Process Configurations & Effects on System Performance Video

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  • 0:00 What Are Process…
  • 1:37 Reducing Customer Flow Time
  • 2:41 Increasing System Capacity
  • 3:21 Balancing the Line
  • 4:02 Using Flexible Resources
  • 4:36 Lesson Summary
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Lesson Transcript
Instructor: Beth Loy

Dr. Loy has a Ph.D. in Resource Economics; master's degrees in economics, human resources, and safety; and has taught masters and doctorate level courses in statistics, research methods, economics, and management.

To improve processes, we can reduce customer flow time, increase system capacity, balance the line, and use flexible resources. We will compare and contrast these multiple process configurations to see what is effective for different situations.

What Are Process Configurations?

There's a process we all go through to go get ready for work in the morning, like getting dressed, eating breakfast, and commuting to work. In order to get to work on time and get enough sleep, you might try to make this process as efficient as possible.

Companies have processes too. Let's take an oatmeal factory for instance. There's a process for how to make it: processing the oats, adding nuts or cranberries, cinnamon or sugar, and then packaging. The goal is to find the best configuration to support this process. In other words, we need the quickest way to make the most oatmeal and therefore the most profit.

Process configurations are designs that we apply to systems in hopes of improving performance. We look at different steps to see where we can improve system efficiency within the confines of our process. As a company strives to produce a quality product, goods and services go through the system. Finding strengths and weaknesses in the system will give a company the opportunity to make improvements and capitalize on strengths.

A company that makes oatmeal has a process. The process is a bit different depending on whether it's high fiber, low fat, low sugar, or organic. Nonetheless, the overall process is the same. For example, oats have to be grown, harvested, dried, chopped, flavored, packaged, and shipped. Let's look into different process configurations, including how to reduce customer flow time, increase system capacity, balance the line, and use flexible resources.

Reducing Customer Flow Time

Customers often find that they become dissatisfied when something takes a long time. This is what we call flow time. It's the amount of time it takes to go through a process. Waiting in line, for example, can be a frustrating way to spend part of a busy day. Customer satisfaction can become so low that the customer looks elsewhere for substitute. Maybe they will cost more or aren't quite the same quality, but the customer is happier not spending time waiting or wasting time, as they're likely feeling.

There are ways to eliminate some of the customer dissatisfaction that comes from a high flow time. As a part of revamping a process configuration, we can have the customer get started in the process while waiting, distract the customer with something interesting (e.g., television, radio, entertainment, food), use a single waiting line to promote fair waiting, and inform customers of their approximate wait times.

For example, if I want to place an order for oatmeal, and the line is really long, providing me with samples of toppings would certainly occupy my time.

Increasing System Capacity

System capacity is the amount of goods and services that can be produced in the smallest amount of time. We want to produce as much as possible, and increasing system capacity is one way to streamline process configuration. Hiring more employees, paying overtime, and hiring contractors are ways to increase production in a shorter amount of time.

Improving existing equipment, updating outdated equipment, and adding speedier equipment are also ways to produce more. If the chopping of the oats in the oatmeal process is faster than the flavoring step that follows, it's time to make a change to increase the system capacity. This may mean adding more labor to the flavoring step.

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