BADM 202
OPERATIONS MANAGEMENT
SPRING, 2020
CHAPTER 4: FLOW TIME ANALYSIS
By: Dr. Chehra Aboukinane, MBA, PhD, P. Eng.
OUTLINE
•Flow time measurement
•Process flow chart
•Theoretical flow time
•Average wait time, Average flow time
•Activity time, Number of visits and Work content
•Time efficiency
•Value adding vs non-value adding activities
•Difference between takt time, cycle time and lead time
simulation (video)
•Network and critical path
•Levers for managing theoretical flow time
•Practice problems 4.1-4.5 (in class drill) & Handout problem (posted on Canvas )
•Case discussion : Delays at Logan Airport (Case Synopsis ONLY)
•Term project: Teams will provide an update to the course instructor about their progress on step 1
FLOW TIME MEASUREMENT
DIRECT METHOD INDIRECT METHOD
1. OBSERVE A PROCESS OVER AN EXTENDED, 1. COUNT THE NUMBER OF UNITS PRODUCED OVER AN
SPECIFIED PERIOD OF TIME EXTENDED PERIOD OF TIME
2. RANDOMLY SAMPLE FLOW UNITS OVER THE 2. R = NUMBER OF UNITS PRODUCED / DURATION OF TIME
OBSERVATION PERIOD PERIOD
3. MEASURE THE FLOW TIME FOR EACH FLOW UNIT 3. COUNT THE NUMBER OF UNITS OF INVENTORY AT
RANDOM POINTS DURING THE TIME PERIOD, AND
FROM ENTRY TO EXIT COMPUTE THE AVERAGE INVENTORY (I).
4. COMPUTE THE AVERAGE OF FLOW TIMES MEASURED 4. COMPUTE T =I/R
EXAMPLE (CREDIT CARD APPLICATIONS)
EXAMPLE (CREDIT CARD APPLICATIONS)
1. A sample of 15 day period and for each day selected a number of applications
Assume the following:
within the process was counted.
• We observe our process during a month period.
Key assumption: Q=10 applications /day
• We take a sample 50 applications and we calculate the average flow time every
unit spends in the process from entry to exit 2. The average of these observations at 4 random times during the 15 day period
Assume that we obtained the following conclusion: was found to be 215
• On average, all these 50 applications take 20.85 working days to be processed. 3. T was calculated as follow:
- T-I/R T = 215/10 flow time is 21.5 days
PROCESS FLOW CHART
ACTIVITY INFO Physical flow
Event BUFFER DECISION EVENT
Information flow
PROCESS FLOW
Punch Form Sub assemble
base base base
Separate
Start
Sheet
Punch Form
Assemble Inspect End
roof roof
THEORETICAL FLOW TIME
Entry Buffer Activity Exit
WONDER SHED INC. THEORETICAL FLOW
TIME
Activity Times at Wonder Shed Inc.
Activity Time
Activity (minutes)
1 Separate 10
2 Punch the base 25
3 Punch the roof 20 PATH 1 (ROOF) START 1 3 5
4 Form the base 5 7 8 END = 80 MINUTES
5 Form the roof 10 PATH 2 (BASE) START 1 2 4
6 Sub assemble the base 10 6 7 8 END = 90 MINUTES
7 Assemble 10
8 Inspect 30
AVERAGE WAIT TIME/ THEORETICAL FLOW TIME/FLOW TIME
AVERAGE WAITING TIME FOR ROOF
T = I / R = 80 / 20 = 4 HOURS OR
240 MINUTES
20 sheds average flow rate (R) per hour
based on empirical data :
AVERAGE WAITING TIME FOR BASE
T = I / R = 100 / 20 = 5 HOURS OR
300 MINUTES
THEORETICAL FLOW TIMES
ROOF 80 MINUTES
BASE 90 MINUTES
FLOW TIMES
ROOF 240 + 80 = 320 MINUTES
BASE 300 + 90 = 390 MINUTES
ACTIVITY TIME, NUMBER OF VISITS AND
WORK CONTENT
Activity time is time required by a typical flow unit to complete the activity once.
