INFS3604 Summary PDF

Week 1 Process View ​(introduction to BPM) 1. Organization Process​ should operationalise organization strategy by providing value in-time with product/service differentiation allowing the organization to meet their market objectives 2. Business Process Management (BPM) ​enables organization to...

Week 1 Process View ​(introduction to BPM) 1. Organization Process​ should operationalise organization strategy by providing value in-time with product/service differentiation allowing the organization to meet their market objectives 2. Business Process Management (BPM) ​enables organization to identify their ​core processes​ (​e.g., costs, responsibility, roles and activities, both human and automated, at all levels in the organization​) and the ​fundamental value proposition​ that they deliver to their clients/customers. ● The core process should be the focus of management and continued improvement for the organization. 3. Why BPM ● Can learn who’s involved in the process ● What activities/tasks they are responsible for ● What documents are involved ● What decisions are made ⬇⬇⬇ producing the outcome​ ⇒ ​manage the process and make recommendations​ for its improvement. 4. Type of Processes ● Order to cash​: The customer must p ​ ay for the product​ and s​ ervice​ that organization delivered ● Quote to order​: the organization ​received a ‘request for quote’​ from a potential customer and ​provide the quote​, ​which may be converted to an order​ by customer. ● Procure to pay​: organizations ​place order​ for suppliers/raw materials => the tender may be ​converted to an order​; thus, materials are ordered and then they have to be ​delivered​, and ​then have to be paid for​. This is the supplier side of quote to order. ● Issue to resolution​: organizations need to ​manage their customer relations​, and this is achieved through the customer relations and management function in the organization​. If there are issues customers need to lodge a complaint​ or provide feedback. The ​complaint or feedback must then be resolved​ by the organization. ● Application to approval​: ​An application​ must be ​submitted​ to the financial services provider, the application then ​passes through a process​ where it is approved or declined and notified (e.g., apply for house loan) Why need recognise the type of process: ● Assist to develop process view of organization 1 5. Core Process​ – critical process that is important to the organizations success -> to determine the core process, it must consider the main value proposition of an organization. ● ​Value chain​: a collection of all the activities that are performed to design, produce, market, deliver, and support a product line. ○ Primary Activities​ (identify the value chain of the organization): Inbound logistics -> operations -> outbound logistics -> marketing & sales -> service ○ ● 6. a value chain represent the core process of the organization. Each primary activity adds value to the product Support Activities​: ○ Organization infrastructure ○ HR management ○ Technology development ○ Procurement ⬇⬇⬇ ● Increase an organization’s effectiveness ● Type of process may be included in support processes Business Process ● Definition​ of organization ​process​: A collection of interrelated events, activities, and decision points that involves a number of actors and objects, and that collectively lead to an outcome that is of value to at least one customer ● Elements of a process ○ Events​: things that happen automatically. Event trigger process (once event occurs, the process commences) ○ Activity​: a set of tasks that are triggered by events. A process made up of activities. ○ Decision points​: a decision affects the way the process is executed. (​decision points need to be modelled as they make a difference in how the process is executed.) ○ Actors​: actors are responsible for activities. ​systems - information systems - can be responsible for activities and decisions within processes ○ ○ ○ Physical objects​: equipment, materials; product and etc. Immaterial objects​: electronic documents and records; emails and etc. Outcome​: the execution of process leads to one or several outcomes. Outcome should deliver value to the customers of the process. ○ Customer​: the actor who consumes the output of the process ● Relationships between the elements of a process: An organization process consists of: ● An event that triggers the process (all process must have a trigger) ● Activities that can be the responsibility of actors or objects. ● Decision points are used to model decision in process An organization process involves: ● Actors that are responsible for activities 2 ● Objects that are artifacts that are input/output/from activities. An organization process delivers​: ● Outcomes (can be negative/positive) 7. Process and strategy ● ● 8. strategies are operationalized through business process​. ​Business processes enable organisations to ​differentiate​ their products and services from those of their competitors and thereby ​offer alternative value propositions​ to their customers in the market the strategy is implemented through the organization processes because: ○ the strategy entail ​differentiating the organization ​from its competitors, ○ Identifying the points of difference ○ being able to ​communicate first​ to the market ○ delivering​ those ​points of difference ○ the ​value proposition​ for that organization meets market through the organization processes. ​Enabler ​(important) ● Definition: a factor that can be adjusted to impact process performance, no process will work optimally until all of the enablers are acting in concert. ● Complete