Throughput Part 2 Effective Capacity & Throughput Leverages. Based on the book: Managing Business Process Flows. Capacity Waste and Theoretical Capacity. Effective capacity of a resource unit is 1/Tp. Unit load Tp , is an aggregation of the productive as well as the wasted time.
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Based on the book: Managing Business Process Flows.
An operating room (a resource unit) performs surgery every 30 min, Tp = 30 min. Tp includes all the distracts. We also refer to it as the Total Unit Load.
Effective capacity is 1/30 per min or 60/30 =2 per hour.
On average, 1/3 of the time is wasted (cleaning, restocking, changeover of nursing staff and fixing of malfunctioning equipment ).
Capacity Waste Factor (CWF) = 1/3.
Unit load = Theoretical Tp= Tp*(1-CWF) =30(1-1/3) = 20 min.
Tp= Unit Load = Theoretical Unit Load /(1-CWF) = 20/(1-1/3) = 30
Theoretical Capacity = c/Theoretical Unit Load; Effective Capacity = c/Unit Load.
Theoretical Capacity = 1/20 per minute or 3 per hour.
Effective Capacity = Theoretical Capacity (1-CWF)
A law firm processes (I) shopping centers and (II) medical complexes contracts. The time requirements (unit loads) for preparing a standard contract of each type along with some other information is given below. In November 2012, the firm had 150 orders, 75 of each type. Assume 20 days per month, and 8 hours per day. Capacity Waste factor at the three resource-s are 25%, 0, and 50%, respectively.
What is the effective capacity of the process (contracts /day)?
Paralegal: Theoretical Unit Load (50%Sh 50% Med): 0.5(4)+0.5(6) = 5 hrs
Theoretical Capacity = 1/5 per hr
Capacity Waste Factor (CWF) = 0.25
Unit Load = Tp = 5/(1-0.25) = 20/3 hrs
Effective Capacity = Capacity = 1/(20/3) = 3/20 per hr
Tax Lawyer: Theoretical Unit Load 0.5(1)+0.5(3) = 2 hrs
CWF = 0
Unit Load = Tp = 2 hrs
Theoretical Capacity = 1/2 per hr
Effective Capacity = Capacity = 1/2 per hr
Senior Partner: Theoretical Unit Load 0.5(1)+0.5(1) = 1 hrs.
Theoretical Capacity = 1/1 = 1 per hr
CWF = 0.5
Unit Load = Tp = 1/(1-0.5) = 2 hrs
Effective Capacity = Capacity = 1/2 per hr
Setup or Changeover: activities related to cleaning, resetting and retooling of equipment in order to process a different product.
Qp : Setup batch or lot size; the number of units processed consecutively after a setup;
Sp:Average time to set up a resource at resource pool p for a particular product
Average setup time per unit is then Sp/Qp
Sp/Qpis also included in Tp
What is the “right” lot size or the size of the set up batch? Lot Size or ?
Reducing the size of the setup batch is one of the most effective ways to reduce the waiting part of the flow time.
Load batch: the number of units processed simultaneously. Often constrained by technological capabilities of the resource.
Setup batch: the number of units processed consecutively after a setup. Setup is determined managerially.
30 min per product
Compute the effective capacity under min cost strategy.
Two set-ups each for 30 min = 60 mins
An aggregate product takes (10+20)/2 = 15
Production time = 8*60-60 = 420 mins
Capacity = 420/15 = 28 aggregate units
Each aggregate unit is 0.5 A and 0.5 B (total of 14A and 14B)
Compute the capacity under min inventory strategy.
In a minimum inventory strategy, we produce one product at a time then switch to the other.
Product A: 10+30 = 40
Product B: 20+30 = 50
An aggregate product takes (40+50)/2 = 45
Production time = 8*60 = 480 mins
Capacity = 480/45 = 10.66 aggregate units.
Each aggregate unit is 0.5 A and 0.5 B (total of 5.33 A and 5.33B)
Throughput ≤ Effective Capacity ≤ Theoretical Capacity
Capacity ≈ theoretical capacity Resources are efficiently utilized; increase the theoretical capacity.
Capacity << theoretical capacity resources are not utilized effectively; eliminate of waste; ↓ Tp or ↑ Net Availability.
This may require greater flexibility on the part of non-bottleneck resources as well as financial investments in tooling and cross-training.
Compute the unit load and the total unit load for each Load batch of Regular tile, Jumbo tile and a product mix of 75% Regular and 25% Jumbo . Load Batches are 4 and 9 for regular and jumbo, respectively. Set-up Batches are 300 and 100 for regular and jumbo, respectively.
Theoretical Capacity of a resource unit =
(1/Unit Load) × Load Batch × Scheduled Availability
Scheduled Availability – the scheduled time period during which a resource unit is available for processing flow units.
Availability factor = Net Availability/Scheduled Availability
Effective Capacity of a resource unit =
(1/Total Unit Load) × Load Batch × Scheduled Availability
Effective Capacity of a pool =
(c/Tp) × Load Batch ×Scheduled Availability