Process Analysis
Let’s go inside a McDonald’s kitchen…
How is an Aloo Tikki burger made?
• Step 1: Pick up buns
Put in toaster
Pass on after toasting
• Step 2: Spread McSauce
Add veggies, cheese slice
Add fried patty
• Step 3: Add veggies on top
Put the top bun
Close the packing box
Let’s draw a Process Flow Diagram
Station 1 Station 2 Station 3
40 s 55 s 35 s
• Assumption: Each station is manned by one worker, all working
simultaneously
• Each burger passes through all three stations sequentially;
• How many Aloo Tikki burgers can this line assemble in one hour? In
other words, what is the flow rate?
Can you take a guess?
Station 1 Station 2 Station 3
40 s 55 s 35 s
• How many Aloo Tikki burgers can this line assemble in one hour?
1. 28
2. 56
3. 65
4. 84
Process capacity & flow rate
Station 1 Station 2 Station 3
40 s 55 s 35 s
Processing time: 40 s 55 s 35 s
Station capacity: 3600/40 3600/55 3600/35
= 90 units/h = 65.45 units/h = 102.86 units/h
Bottleneck Station 2
Process capacity = bottleneck capacity = 65.45 units/h
Flow rate = Min(Demand, Process capacity)
Cycle time, Idle time, Labour cost
Station 1 Station 2 Station 3
40 s 55 s 35 s
Cycle time of the process = 1/FR = 1/65.45 = 0.0153 h = 55 s
Idle time: 15 s 0 s 20 s
Utilization: 40/55 55/55 35/55
= 72.7% = 100% = 63.6%
Overall process utilization = (value-add time)/(total time) = 130s/(3 x 55s)
= 78.8%
Direct labour cost per unit produced = (resource cost per h)/(flow rate)
= (3 x Rs.60/h)/(65.45 units/h)
= Rs. 2.75/unit
(Assuming average hourly wage rate = Rs.60/worker)
Does this line satisfy Little’s Law?
Station 1 Station 2 Station 3
40 s 55 s 35 s
Flow time: 55 s 55 s 55 s
Total flow time: 165 s
Inventory in process: 3 units
Thus, flow rate: (Inventory)/(Flow time)
= 3/165 units/s
= 3(3600)/165 = 65.45 units/h
How do we ramp up capacity?
Station 1 Station 2 Station 3
40 s 55 s 35 s
• Pick up buns • Spread McSauce • Add veggies on top
• Put in toaster • Add veggies, cheese • Put the top bun
• Pass on after slice
• Close the packing
toasting • Add fried patty box
Ramping up capacity => increasing flow rate => reducing cycle time
Suppose the last task at station 2 (add fried patty) takes 10 s
If we shift this task to station 3, then the processing times at stations 2 and 3 will change
Can you take a guess?
Station 1 Station 2 Station 3
40 s 55 s 35 s
• Pick up buns • Spread McSauce • Add veggies on top
• Put in toaster • Add veggies, cheese • Put the top bun
• Pass on after slice
• Close the packing
toasting • Add fried patty box
Suppose the last task at station 2 (add fried patty) takes 10 s; if we shift this task to station 3, then the
processing times at stations 2 and 3 will change
1. What will be the new cycle time?
a. 40 s b. 45 s c. 55 s d. 60 s
2. What is theoretically the lowest cycle time that can be achieved for this line?
a. 40 s b. 35 s c. 55 s d. 43.33 s
Improved capacity
Station 1 Station 2 Station 3
40 s 45 s 45 s
Station capacity: 3600/40 3600/45 3600/45
= 90 units/h = 80 units/h = 80 units/h
Bottleneck: stations 2 and 3
Line capacity: = bottleneck capacity = 80 units/h
Cycle time: = 1/(FR) = 45 s
Overall utilization: = (40 s + 45 s + 45 s)/(3 x 45 s) = 96.3%
Direct labour cost/unit = (3 x Rs.60/h)/(80 units/h) = Rs. 2.25/unit
Key Takeaways
• The capacity of a line can be increased by reducing the cycle time
• This can be done in two ways:
a. Distributing the total work as uniformly among the stations as possible
1. The more uniform the work distribution, the shorter will be the cycle time
b. Increasing the number of stations – this will break the total work into smaller
pieces and reduce the average processing time per station
• Increasing the capacity through this method may lead to significant
reduction in direct resource cost/unit
• Mechanization/automation of the work helps to increase the flow rate
manifold; hence, even with higher resource cost, the unit cost is
significantly lower