Process & Capacity Analysis

A B Raju, CEO
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Processes and Operations

Internal and
external customers

Inputs
• Workers Processes and
• Managers operations
• Equipment Outputs
• Facilities 1 3 • Services
• Materials 5 • Goods
• Services
• Land 2 4
• Energy

Information on
performance
Process Analysis

 A process is an operation which helps in transforming the inputs into value-

added outputs

 Various processes are - assembling various components into computer or a

bicycle, converting iron ore into steel, making all necessary arrangements
for your vacation by a tour operator

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Slot machine in a Casino

 This slot machine has a payback of 95% and has a cycle time of 15 seconds
(a player can feed one one rupee coin at the interval of 15 seconds). If you
go with Rs.100 to this slot machine how long can you play?

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Slot machine

 You can feed 240 coins at the rate of one per 15 seconds in an hour.

 The pay out is 95%- so you would get back Rs.228 in an hour thus the slot
machine keeping Rs.12/hour of your playing on an average.

 So your Rs.100 would last for 100/12 = 8.33 hours

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Types of Processes

 One categorization we have seen – Project process, Job process, Batch

process, Line process and Continuous process

 The other categorization is – single stage (milk pouch packing or our slot
machine) and multi stage (chocolate making to airplane manufacturing)

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Types of processes

 The other categorization of processes is

 Make To Order (MTO)

 Assemble To Order (ATO) / Hybrid and
 Make To Stock (MTS)

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 Processes at
manufacturing
High

organizations
Customization

Low
Low High
Volume
 Processes at
manufacturing
High

organizations
Project process
• Selecting location for new plant
Customization

in Europe
• Installing ERP for a
manufacturing firm’s business
processes

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations
Customization

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations

Job process
Customization

• Machining precision metal tubes

• Internal consulting team at
manufacturing firm

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations
Job process
• Machining precision
metal tubes
• Internal consulting team
Customization

at manufacturing firm

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations
Job process
• Machining precision
metal tubes
Batch process
• Internal consulting team
Customization

at manufacturing
• Forging process to make firm fittings for pressure
vessels access
• Producing a batch of textbooks at R. R.
Donnelley’s plant

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations
Job process
• Machining precision
metal tubes
• Internal consulting team
Customization

at manufacturing firm

Batch process
• Forging process to make fittings
for pressure vessels access
• Producing a batch of textbooks at
R. R. Donnelley’s plant

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations
Job process
• Machining precision
metal tubes
• Internal consulting team
Customization

Line process firm

at manufacturing
• Auto assembly
Batch process
• King Soopers bread
• Forging processline
to make fit-tings
for pressure vessels access
• Producing a batch of textbooks at
R. R. Donnelley’s plant

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations
Job process
• Machining precision
metal tubes
• Internal consulting team
Customization

at manufacturing firm

Batch process
• Forging process to make fittings
for pressure vessels access
• Producing a batch of textbooks at
R. R. Donnelley’s plant

Line process
• Auto assembly
• King Soopers
bread line

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations
Job process
• Machining precision
metal tubes
• Internal consulting team
Customization

Continuous process
at manufacturing firm
• Oil refiningBatch
process
process
• Borden’s pasta making
• Forging process to make fit-tings
for pressure vessels access
process • Producing a batch of textbooks at
R. R. Donnelley’s plant

Line process
• Auto assembly
• King Soopers
bread line

Low
Low High
Volume
 Project process
Processes at
manufacturing
High • Selecting location for
new plant in Europe
• Installing ERP for a
manufacturing firm’s
business processes organizations
Job process
• Machining precision
metal tubes
• Internal consulting team
Customization

at manufacturing firm

Batch process
• Forging process to make fittings
for pressure vessels access
• Producing a batch of textbooks at
R. R. Donnelley’s plant

Line process
• Auto assembly
• King Soopers
bread line
Continuous process
• Oil refining process
• Borden’s pasta
making process
Low
Low High
Volume
 Project process
High
Processes at
• Real estate process for leasing
and constructing facilities for
large insurance company

service providers
• Student team’s field project

Job process
• Customer service process
at financial services firm
Customization

• General medical practice

Batch process
• Order fulfillment process of
importer/distributor
• Placing purchase orders at public
relations agency

