LO3-1 Understand the importance of processes and process thinking
LO3-2 Define the various components of a process
LO3-3 Distinguish between operational, tactical, and strategic capacity planning
LO3-4 Estimate capacity and utilization
LO3-5 Explain the impacts of bottlenecks, variance, and other factors on performance.
LO3-6 Describe process improvement methodologies
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Copyright © 2014 McGraw-Hill Higher Education. All rights reserved.CHAPTER 3Managing Processes and CapacityMcGraw-Hill/IrwinLearning ObjectivesLO3-1 Understand the importance of processes and process thinking LO3-2 Define the various components of a processLO3-3 Distinguish between operational, tactical, and strategic capacity planningLO3-4 Estimate capacity and utilizationLO3-5 Explain the impacts of bottlenecks, variance, and other factors on performance.LO3-6 Describe process improvement methodologies3–2What is a process?A system of structured activities that use resources to turn inputs into valuable outputs.Process thinking views activities in an organization as a collection of processes3–3LO3-1Activities of a processOperations change inputsTransportation moves an input from place to placeInspection verifies the results of an activityDelay unintentionally stops the flow of an inputStorage is the formal inventorying of an input3–4LO3-2Process CapacityCapacity: amount of input that can go into or the amount of output that can be created by a process, at a given level of resources over a given time period3–5LO3-4Theory of Constraints (TOC)Every process has a constraintEvery process has variance that consumes capacityEvery process must be managed as a systemProcess measures are crucial to the process’s successEvery process must continually improve 3–6LO3-5Measures of process flow:Flow time: time for one unit to get through a processCycle time: time it takes to process one unit at an operation in the overall processLittle’s Law: there is a relationship between flow time (F), inventory level (I) and throughput rate (TH) Every Process has a Constraint3–7LO3-5Variability in:Outputs: product variety and variable schedulesProcesses: quality variance, resource availability, and processing speedInputs: variance in quality and delivery3–8Variance Consumes CapacityLO3-5Processes Managed as Systems3–9Changing one element of a process may impact other elements, sometimes in unexpected ways.Process elements are interdependentActivitiesInputs/Outputs/FlowsProcess structuresManagement policiesLO3-5Measure Processes for Success Metrics should address aspects of performance that are important to both customers and the organization.3–10LO3-5Continuous Improvement of ProcessesKaizen: focused, incremental improvement efforts small + small + small + small + + n = LARGE3–11LO3-53–12Managing Process and Capacity:A Summary - Part IProcesses define a business.A process is a collection of activities.Processes are characterized by activities, flows, structures, resources, and metrics.Supply chain capacity should be managed strategically. There is a proven link between output volumes and process economies.3–13The bottleneck activity sets the maximum level of output of any process.Capacity requirements depend on processing and setup times.Variability consumes capacity, cost, and lead times.Processes need to be continuously improvedManaging Process and Capacity:A Summary - Part II
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