Quantitative Process

Analysis
Chapter 4
Process Analysis
Process Analysis Techniques
Fill in the blanks
If you had to chose between two services, you
would typically choose the one that is:

• F…
• C…
• B…
Process Performance
If you had to chose between two services, you
would typically choose the one that is:

• Faster
• Cheaper
• Better
Process Performance Measures
Time

Flexibility

Process
performance

Quality Cost
Process Performance Dimensions
• Time
• Cycle Time
• Waiting time = time spent in NVA tasks
• Cost
• Cost per execution
• Resource Utilization
• Waste
• Quality
• Error rates (negative outcomes, wrong info)
• Missed Promise
• Flexibility
• Run time flexibility
• Build time flexibility

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Process Performance Measures/
Key Performance Indicators (KPIs)
• A quantity that can unambiguously determined
for a given process - assuming of course that the data to
calculate this performance measure is available.

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Process Performance Measures

• Consider the scenario

• A restaurant has recently lost many customers due to
poor customer service. The management team has
decided to address this issue first of all by focusing on
the delivery of meals. The team gathered data by asking
customers about how quickly they liked to receive their
meals and what they considered as an acceptable wait.
The data suggested that half of the customers would
prefer their meals to be served in 15 minutes or less. All
customers agreed that a waiting time of 30 minutes or
more is unacceptable.
• What is the most relevant performance dimension?
Process Performance Measures
Process Performance Measures
• Time
• Cycle Time
• time that it takes to handle one case from start to
end
• Reduce the average cycle time
• aim of a redesign effort
• meet cycle times that are agreed upon with a
client at run time.
• Constituents of cycle time
• Processing time or service time
• Waiting time

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Time Measures
Cycle Time Analysis
• Cycle Time: Difference between a job’s starts and
end time
• Cycle Time Analysis: the task of calculating the
average cycle time for an entire process or process
fragment
• Assumes that the average activity times for all involved
activities are available (activity time = waiting time +
processing times).

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Cycle Time Analysis
• In the simplest case a process consists of a
sequence of activities on a sequential path
• The average cycle time is the sum of the average activity
times

• ... But in general, we must be able to account for

• Alternative paths
• Parallel paths
• Rework (cycles)

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Sequence: An example

Just add the activity times

CT = 10 mins + 20 mins
CT = 30 minutes
Alternative Paths: An example

80%

20%

CT = 10 + ( 20 * 0.8 + 10 *0.2) = 28
Alternative Paths

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Parallel Paths: An examples

CT = 10 + max(20, 10) = 10 + 20 = 30
 Processes with Parallel Activities

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Example: Rework Loop

80%

20%

CT = 10 + 20/(1 – 02.) = 35
Rework

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Rework - Example

CT = 10 + 20/(1 – 02.) = 35

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Flow Analysis Equations for Cycle Time
 Rework At Most Once

CT = 10 + 20+ 20/(1 – 02.) = 55

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 Flow Analysis of Cycle Time

CT = 1/(1 – 02.) + max(1, 3) + 3+ (0.6*1 + 0.4 * 2)

= 1.25 +3 + 3 + 1.4
= 8.65 days or 69.2 hours
Cycle Time Efficiency
• Measured as the percentage of the total cycle time
spent on value adding activities

• Processing Time / Theoretical Cycle Time (TCT) is

the cycle time if we only counted value-adding
activities and excluded any waiting time or
handover time.
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 Cycle time efficiency

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Calculate the cycle time efficiency.
Flow Analysis: Scope and Limitations
Limitation 1: Not all models are structured
Limitation 2: Fixed arrival rate capacity
Cost Analysis
 Cost Analysis

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Cost Analysis: Example

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Cost Analysis: Example

Cost = 2/0.8 * 25 + ( 0.5 + 3) * 25 + 2 * 50 + (0.6 * 2

* 50) + (0.4 * 0.5 *50) + 1 (bank charge)

Cost = 62.5 + 87.5 + 100 + 60 + 10 + 1

Cost = 321

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Cost Analysis: Example

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Typical Components of Cost
Resource Utilization
Resource Utilization &
Waiting Time

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Quality
Balanced Scorecard
Process Performance Reference
Models
Flow Analysis