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OM5 Chapter 7: Process Selection, Design, and Analysis
Discussion Questions
1. What type of process—project, job shop, ow shop, and continuous ow—
would most likely be used to produce the following? Explain your
reasoning.
a. Apple iPads – ow shop (assembly line)
2. Provide some examples of customer- and provider-routed services that you
have encountered that are di,erent from those described in this chapter.
Can you identify any improvements to these processes?
Customer-routed examples include: visiting a bookstore, checking in a
major convention hotel, health clubs, Club Med, sur0ng the Internet,
Provider-routed examples include: Federal Express, simple on-line
will, CNN Headline News, most fast food restaurants such as
McDonald’s, blood tests at a lab or hospital, automatic teller
FYI--To simplify things we only have two choices in OM but in the original
research articles (Collier and Meyer) there is a third choice: co-routed
3. List some common processes that you perform as a student. How can you
use the knowledge from this chapter, such as identifying bottlenecks, to
improve them?
Example student processes include: studying for a test, applying for a
student loan, writing a term paper, applying for US citizenship, paying rent
Simply identifying the process is the first step followed by recognition of
C7 concepts like: customized versus standard, four types of proc2esses,
4. In Section 5 we listed several questions to ask in order to identify and
analyze improvements in a process. Can you think of others?
The questions listed in the chapter, Section 5 include:
• Are the steps in the process arranged in logical sequence?
• Do all steps add value? Can some steps be eliminated and should others
be added in order to improve quality or operational performance? Can
Other example job and process related questions students might cite
include:
1. How much time does it take to process the good or service?
2. Where are service management skills needed in the process? Do we do
a good job of training for these types of skills at these points of customer
5. What sustainability issues are present in the example restaurant order
ful0llment process example (Exhibits 7.6 to 7.11)? What other restaurant
processes need to include sustainability criteria in their design and
day-to-day management?
Sustainability refers to an organization’s ability to strategically address
Sustainability can be viewed from three perspectives: environmental,
social, and economic. Exhibit 1.6 is best suited to provide a framework to
Exhibit 1.6 Examples of Sustainability Practices
Environmental Sustainability
• Waste management: Reduce waste and manage recycling e,orts
• Transportation optimization: Design eIcient vehicles and routes to
save fuel
Social Sustainability
• Product safety: Ensure consumer safety in using goods and services
• Workforce health and safety: Ensure a healthy and safe work
environment
Economic Sustainability
• Performance excellence: Build a high-performing organization with a
capable leadership and workforce
• Financial management: Make sound financial plans to ensure
Clearly, restaurant purchasing/sourcing, energy use, facility design,
emergency and disaster plans and training, food inspections, employee
Problems and Activities
(Note: an asterisk denotes problems for which an Excel spreadsheet template on the CourseMate
Web site may be used.)
1. Research and find an example of a process and/or value chain improvement initiative where
sustainability is included in the analysis. Write a short paper (maximum of two typed pages)
describing the initiative similar to the chapter description about Alfa Laval.
One objective of this “green” assignment is to get students motivated w/r
2. Carbon dioxide emissions associated with a one-night stay in a hotel room are calculated at
29.53 kg of CO2 per room day for an average hotel. If your hotel’s 102 rooms are all
occupied for two days during a college football game, how much CO2 did the guests and
hotel release into the atmosphere? What work and leisure activities and processes in the
hotel generate CO2 emissions? Provide three examples. Explain.
CO2 released = (102 rooms/night)(2 nights) = (204 room days)(29.53 kg of CO2/room day) =
Laundry services
Air conditioning and heating
Vending machines
And, of course, the vehicles that supply the hotel (vendors), airport transport, and customer
vehicles all contribute to the release of CO2 into the atmosphere. Ask your students, “How
OM must now analyze costs, time, quality AND sustainability in process and value
chain design!
If you Google “green hotels” you will get over 2 million hits such as the partial example
below:
And in a nod to the wishes of its environmentally concerned membership, AAA has added an
"eco" icon to its 2010 Tour Books for hotels, motels, and other lodging facilities. The AAA
Eco Program identifies - and in turn, promotes - AAA-approved lodgings that are certified by
"In the hospitality industry, we're seeing a wave of new government mandates stating that
employees can only stay in or host meetings in green hotels," said Ray Hobbs, a member of
For example, in 2007, Florida Governor Charlie Crist signed an executive order mandating
that all state meetings and conventions be held in designated green facilities whenever
possible. With the stroke of a pen, Governor Crist started a veritable stampede of hoteliers
3. Draw a flowchart for a process of interest to you, such as a quick oil-change service, a factory
process you might have worked in, ordering a pizza, renting a car or truck, buying products on
the Internet, or applying for an automobile loan. Identify the points where something (people,
information) waits for service or is held in work-in-process inventory, the estimated time to
accomplish each activity in the process, and the total flow time. Evaluate how well the process
worked and what might be done to improve it.