framework includes six enablers. (​The two enablers that we are most concerned with are ​workflow design and IT support​) ○ ● ● ● ● Workflow design The process workflow design is the work plan for responding to triggering event. It shows the sequence of steps, decision, and handoffs carried out by the process’s actors between the initial event and final result. By having workflow, you can certainly uncover problems in the design of workflow. Information systems Information systems could also be referred to more generically as information technology, which includes systems, information, computers and other devices. Motivation and Measurement Motivation and measurement encompass the explicit and implicit reward systems of the organization. Their concern is how people, organizations, and processes are measured and assessed, and the associated consequences—be they reward or punishment. Human Resources The human resource enabler covers the knowledge, skills, and experience of the workforce, how they are recruited, trained, and assigned within the organization, the design of the organization and individual jobs, and so on. Policies and Rules This includes the rules and policies established by the enterprise to guide or constrain business processes, as well as applicable laws and regulations. In practice, many processes include work and workflow to enforce rules or regulations that are obsolete, contradictory, or overly complex. 3 ● Facilities Facilities are the workplace design and physical infrastructure such as equipment, furnishings, machinery, lighting, air quality, and ambient noise. There is a growing trend to recognize the importance of facilities as enablers to effectiveness, productivity, and well-being. 4 Week 2 Process Identification 1. BPM life cycle focuses on the goal of business process management: continuous improvement 2. As the organization changes and the environment which it operate changes process will also change in response to both internal and external stimuli. Due to this, the process will become less efficient and effective. 3. Process identification a. Definition: a set of activities aiming to systematically define the set of the business process​ of a company and establish clear ​criteria​ for ​prioritizing them. b. Why: i. Understand the organization ii. Maximize value of BPM initiatives c. Output: a process architecture, which represents the business processes and their interrelations. A process serves as a framework. 4. Designation phase a. The core process are enumerated(identified) and scope of those process are determined. In defining the scope of the process, we consider the boundaries of the process: ​(horizontally & vertically) b. Process scope i. The scope of process must be identified to ensure: 1. All correct elements of the process are identified 2. The footprint of the process in the organization is determined, ensuring the ripple effect can be managed 3. Identification of the relationship between process is determined (process are independent) a. Horizontal relationship downstream-upstream: ​quote to order -> order to cash b. Vertical relationship(hierarchical) :​ sub-process i. Core processes, as represented by the value chain, can be quite complex. They have a high level of abstraction. In order to be able to model these complete process, they must be decomposed into sub-process. ii. Process change over time 1. Identification should be exploratory and iterative 2. Improvement opportunities are time constrained c. Process architecture i. Definition: an organization overview of the process that exist within an organizational context, which is often accompanied with guidelines on how they should be organized ii. Components of a process architecture 1. Management process 2. Core process 5 3. Support process: support core process 4. External view a. Suppliers and business partners b. Customers and owners iii. Designing a process architecture 1. Level 1: process landscape model simply the process architecture ->show main process on an abstract level 2. Level 2: abstract process models -> show the process at a finer degree of granularity 3. Level 3: detailed process model -> includes control flow, data inputs & outputs, assignment of participants. Etc. 4. Several perspectives and approaches have been defined for process architecture definition a. Case type​: classifies the type of products that are handled by an organization i. E.g. an insurance company can classified case type based on their product type b. Business function​: classifies the functions of an organization. Simply, It’s something that an organization does. A function can have sub-functions. iv. Steps to map a process architecture 1. Identify case types a. Product type b. Service type c. Channel d. Customer type 2. Identify functions a. A classification is developed of the business functions that are performed on the different case type b. sub-functions 3. Draw type/function matrix a. Case type as column b. Business function as row c. A cell in the matrix contains an ‘X’, if the corresponding function can be performed for the corresponding case type 4. Identify process a. Determine which combination of business functions and case type form a business process b. Guideline to split up process 5. Evaluation phase a. Importance: ​concerned with assessing the strategic relevance of each process. The goal is to find out which process have the greatest impact on the company’s strategic goals. 