Chapter 3 Flashcards
Process
a system of structured activities that use resources to change inputs (energy, material, information, labor, knowledge), into valuable outputs.
Process Thinking
a way of viewing activities in an organization as processes rather than as departments or functions
Juran’s Law
15% of operational problems are the result of human error; the remaining 85% are due to systematic process errors
Four components to typical process:
- Activities
- Inputs/Outputs/flows
- Process Structure
- Management Policies
Two types of Flow
Information and Material
Process Capabilities
the specific types of outputs and levels of performance that a process can generate
Maximum Capacity (aka Design Capacity)
the highest level of output that a process can achieve under ideal conditions in the short term
Effective Capacity
the level of output that the process can be expected to produce under normal conditions
Utilization
the percent of process capacity that is actually used
Yield Rate
the percentage of units successfully produced as a percentage of inputs
Economies of Scale
as production volumes increase with additions of capacity, the unit cost to produce a product decreases to an optimal level
Learning Curve
as the production volume doubles, the labor hours required decrease by a constant proportion
Theory of Constraints (TOC)
- Every process has a constraint
- Every process contains variance that consumes capacity
- Every process must be managed as a system
- Performance measures are crucial to the process’ success
- Every process must continually improve
Bottleneck
an activity or resource that limits or constrains the output of a process
Serial/Sequential Structure
a process structure where the activities occur one after the other in sequence
