Optimization of Time and Cost Parameters of Service Processes













Table of Contents


Table of Contents. 2

Optimization of time and cost parameters of service processes. 3

Taguchi’s Parameter Design Approach. 5

Production Flow Analysis. 7

Value Stream Mapping. 10

QoS Based Optimization of Service Compositions for Complex Work Flows. 13

Order- Based Cost Optimization in Assemble- to- Order Systems. 13

References. 16




Optimization of Time and Cost Parameters Of Service Processes


Accoriding to Altendorfer (2013), Optimization is what is being sought after by most companies that operate online. In that particular regard, it is essential that, the topic will be tackled with the deepest insight available from literature. Most of the businesses are after the best ways of operating effectively so that, they can maximize on their profits and minimize their costs as low as they can possibly do. Thus, optimization is defined as the way of going after the most perfect or effective way in managing a particular process.

It becomes essential to note that optimization is held highly in the area of production management. Thus, in production management and technology, there are different methods that have been developed in order to make producing processes to be more efficient. This is a study that is focused to ensure give all the possible methods and all that which they entail. The information provided about each of the methods that will be indicated in this scenario, will elaborate on the target, the procedure that it embraces and finally an evaluation of whether it is good or bad (Ari Pekka, 2011).

Optimization is useful and it does the following the first is that it helps and organization to be competitive. The organization may not have had the best position within the market place, but it can reclaim its position as market leaded because it will be offering products that are quality and in the right time. Dieter, Andre, Juliana, Ulrich, Apostolos, and Ralf (2010) enumerate that, no delays with optimization because it is meant to make the process involved in production or service provision the most efficient. The second is that optimization helps those who are in charge of an organization or managers to make the best possible decisions. Sometimes, managers make decisions out of an impulse, but the most effective decision is one that has to be informed by a concept. The concept ensures that the managers are able to reach quality which would makes their products sale or create a reputation for their service process among peers. The best solution to be chosen from optimization, there has to be a process that has to be followed every other step.  ElMaraghy (2011) adds that, the initial is defining the problem that the manager or the organization is facing. It is impossible to solve what you do not have an idea of. The second step after identifying the problem is determination of the evaluation criteria. The third step is determination of alternative solutions. There would not be need of optimizing in the case that there is a no choice. Choice means that there is a variety of options that are all likely to suit a situation, or condition, but, one of those solutions is the best. Thus, is the importance of optimization to lead to the most suitable in this particular case? The following step is to evaluate the alternatives that are available based on the evaluation criteria that have been formulated by the process as well.  The final step is the selection of the alternative which provides the best solution.

Optimization leads to better performance in terms of six sigma and time. Thus, it is essential to note that, optimization leads to reduced cost. The cost is reduced through the concept of six sigma were the product which is being manufactured out is done the right way the first time (Ari Pekka, 2011).



Taguchi’s Parameter Design Approach.

Zillur & Faisal (2008) calrify that, consequently, out of this, the initial method is the one which is known as Taguchi’s Parameter Design Approach. The literature in this particular section will explain optimization of a process based on the said method. The Taguchi methods are the methods that have been named after the person who designed them. Dr. Genichi Taguchi methods are statistical and they are purely directed towards improving the quality of products that are produced from a given process. Taguchi for a period has been in the books of history as a quality expert. In fact, a definition from the cost perspective that he holds has it that, quality is about the amount of loss that the people in the society are able to suffered as a result of the products being sold in the market not reaching the best standard.

The loss that happens is informed by the deviation of functional characteristics of a product from the value that is being targeted for that given period of time.  The deviation is caused by some factors that can be controlled and others that cannot be controlled under whatever measure. Thus, it is not about the target but also about the process which includes the variation which takes place in terms of variation. In order for quality to be attained, Taguchi points out that this is essential, and it cannot be ignored under whatever circumstance (Mahadevan, 2010). The method that has been formulated by Taguchi, which is quality engineering, takes into account all stages that are involved in process development, though the most useful of them all is the parameter design. This is so because it is the only which can lead to quality of the highest grade and ensure that production is kept at the minimum possible level.

Zude (2010) futhers that, Taguchi points out that most of the design engineers focus on the product costs and performance which should not be the case. In fact, Taguchi points out that the deterioration and imperfection are most important factors to consider. As a follow up to this, Taguchi came up with Signal-to-Noise ratio (S/N). This is a ratio that was formulated to measure the robustness of the internal and the external sources of variation. Taguchi provides that this is the best which ensures that quality is all times high because it is not affected by the environment as well (ElMaraghy, 2011). Thus, the method is meant to ensure that there is robustness in the production of a product or in a process so that at the end what is realizable is high quality at a low cost. Taguchi was the person who introduced the concept that is used by Toyota, one of the international car companies producing in Japan. The concept is what has made the car to sale and the others find it difficult to out do it because of the concept which Taguchi introduced of Total Quality management while the other companies did not think it counted. The philosophy of Taguchi can thus be broken into three: systematic design, parameter design and lastly is tolerance design.

