Scribd
Upload
8 views9 pages

Understanding Process Measurement

This document discusses the importance of measuring processes and different types of performance measures. It notes that measuring processes allows firms to determine if strategic goals are being met and allows performance comparisons. Some key performance measures discussed include productivity, capacity, capacity utilization, quality, speed of delivery, flexibility, and process velocity.

Uploaded by

Khy Nellas-Leonor
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
8 views9 pages

Understanding Process Measurement

This document discusses the importance of measuring processes and different types of performance measures. It notes that measuring processes allows firms to determine if strategic goals are being met and allows performance comparisons. Some key performance measures discussed include productivity, capacity, capacity utilization, quality, speed of delivery, flexibility, and process velocity.

Uploaded by

Khy Nellas-Leonor
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

PROCESS MEASUREMENT

Importance of Measuring Processes

Is the basis for good managementIf you


cant measure it, you cant manage it.
Allows a firm to determine if its
strategically important goals and standards
are being met.
Allows for performance comparisons with
Types of Performance
Measures
Productivity
The operational efficiency with which inputs are
transformed (converted) into outputs.
Partial measures of productivity can be taken
using the various inputs (e.g., labor, energy, and
materials) that are combined to create a
product. Outputs
Productivity
Inputs
Partial Measures of Productivity
Types of Performance Measures
Capacity
Output of a process in a given period of timeunits of
output per unit of time.
Design capacity
The ideal output rate at which the firm would like to
produce under normal circumstances and for which the
system was designed.
Maximum capacity
The maximum potential output rate that could be achieved
when productive resources are used to their maximum.
Types of Performance Measures
Capacity Utilization
Percentage of available capacity actually used.
Design capacity versus maximum capacity

Homogeneous output

Capacity Actual output



Utilization Design capacity

Variable output
Capacity Actual machine hours used

Utilization Total machine hours available
Measures of Capacity
Types of Performance Measures

Quality
Usually measured by the defect rate of the products produced.
Speed of Delivery
Products lead timeamount of time from when product is
ordered to when it is shipped.
Inventoried versus customized products
Variability/Uncertainty in delivery time
Less uncertainty in delivery times is better.
Types of Performance Measures

Flexibility
The measure of how readily a firms transformation
process can adjust to changes in customer demand (i.e.,
agile manufacturing).
Flexibility Measures
How quickly a process can convert from producing one
product to another product.
How quickly a process can adjust to changes in volume
(demand).
Types of Performance Measures
(contd)

Process Velocity (Manufacturing Velocity)


Ratio of total throughput time for a product to
the value-added time.
Throughput timethe time the product
spends in the process.
Value-added timethe time it takes to
complete the product.
Total throughput time
Process velocity =
Value-added time

You might also like