BUS606 Study Guide

Unit 3: Operations and Performance Analysis

3a. Construct a flowchart for a production or service process with performance metrics 

  • What is a flowchart, and how are flowcharts useful in operations supply chain management?
  • How does a flowchart differ from a cross-functional flowchart?
  • Can you use different types of flowcharts in operations supply chain management?
  • How would you construct a flowchart of a simple production process?

Frank and Lillian Gilbreth developed the first flowcharts in 1921 to support their important work in finding the best way to complete a task. Industrial engineers embraced this new tool, and computer scientists used flowcharts to design computer algorithms in the 1950s and 1960s. A flowchart is simply a diagram to analyze, design, document, and manage a process, whether the flowchart is for a good or service.
As processes become more complex, a cross-functional flowchart might be necessary. While a simple flowchart does not indicate who or what organizational unit is responsible for an activity, a cross-functional flowchart assigns responsibility to specific organizational units. For example, different organizational units were necessary in developing this course, including a subject matter expert, an instructional designer, and a quality assurance reviewer, each with specific tasks assigned for each unit. A business might also use a cross-functional flowchart to indicate that more than one organizational unit might share responsibility for a single process.
While there are several systems to classify different types of flowcharts, one of the more common classification systems models flowcharts based on different user groups: (1) document flowcharts, (2) data flowcharts, (3) system flowcharts, and (4) program flowcharts.
Flowcharts generally use a standard set of shapes to indicate different events in the process, such as a terminal, a process, or a decision.
To review, see Flow Chart Symbols.

3b. Describe the advantages and disadvantages of lean production systems 

  • How are Lean 5S and Kaizen the same? How do they differ?
  • How does Lean Manufacturing differ from more traditional manufacturing?

Both Lean 5S and Kaizen have a similar goal: continuous improvement. However, Lean 5S does this by removing waste (ineffective processes), while Kaizen uses the principles of continuous improvement. Both systems have specific steps for workplaces to follow. A second common factor between these systems is the need for constant training of workers.
Traditionally, firms have gained economies of scale by producing faster, thus lowering the cost of production. This strategy uses a "push" system to push the product to the customer. A significant disadvantage of this strategy is the inability of the system to respond to different customer demands. Lean manufacturing uses a "pull" system, where production is based on actual, not forecasted, customer demand.
To review, see Lean Manufacturing.

3c. Describe risk mitigation solutions in terms of uncertainty and potential breaks in production 

  • In what operational areas can risk occur?
  • How can we mitigate, or reduce, the risks of people?
  • How can we mitigate the risk of process failures?
  • How can a system risk affect the organization?

Risk can occur in four main operational areas: people, process, system, or external events. The risks that can occur in these operational areas and the losses that can be incurred make up operational risk management.
People risks go beyond your employees and include personnel throughout the supply chain and even your customers. Human resource management is a critical factor in mitigating people risks. Processes include the procedures and practices organizations use to conduct their business. Process risks can occur because the process is not well-designed, or the risks can involve the human resources who run the processes. Processes may need to be redesigned or employees better trained. System risks involve the risks associated with technology, both hardware and software. Both accidental failures and intentional acts, like a cyberattack, can impact system risk. An organization or supplier is greatly affected if a data breach occurs. External risk factors are external to the organization, such as natural disasters, utility failures, and the loss of key suppliers.
Risk management aims to have processes in place to mitigate people, process, system, and external risks. Can you think of any organizations you work with that had no risk management plan for a global pandemic? Do you think your bank, hair salon, or local grocery store had a risk management plan for the pandemic?

3d. Describe how queueing theory relates to customer service waiting lines 

  • What can queueing theory tell us about customer service experiences?
  • Who are the stakeholders responsible for evaluating, redesigning, and implementing queueing theory in the customer service experience?
  • What effect might service prototypes have on improving customer experiences?

Unit 2 introduced Little's Law, a theory that describes the importance of understanding wait times in queues. This same theory can help us understand how, in service industries, we can improve the customer service experience. This idea, improving customer experiences, can be implemented through Service Design.
Service designers research, develop ideas, and test experiences to build better customer experiences. As part of the research, service designers begin with the groups of people related to the service: employees, customers, and government officials, when necessary. These groups of people are referred to as stakeholders. Stakeholders work with the service designers to develop ideas to improve customer experience. These new ideas are developed into service prototypes, and feedback is gathered from all stakeholders. Once an improved design meets the needs of all stakeholders, the design can be implemented to improve the customer experience.
The next time you stand in a queue – waiting to board an airplane, enter a sports arena, or enter a concert venue – think about how you can improve your own customer experience!
To review, see What is Service Design?

3e. Perform a waiting line analysis on a service industry firm where uncertainty of demand for customer service varies over time within a predictable pattern 

  • What are typical components of a queue/waiting line?
  • How do these typical components fit into supply chain management?
  • How can we measure the customer experience to meet the goal of better customer service with a minimum wait time?

The next time you are waiting in a queue, look at the behavior of yourself or others. Typically, everyone uses each of the components of a queue:

  • the arrival process;
  • the behavior of customers (including balking, reneging, and jockeying);
  • the service times;
  • the service discipline; and
  • the service capacity.

The service discipline encompasses different methods to move new arrivals through the queue: First Come First Served, Service in Random Order, Last Come First Served, Priorities, Processor Sharing, and Round Robin. Can you identify common waiting lines that use these different order types for customers moving through the queue?
We can analyze wait times for manufacturing firms as well. Some examples include operation supply chain managers who want to identify the appropriate route(s) for their finished goods or determine the safety stock levels throughout the supply chain.
Performance measures should be conducted to ensure whatever service discipline you choose meets the goal of better customer service and minimum waiting time. Some examples of these performance measures include distribution of the waiting and sojourn times, number of customers, amount of work, and busy periods.
To review, see A Survey on Queuing Systems with Mathematical Models and Applications.

Unit 3 Vocabulary 

This vocabulary list includes the terms that you will need to know to successfully complete the final exam.

  • arrival process
  • balking
  • cross-functional flowchart
  • data flowchart
  • document flowchart
  • external risk
  • flowchart
  • jockeying
  • Kaizen
  • Lean 5S
  • operational risk management
  • people risk
  • process risk
  • program flowchart
  • reneging
  • service capacity
  • service design
  • service discipline
  • service prototype
  • service time
  • stakeholders
  • system flowchart
  • system risk