Unit 5A - Business Processes
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What is the productivity per labor hour when producing 12 paper airplanes in 8 hours?

  • 2 planes/hr
  • 1.5 planes/hr (correct)
  • 1 plane/hr
  • 1.2 planes/hr

    • What distinguishes a primary process from a support process?

  • Support processes are essential for delivering the main products or services.
  • Primary processes do not add value to the organization.
  • Support processes are temporary and do not contribute to long-term objectives.
  • Primary processes focus on value-added activities, while support processes handle necessary but non-value-added activities. (correct)

    • What is the standard cycle time in minutes for producing 15 paper airplanes in 8 hours?

  • 40 minutes
  • 32 minutes (correct)
  • 60 minutes
  • 48 minutes

    • What is the efficiency percentage when producing 12 paper airplanes if the standard is 15?

    <p>80%</p> Signup and view all the answers

    What is the purpose of mapping business processes?

    <p>To develop graphic representations that help define process boundaries and relationships.</p> Signup and view all the answers

    If each cycle has a value added time of 24 minutes out of a standard cycle time of 32 minutes, what is the percentage of value added time?

    <p>75%</p> Signup and view all the answers

    Which of the following is considered a development process?

    <p>Developing new products</p> Signup and view all the answers

    Why is managing flows across the supply chain crucial?

    <p>It accounts for a significant portion of total operating budgets, up to 75% in some cases.</p> Signup and view all the answers

    What is the purpose of competitive benchmarking?

    <p>To identify and adapt practices from within the industry</p> Signup and view all the answers

    What is a critical factor to consider when improving a business process?

    <p>Identifying the need for value-added changes and elimination of non-value activities.</p> Signup and view all the answers

    What is the difference between competitive benchmarking and process benchmarking?

    <p>Competitive benchmarking focuses on external competitive standards, while process benchmarking targets internal processes.</p> Signup and view all the answers

    How can efficiency be compared to productivity?

    <p>Efficiency reflects the ratio of outputs to inputs, while productivity represents effectiveness in achieving goals.</p> Signup and view all the answers

    What does percent value-added time represent in a business process?

    <p>The portion of time where an activity contributes directly to the product or service value.</p> Signup and view all the answers

    What is the correct formula to calculate efficiency in a business process?

    <p>Efficiency = (actual outputs / standard outputs)(100%)</p> Signup and view all the answers

    If a welder is producing 27 units per hour and the standard output is 30 units, what is their efficiency percentage?

    <p>90%</p> Signup and view all the answers

    Which of the following statements accurately differentiates between productivity and efficiency?

    <p>Productivity focuses on outputs over time, whereas efficiency focuses on output versus standard output.</p> Signup and view all the answers

    What best describes standard output in a business process?

    <p>An estimate of what should be produced with certain resources.</p> Signup and view all the answers

    What role does efficiency play in evaluating business processes?

    <p>It measures the ratio of actual outputs to expected outputs.</p> Signup and view all the answers

    Why is it said that 'If you can’t measure it, you can’t manage it' in the context of efficiency?

    <p>Management decisions cannot be based on assumptions.</p> Signup and view all the answers

    Which option is an example of a measure that supports improving business process efficiency?

    <p>Standardizing processes to reduce time and waste.</p> Signup and view all the answers

    What is the primary purpose of a process map?

    <p>To identify the specific activities in a business process.</p> Signup and view all the answers

    Which of the following is NOT a process mapping rule?

    <p>Keep it complicated to encompass all details.</p> Signup and view all the answers

    What is the average time an order spends waiting in the process?

    <p>3 hours</p> Signup and view all the answers

    How often do orders get lost due to copier jams or accidental discards?

    <p>1 out of 25 orders</p> Signup and view all the answers

    What happens if an item is not in stock?

    <p>The dealer is notified and a special shipment is arranged.</p> Signup and view all the answers

    What is the average delivery time of the transport firm?

    <p>1 to 3 hours</p> Signup and view all the answers

    What is a critical measure of process performance?

    <p>Quality</p> Signup and view all the answers

    What percentage of orders are incorrectly filled?

    <p>5 percent</p> Signup and view all the answers

    Which airline had the highest percentage of flights arriving on time?

    <p>Hawaiian</p> Signup and view all the answers

    Which airline reported the lowest number of mishandled baggage reports per 1,000 passengers?

    <p>Virgin America</p> Signup and view all the answers

    What was the percentage of flights cancelled by Frontier during March 2016?

    <p>2.6%</p> Signup and view all the answers

    Which airline had a higher percentage of flights cancelled, JetBlue or American?

    <p>JetBlue</p> Signup and view all the answers

    How does the mishandled baggage rate of Delta compare to that of United?

    <p>United has a higher rate than Delta</p> Signup and view all the answers

    Which measure is indicated as not the only consideration for process performance?

    <p>Cycle time</p> Signup and view all the answers

    Which airline had a percentage of arriving on time closest to 80%?

    <p>Virgin America</p> Signup and view all the answers

    What percentage of flights cancelled does Delta have?

    <p>0.1%</p> Signup and view all the answers

    What formula is used to calculate cycle time?

    <p>Elapsed time / # cycles</p> Signup and view all the answers

    What does % Value Added Time represent?

    <p>The proportion of time spent on value-added activities compared to total cycle time</p> Signup and view all the answers

    If 12 paper airplanes are produced in 8 hours, what is the productivity per labor hour?

    <p>1.5 planes/hr</p> Signup and view all the answers

    How do you calculate the standard cycle time in minutes if the standard production is 15 planes in 8 hours?