6 Alignment with strategic objectives: ​are the core processes aligned with the organizational objectives? b. Dysfunction:​ determine which processes are in the trouble i. Health​: (e.g. performance, compliance, sustainability): are the process effective and efficient? c. Feasibility​: determine how susceptible they are to process management initiatives, either incidental or on a continuous basis i. Culture & politics​: organizations change both in the cultural and political dimensions: have the processes changed in line with the organization over time? ii. Feasibility to being successfully improved​: assess the risk of not improving process. iii. Risk of improving​: what is the risk of not improving the process? 6. Pitfall of process identification a. The purpose of the project is not clear enough leading to inappropriate scoping the process b. The scope of the process is too narrow leading the fact that later the identified root-cause are located outside the boundaries of the process under analysis c. The scope of the process is wide leading to the process improvement project that has to be compromised in its lack of detail d. The process is identified in isolation to other project due to poor portfolio management leading to redundancies & inconsistency between these projects e. Involved project members and stakeholders have not been sufficiently informed about the benefits of the project leading to limited participation f. The involved project members and stakeholders have not been carefully selected leading to a very limited source of knowledge. i. 7 Week 3 Essential Process Modeling ​(Process Discovery) 1. Why need model process? a. To better understand the process and to identify and prevent issues 2. The nitty-gritty of the process modeling a. Communication: creating a common understanding i. Why communication important? Process modeling is complex as well as we will be modeling the elements of process and their relationships. The relationship can be dependent on time, conditions, and business rules. Therefore, it is important that we have a common language when communicating with each other about BPM. So that we can ​convey the correct understanding and avoid ambiguity​. b. Accuracy, completeness and understandability of modeling i. Process model need to consider in terms of: 1. Accuracy​: the model must correctly represent the elements of the process and their relationship 2. Completeness​: the model must be include all the elements of the process and their relations. 3. Understandable​: the model should ensure that is understandable. If the BPMN guidelines are followed, the model should be understandable. If the guidelines are not followed it is likely that the model will be difficult to understand 3. Components of business process a. Works​: the extension of effort directed to produce or accomplish something works involves a set of activities or sequence of steps and decisions that can be completed by a person or a machines or both. So when we are modeling process at a detailed level (focus on who/what is responsible for activities. What activities are carried out & what resources are consumed or used), we are modeling the activities that take place within that process b. Four basic elements i. Event (trigger)​: initiate a process. Every process must have a trigger 1. Action event​: a person or an organization decide to do something; a. Customer decides to place an order; b. Company needs to purchase materials from a supplier; c. A statutory authority issue d. A new guideline 2. Temporal event​: a predetermined data or time is reached at which a process must begin; a. End of pay period b. End of semester c. Time to close store 3. Condition or rule​: a process triggered by a condition: low stock level reached a. Balance below agreed overdraft 8 ii. iii. iv. b. Security threat received c. Motor vehicle breakdown in the M5 tunnel Task (activity): ​the activity that from trigger to result: who does what and when? 1. Name rules​: a process must have a name 2. The process name must be in the form verb-noun: ​“accept order”, “delivery pizza”, “acquire new customer” 3. Process are defined in the singular 4. The Verb-noun name must indicated the result of the process by flipping the verb-noun​: order accepted; pizza delivered; new customer acquired 5. Verb can be “active” or “mushy”​(“maintain file”, “organize sales team”, manage customer relationship” ​Avoid mushy verbs by focusing on the result Flow​: all the elements are connected by an ark which denotes flow, the workflow of the process. Gateway​: process can include elements that are conditions or decisions, and these conditions create pathways that must be modelled. 1. Exclusive decision​: XOR-Split/ XOR-Join a. Take only one outgoing branch i. I.e. only one of the activities can be true every time the XOR-split is reached by a token 2. Parallel decision​: AND-split / AND-join a. When two or more activities do not have any order dependencies on each other, they can be executed concurrently i. AND-split: flow concurrently to all the outgoing branches ii. AND-join: must wait for all the incoming branches 3. Inclusive decision​: OR-split/OR-join a. To model situations where a decision may lead to one or more options being taken at the same time i. OR-split: can take on or many outgoing branches ii. OR-join: wait for the active incoming branches 4. Rework and repetition a. To model rework of repetition we need firstly to identify the activities, or more in general the fragment of the process, that can be repeated. The property of a repetition block is that the last of its activities, must be a decision activity. 