Chapter 2: Managing Processes Flashcards
Four basic process decisions
- process structure
- customer involvement
- resource flexibility
- capital intensity
Best understood at process or subprocess level, not firm level
Process structure
Process type relative to the kinds of resources needed, how resources are partitioned between them, and their key characteristics
Customer involvement
Ways in which customers become part of the process and to what extent
Resource flexibility
Ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions
Capital intensity
The mix of equipment and human skills in the process (higher cost of equipment relative to labor = higher capital intensity)
Process divergence
The extent to which the process is highly customized with considerable latitude for how it’s tasks are performed
Flexible flow
The customers, materials, or information moves in diverse ways, with the path of one customer or job often crisscrossing the path the next one takes.
Line flow
The customer, materials, or information moves linearly from one operation to the next according to a fixed sequence (standardized)
Front office process
High customer contact
Service provider interacts directly with customer
More flexible work flows
Considerable process divergence
Back office process
Low customer contact
Little service customization
Line flows
Elements of a product-process matrix
Volume
Product customization
Process characteristics (divergence and flow)
Generally higher customization = lower volume
Six sigma process improvement model
Define (scope and boundaries of process being analyzed)
Measure (specific metrics to determine what priorities are being met or missed)
Analyze (determine where there are gaps between actual and desired performance)
Improve (based on cost benefit analysis. Sets objectives for redesigned process)
Control
Also DMAIC process
Time study method of work measurement
Using a trained analyst to perform four basic steps in setting a time standard for a job or process
- selecting the work elements (or nested processes) within the process to be studied
- timing the elements
- determining the sample size
- setting the final standard
Has an allowance expressed as a percent of total normal time
Elemental standard data method
A database of standards compiled by a firm’s analysts for basic elements they they can draw on later to estimate the time required for a particular job.
Used when products or services are highly customized, job processes prevail, and process divergence is high
May include equations where time required is dependant on other elements of the job
Predetermined data method
Database approach that divides each work element into a series of micromotions that make up the element. The analyst then consults a published database that contains the normal times for the full array of micromotions
Best for highly repetitive processes
Learning curve analysis
Uses a line displaying the relationship between processing time and the cumulative quantity of a product or service produced
Shows how processing improves as operations learned
Process chart
An organized way of documenting all the activities performed by a person or group of people, at a workstation, with a customer, or on materials
Uses a table with information about each step in the process along with time estimates
Work measurement techniques
- time study method
- elemental standard data method
- predetermined data method
- work sampling method
- learning curve analysis
Categories of activities in a typical process
- operation (changes, creates or adds)
- transportation
- inspection
- delay
- storage
Annual labor cost
= time to perform process in hours x variable costs per hour x number of times process is performed per year
Checklist
A form used to record the frequency of occurrence of certain process failures
