Process Flow

MGT 502
Flow and Capacity Management

 Process Flow
 Managing Constraints
 Capacity decisions
 Queuing Theory
 Simulation
Process Flow
 Process decisions are strategic and can affect a
firm’s ability to compete over the long run.
 Time
 Quality
 Cost
 Flexibility
 Productivity
 High Flexible flows
Process
Project
process
Choice
Job
process Intermediate
flows
Customisation

Batch
process

Line
process Line flows

Continuous
process

Low
Low High
Volume
 HBR article on Mass
Customization

change
Transparent Collaborative

Adaptive Cosmetic
no change

no change change
Representation
 Process Management

 Process reengineering
 applied to core processes
 reinvention, start with a “clean slate”
 leadership, cross-functional teams, analysis required

 Process improvement (Kaizen)

 systematic approach
 understand the process
 ask what, when, who, where, how, how long
 Then ask why? (Toyota’s 7(5) why’s rule!)
 Process Analysis

 Deming’s continuous improvement cycle

 Plan – Do – Check – Act

 Six Sigma improvement process

 Define Opportunities

 Measure Performance

 Analyze opportunities

 Improve performance

 Control performance

 DMAIC: Dumb Managers Always Ignore Customers

Streamlining
Eliminate Bureaucracy
Eliminate Duplication
Simplify
Simplify Language
Reduce Cycle time
Proof Errors
 Theory of Constraints
 A management philosophy that focuses the
organizations scarce resources on improving the
performance of the true constraint, and
therefore the bottom line of the organization.
 A manufacturing company can be thought of as
a chain of dependent events that are linked
together like a chain
 A chain is only as strong as its weakest link
 the weakest link is the constraint
Managing Constraints
 A factor that limits a company’s ability to achieve
more of its goal.
 To manage constraints, Goldratt proposed a five-step
Process of On-Going Improvement.
 Identify

 Exploit

 Subordinate

 Elevate

 Go back to Step 1.