
Start Oven
Resource: Roommate, Oven
Capacity: 1
Cycle Time: 1 minute
Remove
Resource: Roommate
Capacity: 1
Cycle Time: 0 minutes
Cool
Resource: none
Capacity: 1
Cycle Time: 5 minutes
Pack, Collect Money
Resource: Roommate
Capacity: 1
Cycle Time: 3 minutes
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1. How long will it take for you to fill a rush order?
Assuming this order is for one dozen cookies, we will need to do the following:
Activity Resource Cycle Time Start Time Finish Time
Order Entry E-mail 0 minutes 00:00 00:00
Wash Bowl, Mix Self 6 minutes 00:00 06:00
Fill Tray Self 2 minutes 06:00 08:00
Prepare Oven Roommate 1 minute 08:00 09:00
Bake Oven 9 minutes 09:00 18:00
Remove Roommate 0 minutes 18:00 18:00
Cool None 5 minutes 18:00 23:00
Pack, Collect Money Roommate 3 minutes 23:00 26:00
Therefore, the minimum time to fill an order is 26 minutes.
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2. How many orders can you fill in a night, assuming you are open four hours
each night?
Here is a Gantt chart for two batches of one dozen cookies each. It doesn't take
twice as long to produce two batches as it does to produce one batch, because
you can start mixing the second batch without having to wait for the whole first-
batch process to be completed (you can start washing out the bowl as soon as
you finish filling the tray). It is possible to produce two batches in 36 minutes.

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In general, a formula for the number of minutes
to produce n one-dozen batches is given by this
expression:
n 10 16
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3. How much of your own and your roommate's valuable time will it take to fill
each order?
For yourself:
Activity Cycle Time
Wash Bowl, Mix 6 minutes
Fill Tray 2 minutes
Total 8 minutes
For your roommate:
Activity Cycle Time
Prepare Oven 1 minute
Remove 0 minutes
Pack, Collect Money 3 minutes
Total 4 minutes
This is assuming all orders are for one dozen cookies.
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4. Because your baking trays can hold exactly one dozen cookies, you will
produce and sell cookies by the dozen. Should you give any discount for people
who order two dozen cookies, three dozen cookies, or more? If so, how much?
Will it take any longer to fill a two-dozen cookie order than a one-dozen cookie
order?
First, let's consider costs. The cost of ingredients and the box are the same, no
matter how many dozen you bake. So the only resource that might differ with
the size of the batch is labor.
One Dozen
Activity Resource Cycle Time Start Time Finish Time
Order Entry E-mail 0 minutes 00:00 00:00
Wash Bowl, Mix Self 6 minutes 00:00 06:00
Fill Tray Self 2 minutes 06:00 08:00
Prepare Oven Roommate 1 minute 08:00 09:00
Bake Oven 9 minutes 09:00 18:00
Remove Roommate 0 minutes 18:00 18:00
Cool None 5 minutes 18:00 23:00
Pack, Collect Money Roommate 3 minutes 23:00 26:00

Self 8
Roommate 4
Total Labor Minutes 12

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Two Dozen
Activity Resource Cycle Time Start Time Finish Time
Order Entry E-mail 0 minutes 00:00 00:00
Wash Bowl, Mix Self 6 minutes 00:00 06:00
Fill Tray 1 Self 2 minutes 06:00 08:00
Fill Tray 2 Self 2 minutes 08:00 10:00
Prepare Oven 1 Roommate 1 minute 08:00 09:00
Bake 1 Oven 9 minutes 09:00 18:00
Remove 1 Roommate 0 minutes 18:00 18:00
Cool 1 None 5 minutes 18:00 23:00
Prepare Oven 2 Roommate 1 minute 18:00 19:00
Bake 2 Oven 9 minutes 19:00 28:00
Remove 2 Roommate 0 minutes 28:00 28:00
Cool 2 None 5 minutes 28:00 33:00
Pack 1 Roommate 2 minutes 23:00 25:00
Pack 2 Roommate 2 minutes 33:00 35:00
Collect Money Roommate 1 minute 35:00 36:00

