Page 280 - DMGT522_SERVICES MANAGEMENT

Unit 13: Performance Measurement in Services

If the next slowest task is much faster than the bottleneck, then the bottleneck is having a major Notes
impact on the process capacity. If the next slowest task is only slightly faster than the bottleneck,
then increasing the throughput of the bottleneck will have a limited impact on the process
capacity.

Starvation and Blocking

Starvation occurs when a downstream activity is idle with no inputs to process because of
upstream delays. Blocking occurs when an activity becomes idle because the next downstream
activity is not ready to take it. Both starvation and blocking can be reduced by adding buffers
that hold inventory between activities.

13.5.3 Process Improvement

Improvements in cost, quality, flexibility and speed are commonly sought. The following lists
some of the ways that processes can be improved:

Reduce work-in-process inventory – reduces lead time.
Add additional resources to increase capacity of the bottleneck. For example, an additional
machine can be added in parallel to increase the capacity.

Improve the efficiency of the bottleneck activity – increases process capacity.
Move work away from bottleneck resources where possible – increases process capacity.
Increase availability of bottleneck resources, for example, by adding an additional shift –
increases process capacity.

Minimise non-value adding activities – decreases cost, reduces lead time. Non-value adding
activities include transport, rework, waiting, testing and inspecting and support activities.

Redesign the product for better manufacturability – can improve several or all process
performance measures.
Flexibility can be improved by outsourcing certain activities. Flexibility also can be
enhanced by postponement, which shifts customising activities to the end of the process.

In some cases, dramatic improvements can be made at minimal cost when the bottleneck activity
is severely limiting the process capacity. On the other hand, in well-optimized processes,
significant investment may be required to achieve a marginal operational improvement. Because
of the large investment, the operational gain may not generate a sufficient rate of return. A cost-
benefit analysis should be performed to determine if a process change is worth the investment.
Ultimately, net present value will determine whether a process “improvement” really is an
improvement.
Self Assessment

Fill in the blanks:
11. ............................ occurs when a downstream activity is idle with no inputs to process
because of upstream delays.
12. ............................ occurs when an activity becomes idle because the next downstream activity
is not ready to take it.

13. Both starvation and blocking can be reduced by adding ............................ that hold inventory
between activities.

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