Line process
• Cafeteria line
• Teller line at bank

Continuous process
• Power generation plant
• Providing telephone line
access
Low
Low High
Volume
 Low volume, make-
to-order process Project process
Volume and Process
Decisions for
• Selecting location for new
 Less vertical plant in Europe
integration • Installing ERP for a

Manufacturing
manufacturing firm’s
 More resource business processes
flexibility

Process design choices
More customer Job process
involvement • Machining precision metal
tubes
 Less capital • Internal consulting team at
intensity/ manufacturing firm
automation
Batch process
• Forging process to make fittings
High volume, make- for pressure vessels access
• Producing a batch of textbooks at
to-stock process R. R. Donnelley’s plant

 More vertical
Line process
integration • Auto assembly
 Less resource • King Soopers bread
line
flexibility
 Less customer Continuous process
involvement • Oil refining process
 More capital
• Borden’s pasta making
process
intensity/
automation
Low High
Volume
 Low volume,
customized-service
process
 Less vertical
integration Project process Volume and Process
Decisions for Services
• Real estate process for leasing
 More resource and constructing facilities for
flexibility large insurance company
 More customer • Student team’s field project
Process design choices

involvement
 Less capital Job process
• Customer service process at
intensity/ financial services firm
automation • General medical practice

High volume,
Batch process
standardized-service • Order fulfillment process of
importer/distributor
process • Placing purchase orders at public
 More vertical relations agency
integration
Line process
 Less resource • Cafeteria line
flexibility • Teller line at bank
 Less customer
Continuous process
involvement • Power generation plant
 More capital • Providing telephone line
access
intensity/
automation
Low High
Volume
In Processes

 Buffering: storing material between two processes

 Blocking: Succeeding process (process 2) blocks preceeding

process (process 1) say if process 2 consumes 50 seconds/cycle
as against 40 seconds/cycle of process 1

 Starving: If the reverse of blocking happens it would be known as

starving.

 So process 2 in blocking situation and process 1 in starving

situation are known as bottleneck processes

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Process Performance Measurement

 Operation time = set up time+run time

 Cycle time = avg. time between completion of two units in a

station (say 30 sec)

 Throughput time = Avg.time for a unit to move through the system

(of 6 stations). Throughput time would be 180 sec or 3 min

 Throughput rate = 1/ cycle time = 1/0.5 min = 2/min or 120 units/hr

 Velocity (or throughput ratio) = Throughput time/value-added time

(will be 1 if no buffers exist in the system)

 Efficiency = Actual output/standard output

 Utilisation = time activated / time available

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 Classic Pizza

Classic Pizza is a take-away home pizza shop. One person each at

4 stations as given below with time consumed for manual work
(which is the maximum time for that operation) is given

Prepare pizza Bake the pizza, Pack the Pizza

Take order Bread with Remove and Handover and
1 min Cheese &toppings Make slices Collect money
3 min 4 min 2 min

For an 8 hour shift,

1. How many maximum pizzas can be sold?
2. If we add one more person along with necessary equipment, where
Should we add to improve output and what will be the output?
3. If we shift one minute of 3rd operation to person at 4th operation,
Would there be any change in the output (ignoring change in question 2)
and how much is it?
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Basic Process Vocabulary
• Inventory: the number of flow units in the system.

• Activity times: how long does the worker spend on the task?

• Capacity = 1/activity 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.
NYPD procedures for getting a new tire
on a police car:
 Officer fills out Tire Replacement Request (TRR) form

 Tire Integrity Unit reviews request

 Officer picks up tire at a vehicle maintenance facility

 City approved vendor replaces tire

 Used tire returned to police garage

 Precinct commander signs

 Tire Integrity Unit compares original and signed forms

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Estimated 1995 salaries for tire changing: $500,000

 Los Angeles Police (1996)

 At each change of shift, each officer spends 30 minutes

signing in/out equipment

 Each month each officer spends 3 hours requesting days

off for the next month

 Every arrest must be approved by the watch

commander. Arresting officers drive detainees to the
precinct, wait for the watch commander to be available,
then drive the detainees to booking. The arrest approval
rate by the watch commander is over 99.8%

 Arrest/booking forms for juvenile drunk driving require

manually writing the suspect’s name 70 times.
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Productivity in the insurance industry, 1988-
1991 average
(source: HBR, July-Aug 1997, p.90)

Firm General expenses

/premiums
Connecticut Mutual 20.5%
Phoenix Mutual 15.7%
Northwestern Mutual 6.9%

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Banking: 126 bank study (1996)
Opening a checking acct with a $500 cashier’s check and
no prior banking relationship

Activity time(min.) Customer time (Min.)

