Fall 2011
Class #2
Toyota’s Way
What is Toyota doing now?
Taiichi Ohno’s answer was very simple:
“All we are doing is looking at the time line from the moment the
customer gives us an order to the point when we collect the cash.
And we are reducing that time line by removing the non-valueadded wastes.”
(Taiichi Ohno. Toyota Production System: Beyond Large-Scale Production. p. ix.)
http://www.youtube.com/watch?v=kq4JVkkCzKY
Little’s Law
Example
A major manufacturer sells $300 million worth of
cellular equipment per year. Average amount in
accounts receivable is $45 million. What is the
average elapse time from the time a customer is
billed to the time payment is received?
Note that in this case, the process is the manufacturer’s
account receivable department and the flow unit is a dollar
in accounts receivable.
Analyzing the Job
 Flow process chart
 Chart used to examine the overall sequence of an
operation by focusing on movements of the
operator or flow of materials
7-4
Symbols for Flow-Process Chart
Operation (a task or work activity)
Inspection (an inspection of the product for
quantity or quality)
Transportation (a movement of material from
one point to another)
Storage (an inventory or storage of materials
awaiting the next operation)
Delay (a delay in the sequence of operations)
7-5
FLOW PROCESS CHART
ANALYST PAGE
Job Requisition of petty cash D. Kolb 1 of 2
Details of Method
Requisition made by department head
Put in “pick-up” basket
To accounting department
Account and signature verified
Amount approved by treasurer
Amount counted by cashier
Amount recorded by bookkeeper
Petty cash sealed in envelope
Petty cash carried to department
Petty cash checked against requisition
Receipt signed
Petty cash stored in safety box
7-6
7-7
Questions to ask when adopting a process
view
1. What are the process boundaries: what is the input and output?
2. What is the flow unit or the unit of analysis?
3. “Attach yourself to” the flow unit and record its process steps through the
process
 What are the value-added and necessary activities? What are the
associated processing times or work content?
 Where does the flow unit wait (buffers)? What are the associated waiting
times?
 What are the routes a flow unit can take? What are necessary precedence
relationships? (i.e., what must be done sequentially?)
 Note that the first improvement step will be to delete non-value-added and
unnecessary activities and buffers = waste
Questions to ask when adopting a process
view (Cont.)
4. Who does the work? What are the resources for each activity?
 What are all the activities a given resource performs? (cross-training ,
flexibility)
 What are the resource constraints? What determines the flow rate?
(demand or capacity)
Key for Capacity Analysis
 How is quality measured?
 What is the cost of each resource?
5. What information is required to perform each activity? Where does this
information come from? This specifies the information flow (dashed lines)
Case Study
 Paediatric Orthopaedic Clinic at the Children's
Hospital of Western Ontario
Introduction
 As Chief of Paediatric Orthopaedic Surgery, Dr. Leitch was
very concerned by the long wait times that the young
patients (and their parents) were experiencing in the clinic.
Long wait times tended to aggravate the already pent-up
distress and concern that they were feeling. She glanced at
recently collected data on service times and wondered how
the process might be improved, while continuing to
balance budgetary pressures to reduce costs. Moreover, any
changes could not be done in isolation, as her clinic shared
resources with other departments. A monthly executive
meeting was fast approaching, and expectations were
starting to run high that Leitch’s efforts might be able to
spur improvements in other departments too.
Issues
 Major:
 Reducing lengthy wait times
 Minor:
 Improving process and service performance
 Reducing variability in activity times and wait times
 Identifying the interactions with patients from other
departments (shared resources)
 Efficiently managing both demand and human
resources to address patient needs.
Average Patient Mix at the Clinic
Patients - 80
New – 80
(40% of total patients)
Follow-up - 48
(60% of total patients)
Need X-Ray – 40.8
(85% of follow-up
patients)
No X-Ray required- 7.2
(15% of follow-up
patients)
Process Flow Diagram