Sometimes activities may need to be repeated
Work Content = Activity Time × Average Number Of Visits
Theoretical flow time is computed based on work content not based on activity
time
ACTIVITY TIME, NUMBER OF VISITS AND
WORK CONTENT (EXAMPLE)
• PATH 1: ROOF WORK CONTENT • PATH 2: BASE WORK CONTENT
Activity Times at Wonder Shed Activity Times at Wonder Shed
Activity Times Work Content
Activity Times Work Content Process Flow# Activity (min) Number of Visits (min)
Process Flow# Activity (min) Number of Visits (min)
1 Separate 10 1 10
1 Separate 10 1 10 3 Punch the Base 25 1.2 30
3 Punch the Roof 20 1.1 22 5 Form the Base 5 1.2 6
5 Form the Roof 10 1.2 12 Sub assemble the
6 Base 10 1.3 13
7 Assemble 10 1 10
7 Assemble 10 1 10
8 Inspect 30 1.2 36 8 Inspect 30 1.2 36
Total 90 min Total 105 min
FLOW TIME EFFICIENCY
Example of work content/Activity time to calculate FTE
Flow Path (minutes)
Roof Base Critical Path
Flow Time Efficiency = Activity time 80 90 90
Theoretical Flow Time / Wait time 291 327
Total time 371 417 417
Flow Time Work Content 90 105 105
Wait time 291 327
Total Time 381 432 432
Example: Flow time efficiency in
constructing the base:
Flow Time Efficiency = 105/432 = 24%
TIME FLOW EFFICIENCY OF BUSINESS
PROCESSES (BLARKBURN , 1992)
Industry Process Average Flow Time Theoretical Flow Flow Time Efficiency
Time
Life Insurance New Policy 72 hrs. 7 min. 0.16%
Application
Consumer Packaging New Graphic Design 18 days 2 hrs. 0.14%
Commercial Bank Consumer Loan 24 hrs. 34 min. 2.36%
Hospital Patient Billing 10 days 3 hrs. 3.75%
Automobile Financial Closing 11 days 5 hrs. 5.60%
Manufacture
VALUE ADDING & NON-VALUE ADDING
ACTIVITIES IN TFT
Value –adding activities are those activities that increase the value of the flow units (ex:
assembly, surgery, piloting and a helicopter)
Non value adding activities are activities that do not directly
increase the value of a flow unit (ex: rework, transport, waiting, inspection)
Theoretical Flow time = Value-adding times + Non-value-
adding times
DIFFERENCE BETWEEN TAKT TIME, CYCLE TIME, LEAD TIME
SIMULATION (VIDEO)
Source: https://www.youtube.com/watch?v=isu6mg3v0-s
Title: TAKT TIME, CYCLE TIME, LEAD TIME
Time: 13 min 49 seconds
MORE ON PROCESS (NETWORK AND CRITICAL
PATH)
SOURCE: PROJECT MANAGEMENT THE MANAGERIAL PROCESS, BY LARSON AND GRAY , 2013 (5 TH EDITION)
• ACTIVITY: AN ELEMENT OF THE
PROJECT THAT REQUIRES TIME. A
• MERGE ACTIVITY: AN ACTIVITY THAT
HAS TWO OR MORE PRECEDING
ACTIVITIES ON WHICH IT DEPENDS.
B D
• PARALLEL (CONCURRENT) ACTIVITIES:
ACTIVITIES THAT CAN OCCUR
INDEPENDENTLY AND, IF DESIRED,
NOT AT THE SAME TIME.
C
MORE ON PROCESS (NETWORK AND CRITICAL
PATH)
SOURCE: PROJECT MANAGEMENT THE MANAGERIAL PROCESS, BY LARSON AND GRAY , 2013 (5TH EDITION)
• EVENT (ENTITY WHICH DOES NOT
REQUIRE TIME): EXAMPLE: A POINT B
IN TIME WHEN AN ACTIVITY IS
STARTED OR COMPLETED AND WHICH
DOES NOT CONSUME TIME.
A C
• BURST ACTIVITY: AN ACTIVITY THAT
HAS MORE THAN ONE ACTIVITY
IMMEDIATELY FOLLOWING IT (MORE
THAN ONE DEPENDENCY ARROW D
FLOWING FROM IT).
MORE ON PROCESS (NETWORK AND CRITICAL
PATH)
SOURCE: PROJECT MANAGEMENT THE MANAGERIAL PROCESS, BY LARSON AND GRAY , 2013 (5 TH EDITION)
• PATH: A SEQUENCE OF CONNECTED,
DEPENDENT ACTIVITIES.
• CRITICAL PATH: THE LONGEST PATH C
THROUGH THE ACTIVITY NETWORK
THAT ALLOWS FOR THE COMPLETION
OF ALL PROJECT-RELATED ACTIVITIES; A B D
DELAYS ON THE CRITICAL PATH WILL
DELAY COMPLETION OF THE ENTIRE
PROJECT.
MORE ON PROCESS (NETWORK AND CRITICAL
PATH)
SOURCE: PROJECT MANAGEMENT THE MANAGERIAL PROCESS, BY LARSON AND GRAY , 2013 (5TH EDITION)
• BASIC RULES TO FOLLOW WHEN BUILDING A NETWORK
Example: DIAGRAM:
1. NETWORKS TYPICALLY FLOW FROM LEFT TO RIGHT.
2. AN ACTIVITY CANNOT BEGIN UNTIL ALL PRECEDING
CONNECTED ACTIVITIES ARE COMPLETE.
