Operations Management Chapter 3

Process analysis
a rigorous framework for understanding the detailed operations of a business. Determines how many flow units can be processed per unit of time and how busy the resources of the process are
Process flow diagram
a graphical way to describe the process. It uses boxes to depict resources, arrows to depict flows, and triangles to depict inventory location
Resource
a group of people and/or equipment that transforms inputs into outputs
Flow unit
the unit of analysis that we consider in a process analysis: for example, patients in a hospital
Upstream
the parts of the process that are at the beginning of the process flow
Downstream
the parts of the process that are at the end of the process flow
Processing time
the time it takes a resource to complete one flow unit
Capacity
the maximum number of flow units that can flow through that resource per unit of time
Process capacity
the maximum flow rate a process can provide per unit of time. This determines the maximum supply of the process. Is the smallest capacity of all resources in the process
Demand rate
the number of flow units that customers want per unit of time
Capacity-constrained
the case in which demand exceeds supply and the flow rate is equal to process capacity
Demand-constrained
the case in which process capacity exceeds demand and thus the flow rate is equal to the demand rate
Throughput
a synonym for flow rate, the number of flow units flowing through the process per unit of time
Utilization
the ratio between the flow rate (how fast the process is currently operating) and the process capacity (capturing how fast the process could be operating if there was sufficient demand)
Cycle time
the time between completing two consecutive flow units
Lead time
the time between when an order is placed and when it is filled. Process lead time is frequently used as an alternative term for flow time
Bottleneck
resource with the lowest capacity in a process
Worker-paced
a process line in which each resource is free to work at its own pace; if the first resource finishes before the next one is ready to accept the flow unit, then the first resource puts the completed flow unit in the inventory between the two resources
Machine-paced
a process in which all steps are connected through a conveyor belt and all the steps mush work at the same rate even if some of them have more capacity than others
Time through the empty system
the time it takes the first flow unit to flow through an empty process; that is, a process that has no inventory