This question helps students see processes from a larger perspective and
4. Design a process for one of the following activities:
a. Preparing for an exam
b. Writing a term paper
c. Planning a vacation
The instructor should expect a simple owchart with 3 to 10 activities
possibly with feedback loops. Make sure the students understand a group
of tasks de0ne a workstation and the process map (owchart) should be
5. A 30,000-seat college football stadium is used 18 times for games, concerts, and graduation
ceremonies. Each event averages four hours and assumes the stadium is full for each event.
The stadium is available 365 days a year from 6 am to midnight. What is stadium (seat)
utilization using Equation 7.1? Can you think of one or two other assets that have such low
resource utilization?
Utilization (U) = Resources Used/Resources Available (Eq. 7.1) [Notice:
the focus is stadium “seat” utilization)
= 0.0122 or 1.22% Stadium seat utilization (very few
6. The demand for intensive care services in an urban hospital is 11 patients per hour on
Mondays while intensive care nurses can handle 4 patients per hour. What is nurse (labor)
utilization if five intensive care nurses are scheduled to be on duty for Monday? What are
the advantages and disadvantages of this resource schedule for Mondays from the patient’s
and management’s perspective?
Use Equation 7.2 and notice all equation inputs are in the same units of measure!
The planned nurse utilization is close to100% so any delays or longer
emergencies will probably result in patients waiting for service. If you
7. A telephone call center uses three customer service representatives (CSRs) during the 8:30
a.m. to 9:00 a.m. time period. The standard service rate is 2.0 minutes per telephone call per
CSR. Assuming a target labor utilization rate of 80 percent, how many calls can these three
CSRs handle during this half-hour period?
For all of these problems emphasize that students must get all variables
8. What is the implied service rate at a bank teller window if customer demand is 43 customers
per hour, two bank tellers are on duty, and their labor utilization is 90 percent?
Service rate = ??
Utilization (U) = Demand Rate/[Service Rate*Number of Servers] (7.2)
9. Refer to Exhibit 7.7 and recomputed the total value-added and non-value-added time and cost
given the following new information. If a restaurant uses iPads to place orders and notify
waiters when the customer’s order is ready, the time on the order board (now an electronic
order board) decreases from 5 to 1 minute, and the prepared order wait time decreases from 5
to 3 minutes. How might speeding up the order and delivery process affect customer
satisfaction? Explain.
Therefore, introducing technology into this restaurant ordering process has reduced
10.* An express checkout line at a grocery store takes an average of 3 minutes to ring-up a
customer’s order. On average 4 customers are in the checkout line. What is the average
number of customers per hour that are processed in the checkout line?
WIP = R* T
4 = R*(3 min)
11.* An accounts receivable manager processes 200 checks per day with an average processing
time of 15 working days. What is the average number of accounts receivable checks being
processed in her office? What if through information technology she reduces the processing
time from 15 days to 10 days to 5 days? What are the advantages and disadvantages of
adopting this technology? Explain.
WIP = R* T = (200 checks/day)(15 days) = 3,000 checks
The new information technology dramatically speeds up the process and
The Excel template Little’s Law may also be used to solve this problem. The first calculation
is shown below:
12.* A manufacturer’s average work-in-process inventory for Part #2934 is 750 parts. The
workstation produces parts at the rate of 225 parts per day. What is the average time a part
spends in this workstation?
The Excel template Little’s Law may also be used to solve this problem.
13. Marion Health Clinic sees patients on a walk-in basis only. On average, 10 patients per hour
enter the clinic. All patients register at the registration window with a registration clerk (RC),
which takes 3 minutes. After registration, but before being seen by a nurse practitioner (NP),
the registration records clerk (RRC) pulls the patient’s records from the records room, which
takes 6 minutes. At his or her turn, each patient then sees a NP, who checks weight,
temperature, and blood pressure. This work activity takes 5 minutes. The NP determines if
the patient must see a doctor (MD) or can be handled by a Physician’s Assistant (PA). There
is one MD, one PA, one NP, one RRC, one BC, and one RC in the system at the current time.
The NP sends 40 percent of the patients to the PA and 60 percent to the MD. The PA takes
on average 6 minutes per patient whereas the MD takes 15 minutes. After the patient sees the
PA and/or MD, the patient pays the bill or processes insurance information with the billing
clerk (BC), which takes 5 minutes per patient. Then the patient exits the process.
a. Draw a process ow diagram, label everything, and place the times and
percentages given in the problem on the diagram. See the following.
Notice that in the base analysis, the RRC is at 100% labor utilization
b. What is the throughput in patients per hour of each stage in the
process?
Assume one person per stage MD = 4 patients/hour, NP = 12
c. What are the labor utilization rates for the MD, NP, PA, BC, RRC, and
Assume one person per stage MD = 150%, NP =83.3%, PA = 40%, BC
=83.3%, RRC = 100%, and RC = 50%. The bottleneck is MDs. The labor
d. The PA often discovers the patient should see a MD so the patient is
sent to the MD after seeing the PA 50% of the time. How does this change
a,ect your answers to the questions above?
The demand for MDs is now 8 patients/hour instead of 6 so with 1 MD