Best bank 27 24
average 54 42
worst bank 70 59
worst 20 banks >=60 >=48

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Kristen’s Cookies
Kristen’s Cookies
Line Balancing

Green Grass, Inc.

Big Broadcaster

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Line Balancing Big Broadcaster

Work Time Immediate

Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B Insert impeller shaft 30 A
C Attach axle 50 A
D Attach agitator 40 B
E Attach drive wheel 6 B
F Attach free wheel 25 C
G Mount lower post 15 C
H Attach controls 20 D, E
I Mount nameplate 18 F, G
Total 244

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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B Insert impeller shaft 30 A
C Attach axle 50 A
D Attach agitator 40 B
E Attach drive wheel 6 B
F Attach free wheel 25 C
G Mount lower post 15 C
H Attach controls 20 D, E
I Mount nameplate 18 F, G
Total 244

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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B Insert impeller shaft 30 A
C Attach axle 50 A
D Attach agitator 40 B
E Attach drive wheel 6 B
F Attach free wheel 25 C
G Mount lower post 15 C
H Attach controls 20 D, E
I Mount nameplate 18 F, G
Total 244
A
40

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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B Insert impeller shaft 30 A
C Attach axle 50 A
D Attach agitator 40 B
E
F
Attach drive wheel
Attach free wheel
6
25
B B
C
G Mount lower post 15 C
H
I
Attach controls
Mount nameplate
20
18
30 D, E
F, G
Total 244
A
40

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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B Insert impeller shaft 30 A
C Attach axle 50 A
D Attach agitator 40 B
E
F
Attach drive wheel
Attach free wheel
6
25
B B
C
G Mount lower post 15 C
H
I
Attach controls
Mount nameplate
20
18
30 D, E
F, G
Total 244
A
40 C
50

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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B
C
Insert impeller shaft
Attach axle
30
50
A
A
D
D Attach agitator 40 B
E Attach drive wheel 6 B B 40
F Attach free wheel 25 C
G Mount lower post 15 C
H
I
Attach controls
Mount nameplate
20
18
30 D, E
F, G
Total 244
A
40 C
50

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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B
C
Insert impeller shaft
Attach axle
30
50
A
A
D
D Attach agitator 40 B
E Attach drive wheel 6 B B 40
F Attach free wheel 25 C
G Mount lower post 15 C
H
I
Attach controls
Mount nameplate
20
18
30 D, E
F, G
E
Total
A
244
6

40 C
50

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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B
C
Insert impeller shaft
Attach axle
30
50
A
A
D
D Attach agitator 40 B
E Attach drive wheel 6 B B 40
F Attach free wheel 25 C
G Mount lower post 15 C
H
I
Attach controls
Mount nameplate
20
18
30 D, E
F, G
E
Total
A
244
6
F
40 C 25
50

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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B
C
Insert impeller shaft
Attach axle
30
50
A
A
D
D Attach agitator 40 B
E Attach drive wheel 6 B B 40
F Attach free wheel 25 C
G Mount lower post 15 C
H
I
Attach controls
Mount nameplate
20
18
30 D, E
F, G
E
Total
A
244
6
F
40 C 25
50

G
15
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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B Insert impeller shaft 30 A D
C
D
Attach axle
Attach agitator
50
40
A
B
H
E Attach drive wheel 6 B B 40
F Attach free wheel 25 C 20
G Mount lower post 15 C
H
I
Attach controls
Mount nameplate
20
18
30 D, E
F, G
E
Total
A
244
6
F
40 C 25
50

G
15
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 Line Balancing Big Broadcaster
Work Time Immediate
Element Description (sec) Predecessor(s)
A Bolt leg frame to hopper 40 None
B Insert impeller shaft 30 A D
C
D
Attach axle
Attach agitator
50
40
A
B
H
E Attach drive wheel 6 B B 40
F Attach free wheel 25 C 20
G Mount lower post 15 C
H
I
Attach controls
Mount nameplate
20
18
30 D, E
F, G
E
Total
A
244
6
F
40 C 25
50 I
18
G
15
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Line Balancing Big Broadcaster