Zillur & Faisal (2008) define System design to be the application of knowledge which is scientific as well as engineering knowledge to ensure that, a basic functional prototype design is realized.  In the case of parameter design, a experimentation has to be carried out in order that, to determine the effect that noise has on the way the characteristics of a given product perform based on a set of values for the design parameters. The experimentation is to be carried out to ensure that optimal levels are attained for controllable system to ensure that the system is functional. In addition, is to ensure that performance is at all times high to overcome conditionality’s of all kinds and that, it is robust to noise. The other one is tolerance design and it is known for tightening on tolerances where variability could have large negative effects on the final the final system. The tightening of tolerances unlike in the case of parameter design, it leads to an increase in the amount of costs that are incurred.

In conclusion, Rao (2010) explains that, the designing of a high quality product or a process with minimal variation at a low cost is the challenge of the highest degree that the engineers have been able to note. This falls within the confines of technology and economy as well. Taguchi method is designed in order to cater for the particular need. Follows is the systematic Taguchi optimization process. The initial is planning on experimentation. This is the step which entails more of identifying and rectification of defaults. The initial of all is the identification of main function side effects and failure mode; identification of noise factors; identification of quality characteristics; identification of control factors; and finally in the first steps is designing a matrix experiment.  The second step is performing the experiment which entails performing Taguchi is matrix experiments. Thirdly are analyzing experiment results with the last step being confirmation of experiment. It is fit to conclude that when it comes to quality, then this particular method stands out as one of the best. It has been embraced by a number of companies yet, Toyota has been in the center which and it has performed exemplary out of the method.

Production Flow Analysis

Ari Pekka (2011) makes it clear that, this is the second method which can be embraced; it deals with the transformation of traditional functional layout into a product oriented layout. It is a method that was introduced by a Professor who in most case used to question the students in his class, why Adam Smith ignored the encompasses that result to efficient operations management in the book, “Wealthy Nations.”Adam Smith is the father of capitalism and that is why most probably, the Professor used to ask the very question to the students because, most probably, the father should have tackled it. But, the Professor after proper work on this particular method finally lets the suspense go by informing all the readers the reason as to why Adam Smith did not do so, and why it was not possible for that to happen. The professor indicates that manufacturing had not grown as much during them days and that operations management problems were thus of no immediate importance.

Zude (2010) adds that, it then came a time when manufacturing had begun to extent its roots. In so saying, most of the shops were used for manufacturing, and there was no need for complex planning and control since the material flow was manageable and that it was guided through visual only. Thus would not be the case in the long term and hence, the complexity in production which was witnessed with time as a result of continued production. Thus, the Professor found a meaning in formulating the method. The method that the professor later on formulated in the 70’s and 80’s was meant to ensure that, the production was made to change from the very current functional layout to the product driven layout.

Functional operation process is a process which entails to the specialization which takes place in a given manufacturing company. The functions involved are those that an organization makes in order of similar responsibilities, but, the method which has been formulated by the Professor does not advocate for this. The Professor advocates for groups completing of families of components. The importance of this particular method as to why it was developed is to ensure that there are short lead times and that, the work in process is at an all minimal level (Altendorfer, 2013). That is the only way a business will be most effective and be able to gain most out of the production process of product development or any other related process.

In relation to ElMaraghy (2011), the study which was done the by the professor must have been critiqued by a given concept. Every other study, just like this one is meant for a given reason. It is elaborate that during those periods that Economic Order Quantity (EOQ) was the light of the day. Most of the manufacturing companies embraced the idea of demanding for goods when they went down to a given level. The Professor noted that all of the stock control procedures which were used in would amplify variations because demand is takes course via the supply chain. Thus, it became essential that the production process that was being focused would be simplified and supply flows as well the simplification of the two would ensure that, efficiencies are realized in the value creation process. The professor in facts counts the use of the EOQ concept which is still being embraced till today as an illusion. In the elaboration, EOQ is said to lead to unnecessary building of sticks while at the same time it leads to long lead times.

