1 4. flow-time analysis inventory adversely affects all competing edges (p/q/v/d) has cost ...

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4. Flow-Time Analysis

Inventory adversely affects all competing edges (P/Q/V/D)Has cost

Physical carrying costs Financial costs

Causes obsolescence Due to market changes Due to technology changes

Leads to poor quality Feed back loop is long

Hides problems Unreliable suppliers. High defect rate, tools changeover times, machine

breakdowns.Causes long flow time

Lean Operations: The Real Cost of Inventory

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Flow-Time Analysis

Competitive Advantages of a shorter flow time

Shorter response time (both in production and product design)

Delayed differentiation (Postponement)

Lower inventory costs (due to Little’s Law)

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Direct Methods of Measuring Flow Time

Direct Method

Observe a process over an extended, specified period of time

Randomly sample flow units over the observation period

Measure the flow time for each flow unit from entry to exit

Compute the average of flow times measured

Example During a given month, a sample of 50 applications was taken The average flow time = 20.85 working days

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Indirect Methods of Measuring Flow Time

Indirect Method

Count the number of units produced over an extended period of time

R = number of units produced / duration of time period

Count the number of units of inventory at random points during the time period, and compute the average inventory (I).

Compute T =I/R

Example 200 applications processed during a given month, 20 days of operation

during the given month. Throughput for the sample is R=200/20 = 10 applications per day.

After counting the number of applications at 4 random points during the

month, the average inventory (I) was 215.

T=I/R T = 215/10 flow time is 21.5 days

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Process = network of activities performed by resources

1. Flow unit: The unit of analysis– Level of detail

2-3. Network of Activities & Storage/Buffers

Define Process Boundaries

Activities with activity times

Buffers with waiting flow times

Routes: precedence relationships (solid lines) with throughputs

4. Resources & Allocation

- Who does what?

5. Information Structure & flow (dashed lines)

Key for capacity analysis

Process Flow Chart

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Flowcharting

ActivityBuffer

Physical flowEvent

Information flow- See the total process; a systems view

- Define flow units and process boundaries

- Include only the key steps

- Clarify the level of detail needed. Processes can be broken down into sub-activities. On the other hand, cascading allows several activities to be combined in a single sub-process

- Depicts resources required to carry out activities

- Identify the processes that need attention (weak points)

Decision

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Wondershed Inc: Narrative Representation

Required activities :

1. Separate the roof and the base sheets

2. Punch the base

3. Punch the roof

4. Form the base

4. Form the roof

6. Sub-assemble the base

7. Assemble

8. Inspect

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End

Wondershed Inc. : Schematic Representation

StartSeparate

Sheet

Punch base

Punch roof

Form base

Form roof

Sub assemble base

InspectAssemble

StartActivity

AActivity

BActivity

CEnd

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Theoretical Flow Time

Theoretical Flow Time: The minimum amount of time required for

processing a typical flow unit without any waiting

Entry Buffer Activity Exit

Activity Time: The time required by a typical flow unit to complete

the activity once. Unless stated otherwise, we assume that an activity

can not be broken down into smaller activities that can be executed in

parallel. What does that mean???

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Critical Path

Theoretical flow time of each path in the process flowchart

= sum of the activity times of all activities on that path

Critical Path: the longest path

Critical Activities: activities that lie on the critical path

The theoretical flow time of the process = the time of the theoretical critical path

Activity Time 2Activity Time 1 Activity Time 3


Sequential Activities

Sequential Activities

Parallel Activities

How many Paths?



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Wondershed Inc. Theoretical Flow Time

Path 1 (roof) Start 1 3 5 7 8 End = 80 minutes

Path 2 (base) Start 1 2 4 6 7 8 End = 90 minutes

Activity Times at Wonder Shed Inc.

Activity

Activity Time (minutes)

1 Separate 10

2 Punch the base 25

3 Punch the roof 20

4 Form the base 5

5 Form the roof 10

6 Subassemble the base 10

7 Assemble 108 Inspect 30

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Average Wait Time, Average Flow Time

Average waiting time for roof

T = I / R = 80 / 16.5 = 4.85 hours or

291 minutes

Average waiting time for base

T = I / R = 90 / 16.5 = 5.45 hours or

327 minutes

Theoretical flow times

Roof 80 minutes

Base 90 minutes

Flow Times

Roof 291 + 80 = 371 minutes

Base 327 + 90 = 417 minutes

Buffer

Average number of

bases

Average number of

roofs

2 30 -3 - 254 10 -5 - 206 20 -7 10 158 20 20

Total 90 80

16.5 sheds average flow rate (R) per hour based on empirical data

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Value-adding vs. Non-value-adding activities

Value-adding activities are those activities that increase the value

of a flow units Example: assembly, surgery, piloting an airplane, etc.

Non value adding activities are activities that do not directly

increase the value of a flow unit. Re-work Transport Inspection Waiting

Flow time = Value-adding times + Non-value-adding times

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Activity Time, Number of Visits and Work Content

Activity time is time required by a typical flow unit to complete the activity once.

Sometimes we may need to repeat an activity, i.e. the number of visits is not necessarily 1.