D
H
B 40
20
30 E
A 6
F
40 C 25
50 I
18
G
15
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Line Balancing Big Broadcaster

D
H
B 40
20
30 E
A 6
F Desired output rate = 2400/week
40 C Plant operates 40 hours/week
25
50 I
18
G
15
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Line Balancing Big Broadcaster

D
H
B 40
20
30 E
A 6
F Desired output rate = 2400/week
40 C Plant operates 40 hours/week
25
50 r = 2400/40 = 60 Iunits/hour

18
G
15
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Line Balancing Big Broadcaster

D
H
B 40
20
30 E
A 6
F Desired output rate = 2400/week
40 C Plant operates 40 hours/week
25
50 r = 2400/40 = I60 units/hour

18
c = 1/60 = 1 minute/unit
G = 60 seconds/unit
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
D
H
B 40
20
30 E
A 6
F Desired output rate = 2400/week
40 C Plant operates 40 hours/week
25
50 I
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
D
H
B 40
20
30 E
A 6
F Desired output rate = 2400/week
40 C Plant operates 40 hours/week
25
50 TM = 244 seconds/60
I seconds
= 4.067 or 5 stations
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
D
H
B 40
20
30 E
A 6
F Desired output rate = 2400/week
40 C Plant operates 40 hours/week
25
50 TM = 244 seconds/60
I seconds
= 4.067 or 5 stations
18
G
Efficiency = [244\5(60)]100 = 81.3%
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
30 E
A 6
F Desired output rate = 2400/week
40 C Plant operates 40 hours/week
25
50 TM = 244 seconds/60
I seconds
= 4.067 or 5 stations
18
G
Efficiency = [244\5(60)]100 = 81.3%
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
30 E
A 6
Cumm Idle
F Station Candidate Choice Time Time
40 C 25
50 I
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
30 E
A 6
Cumm Idle
F Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 I
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
30 E
A 6
Cumm Idle
F Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 I
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
Cumm Idle
F Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 I
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
Cumm Idle
F Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10

18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
Cumm Idle
F Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10

18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
S2 F
Cumm Idle
Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10

18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
S2 F
Cumm Idle
Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10
S3 B,F,G B 30 30
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
S2 F
Cumm Idle
Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10
S3 B,F,G B 30 30
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
S2 F
Cumm Idle
Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10
S3 B,F,G B 30 30
18
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
S2 F
Cumm Idle
Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10
S3 B,F,G B 30 30
E,F,G 18
F 55 5
G

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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
A 6
S2 F
Cumm Idle
Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10
S3 B,F,G B 30 30
E,F,G 18
F 55 5
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
S3 6
A S2 Cumm Idle
F Station Candidate Choice Time Time
40 C 25 S1 A A 40 20
50 S2 B,C C
I 50 10
S3 B,F,G B 30 30
E,F,G 18
F 55 5
G
15
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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
S3 6
A S2 F
40 C 25
50 I
18
G

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Line Balancing Big Broadcaster

c = 60 seconds/unit
TM = 5 stations D
Efficiency = 81.3% H
B 40
20
S1 30 E
S3 6
A S4
S2 F S5
40 C 25
50 I
18
G
15
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 Making hot dogs
(http://www.youtube.com/watch?v=moM1s3cltTc)

The input is meat. The steps, in sequential order

are: grind trimmings, mix ingredients, stuffing,
cook and flavor, peeler, and inspection. The
output is a hot dog.
Process data
• 2 grinders. • 17 inspection
stations.
• 22,000 dogs
per batch. Grind Inspectio • Each inspector
trimmings n requires only1/ 6th
• 5 minutes to
of a second to
load and inspect each dog.
grind.
• 6 mixers. • 8 peelers.
• 22,000 dogs Mix Peeler
• 700 dogs per
per batch. ingredient
minute per peeler.
s
• ⅓ hour to mix.
• 5 ovens.

• 3 machines. • Each oven holds

Stuffing Cook 15,000 dogs.
• 2,300 dogs and • Each dog spends
per minute flavor 15 minutes in
per machine. process.
Capacity calculations – grind, mix, stuff

Find the capacity of each process step, which is the maximum flow rate
(R) through that process step.
Express each process step’s capacity in the same units.
• You can choose any time length you want (for example: dogs / min, dogs /
day, lbs / second), but you must be consistent.
• We’ll choose dogs / min.

