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hello and welcome back i always noticed some of my students get confused between the various terms used in process analysis for example cycle time flow time lead time flow rate average inventory etc etc so in this video i promise you to clear these confusions once and for all let's consider a small pasta shop which sells pasta during lunch time let's call it awesome pasta bistro during lunch time customer come and queue up the pasta making has three steps the first step is where customer place the order there is one worker who takes the order and prepares the ingredients for that order it takes two minutes to do this the second process step is the cooking of the pasta there is one worker who does this cooking and it takes six minutes to cook the third process step is to serve the delicious cooked pasta on a nice plate and serve it to the customer who's waiting there is one worker here who does this incidentally he also collects the money it takes two minutes to get all this done at this process step c during lunch time customers come and queue up let's assume each customer order just one plate of pasta to keep our case simple customer one comes there is no one in the queue so he places the order at time equals zero his order gets prepared at the process step a and gets finished at time equals two minutes and leaves the process step a and enters this next process step which is cooking at time equals two minutes of course it gets cooked there for about six minutes and it leaves the process step b at time equals eight minute it then goes on to process step c and enters the process step c at time equals eight minutes and leaves at ten minutes because it's only two minutes at process step c so customer one gets his pasta at time equals 10 minutes so he basically spent 10 minutes waiting to get his food customer 2 comes in and places the order but his order can only enter process step a at time equals 2 because the process step a is busy with customer one's order the second customer's order can only enter the process step a at two minutes and it leaves at time equal to four minutes similarly customer two's order can only enter the process step b at time equals eight minutes because process step b is busy with customer ones order so it can only enter at time equals to eight minutes and customer two's order comes out of that process at 14 minutes it then goes on to process step c at time equals 14 minutes since process step c is available it's not busy and it leaves at time equals 16 minutes so you can see now how this works finally customer 2 gets his plate of pasta at time equals 16 minutes you can now see how this whole thing works so let's talk about cycle time cycle time is defined as the time that passed between customer one getting his pasta and customer two getting his pasta we know that custom on god is pasta at time equals to 10 and customer 2 got his pasta at time equal to 16 therefore the time elapsed between these two events is actually six minutes so this is the cycle time of this process you can apply the same logic between customer two and customer three to find the cycle time let me fill up customer 3's data here he comes in and he follows the system and he will get his pasta at time equals 22 minutes okay now let's talk about flow time in this process we see that flow units are the customers all customers arrive at the same time at time equal to zero c1 gets his plate of pasta at time equal to 10 therefore his flow time is 10 minutes customer 2 gets his pasta at time equal to 16 therefore his flow time is 16 minutes customer 3 gets his pasta at time equals 22 minutes so his flow time is 22 minutes you can see the flow time was is different for different flow units if you are lucky enough to come early you will get your pasta early so your flow time will be less extend the spreadsheet up to customer number 10. you can see i have done the same i've applied the same logic all the way through customer 10 and i have calculated the flow time i've also added another column column l which captures the actual waiting time of the customer before their order gets processed for example customer number one waiting time is zero because when he comes in there was nobody in the queue so his order goes right through the system and then exactly at ten minutes he gets his pasta his waiting time is zero his order was processed straight through but it's not the case with the rest of the customer look at the customer number ten he gets his pasta at time equal 64 minutes and he has to wait 54 minutes before his order is processed let me also take you through some of the metrics of this current process system here first cycle time which is 6 you all know that secondly if you look at column k we know the individual flow time of the customers so i take an average of all the 10 customers and that's where you get 37 minutes so the flow rate per minute is the reciprocal of this 1 divided by 37 so that's your flow rate if you recall the flow rate can also be computed as 1 over the cycle time so the cycle time here is 6 so 1 over 6 will also give you the same flow rate per minute average waiting time i take an average of this entire column of 10 customers then that's the average waiting time customers have to wait for a lunch time this is not really a very good situation people only get half an hour to 45 minutes for for lunch if on average if they have to wait 27 minutes that's not really good and if you look at the customer 10 poor guy he got to wait for almost like 54 minutes before his order is processed and by the time he gets his order it's 64 minutes the flow time is too high so now how do we improve this process first of all let's look at the process steps a b and c so you know that you can see process step b is slow that is the bottleneck here so incidentally the bottleneck in a multi-process multi-step process will dictate the cycle time you can see the processing time at the bottleneck process b is six minutes and that is the cycle time how do we improve how do we make the system faster so we remove the bottleneck let's add one more resource here we put one more worker or a chef with one more walk enter everything improves now you can see the cycle time has improved from six it went down to three so it's 100 improvement and the average flow time has gone down from 37 to 20.5 flow rate has doubled from 0.16 to 0.33 from 10 to 20 based on one hour and the average waiting time also has dropped from 27 to 13.5 is this an ideal situation if you ask me i wouldn't say this is the ideal situation because for lunch time if people look at the customer number 10 if he has to wait for 27 minutes that's quite a lot of waiting there is some improvement you still can make what if we balance the process steps we try and balance all pre-process steps by adding one more resource here enter so now it looks much better you can see cycle time has gone down to two two minutes the flow rate has gone up to 30 customers per hour and the average waiting time has come down to nine minutes this is not bad this is acceptable if you want to further improve then you may have to consider doubling all three processes and prepare one more production line here that would be the next step for improvement let me also touch upon a little slaw since we already know the flow rate and also the average flow time you know by little's law if you have these two parameters you can find the inventory in this case the number of customers waiting at any point in time in this system on average the inventory is 7.5 now originally was six you might think how come the inventory has gone up isn't it bad you have to look at this inventory in the context of flow rate and the average waiting time last time yes the inventory was only six and this average inventory has got an average waiting time of 27 minutes but look at this now is slightly gone up 7.5 but the average waiting time has gone down to 9 minutes so people are served faster they don't have to wait so that's the intuition here the bistro can only handle 10 customers per hour and this time now they can handle 30 which is more reasonable and with so much customers passing through the average inventory is still quite close to the original this situation is acceptable for this pasta shop they will make money and customers will come back but in case one i doubt i will ever go back if i was customer number 10. i hope this video clears the confusion between cycle time flow time average waiting time etc thank you and good luck