Resource Pool and Process Capacity
Ronald S. Lau, Ph.D.
HKUST – ISOM
How does a bottleneck affect the process capacity?
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Bottleneck
Effect of bottleneck in a process
Bottleneck is the resource in the process
with the minimum capacity
Bottleneck determines the capacity of
the overall process
How to identify bottleneck?
Visually: By observing the process and Blocking Starving
identifying the resource before which
the work starts piling up (or after which
“starving” may occur)
Analytically: Identifying the resource
with the minimum capacity (⇒ highest
resource utilization)
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Bottleneck is all about the limiting resource in question…
Fabric Cutting Sewing Packing T-shirt
Resources: Worker A Worker B Worker C
Processing time: 3 min/unit 4 min/unit 3 min/unit
Where is the bottleneck?
Bottleneck = Activity with the longest processing time?
In this example, bottleneck is the resource required to perform the activity
with the longest time, i.e., Worker B
Caution: Even the longest activity time does not always implicate a bottleneck because…
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Bottleneck and utilization
Flow rate (how much does it produce?)
Utilization =
Capacity (how much can it produce?)
Bottleneck refers to the resource with the highest utilization (but not always the
one with the lowest resource capacity because of the actual process flow)
u = 18/20 u = 18/30
Example 1 = 60%
Bottleneck = Resource = 90%
with the lowest capacity Rate in
20/hr 30/hr
18/hr
Example 2 u = 12/12 u = 9/10
Bottleneck ≠ Resource = 100% = 90%
with the lowest capacity Rate in 75%
12/hr 12/hr 10/hr
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What is the capacity of this process?
Activity 1 Activity 2 Activity 3
Resources: Worker A Worker A Worker B
Activity time: 10 min/unit 20 min/unit 15 min/unit
Resources Activities Time required Number of Capacity
performed per unit of work each resource (# resources x 1/activity time) Processing rate
= 1/processing time
Worker A Activity 1 10 minutes 1
Activity 2 20 minutes
Worker B Activity 3 15 minutes 1
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Solution
Activity 1 Activity 2 Activity 3
Resources: Worker A Worker A Worker B
Activity time: 10 min/unit 20 min/unit 15 min/unit
Resources Activities Time required Number of Capacity
performed per unit of work each resource (# resources x 1/activity time)
Worker A Activity 1 10 minutes 1 1 x 1/(10+20 minutes/unit)
Activity 2 20 minutes = 2 units/hour
Worker B Activity 3 15 minutes 1 1 x 1/(15 minutes/unit)
= 4 units/hour
Overall process capacity = Capacity of resource with minimum capacity = 2 units/hour
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Example: Resource pool with multiple resource units
Activity 1 Activity 2
Resources: Machine A Machine B (two identical machines)
Activity time: 2 min/unit 5 min/unit (for each machine)
Resources Activities Time required Number of Capacity
performed per unit of work each resource (# resources x 1/activity time)
Machine A Activity 1 2 minutes 1
Machine B Activity 2 5 minutes 2
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Solution
Activity 1 Activity 2
Resources: Machine A Machine B (two identical machines)
Activity time: 2 min/unit 5 min/unit (for each machine)
Resources Activities Time required Number of Capacity
performed per unit of work each resource (# resources x 1/activity time)
Machine A Activity 1 2 minutes 1 1 x 1/(2 minutes/unit)
= 30 units/hour
Machine B Activity 2 5 minutes 2 2 x 1/(5 minutes/unit)
= 24 units/hour
Overall process capacity = Capacity of resource with minimum capacity = 24 units/hour
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How to assess the process capacity given a pool of
resources?
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Capacity measures
Capacity Productive capability of a process
Quantify how much business the operations can support
Measured as a quantity of output per unit time, e.g.,
Number of customers served per hour
Number of transactions completed per day
Number of automobiles produced per month
…
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Flow rate and process capacity
Process capacity = Maximum flow rate of a process
Determined by the bottleneck
How to measure capacity for a resource pool?
