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Part Two
Design
From Little’s law,
Work-in-progress = 15,000 applications
Cycle time = Time producing
Time producing 8 hours 480 minutes
= = = 0.096 minute
Number produced 5,000 5,000
Throughput time = WIP × Cycle time
Throughput time = 15,000 × 0.096
= 1,440 minutes = 24 hours = 3 days of working
Work content 25
Throughput efficiency = = = 1.74 per cent
Throughput time 1,440
Although the process is achieving a throughput time of 3 days (which seems reasonable
for this kind of process) the applications are only being worked on for 1.7 per cent of the
time they are in the process.
Value-added throughput
efficiency
Value-added throughput efficiency
The approach to calculating throughput efficiency that is described above assumes that all
the ‘work content’ is actually needed. Yet we have already seen from the Intel expense report
example that changing a process can significantly reduce the time that is needed to complete
the task. Therefore, work content is actually dependent upon the methods and technology
used to perform the task. It may be also that individual elements of a task may not be
considered ‘value-added’. In the Intel expense report example the new method eliminated
some steps because they were ‘not worth it’, that is, they were not seen as adding value. So,
value-added throughput efficiency restricts the concept of work content to only those tasks
that are actually adding value to whatever is being processed. This often eliminates activities
such as movement, delays and some inspections.
For example, if in the licensing worked example, of the 25 minutes of work content only
20 minutes were actually adding value, then
Value-added throughput efficiency =
20
1,440
= 1.39 per cent
Workflow 5
When the transformed resources in a process is information (or documents containing
information), and when information technology is used to move, store and manage the
information, process design is sometimes called ‘workflow’ or ‘workflow management’. It
is defined as ‘the automation of procedures where documents, information or tasks are
passed between participants according to a defined set of rules to achieve, or contribute
to, an overall business goal’. Although workflow may be managed manually, it is almost
always managed using an IT system. The term is also often associated with business process
re-engineering (see Chapter 1 and Chapter 18). More specifically, workflow is concerned
with the following:
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Analysis, modelling, definition and subsequent operational implementation of business
processes;
The technology that supports the processes;
The procedural (decision) rules that move information or documents through processes;
Defining the process in terms of the sequence of work activities, the human skills needed
to perform each activity and the appropriate IT resources.