    <p>Total minutes of work divided by the number of planes</p> Signup and view all the answers

    What is the efficiency calculated from producing 12 paper airplanes when the standard is 15 in the same time?

    <p>80%</p> Signup and view all the answers

    If the value added time is 24 minutes for each cycle, what is the % Value Added Time for the cycle?

    <p>50%</p> Signup and view all the answers

    Which of the following is NOT a factor of cycle time improvement?

    <p>Completing steps in series</p> Signup and view all the answers

    In a scenario where 12 paper airplanes are produced in 8 hours but the standard is 15, what does this imply about the production process?

    <p>Production is below standard efficiency</p> Signup and view all the answers

    Study Notes

    Unit 5A - Business Processes

    • Business processes are a set of logically connected tasks to achieve a defined outcome.
    • The business process perspective differs from a traditional functional perspective.
    • Process maps visually represent business processes, activities, and steps.
    • Process maps help diagnose processes and improve them.
    • Factors to consider when improving a business process include quality, cost, and time.
    • Efficiency measures actual outputs against standards.
    • Productivity measures outputs relative to inputs.
    • Cycle time is the total time required to complete a process.
    • Value-added time is the portion of cycle time directly contributing to the product or service.
    • Benchmarking identifies, understands, and adapts best practices from other organizations or industries to improve performance.
    • Competitive benchmarking compares a company to others in the same industry.
    • Process benchmarking compares a company's processes to "world-class" processes in unrelated industries.
    • Key measures of process performance include quality, cost, time, and flexibility.

    Mapping Business Processes

    • Mapping is the process of graphically representing organizational relationships and activities within a business process.
    • Mapping purposes include shared understanding of process content, defining process boundaries, and measuring improvement impacts.
    • A process map details the flow of information, physical products, etc. within a process.
    • Process mapping rules include identifying the focal point, clear start and end points, and simplicity.

    Example - Business Process at Distribution Center (DC)

    • Dealer emails an order to the DC.
    • Copier issues may lead to order loss (1/25).
    • Order print sits in inbox for an average of 2 hours.
    • Internal mail delivers order to the picking area (1 hour average; errors may occur - 1/100).
    • Order sits in clerk’s inbox for an average of 1 hour processing.
    • Processing takes 5 minutes.
    • In-stock items are picked and packed (20 mins, +/-10-45 mins).
    • Inspector checks the order (2 mins, errors may occur 1/200).
    • Transport firm delivers the order (1-3 hours).
    • Out-of-stock items have a special shipment arranged within a week.

    Example - Distribution Center (Figure 4.6)

    • Specific steps in the process and average wait times (e.g., order in inbox, mail delivery, clerk processing) are listed.
    • Includes success percentages and error rates.

    Example - Performance Impact

    • Shows average processing time for in-stock items is 6.4 hours. Other issues included are lost orders and incorrect items.
    • 3 hours of the 6.4 hours are waiting time.
    • 5 percent of orders are lost before picking.
    • 1 in 200 orders get incorrect items.

    5.3 - Measuring and Improving Business Processes

    • Questions to ask to improve business processes include how customers' needs are met and whether the process is efficient and effective.
    • How can business process improvement be organized and what steps should be taken?

    5.4 - Efficiency

    • Efficiency is a process performance measure; the ratio of actual outputs to standard outputs.
    • Efficiency is usually expressed as a percentage.

    5.4 - Productivity Versus Efficiency

    • Productivity is outputs/inputs(e.g., planes produced/machine hours).
    • Efficiency is (actual output/standard)(100%).

    Example - Efficiency with Standard Output

    • Example shows calculating efficiency given a standard output rate (e.g., units per hour).
    • This illustrates how actual output against a standard output can calculate efficiency.

    5.5 - Cycle Time & Percent Value-Added Time

    • Cycle time is the total time required to complete a process
    • Value-added time is the portion of the cycle time where activities directly add value to the finished product or service.
    • Percentage value-added time is (value-added time / total cycle time) x 100%.

    Example - Customer Order Fulfillment Process at retail store

    • Specific steps with associated time estimates are presented for a customer order fulfillment process at a retail store.

    Improving Cycle Time - Steps Done in Parallel

    • Shows how parallel steps reduce total cycle time.

    Measuring Business Process Efficiency (Sample Problem)

    • Example uses paper airplane production during class time to illustrate concepts like productivity (12 planes in 8 hours), standard (15 planes in 8 hours), efficiency, cycle time, and value-added time.

    5.6 - Benchmarking - Competitive vs Process

    • Benchmarking is identifying and adapting best practices.
    • Competitive benchmarking compares to similar companies in the same industry.
    • Process benchmarking compares to best practices in unrelated companies.

    Table 4.7 Competitive Benchmarking Data

    • Shows performance metrics for some U.S. airlines (e.g., on-time arrival rate, cancellations, mishandled baggage).

    5.6 - Competitive or Process Benchmarking?

    • Questions to decide if competitive or process benchmarking is appropriate (e.g., comparing grades, supply chains between companies).

    Review

    • Cycle time is an important but not only measure of process performance. Focus on cycle time may affect other important measures.
    • Efficiency and productivity are compared; their different focuses help understand business process performance.

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    Unit 5A - Business Processes PDF

    Description

    Explore the concepts of business processes and their importance in achieving defined outcomes. Learn about process mapping, efficiency, productivity, and benchmarking as tools for diagnosing and improving business workflows. This quiz will test your understanding of the key concepts and factors involved in managing business processes.

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