Process choice« umbrella case »Process flowchartsEvaluating and Improving Processesidentifying a bottleneckNational Cranberry CaseBalancing the Processassessing efficiencyChoice of product mixInevitability of a queueBasic Components in a waiting line systemClassification of queueing systemsM/M/1 Model (single server model)M/M/S ModelLq approximationPooling Effects (regional bank example)Monte Carlo SimulationRenaissance Clinic CaseMGO 304 1st Edition Exam # 1 Study GuideProcess choice Process Improvement vs. Process Reengineering: To ultimately 1) Deliver the “customer’s promise & 2) Create value for stakeholdersProcess Choice: Project: highly customized system; one of a kind products or services; project firms’ capacity tends to be fairly small; closely coordinated due to interrelated tasks; make heavy use of expertise at certain points. Firms highlight capabilities not products or services. Highest managerial challenge is finding experts & meeting deadlines. EX) consulting, event planning, political campaigns, & developing a new course. Job shop: organizes similar tasks, activities & technologies into separate departments; allowing you to perform work on a variety of products/ services serving high amounts of customers; high customization & low volume (not as low as a project); make to order; customer needs and repeat orders is unknown; each new order is handled as a “job”; jumbled flow (products/ customers each follow different paths). +specialists work with each other sharing ideas +flexible operations –High setup costs –excess capacity –Increase costs due to frequent WIP. Managerial challenges: Reduce delay, idle, & WIP, estimating costs & scheduling, & worker development for high quality outputs. EX) hospitals, tutoring, charter flights, private dining, individual selling. Worker- Paced Flow: workers perform in a specified sequence/ in parallel to serve customers. Workers themselves move products or guide customers from one task to then next. Managerial challenges: designing tasks to maximize efficiency, & developing workers’ skills.- Batch Process-worker produces/performs multiple products/ services at the same time. EX) check depositing, security trading, credit card processing, taxi service, fine dining restaurants. (Where things are processed all at once.) –defects are not recognized until the entire batch has been examined- Cellular Process-products/ services processed one at a time from worker to worker. +workers become very close knit & educe idle time, increase quality. –cross-training requires time & capital –May not always increase capacity. These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Machine- Paced Flow: “narrow range of products”; work/ service is broken into short, repetitive tasks that can be performed with minimal training (assembly lines) –limited conveyor speeds. Managerial challenges: improving quality, monitor staffing, & product changes, minimizing costsEX) tanning salons, amusement parks, movie theatres etc. Continuous Flow : «narrow range of products » but these are even more narrow ; usually 1 standardized product ; very high volume ;(not happening in discrete units like a laptop. more like electricity where its flowing continuiously) ; high machine utilization ; machines work on the products, skilled workers maintain the machines. Management prevents downtime by :maintaining an adequate supply of raw materials & skilled technicians on hand to repair the machines.EX) electric generation plants, utility companies, phone service companies & internet companies« umbrella case »Current Processes: Each mortgage application treated as a process; company is organized as job shops (sales dept., processor dept., underwriter dept., etc.); and each of these job shops is run through a worker paced batch process. Creating a “spaghetti-like” process. Process Suggestions:-Machine paced flow for simple loans & -Worker paced cellular process for complex loans. (making it more organized and “steady- flow like”)-Standardize sales process & improve sales quality (B/C.. the lack of standard sales processes and incentive capable compensation schemes cause for slow processes)Remember: One needs to take a systematic approach to improve service processes! The one with high utilization and a long service time may not always be the CAUSE of the slow process. Process flowchartsSequential Process: Task A Task B Task C Task DParallel Process: Task A Task B Task C Task E Tasks are being performed at the same time*: Task D Task FAlso includes the different shapes (triangles & circles/ ovals) to indicate at which point in the system a customer is. And decision nodes, as a diamond with a question mark, that indicate paths to take given the circumstances (tea or coffee, yes or no, male or female etc.) Processes that are occurring in parallel to another don't need decision nodes. Evaluating and Improving ProcessesBar Charts: Measure the frequency of occurrence measure on a yes/no basis. EX) airline manager using achecklist to survey customer complaints over several weeks. Pareto Chart: Bar chart where factors are plotted in decreasing order of frequency along the horizontal axis (symbolizing that 80% of the problem is caused by 20% of the factors).Cause- and- effect diagram: “fishbone diagram”, relates a key performance problem to its potential causes; graphically displaying (in great detail) all of the possible causes to discover the root causes. identifying a bottleneckCAPACITY: “design/ rated capacity”; The maximum rate of output of a process or system; Often greater than actual output.EX) number of customers who can be served per hourBOTTLENECK: any capacity constraint in a system that actively limits it from accommodating a desired level of demand; recognized as the part in the system that has the highest time of all others. Eventually decreases revenue, and increases idle time and lead- time. (where demand>service time)**- Blocked tasks are those that come before a bottleneck. Here their WIP capacity is full and must wait for the bottleneck portion to pass customers through so the customers waiting can finally proceed to the next step. - Starved tasks are those that are waiting for the bottleneck portion to finally finish so they can serve the next customers. - Bottleneck