Intermediate

Intermediate Process
Process Analysis
Analysis
Kristen’s Cookies

Getting more for your cookie,

er, money!

Gantt Charts
Resource conflicts
Batch size and setups
Economies of Scale
 The
The Big
Big Picture
Picture

 Your operations strategy drives 3

major competitive differentiators in
your business model.

– Cost (price)
– Quality (e.g. customization, conformity)
– Timing (e.g. lead time)

Unfortunately, these tend to trade off

against each other.

 Clever process design is about

figuring out ways to avoid these
tradeoffs.
KRISTEN’S PROCESS FLOW
DIAGRAM
 GANTT CHART
(ORDER SIZE = 1 DOZ.)

mix/spoon

bake

cool

pack

pay

Kristen

roommate

oven

0 5 10 15 20 25 30 35 40 45 50 55 60 65
 Cookie
Cookie Questions:
Questions: 11 Dozen
Dozen
Rush order flow time?

Min. process cycle time?

Process capacity?

If we start at 8:00 pm and end at Midnight, how many cookies can we make?

Let us look at a Gantt chart

 Add’l.
Add’l. Cookie
Cookie Questions
Questions
What is the labor content per order?

What is the labor utilization if orders

arrive at the same rate they are fulfilled?

How many baking trays do we need?

Where should we add resources?

 GANTT CHART
(ORDER SIZE = 2 DOZ.)

mix/spoon

bake

cool

pack

pay

Kristen

roommate

oven

0 5 10 15 20 25 30 35 40 45 50 55 60 65
 Gantt Chart: Order size = 2 dozen

mix/spoon
16 36
bake
8

cool
18 23 28 38 48

pack
31 51
pay
36 56

Kristen

roommate

oven

0 5 10 15 20 25 30 35 40 45 50 55

4
 Suppose the order size increases.

Order Labor Bottle- Process Min ROFT

Size Content neck Capacity Proc CT

1 dz. 12 min Oven 6 dz./hr. 10 min 26min

2 dz.

What happens to the order lead time?

Should we give a Price discount?

5
 Suppose we have two ovens. . .
(Note: Sometimes we leave WIPs out of Process Diagrams.
Don’t do this unless you’re an expert, though.)

Oven
10 min/dz.
Receive
Mix
Payment
Spoon Cool Pack
6 min 2 min/dz 5 min. 2 min/dz 1 min
per order
per order
Oven
10 min/dz
 Performance
Performance with
with 22 Ovens
Ovens
and
and aa 11 dozen
dozen order
order size
size

Kristen’s
Labor Content

Room-Mates’
Labor Content

Oven resource content

Oven Min CT

Bottleneck

Process Capacity
 More
More Cookie
Cookie Quandaries
Quandaries
What is the value of a second oven for
order size = 1 dz.?

What is the impact if your roommate is

out of town for order size = 1 dz.?
 LESSONS
LESSONS
1. Flow time and Cycle time:

Implications for customers, managers:

Flow time is more important to:

Cycle time is more important to:

Interrelationships:
Will decreasing the minimum process cycle
time necessarily decrease process flowtime?

Will decreasing the process flowtime

necessarily decrease the minimum process
cycle time?

10
 LESSONS
LESSONS (cont.)
(cont.)
2. OM tension in the case: Kristen uses a make-
to-order (MTO) customer interface, but what
advantages would she get from a FGI (make-to-
stock—or MTS—interface)?

What disadvantages would result?

Why wouldn’t you use a MTS operating system

when no product customization is allowed?

11
 The
The GM’s
GM’s Corner
Corner

There is a 3-way tradeoff between

cost, quality, and timing that drives
your business model.

– Economies of scale reduce resource costs but

also restrict customization
– Having an FGI improves lead time but also
degrades freshness & customization and
increases holding costs & defects

Clever process design is about

figuring out ways to avoid these
tradeoffs.

– One way to do this is to map out your process to

identify & remove resource conflicts, which will
improve both cost and lead-time.