5. Resources a. The organizational perspective, indicates who or what performs activity b. Resource is a generic term to refer to anyone or anything involved in the performance of a process 9 c. A resource can be: i. A process participant​ (individual person, manager) ii. A software system​ (server or software application) iii. An equipment​ (printer) d. Resource class: set of resources with shared characteristics. A resource class can be a: i. Role​: classification based on what a resource can do or is expected to do (e.g, skill, competence, qualification) ii. Group​: classification based on the organization is structure. (department, team, office) iii. In BPMN, resources classes are captured using​: 1. Pools:​ used model independent organizational entities (resource classes) e.g, customer, supplier, a system, credit provider, etc. 2. Lanes: ​used to model resource classes in the same organizational space and sharing common systems. E.g, department, unit, team or software within the organization 6. BPMN information artifacts a. Data objects​ are a mechanism to show how data is required or produced by activities. They are depicted by a rectangle that has its upper-right corner folded over. It represent input and output of a process activity and can indicate states of the object b. Data stores​ are containers of data objects that need be persisted beyond the duration of a process instance c. Associations​ are used to link aircrafts such as data objects and data stores with flow objects Week 4 Detailed Process Modelling 1. Decomposition a. Sub-process can: i. reduce complexity in problems. ii. develop a hierarchical view of processes. b. Sub-process are: i. Self-contained ii. Composite activity​ that can be broken down into smaller units of work iii. Atomic activity, also ​called task​, ​is an activity capturing a unit of work that cannot be further broken down​. c. To what level should decomposed? (be guided by the case) 10 i. ii. In order to determine the lower level,we should stop at that level which is clear, unambiguous within the description of the process. 1. Collapsing​: a sub-process which h ​ ides​ its internal steps 2. Expanding​:​ a sub-process which ​shows​ its internal steps 3. Embedded​:​ by default, a sub-process is embedded within its parent process model, and as such it can only be invoked from within that process model. 4. Global​:​ a global process model is a process model that is ​not embedded​ within any process model, and as such can be invoked by other process models within the same process model collection. (use same parent process) Approaches to modelling sub-process 1. when should we decomposed? The attributes of process model should be considered: Understandability, accuracy, completeness. (A further attribute should also be added, which is readability. Sub-process allows us to develop a ​hierarchical view ​of the model which can improve readability and understandability) Syntax rules for sub-processes 1. A sub-process is a regular process model 2. It should start with at least one trigger 3. If there are multiple end events, the sub-process return control to parent processes, when an end event/outcome has been reached 4. Boundaries of sub-processes cannot be crossed with a sequence flow. 5. Control is passed to and from sub-processes by triggers and outcomes. 6. Message flows can be across sub-process boundaries. 2. Rework and repetition a. Sequential repetition​: instances of the loop activity are executed ​one after the other b. Parallel repetition​: executing multiple instances of the same activity ​at the same time i. Multi-activity​: a multi-instance activity indicates an activity that is executed multiple times concurrently (|||) c. ​Uncontrolled repetition​: activities that can be repeated multiple times with ​no specific order​, or not at all, until a condition is met. Week 5 Advanced Process Modelling 1. Additional event 11 2. 3. 4. 5. 6. 7. 8. · Can be a trigger · Can occur during a process (intermediate and receive) · Can replace activities · Differentiate between send, receive, end event · Catching and throwing Temporal events · A temporal event that needs to elapse before the process instance can proceed · Can be a trigger · Can be intermediate Racing events: two external events races against each other: deferred choice Process Abort: handling exceptions: if a terminate is triggered from within a sub-process, it will not abort the parent process Internal exceptions External exceptions · Scope issue · Use sub-process to encapsulate the activities during which the exception may occur · Attach the event to the sub-process boundary Process Choreographies · Interaction that involves all entities that are external to each other. · A high-level view of collaboration diagrams: o When a low-level view is not possible: Interactions not clear; Black box view required. Choreography Diagram · Choreography diagrams are started by one or more triggers. · Concluded by one or more results/outcomes · Activities connected by flows and gateways 12 Week 6 Process Discovery 1. Process Discovery 1) Definition:​ Process discovery is defined as the act of​ gathering information about an ​existing process​ and organising and presenting it in terms of an as-is process​. It focuses on gathering and organizing information. So, discovery is much more complex activity than modelling. 