Self 10
Roommate 7
Total Labor Minutes 17

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Three Dozen
Activity Resource Cycle Time Start Time Finish Time
Order Entry E-mail 0 minutes 00:00 00:00
Wash Bowl, Mix Self 6 minutes 00:00 06:00
Fill Tray 1 Self 2 minutes 06:00 08:00
Fill Tray 2 Self 2 minutes 08:00 10:00
Fill Tray 3 Self 2 minutes 06:00 08:00
Prepare Oven 1 Roommate 1 minute 08:00 09:00
Bake 1 Oven 9 minutes 09:00 18:00
Remove 1 Roommate 0 minutes 18:00 18:00
Cool 1 None 5 minutes 18:00 23:00
Prepare Oven 2 Roommate 1 minute 18:00 19:00
Bake 2 Oven 9 minutes 19:00 28:00
Remove 2 Roommate 0 minutes 28:00 28:00
Cool 2 None 5 minutes 28:00 33:00
Prepare Oven 3 Roommate 1 minute 28:00 29:00
Bake 3 Oven 9 minutes 29:00 38:00
Remove 3 Roommate 0 minutes 38:00 38:00
Cool 3 None 5 minutes 38:00 43:00
Pack 1 Roommate 2 minutes 23:00 25:00
Pack 2 Roommate 2 minutes 33:00 35:00
Pack 3 Roommate 2 minutes 43:00 45:00
Collect Money Roommate 1 minute 45:00 46:00

Self 12
Roommate 10
Total Labor Minutes 22

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Operations -- Prof. Juran 14
Let's assume your time is worth $12 per hour. Your labor costs would be:
# Cookies in Batch Minutes Cost Cost per Dozen
1 dozen 12 $2.40 $2.40
2 dozen 17 $3.40 $1.70
3 dozen 22 $4.40 $1.47
It looks like you could afford to give a discount for two- and three-dozen orders.
A two-dozen order doesn't cost twice as much as a one-dozen order.
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5. How many food processors and baking trays will you
need?

The food processor is only used in the mixing stage, and we
ought to be able to see that the processor is idle for long
periods of time, and that the real bottleneck is the oven.
Buying another food processor won't improve the
productivity of the system at all.

The number of baking trays ought to equal the maximum
number of trays you will be using at any one time. Three is
probably enough.
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Operations -- Prof. Juran 16
6. Are there any changes you can make in your
production plans that will allow you to make better
cookies or more cookies in less time or at lower cost? For
example, is there a bottleneck operation in your
production process that you can expand cheaply? What
is the effect of adding another oven? How much would
you be willing to pay for an additional oven?
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Operations -- Prof. Juran 17
Benihana: Strategy
Finance
Strategic
Planning
Human
Resources
Construction Marketing
Accounting
Operations
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Operations -- Prof. Juran 18
Inputs Processes Outputs
Food & Beverages
Labor
Customers
Capital
Debt
Management
Food & Beverage
Preparation
Store Construction
Customer consumption
of drinks & meals
Customer payment
Employee hiring &
training
Marketing
Revenue & profit
Equity value
Credit rating
Customer satisfaction
Employee satisfaction

Benihana: Strategy
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Operations -- Prof. Juran 19
Elements of the Benihana concept:
Low costs (labor, food & beverage, rent)
Aggressive promotion
Authentic japanese atmosphere
Benihana: Strategy
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Operations -- Prof. Juran 20
Also:
Decreased labor costs
Decreased food costs
Decreased beverage costs
Decreased rent
Increased construction costs
Benihana: Strategy
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Operations -- Prof. Juran 21
Benihana Typical
Labor 10-12% 30-35%
Food 30-35% 38-48%
Beverage 20% 25-30%
Rent 5-7% 5-9%
Promotion 8-10% 0.75-2.0%
Construction Somewhat More (because
of Japanese authenticity)