Grind:
22,000 dogs
• Each grinder = = 4,400 dogs / min.
5 min
• 2 grinders×4,400 dogs / min = 8,800 dogs / min.

Mix:
22,000 dogs
• Each mixer = = 1,100 dogs / min.
1 
3 hour  60 min / hour 
 
• 6 mixers×1,100 dogs / min = 6,600 dogs / min.
Capacity calculations – stuff, cook, peel, inspect
Stuff:
• 3 stuffers×2,300 dogs / min = 6,900 dogs / min.

Cook and flavor:

• To find R, use Little’s Law,
I
R .
T
• I = 15,000 dogs, T = 15 min.
•

15,000 dogs = 1,000 dogs / min.

R
15 min
• 5 ovens×1,000 dogs / min = 5,000 dogs / min.
Peeler.
• 8 peelers×700 dogs / min = 5,600 dogs / min.

Inspection.
•

1/ 6 sec / dog = 6 dogs / sec.

• 17 stations×6 dogs / sec×60 sec / min = 6,120 dogs / min.

Capacity of the entire process 1

The capacity of a process is the minimum capacity of the sub processes:

• This process cannot produce any more than 5,000 dogs / min on a consistent basis.
• The sub process that constrains the entire process is called the bottleneck.

Here are the rates: Grind trimmings, 8800 dogs per minute. Mix ingredients, 6600 dogs per
minute. Stuffing, 6900 dogs per minute. Cook and flavor, 5000 dogs per minute. Peeler, 5600
dogs per minute. Inspection 6120 dogs per minute. The bottleneck is cook and flavor, which
has the slowest rate of 5000 dogs per minute.
Capacity of the entire process 2

• For this process, the flow rate, R, is 5,000 dogs / min.

• This process can also produce 5,000 dogs / min×60 min / hour =
300,000 dogs/ hour.
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:

Result of step 3
Implied utilization 
Result of step 1
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.
Process analysis with different types of flow units

• Three types of job applications need to be processed: “consulting,”

“staff,” and “internship.”
• There are inventory buffers in front of each resource/task (not shown).
• Each type of application has its own path through the process and does
not necessarily visit all tasks.

There are 3 inputs: consulting applications, staff applications, and internship

applications. For consulting applicants, they will contact faculty, contact prior
employers, then send a decision letter. For staff, they contact prior employers then
send a decision letter. For internship applications, they look at benchmark grades then
send a decision letter.
Defining the common flow unit

Define the common flow unit so that:

(1) The capacity of each task can be expressed in terms of the “flow unit” per unit of time

(2) Demand can be expressed in terms of the “flow unit.”

An intuitive and natural flow unit for this process is an “application”:

• Given that an “application” is the flow unit …
• The capacity of each task should be defined in terms of “applications per unit time.”
• Demand should be expressed in terms of “applications per unit time.”
 Demand and capacity
• Demand data (given to us): Application
per hour
Consulting 3
Staff 11
Internship 4

• Staffing and processing time data (given to us) and capacity calculations:

Contact Contact Benchmark Decision

faculty employers grades letter
Number of workers (a) 2 3 2 1
Processing time (min/app) (b) 20 15 8 2

Calculations:
Capacity per worker (c = 1/b) 0.05 0.07 0.13 0.50
(app/min)
Task's capacity (app/min) (d = a × 0.10 0.20 0.25 0.50
c)
Task's capacity (app/hour) (d × 60) 6 12 15 30
Evaluating implied utilization
Contact Contact Benchmark Decision
faculty employers grades letter
Data: 3 3 0 3
Consulting demand 0 11 0 11
(app/hour)
Staff demand (app/hour) 0 0 4 4
Internship demand
(app/hour)

Calculations
Total Demand (app/hour) (a) 3 14 4 18
Task's capacity (app/hour) (b) 6 12 15 30
Implied Utilization (a/b) 50% 117% 27% 60%

Evaluate the total workload on each task:

• For example, “Contact employers” receives 14 apps/hour.

Implied utilization is the ratio of demand on a task to its capacity.

The task with the highest implied utilization is the bottleneck.
Defining a different flow unit – one minute of
work 1

Define the flow unit to be “one minute of work”:

• Demands and capacity should then be expressed in terms of “minutes of
work.”