3. ARROWS INDICATE PRECEDENCE AND FLOW
AND CAN CROSS OVER EACH OTHER.
4. EACH ACTIVITY MUST HAVE A UNIQUE IDENTIFY NUMBER
THAT IS GREATER THAN ANY OF ITS PREDECESSOR ACTIVITIES.
5. LOOPING IS NOT ALLOWED.
6. CONDITIONAL STATEMENTS ARE NOT ALLOWED.
7. USE COMMON START AND STOP NODES.
FREE SLACK (FLOAT)
THE AMOUNT OF TIME A NONCRITICAL TASK CAN BE DELAYED WITHOUT DELAYING THE PROJECT:
SLACK= LFT – EFT OR LST – EST
• IT IS THE AMOUNT OF TIME AN ACTIVITY CAN BE DELAYED AFTER THE START OF A LONGER
PARALLEL ACTIVITY OR ACTIVITIES.
• IT IS HOW LONG AN ACTIVITY CAN EXCEED ITS EARLY FINISH DATE WITHOUT AFFECTING EARLY
START DATES OF ANY SUCCESSOR(S).
• IT ALLOWS FLEXIBILITY IN SCHEDULING SCARCE RESOURCES.
NETWORK FORWARD PASS
SOURCE: PROJECT MANAGEMENT THE MANAGERIAL PROCESS, BY LARSON AND GRAY , 2013 (5TH EDITION)
FORWARD PASS COMPUTATION:
• ADD ACTIVITY TIMES ALONG EACH PATH IN
THE NETWORK (ES + DURATION = EF).
• CARRY THE EARLY FINISH (EF) TO THE NEXT
ACTIVITY WHERE IT BECOMES ITS EARLY
START (ES) UNLESS THE NEXT SUCCEEDING
ACTIVITY IS A MERGE ACTIVITY, IN WHICH
CASE THE LARGEST EF OF ALL PRECEDING
ACTIVITIES IS SELECTED.
NETWORK BACKWARD PASS
SOURCE: PROJECT MANAGEMENT THE MANAGERIAL PROCESS, BY LARSON AND GRAY , 2013 (5TH EDITION)
BACKWARD PASS COMPUTATION:
• SUBTRACT ACTIVITY TIMES ALONG EACH PATH
IN THE NETWORK (LF - DURATION = LS).
• CARRY THE LATE START (LS) TO THE NEXT
ACTIVITY WHERE IT BECOMES ITS LATE FINISH
(LF) UNLESS
• THE NEXT SUCCEEDING ACTIVITY IS A BURST
ACTIVITY, IN WHICH CASE THE SMALLEST LF OF
ALL PRECEDING ACTIVITIES IS SELECTED.
LEVERS FOR MANAGING THEORETICAL FLOW
TIME (THREE MAIN STRATEGIES)
ELIMINATE: REDUCING THE WORK CONTENT OF CRITICAL ACTIVITIES
Work smarter: eliminate non-value-adding aspects of the activity:
Work faster: increase the speed at which the activity is performed, e.G. Better methods, training,
advanced technology, better management.
Work right in the first time: reduce repetitions of the activity
WORK IN PARALLEL: MOVING WORK OFF THE CRITICAL PATH
Move work off the critical path to a noncritical activity
Move work off the critical path to the outer loop (pre- or post-processing)
SELECT: MODIFY THE PRODUCT MIX
Make more of a product that requires less processing time reduce overall flow time (given market
condition)
EXAMPLE PROBLEM (CLASS HANDOUT-SEE
CANVAS)
PRACTICE PROBLEMS 4.2-4.5 (IN CLASS
DRILL/HANDOUT)
Delays at Logan Airport (In class -case discussion)
Discussion questions:
1. Provide a synopsis of the case
26
26
Delays at Logan Airport (Team case discussion due as
a deliverable (if chosen)
TEAM ANALYSIS DISCUSSION
QUESTION/S):
1. What is your overall recommendation to
the FAA for the city of Boston? a-Allow
Massport to build a new runway? B-Insist
that Massport Institute peak-period
pricing? C-Do both? D-Do neither
Project Activity 2: Progress Update on Step 1 of the PA
• By the end of class 2 session, all assigned groups need to :
Update the course instructor on their progress on completing Step 1 of the PA by
answering the following questions:
1. Was the team able to define their inputs and outputs in the overall process?
2. Did the team define entry points of their process inputs and exist points of their process
outputs?
