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Finding the bottleneck in processes with multiple flow units


Since many flow units (e.g. customers in a shop, patients in a hospital) do not at all need the very same treatment or service, business processes have to serve different needs. Processing times thus might be quite different for each flow unit as well, even the path of flow units through the process might differ. For such processes with so-called multiple flow units, we need new tools to figure out which process step can bee seen as the bottleneck.

Finding the bottleneck in a multiple flow unit scenario takes four easy steps:

Step 1: Determine the capacity of each resource in the process (m / activity time or units per hour)
Step 2: Calculate the service demand for each of these resources considering multiple flow units
Step 3: Add multiple unit demand for every resource to calculate total demand for the resource
Step 4: Divide the total demand by the capacity of the resource to calculate the implied utilization

The highest implied utilization indicates the bottleneck process step. To differentiate between the implied utilization and the “regular” utilization, its best to keep this important difference in mind:

utilization = flow rate / capacity (always between 0% and 100%)
implied utilization = demand / capacity (can very well exceed 100%)

The same calculation can also be done by looking at the required work time:

Step 1: Determine the work time capacity of each resource (e.g. 2 workers x 60 min = 120 min)
Step 2: Calculate the demand for work time at each resource considering multiple flow units
Step 3: Add multiple unit demand for every resource to calculate total demand for the resource
Step 4: Divide the total workload by the available time to calculate the implied utilization

These lecture notes were taken during 2013 installment of the MOOC “An Introduction to Operations Management” taught by Prof. Dr. Christian Terwiesch of the Wharton Business School of the University of Pennsylvania at Coursera.org.
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Flow rate / throughput, flow unit, inventory and flow time


The three most important performance measures of a business process are flow rate / throughput, inventory and flow time. In the following definitions, the term “flow unit” will be used a lot. A flow unit is the basic unit of analysis in any given scenario (customer, sandwich, phone call etc.).

Flow rate / throughput: The number of flow units (e.g. customers, money, produced goods/services) going through the business process per unit time, e.g served customers per hour or produced parts per minute. The flow rate usually is an average rate.

Flow time: The amount of time a flow unit spends in a business process from beginning to end, also known as the total processing time. If there is more than one path through the process, the flow time is equivalent to the length of the longest path.

Inventory: The number of flow units that are currently handled by a business process, e.g. the number of customers in a store, the number of enrolled students in an university etc. pp.

It should be kept in mind that the definition of inventory in Operations Management is different from the definition used in accounting. While the number of bottles on stock qualifies as inventory in both Operations Management and accounting, the number of patients waiting at a dentists office would not be seen as inventory in accounting – but is, in fact, inventory in Operations Management.

These lecture notes were taken during 2013 installment of the MOOC “An Introduction to Operations Management” taught by Prof. Dr. Christian Terwiesch of the Wharton Business School of the University of Pennsylvania at Coursera.org.
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