1 Process Analysis Student's Name Institutional Affiliation Course Instructor Date 2 PART 1. Request materia l Get supplier bids Order Purchase orders Delivery Received by procurement team 1. The process flow concerns purchasing of raw materials for a firm. The first input is the request of materials and the process flows all the way through bids from suppliers, then purchasing orders to supplying the purchased goods to client or receiving of the goods by the procurement team. The receiving of the goods is the output. 2. Resources Getting supplier bids: 1) The most imperative resource here is the advertised tender, it contains the information on specifications of the desired materials. 2) The procurement team analyses these tenders and the key decision is deciding the most appropriate supplier with the most optimal materials both economically and quality wise. 3 3) Getting a reliable supplier will enable the organization to produce goods consistently and have a high throughput. The decision also affects the operating expenses as getting an economical and huge volumes supplier will help the organization have economies of scale. Lastly, purchased materials are organizations inventory, thus, purchasing huge volumes of raw materials increases an organizations disposable assets. 4) The throughput can measured through benchmark efficiency MIS metrics, lead time can measure effect on expenses whereas LIFO and FIFO will be used to measure effects on inventory. 5) There might be information risk of poor vendor selection. Material requests 1. A list of approved suppliers or a material requisition form will explain on the particulars of the materials needed. 2. The key decision here is how to advertise the request for goods supply. 3. Shortlisting credible suppliers will increase the throughput, economize on expenses and increase business assets. 4. Benchmark efficiency MIS metrics can be used to calculate throughput. Lead time can be used to calculate the effect on expenses, whereas LIFO and FIFO will be used to calculate the effect on inventory. 5. Inadequate need analysis is an information risk that can hinder material request. 3. Connections /interfaces 4 1) Getting supplier bids and purchasing orders: the organization and the chosen supplier exchange bid form and particulars. 2) The documents are exchanged for reference and the dynamics of accountability and participation must be maintained. 3) The expenses in this interface are the negotiation costs. 4) One risk here is manual internal processing problems. Purchase orders and receiving of materials. 1) The bought materials and invoices are exchanged. 2) The goods are exchanged as it’s an obligation in transactions. 3) Base costs and transportation costs will be incurred in this interface. 4) There might be the risk of noncompliance and delays in procurement. 4. I would place the bottleneck in the interface between requesting materials and getting supplier bids. This is because I feel despite slowing the process, I would get enough time to source materials from other sources without infringing contracts with other parties. Also not a lot of expenses would have been spent. 5. There are several risks that might reduce throughput and increase expenses. One is poor contracting and noncompliance, the second risk is delay in procurement. They can be solved through use of legal contracting and digital procurement respectively. 5 Part 2 1. 1 Ticket number and payments 2 Division process Processing time 2 mins 12.5 mins No of workers 2 8 2. SR treatment 3 40mins `18 Capacity and bottleneck Activity No of workers Processing time 1 2 2 Hourly capacity (60 ÷ 2) × 2 60 customers per hour 2 8 12.5 (60 ÷ 12.5) × 8 38.4 customer per hour 3 18 40 (60 ÷ 40) × 18 27 customers per hour 6 Stage 3 is the bottlemark with maximum processing time of 40 mins and lowest capacity of 27 customers per hour. As system capacity= bottlemark The system capacity is 27 customers per hour. 3. The store is open for 12 hours per day Maximum number of customers that the institute can handle per day = 27x12= 324 customers Input rate= 288 customers÷12 hrs. = 24 customers per hour Flow rate =min (input rate; process capacity) =24 customers per hour Utilization=flow rate÷ capacity Activity Capacity Utilization 1 60 customer per hour 24÷60=0.4 2 38.4 customers per hour 24÷38.4=0.625 3 27 customers per hour 24÷27=0.89 The system capacity is 27 customers per hour From Monday to Thursday customers’ requests are 288 i.e. 288 customers÷12 hrs. = 24 customers per hour Thus the system is enough to cover customer requests on these days But on Friday customer requests are 396 i.e. 396 customer’s ÷ 12 hrs. = 33 customers Thus the system is not enough to cover customer requests for Friday. 4. As the customer flow rates varies, we take the system capacity as the flow rate 7 Cost of direct labor= wages per unit time÷ flow rate per unit time = ((2+8+18) x500) ̷ (27 x 12 x5) =14000 ̷ 1620 customers . 5. Ticket number and payments (2 mins) Examination (5 min) 3 specialist assigned Division (12.5 min) 8 workers 80% undergoes SR 4 workers SR treatment (40min) 18 workers 95% clients from SR 80% from stage2, HH (10min) Capacity for stage 1 would be 2min per client For stage 2 will be 5÷3= 1.67 client per minute Stage 3, 12.5 ÷ 8= 0.625 per client Stage 4, 40 ÷18= 2.22 per client Stage 5, 10 ÷4= 2.5 per client The bottle neck is in stage 3 as it has the least production capacity 8 The process capacity is that of stage three as it will be the threshold for the whole process. Utilization =flowrate / capacity Stage 2÷2= 100% Stage2, 80%of1.67=1.336 1.336 ÷1.67=-80.14% Stage3, 0.625÷0.625=100% Stage 4, 2.22÷2.22=100% Stage 5, 95% of 2.5=2.375 50%of 2.5=1.25 2.375-1.25=1.125 1.125÷2.5= 45% PART 3 1. I would allocate stage 1, one worker, stage 2 two workers, stage 3, two workers and stage 4 one worker Activity No of workers Processing time Hourly capacity Stage 1 1 1.5 min 40 2 2 6.6667min 18 9 3 2 12min 10 4 1 4 15 2. The bottleneck is stage 3, as its production capacity is the lowest and below the input from process Activity Capacity Utilization 1 40 40÷40=1 2 18 17÷40=0.94 3 10 8.55÷10=0.855 4 15 8.5÷15=0.57 3. I think both processes 1 and 2, are equivalent as they will only affect the input of stage two and three. The flow rate and capacity will only vary in stages 2 and three, which will not affect the output from stage four as it’s the bottleneck, and it has one worker. The flow rate and the capacity in stage four will remain constant irrespective of the two changes.