Over time, other researchers have done their research and they have been in a position to formulate other methods and additional algorithms that would come to complement production flow analysis. The complement is meant that the PFA is the best that it can be in helping reduce the lead times to the minimal possible level as well as minimal work in process. When transformation from traditional functional layout to product has to take place, then, there has to be transformation in the entire facility. That is may not be the case in other situations. Some of the situations may dictate a not in the layout but the logic on how it is operated follows different principles.  A perfect example has been given from a Hospital. The example shows the traditional functional orientation system as the single first-in-first -out in open surgery which is being conducted in a hospital. This is then replaced with a product oriented system where the patient is at the center (Mahadevan, 2010). In thus saying, a double queue system is embraced in which long and short procedures are used alternatively to ensure that the workload it is kept at the lowest possible level. That is a perfect illustration of how the PFA works, and how it helps in minimizing the lead time that are available in every system will at the same time ensuring that the work in process is minimal. The lead time in the hospital is reduced in the case that it is applied because instead of one line for the heart opening section, there are two of them. Even though, all of them are focused in ensuring the patients with the heart problem have them opened, the PFA ensures that the long and the short procedures are used alternatively in order that the work load is brought don to the minimal possible level which in turn leads to reduced lead times. Increased lead-time is not good for any given process because it leads to inefficiencies, and that should not be the case.

Value Stream Mapping

Martine and Osterling (2013) explain that, this is the third method which is most useful in the product process optimization .it is most essential because of the simple reason that, it is tailored to ensure that the lead time that are experienced within the process are reduced to the minimum possible level. That said, it is crucial to know that this method is only useful in the case of product development process and neigh other. Product development is a field that is broad unlike most of the people may think. It can be called a process because of the factors that come into play. In fact, before a product can be marketable, there are several stages that have to be undergone. It is for this particular reason that, the stages involved are referred to a process, because, there is none which that can come before the other. In other words, the stages which are involved in the development of a product cannot in a way be interexchange (Rother & Shook, 2003). Some of the stages which are essential in development are include: the identification of a need or gap that ought to be met, planning of how to fix this particular gap, designing a product that would fill in the gap, creating the actual product and the final stage is the marketing of the product. Thus, this is a method that targets to ensure that the products which are being developed are made in the most efficient way at a fast rate while at the same time, ensuring that the performance and quality of the product is maintained at an all high level at all times.

Satish, Alok, Xianming, and Yang (2014) clarify that, most of those competing for the market for a given service or product find it inevitable to enter the market before any other of their competitors could explore it. Besides, they ensure that the products or the services which they are offering have quality that is standard or which is improved other than letting it to decline at any given point in time. Thus, most of the organizations focus on how to reduce that they take to introduce their products in the market. In so doing, the product development process comes into play and becomes inevitable. Organizations are able to utilize the product development process in order that they will be in a position to meet needs of one or several products of services. The process as indicates in the part of the introduction it entails the chain of activities that spun from the market research which is conducted to formation of an actual product or service to meet the problem that the research found to be relevant in solving.

The lean concept has been one that has been used by most industries for decades. It has been at the center of manufacturing by helping pluck out waste materials in order to ensure that the process is efficient (Martine & Osterling, 2013). However, the literature which is readily available in books and other sources does not make it clear that; lean concept can be used in product development as well.  The study which was done in relation to the above topic was the formulation of way on how to identify as well as eliminate the steps which do not have value addition in product development process in order to lower the lead times.

The performance of lead times in relation to the available information is said to be measured through cost, lead times and lastly through quality. If the cost is not maintained at the minimal possible level, the lead times are not short and the quality is not high, then the product development process has problems that ought to be fixed. That is a clear indication that the process which is being embraced is not efficient. Literature indicates that a there are many model of the product development process (ElMaraghy, 2011). The initial product development process is one which involves the following for stage: the concept generation; product planning; product engineering and finally is the process engineering. There are other production processes which contain two, three phases while other contain four and five. Ulrich model is the one which has been categorized to have five phases as shows below. The first phase is concept generation, the second is system level design, detail design, testing and refinement and the last phase is production ramp-up.

Satish, Alok, Xianming, and Yang (2014) add that, the  literature indicates that it takes duration of 4 to 5 years to have a new product developed and functional in the market. Most of all, 50 percent of the costs that are incurred in ensuring that a new product is in the market are realized from wastes. Thus, the research that was conducted was meant to ensure that the amount of money that was spent in unnecessary wastes would be brought to an end as well as ensure that the lead times are reduced to the minimal possible level. That is the only possible way that efficiency in the process would be realizable. In most organizations, there is no way of determining how problems can be generally tackled. It is from this case that it is notable that still, there has not been a special way of selecting the tools that are best suited for the Production development process.  The lean concept has been used in many manufacturing companies as indicates in some of the precious sections. It is likewise important to know that, it has the potential of reducing the time to market for product development.

It is imperative noting that there exists a difference in manufacturing and product development. The fact that lean concept has done well in the manufacturing is not a guarantee that it would work in the case of the product development product. In order for that to be workable, the principles that are tailor made for lean have to be modified in order for them to be fit for the scenario.  VSM are tools which have been scrutinized, studied and agreed upon to be integrated with the production development process to ensure that it works well. VSM are not the only available tools, because the study has indicated that there are many more others, even though, with all that, it remains to win the vote of most people (Martine & Osterling, 2013).