Consider the “Contact employers” task:

• Recall:
• Demand on this task is 14 applications per hour.
• Each application requires 15 minutes of work.
• So demand on this task each hour is 14×15 = 210 minutes of work.

Access the text alternative for this image.

Defining a different flow unit – one minute of work
2
Contact Contact Benchmark Decision
faculty employers grades letter
Data: (a) 3 14 4 18
Total demand (b) 20 15 8 2
(app/hour)
Processing time (c) 2 3 3 1
(min/hour)
Number of workers

Calculations
Total Demand (min/hour) (d = a × b) 60 210 32 36
Task's capacity (e = c × 60) 120 180 120 60
(min/hour)
Implied Utilization (d/e) 50% 117% 27% 60%

• Defining the flow unit as “one minute of work” yields the same implied
utilizations as defining the flow unit as “one application.”
• In other words, the implied utilization does not depend on how the
flow unit is defined as long as all demands and capacities are defined
with the same flow unit.
 Milling machine at Nova Cruz
• A milling machine is needed to make one steer support and two ribs
per Xootr.

Setup time Processing

(min) time (min)
Steer support 60 1
Rib 60 0.5

• The setup time is the time needed to get ready for production during
which no production actually occurs.
• What is the capacity of the milling machine?

The Xootr by Nova Cruz

 Capacity of a process with setups
• Capacity can be defined like this.

Number of units produced

Capacity 
Time to producethose units

• For example, if a process produces 12 units every 4 minutes then.

12 units
Capacity   3 units/minute.
4 minutes
• How long does it take to produce a batch of items?

Time to produce a batch =

Setup time + Batch size× Processing time

• So the capacity of a process with setup times that produces in batches is:

Batch size
Capacity 
Setup time  Batch size  Processing time
What are the batches for Nova Cruz?

Suppose Nova Cruz uses the following production cycle: 100 steer
supports, 200 ribs, 100 steer supports, 200 ribs, etc.

What is the “batch”?

• A “batch” is defined by a set of flow units and an interval of time such that these
intervals of time are identical and repeat themselves.
• It follows that …
• Successive intervals are of the same length.
• The same number of the flow unit is produced in each interval.

Access the text alternative for this image.

Suppose “ribs” are the flow unit defining the
batch

Within each rib batch, the same number of ribs are produced.
Each rib batch includes the same amount of time:
• This implies that certain events, like the start of rib production, occur at regular intervals.

Two things occur during a rib batch interval:

• production of ribs.
• activities that do not produce ribs – we call this “setup time” for rib production.
Setup time in rib batches

Within each rib batch interval, the “setup time” is all time in which ribs are not
produced:
• Can include setting up to start rib production.
• Can include idle time (in which workers/machines are doing nothing).
• Can include time producing other things.
Analysis of rib batches 1

Setup Processing
time (min) time (min)
Steer 60 1
support
Rib 60 0.5

Batch size = 200 because 200 ribs are produced per rib batch.
Setup time = time per rib batch in which ribs are not being produced.
• = Rib setup time + Steer support setup time + Steer support production time
• = 60 min + 60 min + 1×100.
• = 220 min.

With this schedule the milling machine can produce 0.625 ribs per min:

Batch size 200

Capacity    0.625
Setup time  Batch size  Processing time 220  200 0.5
 Analysis of rib batches 2

Setup Processing
time (min) time (min)
Steer 60 1
support
Rib 60 0.5

Batch size = 100 because 100 steer supports are produced per steer support
batch.
Setup time = time per steer batch in which steers are not being produced:
• = Steer support setup time + Rib setup time + Rib production time.
• = 60 min + 60 min + 0.5×200.
• = 220 min.

The milling machine can produce 0.3125 steer supports per min:

Batch size 100

Capacity    0.3125
Setup time  Batch size  Processing time 220  1001
 A component set batch
Setup Processing
time (min) time (min)
Steer 60 1
support
Rib 60 0.5

Define a “batch” to be a “component set” (that is, 1 steer support and 2 ribs).
• This makes sense because each Xootr needs 1 support and 2 ribs.

Batch size = 100 component sets:

Setup time = time not producing a component set.
• = Rib setup time + Steer support setup time.
• = 120 min.