Unit load Ti = The total amount of time the resource works to process each flow unit
with resource i
Capacity of a resource unit = 1 / Ti
Capacity of a resource pool = c / Ti where c is the number of identical resource units in
resource i
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Example: Effective capacity of processing insurance claims
Resource pool Unit load or Effective Number of Effective
(i) processing capacity of a units in the capacity of a
time for i resource unit resource resource pool
(minutes (claims per pool (claims per
per claim) minute) minute)
Ti 1 / Ti c c x 1/Ti
Mailroom Original process capacity
0.6 1/0.6 = 1.667 1 1.667 = 1.667 x 60 minutes
clerk
= 100 claims per hour
Data entry
4.2 1/4.2 = 0.238 8 1.905
clerk
Claims
6.6 1/6.6 = 0.152 12 1.818
processor
Claims
2.2 1/2.2 = 0.455 5 2.273
supervisor
There is always at least one bottleneck in the process. Example: After an extra
mailroom clerk is added, the bottleneck will shift to claims processor and the
process capacity = 1.818 x 60 minutes = 109 claims per hour
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Example: Campus Hair Salon
Reception Shampoo Styling Payment
3 minutes 10 minutes 15 minutes 5 minutes
by Lulu by Billy, by Billy, by Billy,
Frankie, or Frankie, or Frankie, or
Mimi Mimi Mimi
What is the number of customers that can be served per hour?
What process change can be made to improve the capacity?
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Process analysis at the Campus Hair Salon
Identify the capacity based on the unit load for each of three hair stylists
(Billy, Frankie, Mimi):
Sum of Ti = 10 + 15 + 5 = 30 minutes per customer for each hair stylist i
Capacity of the resource pool = 3 / 30 x 60 minutes = 6 customers per hour
Analysis:
Unit load for Lulu (receptionist) = 3 minutes per customer or 20 customers per hour
Bottleneck Hair stylists
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Improving the process at the Campus Hair Salon
Work re-arrangement
If Lulu is also responsible for payment, the unit load of stylists is reduced to 25 minutes
(i.e., 30 – 5 = 25)
Capacity of stylists = 3 / 25 x 60 minutes
= 7.2 customers per hour
Lulu’s unit load will increase to 3 + 5 = 8 minutes
Capacity of Lulu = 1 / 8 x 60 minutes
= 7.5 customers per hour
Result
The capacity of the salon will be increased from 6 to 7.2 customers per hour, a 20%
improvement
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Some concluding remarks on the topic of process
analysis…
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Why are there so much confusion?
Be careful about the terms and definitions, as they can be used for the
activity (or task or process step) or the entire process
Task time, flow time, throughput time, cycle time
Resource capacity, process capacity
Measurement units:
Time = Time (per one unit)
Rate = Number of units per unit of time
Bottleneck determines the pace of production and thus process capacity
(rate) while critical path determines the process flow time
Bottleneck capacity ⇒ Flow rate
Critical path length ⇒ Flow time
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Be sure what you are talking about…
Activity vs. Process
Activity: Unit load Ti is also known as activity time, task time, or processing time, etc.