2) Process discovery often includes: · Study of business environment and factors that contribute or interact with the environment (e.g. government, industry regulations, market pressures, and competition) · The context of business, its strategy, the supply chain (inputs and outputs of the process) · Customer needs · Organization culture · Business values · How the process will perform to achieve business goals ->process discovery becomes an essential tool to show how well the business meeting its objectives 3) Quality and process analysis · ​Attributes of quality: ​readability, understandability, accuracy and completeness · ​Antecedents of these attributes: ​understanding the operation of the business process and have the skill to represent them as a process model 4) Four phases of process discovery a) Defining the setting: ​this phase is dedicated to assembling (装配，组装) a team in an organization that will be responsible for working on the process b) ​Gathering information: ​this phase is concerned with building an understanding of the process. Different discovery methods can be used to acquire information on a process c) Conducting the modelling task:​ this phase deals with organizing the creation of the process model. The modelling method gives guidance for mapping out the process in a systematic way d) ​Ensuring process model quality:​ this phase aims to guarantee that the resulting process model met different quality criteria. This phase is important for establishing trust in the process model. 5) Complementary roles involved in process discovery · ​Domain Expert: ​any individual who has intimate knowledge about how a process or activity is performed · ​Process Analyst: ​process analysts ​are responsible for driving the modeling and analysis of a business process. 6) Three process discovery challenges a) Challenge 1: Fragmented Process Knowledge ->Fragmented process knowledge is one of the reasons why process discovery requires several iterations. Having received input from all relevant 13 domain experts, the process analyst has to make proposals for resolving inconsistencies, which again requires feedback and eventually approval of the domain experts. b) Challenge 2: Domain Experts think on Instance level -> Domain experts will find it easy to describe the activities they conducted for one specific case, but they might have problems responding to general questions about how a process works in the general way. c) Challenge 3: Knowledge about Process Modelling is rare ->the problem is not only that domain experts are often not trained to create process models themselves, but also that they are not trained to read process models that others have created. This lack of training can encumber the act of seeking feedback to a draft of a process model. 2. What makes a good process analyst? Expert process analysts can be described based on a set of general dispositions, their actual behaviour in a process analysis project, and in terms of the process resulting from their efforts. · Getting the right people on board. · Having a set of working hypotheses on how the process is structured at different levels of details · Identifying patterns in the information provided by domain experts · Paying attention to model aesthetics 3. Process Discovery Techniques 1) Evidence-based a) Document analysis: ​exploits the fact that there is usually documentation material available that can be related to existing process. · Formal documentation in terms of: o Organizational chart o Employment chart o Quality certificate report o Internal policies o Glossaries and handbook · Potential issues: o Most of the documentation that is available about the operations of company is not readily organized in a process-oriented way o Level of granularity of the material might not be appropriate o Many of the documents are only partially trustworthy · Advantage: a process analyst can use them to get familiar with certain parts of a process and its environment, and also to formulate hypotheses. b) ​Observation:​ observe what people do at their workplace. The process analyst can either play the active role or the passive role 14 Active customer role: ​only see those parts of the process that require interaction with the customer. · Passive observer: ​understanding the entire process, but it also requires access to the people and sights where the process is being worked on · Advantage:​ context-rich insight into process · Weakness:​ potentially intrusive and stakeholders likely to behave differently c) Process Mining (automatic process discovery) · ​Advantage​: event logs capture the execution of a process very accurately including information about execution times. · ​Weakness: p ​ otential issue with data quality 2) Interview-based Discovery​:​ ​build on interviewing domain experts about how a process is executed. · ​Advantage:​ interview situation provides a rich and detailed picture of the process and the people working in it. It has the potential to reveal inconsistent perceptions that different domain experts may have on how a process operates. It also helps the process analyst to understand the process in detail · ​Drawback: ​labour-intensive and several iterations are required for arriving at a point where domain experts feel comfortable with how a process is described in a process model. 3) Workshop-based Discovery​:​ ​offers the opportunity to get a rich set of information on the business process · Gather all key stakeholders together (facilitator, tool operator, domain experts, process owner and process analyst) · One process analyst, multiple domain experts · Participants interact to create shared understanding · Often: software-supported, a model is directly created during the workshop · Model is reference point for discussion · ​Advantage: ​direct resolution of conflicting views · ​Disadvantages: ​synchronous availability of several stakeholders · 5. Process Modelling effort 1) Identify the process boundaries --- identify all triggers and outcomes 2) Identify activities and events ---identify main activities 3) Identify resources and their handovers--- who, relationship between handovers and modules that can be considered in isolation (decomposition and sub-processes) 4) Identify the control flow --- XOR, XAND, XOR 5) Identify additional elements --- artifacts and their relationships, exceptions and handlers 15 6. Process Quality Assurance 1) Syntactic (语法)Quality and Verification:​ relates to the goal of producing a process model that conforms to these rules · ​Verification​ essentially addresses formal properties of a model that can be checked without knowing the real-world process o ​Structural correctness​ relates to the types of element that are used in the model and how they are connected. o ​Behavioural correctness​ relates to potential sequences of execution as defined by the process model. 