Copyright

Process Metrics: Thruput, Inventory & Flow Time

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Process Configurations & Effects on System Performance

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:04 Process Metrics
  • 1:00 Thruput
  • 2:03 Inventory
  • 2:53 Flow Time
  • 3:47 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay
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.

Major metrics are needed to get the most out of a business process: we want to know where we can do better. In this lesson, we'll define, discuss, and explore the interconnection of these metrics, highlighting thruput, inventory, and flow time.

Process Metrics

Attending a football game usually calls for some type of tailgating. We might have a menu that includes hamburgers, hotdogs, and ribs. Let's say JD Catering was brought in to help with homecoming. When bidding for the job, JD Catering had to show that it had the capacity to handle a high demand for quality food quickly. As a part of its bid for the job, JD Catering shared its process metrics, including thruput, inventory, and flow time.

Process metrics are data collected on production capacity, quickness, and efficiency. We want to know how many goods or services on average go through the system, how much time it takes to produce them, and what their quality is. Using these metrics will help a company determine its strengths and weaknesses. To win the tailgating job, JD Catering wanted to highlight its strengths. The company started by reporting its thruput.

Thruput

The thruput is the average number of goods or services going through a business process per unit of time. This metric could be used to look at most anything. Thruput could be average haircuts per hour, patients per quarter, dental cleanings per day, or balloons per minute. Any evaluation of something being created within a specific time frame can serve as a thruput metric.

In the case of JD Catering's bid for the tailgating job, the company provided the average number of hamburgers, hotdogs, and ribs it can serve per hour. Other thruput metrics that might be helpful are drinks, desserts, and sides provided per hour. To show that the company makes high quality food, the company could also report a low negative metric, such as the number of dissatisfied customers per hour.

Moving from thruput to other important parts of the process, JD Catering next focuses on inventory metrics. The company wanted to show how much experience it has with serving large numbers of customers in a chaotic environment.

Inventory

Inventory tells us the number of flow units being processed. Flow units are things that go through a system to be processed. Examples include customers, athletes, patients, and kittens. Typically, a company wants flow units to be high. Flow units will be low if a company's good or service isn't in demand or if the process is inefficient. Inventory metrics could include looking at how many patients are admitted into a hospital, kittens housed at a shelter, or customers left in a waiting room.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create An Account
Support