performed by the resource i
Process: Flow time T (throughput time or lead time) is the average time required to get
through from the entry point to the exit point, completing many activities/tasks
Theoretical flow time vs. Actual flow time
Theoretical flow time is the minimum amount of time required for processing a typical
flow unit without any waiting
Actual flow time includes waiting and other (e.g., setup, transportation) time for a flow
unit to get through the process
Flow time efficiency = Theoretical flow time / Actual flow time
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Flow time vs. cycle time
Confusing terms for flow time measurements…
Process flow time Process flow time
Activity Activity 1 1 1
3 minutes/unit
time time min/unit min/unit min/unit
# Resource units = 1 # Resource units = 3
Flow time = 3 minutes per unit Flow time = 3 minutes per unit
Cycle time = 3 minutes per unit Cycle time = 1 minute per unit
Flow rate = 1 / Cycle time (or Flow time) Flow rate = 1 / Cycle time
= 60 minutes / 3 minutes/unit = 60 minutes / 1 minute/unit
= 20 units per hour = 60 units per hour
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Lessons learned:
• Cycle time is determined by the bottleneck
Impact of bottleneck on cycle time • Process capacity: Flow rate = 1/Cycle time
Process flow time Process flow time
Activity 4 5 3 4 5 3
time min/unit min/unit min/unit min/unit min/unit min/unit
Resource 1 1 1 1 2 1
unit
“Activity” cycle time “Activity” cycle time
= 5 minutes/unit = 2.5 minutes/unit
Bottleneck Bottleneck
Flow rate = 12 Cycle time Cycle time
units per hour = 5 min/unit = 4 min/unit
Flow rate = 15
units per hour 21
Reframe the problem using the Little’s Law
Inventory = # flow units in the process
Inventory = ThRoughput× Flow Time
Flow rate = 1 / Cycle time
Flow time = Total time a flow unit
spends in the process
Activity 4 5 3
time min/unit min/unit min/unit What do we know?
Resource Flow rate = 1 / 4 minutes/unit
1 2 1 = 1/4 unit per minute
unit
Flow time = 4 + 5 + 3
Bottleneck = 12 minutes
Cycle time Now, find inventory in the process
= 4 minutes/unit = 1/4 x 12 = 3 units
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Why the concept of critical path is important when
determining the process flow time?
1.5 trays/
Practice question #7
How to identify the critical path? passenger and
40 secs/tray
Path A-B-D: 30 + 40(1.5) + 60 = 150 seconds
Task B
Path A-C-D: 120 seconds
Task A
Critical path: A-B-D 40(1.5)=60 sec
per passenger Task D
Implications:
Expediting task C has no effect on the flow time Task C
Lessons learned:
From Theory of Constraints (TOC), any improvement of
activities on non-critical path has no impact on the flow
time performance.
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Bottleneck vs. critical path
Bottleneck Lessons learned:
Bottleneck refers to the resource has the minimum • Process capacity is constrained by
the bottleneck’s capacity
resource capacity: Welding
• Process flow time (throughput time)
Bottleneck determines the pace of the entire process is determined by the critical path
⇒ Process capacity = Welding’s capacity
Monthly capacity = 2 units/hour x 8 hours x 20 days
= 320 units per month
Practice question #16
Throughput time 86 min
Throughput time = Flow time of the longest path
Determined by the critical path 10 min 10 min
Path 1: S1-S2-W-A = 10+10+30+86 = 136 minutes
30 min
Path 2: D-W-A = 25+30+86 = 141 minutes
25 min
To reduce the throughput time is to reduce the
activity time on the critical path
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Student loan application process
X Activity with
time indicated A G
7 10
in minutes 7
C D E F 75%
Start End
8 6 12 2
B H
26 20
How long does it take a student to have his/her student loan application approved?
How many student loan applications can be processed per hour?
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Solutions
How long does it take a student to have his/her student loan application approved?
How long is the flow time?
A-C-D-E-F-G = 7+8+6(1.25)+12(1.25)+2(1.25)+10 = 50 minutes
A-C-D-E-F-H = 7+8+6(1.25)+12(1.25)+2(1.25)+20 = 60 minutes
B-C-D-E-F-G = 26+8+6(1.25)+12(1.25)+2(1.25)+10 = 69 minutes
B-C-D-E-F-H = 26+8+6(1.25)+12(1.25)+2(1.25)+20 = 79 minutes
How many student loan applications can be processed per hour?
Where is the bottleneck?
Resource responsible for activity B => 1/26 x 60
minutes = 2.3 applications per hour
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