You Were Just Promoted to Manage the Process Defined by the Four

question 43

Essay

You were just promoted to manage the process defined by the four stages A to D below. This process could be a human resource management, marketing, accounting, finance, or engineering process and you are the manager. This is your chance to impress your boss and be promoted again. After three months on the job you realize something is not right with the process because your employees experience big pile ups of work, things take too long to be processed, the opportunity for error is increasing, and the entire process is approaching chaos. Do a process and capacity analysis of this process. The numbers in parentheses (#) are the times in minutes to complete one unit of work. Demand on the process averages 30 units per hour and each unit must be worked on by all four stages. Administrative clerk(s) do Stage A work. The assistant manager(s) do Stages C and D work. The coding specialist(s) do Stage B work. Currently, there are 3 administrative clerks, 2 coding specialists, and 3 assistant managers on duty. Each assistant manager is cross-trained so he/she can do Stage C or Stage D work.
a.Which stage of work is the bottleneck? What is the capacity (in units per hour) at the bottleneck stage?
b.What should the throughput rate be set at so that the utilization at the bottleneck stage is 90%?
c.Based on your throughput rate found in question b above, what will be the utilization at each of the work stages?

---

Definitions:

Moral Hazard

The situation where one party is more likely to take risks because another party bears the consequences.

Incentives

Rewards or penalties that motivate individuals or entities to act in certain ways.

Hazardous Jobs

Occupations that pose significant risks of injury, illness, or death as a result of the work environment or tasks involved.

Moral Hazard

A situation where one party is more likely to take risks because the consequences of their actions are partly borne by others.