QoS Based Optimization of Service Compositions for Complex Work Flows


Dieter, Andre, Juliana, Ulrich, Apostolos, and Ralf (2010) explain that, it is a period where competition is at an all times high. The reason to thus be that, most of the competition comes from the existence of products that are very much similar. The similarity of products in the market leaves manufacturing companies with no choice other than to ensure that they focus on efficiency of a process. The customers will go for products that they will be able to derive most utility from, thus, the importance of the businesses to focus on efficiency. Efficient process ensures that the products that are produced are of high quality and that there are no fluctuations realizable under whatever case.

The field of service selection is on which has garnered much attention from all over. Some of the authors who have tackled this particular topic have proposed heuristics solutions. Others propose tree based algorithms. These is the kind of algorithm which elucidates that, complex work has into a tree like execution structure. Thus is based on the way of alignment of the considered workflow patterns (Rao, 2010).

Order- Based Cost Optimization in Assemble- to- Order Systems


Yingdong and Jing Sheng  (2005) insinuate that,this entails the study of a multi-item stochastic system. This is the case where the customers involved within the process are able to purchase number of items that are most likely similar but, the items are overlapping. The goal that is for this particular method is to determine the right level stock for each of the items. It is also of equal importance that, the key factor of the basic level stock be determined.  Managing such a scenario may be the hardest thing that a manager of a manufacturing company may have ever had. Based on the fact that delivery of the subsets in the required form is what may derive satisfaction of the customer, then there has to be a predetermined way of mailing this possible. The process undertaking this too should be effective and efficient.  

An excellent example has been elaborated by one of the authors as the Assemble-To-Order (ATO). This is a component for inventory planning, whereby the goods that are to be delivered to a customer can only be delivered are known. The delivery of the products can only be done when the customers’ gives a list of all that they want. The subsets may be overlapping, in that, all of the products are needed to be delivered at the same time yet, at times, one of the subsets may lack. The lack of the subset in the Assemble-To-Order may result to a delay of delivery because, the delivery happens when the entire batch requested by the customer is available (Zude, 2010). Thus, the computation of the inventory level of one particular product should take into account of the other products inventory that ought to be ordered at ago. Even though, it is essential and best in the case that the products will have to be delivered together in future. But, it is goo also to note that the computation of such inventories may require intensive calculations and optimization of certain variables. The complexity that would involve the computation of a number of item inventories is a clear evidence of why most of the organizations use the single product inventory planning tools ignoring a relationship with other products.

The approach which has been discussed in the above paragraph is known as the item-based approach. The essence of this particular study is to elaborate on the on the efficient solution for the multi-item system. This achievable through formulating a model that would lead to low costs while at the same time, determine the joint optimal base stocks.  Altendorfer (2013) enumerates that, the item level is the one which determines the inventory costs, while the customer order level determines the back order costs. A comparison is made based on the single -item cost-minimization model with that of order based model. The study which was conducted for the multi-item system shows that items in the system are complimentary. That implicates that an increase in order of one of the items increased the desirability of stocking the other products.  for the other. The second thing to note is that the optimal base stock level as are able to increase with there is stochastic longer lead times. That insinuates that the optimal base stock may thus increase or decrease based on the changes on stochastic lead times.

Available literature is categorical that there are many methods that would be used in determining the way to optimize the process of production or the one which is used to offer quality services. In so saying, it is however, important to know that those which have been discussed in this study play an equal role in optimizing the process. Each of the process is meant to achieve different kind of effectiveness for the process. There are those which have been discussed to ensure that the lead time is shorter (Mahadevan, 2010). There are other methods which indicate that work in process will be minimal that it previously was. Also, there are those who indicate that the cost which is involved will be reduced to minimal possible level. Most of all in order for the products which are being developed to compete in the market or for the service which is being offered, the optimization concept based on any of the discussed method ensures an organization win a competitive position against their competitors.

Optimization is a concept that any serious organization or manufacturing firm is not is a position to ignore. The future of the competition as it unveils is informed by the way competitors will know how best to optimize. Them that learn the concept and put it into perfect implementation will enjoy a perfect success in the market against their competitors. Each of the methods elaborated in the section above have their advantages as well as their disadvantages. Thus, it is essential to note that, the competitors ought to know which is the best of the method to use for their case based on their needs and the advantages the method can offer over the others in order to remain competitive.














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Dieter, S., Andre, M., Juliana, E., Ulrich, L., Apostolos, P., & Ralf, S. (2010). QoS- Based Optimization of Service Compositions for Complex Workflows. Proceedings of Eigth International Conferenceon Service Oriented Computing (pp. 641-648). San Francisco: Springer.

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Zude, Z. (2010). Manufacturing Intelligence for Industrial Engineering. Hershey: IGI Global.




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