Work content = Activity time × Average number of visits

Theoretical flow time is computed based on work content not based on Activity time

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Activity Time vs. Work Content

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Theoretical Flow Time vs. Flow Time

(minutes)Roof Base Critical Path

Activity time 80 90 90

Wait time 291 327

Total time 371 417 417Work Content 90 105 105

Wait time 291 327

Total Time 381 432 432

Flow PathTheoretical flow time = 90

Flow time = 432

Flow Time Efficiency = Theoretical Flow Time / Flow Time

Flow Time Efficiency = 105/432 = 24%

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Industry Process Average Flow Time

Theoretical Flow Time

Flow Time Efficiency

Life Insurance New Policy Application

72 hrs. 7 min. 0.16%

Consumer Packaging New Graphic Design

18 days 2 hrs. 0.14%

Commercial Bank Consumer Loan

24 hrs. 34 min. 2.36%

Hospital Patient Billing 10 days 3 hrs. 3.75%

Automobile Manufacture

Financial Closing

11 days 5 hrs 5.60%

Flow Time Efficiencies in White Collar Processes

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Reducing Theoretical Flow Time: Shorten the Length of Every Critical Path by 3 Basic Approaches

Eliminate: Reducing the work content of critical activities

Work smarter: Eliminate non-value-adding aspects of the activity:

Work Faster: Increase the speed at which the activity is performed, e.g.

Better Methods, Training, Advanced Technology, Better Management.

Work right in the first time: Reduce repetitions of the activity

Work in parallel: Moving work off the critical path

Move work off the critical path to a noncritical activity

Move work off the critical path to the outer loop (pre- or post-processing)

Select: Modify the product mix

Make more of a product that requires less processing time reduce overall

flow time (Given market condition)

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Levers for Managing Theoretical Flow Time

Introductory client/adviser

meeting

Paraplanner-adviser meeting

Paraplannerprepares financial

plan

All thenecessaryinformation

obtained formthe client?

Advancedplanningrequired?

No Yes

Yes

No

Advancedplanning

professionals-adviser meeting

AdvancedFinancial plan

completed

Client takes theplan home to

review

Client/Advisermeeting to go over

the plan

Clientsatisfied?

Client/Advisermeeting to signand finalize the

plan

Yes No

Old Process,1.5 months

New Process,2 weeks

Introductory meeting client. Adviser/Paraplanner/Advanced Planning

Professionals

Financial plan completed and mailedto client

Client/Adviser/Paraplanner meetingto sign and finalize the plan

- Move work to the outer loop (pre-meeting “homework”)

- Work in parallel (professionals work simultaneously)

- Elimination of non-value-adding work(only two meetings)

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Critical Path Method: The Network

A1 A3

A4 A6

A5A2

4

3

6

4

2

3

E

S

Find the Critical Path.

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Critical Path Method: Paths

A1 A3

A4 A6

A5A2

4

3

6

4

2

3

E

S

10

Critical Path is the longest Path

11 8

How many path?

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Forward Path; Earliest Starts

A1 A3

A4 A6

A5A2

4

3

6

4

2

3

E

S0

0

0

0

0

0

4

3

3

4

4

3

4

4

3

4

4 10

8

5

5

5

8 8

10 10

8 11

11

1111

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10

3020

Max = 30

5

35

Forward Path

35

35

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Backward Path; Latest Starts

A1 A3

A4 A6

A5A2

4

3

6

4

2

3

E

S0

0

0

0

0

0

4

3

3

4

4

3

4

4

3

4

4 10

8

5

5

5

8 8

10 10

8 11

1111

1111

11

11

11

11555

88

8

8

8

8

8

4

6

4

4

66

633

3

40

0

0 11

11

25


30

3030

Min = 35

5

35

45

30

Backward Path

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Activity Slack

Slack, or float: The amount of time a noncritical task can be

delayed without delaying the project

Slack—LFT – EFT or LST – EST

EST—Earliest Start Time; Largest EFT of all predecessors

EFT—Earliest Finish Time; EST + duration for this task

LFT—Latest Finish Time; Smallest LST of following tasks

LST—Latest Start Time; LFT – duration for this task

04/18/23 Ardavan Asef-Vaziri 5-1-26

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Critical Path, Slacks

A1 A3

A4 A6

A5A2

4

3

6

4

2

3

E

S

0

0

4

3 3

4

4 10

8

5

8 11

11

11115

88

8

4

663

40

11

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Theoretical Critical Path vs. Critical Path

A1 A3

A4 A6

A5A2

4

3

6

4

2

3

E

S

W1

W2

W4

W3

W6

W7

W5

W9

W8

The time of the critical path differs from the time of the theoretical critical path. Why?

The critical path itself also may differ from the theoretical critical path. Why?

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Practice: Draw the Network of Activities

Task Pred. Dur. Task Pred. Dur.

a -- 4 g c,d 1

b -- 3 h e 4

c a 3 i f 5

d a 2 j e,g 6

e b 6 k h,i 1

f b 4

For each task, compute ES, EF, LF, LS, slack


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Practice: Compute the Theoretical Flow Time

Start Finish

a=4slack=

b=3slack=

c=3slack=

d=2slack=

e=6slack=

f=4slack=

g=1slack=

h=4slack=

i=5slack=

j=6slack=

k=1slack=

Task=durslack=xxx

LST LFT

EFTEST


1 4. flow-time analysis inventory adversely affects all competing edges (p/q/v/d) has cost ...

Documents

average flow time

flowtime analysis process

flowtime analysis inventory

flowtime analysis wondershed

sample flow units

long flow time lean

information structure

duration of time period