Processing time = time to produce one component set:

• = time to produce 1 steer support + 2 ribs.
• = 1 + 2×0.5.
• = 2 min.
 Component set batches – continued
Setup Processing
time (min) time (min)
Steer 60 1
support
Rib 60 0.5

Batch size
Capacity 
Setup time  Batch size  Processing time
100

120  100 2
 0.3125

• The milling machine can produce 0.3125 component sets per minute.
• We’ll use this definition of a batch in the remainder of our discussion.
Capacity increases as the batch size
increases
Batch size
Capacity 
Setup time  Batch size  Processing time

• As the batch size

increases, the setup time
is amortized over more
units, thereby increasing
the process capacity.
• The process capacity can
never be more than 1 /
Processing time (that is,
the capacity with an
infinite batch size).
Batch size and the location of the
bottleneck

Setup time 120 minutes –

Processing time 2 minutes/unit 3 minutes/unit
Capacity (B=12) 0.0833 units/minute ⅓ units/minute
Capacity (B=300) 0.4166 units/minute ⅓ units/minute

• If the batch size is 12, the Milling Machine is the bottleneck (0.0833
units/min).
• If the batch size is 300, Assembly is the bottleneck (⅓ units/min).
• What is the smallest batch size such that the Milling Machine does not
constrain the process flow?
Choosing the batch size to meet a target
capacity 1

The target capacity for

milling is ⅓ units/min
because that is the
capacity of assembly:
• With a lower capacity,
milling becomes the
bottleneck.
• This presumes the system is
supply constrained
(otherwise the demand rate
would be the target
capacity).

What is the minimum

batch size that yields the
target capacity of ⅓
units/min?
Choosing the batch size to meet a target
capacity 2

• Start with the capacity equation:

Batch size
Capacity 
Setup time  Batch size  Procesing time

• Rearrange it to yield an equation for the batch size that yields the
target capacity:
Capacity  Setup time
Batch size 
1  Capacity  Processing time

• For our milling machine example:

If you enter 0.33 as the desired

1/3 120
Batch size   120 capacity you get 116.47 due to
1  1/3  2 the rounding error.

• Hence with a batch size of 120 units or more, the milling machine’s
capacity will be at least ⅓ units / min, equal to assembly’s capacity.
Batch size, idle time, utilization and inventory

Idle time is time not producing:

• Idle time has two parts: setup time and literal idle time (neither producing, nor
even setting up for production).

Utilization = Time producing / (Time producing + Idle Time)

• Increasing the batch size increases utilization of milling up to the point at which
it is no longer the bottleneck or the process becomes demand constrained.

Inventory always increases as the batch size gets larger:

• Reducing batch size reduces inventory.
• Reducing inventory reduces flow time through the process (Little’s Law).
“Small” batch – assembly is underutilized

Suppose the batch size is 80 component sets (and they are supply
constrained):
• Milling is the bottleneck – it needs 280 minutes to produce this batch.
• Assembly needs 80×3 = 240 minutes to produce this batch (they must idle for 40
min with each batch, or else they will produce too much).

240
Assembly’s utilization =  85.7%.
280
160
Milling’s utilization =  57%.
280
“Large” batch – assembly is fully utilized

Suppose the batch size is 200 component sets (and they are supply
constrained):
• Assembly is the bottleneck, it takes 3×200 = 600 min to produce 200 units.

600
Utilization for assembly =  100%.
600
400
Utilization for milling is  67%.
600
The “just right” batch size
Suppose now the batch size is 120 component sets (and they are supply
constrained):
• Assembly takes 3×120 = 360 min to produce 120 units.

360
Utilization for assembly =  100%.
360
240
Utilization for milling is  67%.
360
• Milling’s utilization cannot be higher!
• If it were, milling’s actual production would exceed 67%×½ units/min = ⅓
units/min …
• … and then parts inventory would continue to grow without limit…
• … which is clearly not desirable.
Inventory dynamics
• Suppose the batch size is 200 component sets and the flow rate is ⅓
units/min.

Access the text alternative for this image.

Summary
In a process with a series of tasks:
• The bottleneck’s capacity determines the maximum flow rate through the
process.

Adding capacity to the bottleneck will increase the capacity of the total
process, but may cause the bottleneck to move to another
task/resource.
Line balancing (that is, reallocating tasks from the bottleneck to another
resource) can improve the capacity of the total process without adding
resources.
Integrating work improves line balancing.
Implied utilization of a resource can be evaluated even if there are
different types of flow units.