Benihana: Strategy
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Operations -- Prof. Juran 22
Benihana: Process Analysis
Pay
Food
Go to
Benihana
Drinks
Get
Hungry
Decide to
go to
Benihana
Never
Return
Satisfied?
Yes No
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Benihana: Process Analysis
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Important parameters:
How many chefs and waitresses there are
How frequently customers arrive at the restaurant
How quickly customers are seated, either in the bar or in the dining
area
How frequently the customers order and consume drinks
How quickly drinks are served
How long it takes to prepare the meal at the grill
How long it takes for the customers to eat their meal
How long it takes for customers to pay and leave the dining area.
Benihana: Process Analysis
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Operations -- Prof. Juran 25
Assume that the dining process takes 60 minutes, and that we want
customers in the bar for 24 minutes.
Consider three scenarios:
Bar - 8 seats; Dining area - 40 seats
Bar - 16 seats; Dining Area - 80 seats
Bar - 48 seats; Dining Area - 120 seats
Benihana: Process Analysis
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Operations -- Prof. Juran 26
Bar - 8 seats; Dining area - 40 seats
It takes 60 minutes for one customer to eat dinner, and
there are 40 seats in the dining area. Therefore 40 people
eat every 60 minutes (throughput).
On the average a dinner cycle is completed every 60
minutes/40 people = 1.5 minutes per person (cycle time).
We know that dinners are processed in batches of 8, so on
the average a table of 8 finishes every 12 minutes.
Benihana: Process Analysis
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Operations -- Prof. Juran 27
Bar - 8 seats; Dining area - 40 seats
This means that the 8-seat bar must empty every 12
minutes.
The "ideal" time for someone to remain in the bar is
about double that time (because this will be just after the
second drink has reached the table).
Therefore, it would appear that the ratio of 0.2 (8 bar
seats to 40 dining seats) is too small.
Benihana: Process Analysis
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Operations -- Prof. Juran 28
Bar - 16 seats; Dining Area - 80 seats
It takes 60 minutes for one customer to eat dinner, and
there are 80 seats in the dining area. Therefore 80 people
eat every 60 minutes (throughput).
On the average a dinner cycle is completed every 60
minutes/80 people = 0.75 minutes per person (cycle time).
We know that dinners are processed in batches of 8, so on
the average a table of 8 finishes every 6 minutes.
Benihana: Process Analysis
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Operations -- Prof. Juran 29
Bar - 16 seats; Dining Area - 80 seats
This means that the 16-seat bar must empty every 12
minutes.
Therefore, it would appear that the ratio of 0.2 (16 bar
seats to 80 dining seats) is too small.
In fact, all this does is double the restaurants capacity,
and the bar time remains at 12 minutes.
The only benefit is that 16 seats might allow the host or
hostess to do a better job of assembling groups of eight.
Benihana: Process Analysis
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Operations -- Prof. Juran 30
Bar - 48 seats; Dining Area - 120 seats
It takes 60 minutes for one customer to eat dinner, and
there are 120 seats in the dining area. Therefore 120 people
eat every 60 minutes (throughput).
On the average a dinner cycle is completed every 60
minutes/120 people = 0.5 minutes per person (cycle time).
We know that dinners are processed in batches of 8, so on
the average a table of 8 finishes every 4 minutes.
Benihana: Process Analysis
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Operations -- Prof. Juran 31
Bar - 48 seats; Dining Area - 120 seats
To send 8 people into the dining area every 4 minutes
means that the 48-seat bar must empty every 24
minutes.
Perfect!
Given our assumptions regarding the cycle times of the
bar and the dining area, it would appear that a ratio of
bar seats to grill seats of 0.4 is about right.
(In our case 120:48, but the ratio is more important than
the specific numbers.)
Benihana: Process Analysis
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Operations -- Prof. Juran 32
Benihana: Process Analysis
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Historical Development of OM
Craft System
Industrial Revolution
Scientific Management
Organizational Science
Operations Research
JIT and TQM
Supply Chain Management
Internet Commerce
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Scientific Management
Frederick Winslow Taylor,
(1856-1915), American
industrial engineer.
In 1878, he began working at
the Midvale Steel Company.
Developed measures of
productivity based on time &
motion studies.
Became rich from 100+ patents
including tempered steel.
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Taylors Industrial Environment
Large numbers of unskilled workers
Many immigrants who often didnt
speak English
Homogeneous markets meant great
returns to scale (e.g, Model T dropped
in price from $1000 to $360)
Management not viewed as a general or
learnable skill

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Scientific Management
Defined by Frederick Taylor, late 1800s.
The systematic study of the relationships
between people and tasks to redesign the
work for higher efficiency.
Taylor sought to reduce the time a worker
spent on each task by optimizing the way
the task was done.
Significant improvements in productivity
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Operations -- Prof. Juran 37 2-6
Taylors 4 Principles
Develop a science for each element of
work
Select, train, and develop workers
Cooperate with workers (share the
savings more $$$ for better
performance)
Divide work and responsibility equally
C
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Resistance to Taylor
Separation of work from planning
destroyed the traditional craft system
money substituted for pride
Unions mistrusted Taylor reduced
work force from 450 to 150 on first job
Some firms cut rates after changes
Legislation to prevent time studies in
government jobs.
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Operations -- Prof. Juran 39
Frank & Lillian Gilbreth
Time and Motion Studies
Film
Therbligs
Cheaper by the Dozen
Henry L. Gantt
Engineer; worked with Taylor
Gantt Chart
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The Gilbreths
Frank and Lillian Gilbreth refined Taylors
methods.
Made many improvements to time and motion studies.
Time and motion studies:
1. Break down each action into components.
2. Find better ways to perform it.
3. Reorganize each action to be more efficient.
Gilbreths also studied fatigue problems,
lighting, heating and other worker issues.
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Summary
Types of Processes
Kristin
Benihana