Question

THE PERFORMANCE PROBLEM!

A well-established business is having performance problems; at least as far as management is concerned. This particular location has the slowest total processing time measured from when the receipt is processed until the shipment is released for delivery to the customer. You’ve been tasked with “speeding up” the order processing system.

There are 12 distinct operations involved in processing and shipping orders. Some can be performed at the same time as others, whereas others have to be performed in sequence- meaning, once can not take place before the other is completed.

You job (based on the information provided below) and (remembering the lecture notes that accompanied this assignment) is to analyze the order-processing and shipping operations. Review the supplied data below and then answer the questions.

**Note – When reviewing the chart you will notice that PRECEDENCE (P) RELATIONSHIPS has a ** beside it, the explanation for this area is as follows:

(Tasks on the right of the < cannot begin until tasks on the left are completed)

Task                Description                       Duration (in days)         P Relationships**

A         Order received / Entered in system                0.25                             A < D

B         Decision, Fill from Warehouse OR

            Direct ship from factory                                 0.50                             B < C

C         Print pick ticket / order                                   0.30                             C < H

D         Verify customer credit                                    0.35                             D < G,E

E         Check / determine buyer discounts                 0.15                             E < F

F          Prepare invoice, enter in accts. receivable       1.00                             F < K

G         Decision – mode of shipment and carrier       1.65                             G < J

H         Pick order at warehouse                                  0.75                             H < I

I           Pack and label shipment                                 1.20                             I < L

J          Notify carrier, prepare shipping documents    2.25                             J < L

K         Transmit copy of invoice to shipping dock     1.20                             K < L

L         Transport order to customer                            3.50                                 

Arrange the tasks as shown above into cycle paths. HINT there are 3 path possibilities

Identify the critical path?

Which path is the quickest to complete?

Considering your answers to questions 1 and 2 which path offers the best opportunities for reducing the order/ship processing cycle? Why?

Since speed to the customer is the issue, should you source faster transportation or look at the identified paths for improvements?

Realizing the chart doesn’t tell you how many workers are assigned to each task; are there any tasks that could be identified for reducing the number of employees assigned to them and if so where would you reassign them to?

Answer 1

(a)

As shown, there are three cycle paths -

1. B-C-H-I-L: Duration = 0.5+0.3+0.75+1.2+3.5 = 6.25 days
2. A-D-G-J-L: Duration = 0.25+0.35+1.65+2.25+3.5 = 8.0 days
3. A-D-E-F-K-L: Duration = 0.25+0.35+0.15+1.0+1.2+3.5 = 6.45 days

The critical path is A-D-G-J-L as it is of the longest duration of 8 days.

(b)

The path B-C-H-I-L is quickest to complete. The duration is 6.25 days.

(c)

Of course, the critical path has the highest opportunity to reduce the duration. First, it can be reduced to 6.45 days when both the paths A-D-G-J-L and A-D-E-F-K-L will become critical. From there, they both are to be jointly reduced up to 5.25 days when all three paths will become critical.

(d)

The speed to the customer will be governed by the bottleneck of the process which is the critical path. Transportation can be focused as is on the critical path. other activities on the critical path (e.g. A, D, G, and J) can also be focussed alternatively to reduce the duration.

(e)

Take any activity which is NOT on the critical path. For example, 'B' seems a manual activity. We can reduce manpower from 'B' up to the level where the duration of B-C-H-I-L is not more than 8 days. If this manpower is reassigned to say, activity 'D', the delivery time to the customer will reduce because 'D' is on the critical path.