Understanding Processes

(Courtesy - Prof. Arvind Alvis)

Process – It is a set of inter-related or inter-acting activities performed in a logical sequence, which converts / transform inputs (resources) into outputs

Procedure – It is collection activities, tasks, steps, decisions and processes, that when undertaken in the sequence laid down, should produce the described result, product or outcome.

What is the difference between a process and a procedure?

A process is characterized by the following 4 parameters (MRTP criterion)

1. Measurability – The inputs, outputs and the relationship between them should be measurable and specific. Example – 1.6 tons of limestone, processed in an efficient cement plant, would yield 1.0 tom of cement.

2. Repeatability – The process, when repeated with the same inputs under the same conditions, should produce the same outputs. Example – The cement plant should be able to reproduce the same output day after day while following the manufacturing process adopted by the plant.

3. Transferability – The capability to follow the process should be transferable to others with the same results. A process is ‘people-independent’. Example – There would be no difference in the output or quality in the cement produced between the 3 shifts during a day.

4. Predictability – While following the process under specified conditions, it should be possible to predict the outputs, both in terms of quantity and quality. Example – It should be possible to predict the output of each cement plant accurately during the planning stage.

Process Management – It is the selection of the inputs, operations, work flows and methods that transforms inputs into outputs (products or services valued by customer / users).

Process classification and selection

Types of operating processes -

Type	Example	Customization	Volume
Project	Building a hospital, ship	Very high	One
Job (Shop)	Machining a metal casting for a specialized application	Very high	One
Batch	Training a group of fresh recruits	Relatively lower	Relatively higher (Batch size)
Line Assembly	Assembly lines of cars	Low	High
Continuous	Aluminium processing plant	Minimum	Very High

Basic elements of Process Design

· External requirements (set by customers)

o Quality of products or services

o Time deadlines

· Internal constraints of the firm

o Financial viability (managing cost structure)

o Risk of inflexibility

Effectively balancing external requirements with internal constraints faced is the challenge for every operating firm. The objective of this exercise would normally be to maximize the form’s profitability in the long term.

Some important Definitions relating to processes

Set-up time – It is the time required to get a machine / process ready for producing / processing a particular job from a state of being free from any other job (neutral state)

Set-down time or Dismantling time – It is the time required to bring a machine / process from a state of producing / processing a particular job to a state of being free to take up another job (neutral state)

Note: Set-up and Set-down time are unique for each product / process

Change-over time or switch-over time – It is the duration between the end of producing / processing a product / process A and the moment the machine / process is ready to start producing the next product / process B.

Change-over time = Set-down Time for A + Set-up time for B = Time between 1^st product of B (set-up) and last product of A (set-down)

Note: Change-over Time is unique for each set and sequence of products / processes. Thus, the change-over time for switching from A to B would most likely be different from switching from B to A

Rune Time – It is the duration the machine / process operates in order to produce / process the required volume of output. This is the time measured from the end of set-up till the moment the machine / process has completed the task and is ready for set-down.

Cycle Time –Maximum time allowed at each workstation to complete its set of tasks on a unit. It is the reciprocal of the desired output rate. Thus, if the target output rate for an operation is 300 units per hour, then the cycle time, C = 1/300 hours per unit = 12 seconds. CT ignores Set-up and Set-down time.

Throughput time (Total Cycle time / Production Lead Time) – It is the duration taken by a production / processing system from the first to the last operation to produce the desired output. For example – In an automobile line assembly, throughput time is the duration from the initial assembly operation performed at the first work station till the moment the assembled product rolls off the line.

Throughput Rate – It is the volume of output delivered by the process in unit time, usually an hour or a day. For example – An insurance claim form processing’s centre’s throughput rate could be specified as 150 forms per hour or 1200 forms per shift.

Takt Time – It is the time available to a system to produce / process one unit of output. For example – A Pizza centre may be required to produce 100 pizzas per hour during peak hours but only 20 pizzas per hour during non-peak hours, the takt time is 180 seconds. Takt time is important to allocate the optimum level of resources at any point in time so that costs are minimized.

Bottleneck – It is an operation that has the lowest effective capacity in a facility having multiple operations. It limits the facility’s output rate, bringing it down to the level of the bottleneck.

Process Cycle Efficiency = (Processing or Operations Time / Throughput time)

Throughput time = Processing Time + Inspection Time + Movement Time + Waiting Time + Storage Time

Hence, Process Cycle efficiency will always be less than 1. The value of the ration usually indicates how well the process is adding value from the customer’s perspective. For a manufacturing unit, the ratio is referred to as Manufacturing Cycle Efficiency, while for a service unit, we call it Service Cycle Efficiency