4

C h a p t
e r
PROCESS MEASUREMENT AND
ANAYLYSIS
Chapter
Outline
•Process Analysis
•Process Measurement
•Benchmarking
•Process Analysis in
Manufacturing
•Process Analysis in
Services
•Business Process
Reengineering

4-1
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4
C h a p t
e r
PROCESS MEASUREMENT AND
ANAYLYSIS Chapter
Objectives
•Identify the different performance
measures for
evaluating a process.
•Introduce benchmarking and
demonstrate its
importance to world class operations.
•Show how process analysis can provide
an in-
depth understanding of processes.
•Introduce the concept of service
blueprinting and
show how it is used to evaluate a
service
operation.
4-2
Irwin/McGraw-Hill •Introduce the concept of business
© The McGraw-Hill Companies,
 EXHIBIT 4.1 Process Flow Charts for Making
Hamburgers
A) Standard:

Cook Assemble Customer

Raw Material

B) McDonald’s

Cook Assemble Customer

Raw Finished
Materials Goods
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 EXHIBIT 4.1 Process Flow Charts for Making
Hamburgers continued

C) Burger King:
Yes
Assemble
FG
Cook Std? Customer

Raw WIP
Assemble
Materials No

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 EXHIBIT 4.1 Process Flow Charts for Making
Hamburgers continued

D) Wendy’s:

WIP
Cook Assemble Customer

Raw
Material

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HIBIT 4.2 Partial Measures of Productivity

Type of Business Productivity Measure (Output/Intput)

Restaurant Customers (meals)/labor hour

Retail store Sales/square foot

Chicken farm Pounds of meat/pound of feed

Utility plant Kilowatts/ton of coal

Paper mill Tons of paper/cord of wood

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XHIBIT 4.3 Measures of Capacity

Type of Operation Measure of Capacity

Fast food restaurant Customers (meals)/hour

Brewery Barrels of beer/year

Hotel reservation call center Telephone calls/hour

Automobile assembly plant Cars/hour

Paper Tons of paper/year

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HIBIT 4.4 Major Steps in Benchmarking

• Planning

• Analysis

•
Integration

• Action

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 EXHIBIT 4.5 Make-to-Stock and Make-to-
Order Processes

Make-to-Stock:

Step 1 Step 2 Customer

Finished
Goods
Make-to-Order:

Step 1 Step 2 Customer

Raw
Materials
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 EXHIBIT 4.5 Modularization

Modularization:

Step 1 Step 2 Customer

Standard Assemble-
Components to-Order

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 Example of Process Analysis

A Commercial Bread Bakery

lb./hr. Number of Total

Stage per Machine Machines Capacity

Mix 60 3 180
Proof 25 6 150
Bake 40 4 160
Package 75 3 225

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 Process Analysis - Service Blueprinting

Back-of-the-House Front-of-the-House

Delay (Customer
Stage 2 Stage 1 Start
Enters Process)

Stage 3 Stage 4 End

(Customer
Exits Process)

Line of Visibility

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