2) Semantic Quality (语义)and Validation:​ relates to the goal of producing models that make true statements about the considered domain, either for existing as-is processes or future to-be processes. · ​Validation ​deals with checking the semantic quality of a model by comparing it with the real-world business process. o ​Validity ​means that all statements included in the model are correct and relevant to the problem o ​Completeness ​means that the model contains all relevant statements on a process that would be correct 3) Pragmatic (实用)Quality and Certification:​ relates to the goal of building a process model of good usability. · ​Certification: ​the activity of checking the pragmatic quality of a process model by investigating its usage. · ​Understandability:​ relates to the fact how easy it is to read a specific process model · ​Maintainability:​ points to the ease of applying changes to a process model. · ​Learning: ​relates to the degree of how good a process model reveals how a business process works in reality. 16 7. 7 process Modelling Guidelines 1) Use as few elements in the model as possible 2) Minimize the routing paths per element 3) Use one start and one end event 4) Model as structured as possible 5) Avoid OR routing elements 6) Use verb-object activity labels 7) Decompose a model with more than 50 elements Week 7 Qualitative Process Analysis 1. As-is process assessment · Holistic approach: ensures completeness thus ensuring that significant issue can be leveraged delivering maximum efficiencies in terms of the to-be system. In other word, if all issues are not identified, they will not be addressed in the to-be solution. The best way to be holistic is consider the enablers. 2. Value-Added Analysis:​ value-added analysis typically consists of two stages: value classification and waste elimination 1) Value classification a) Four types of event driven process: · ​Customer affecting process:​ those for which a customer would pay · ​Management process:​ required for the organisation to control and guarantee quality of its processes · ​Primary process:​ needed to allow the process to take place (do not actually add value) · ​Support processes:​ not germane to the process, do not add value but without them the process would be impossible e.g. transport ● process can be made up of more than one; part of the as-is analysis is determining which type of process each activity is b) ​Priority:​ eliminate waste by minimising the number of activities, processes that do not add value, that aren’t actually required from a management perspective or from a process. · ​Leaning out process-​-- “lean” is actually embedded in a business process management as business process management is about eliminating waste in processes in order to continuously improve processes. o To be value adding, a customer must be willing to pay for the activity and the step must in some way affect the service or product with 100% accuracy o Flawed VA steps must be evaluated for their necessity and considered for root cause analysis c) Value proposition: (classification) 17 ​Value-adding (VA):​ produces value or satisfaction to the customer o Is the customer willing to pay for this step? · ​Business value-adding (BVA):​ necessary or useful for the business to run smoothly, or required due to the regulatory environment e.g. check, controls o Would the business potentially suffer in the long-term if this step was removed? · ​Non-value adding (NVA):​ the step does not fall into any of the other two categories d) Why have non-value-added (NVA) steps: · Business requirements · Necessary waste: legal, regulatory or other required activities · Try to identify steps that are not necessary within the scope of enablers 2) Eliminate waste:​ minimize or eliminate NVA steps · Instance of waste (DOWNTIME) o ​Defects (缺点):​ anything not done according to specifications and correctly the first time (rework to fix defects) o ​Overproduction(生产过度):​ making the product faster, sooner, or more than needed (unnecessary cases) o ​Waiting:​ time lost when people wait, material, or machines are waiting (waiting time between tasks) o ​Non-utilised talent​: not fully utilising people involved; not using people closest to the actions and their knowledge o ​Transportation​: any movement of parts, material, employees, or customers creates waste (unnecessary transportation, e.g. send, receive) o ​Inventory​: any material in excess is classified as one of three types---raw material, work-in progress, finished good o ​Motion(动作)​: movement of people, product, materials, or machines that does not directly add value to the final product (drop-off, pick-up, go to) o ​Over processing​: perform what is not yet needed or might not be needed · ​By applying DOWNTIME (lean the process), the following may occur​: o Minimising time of process movement between people by moving the participant physically closer o Combining steps o Reassigning work done by several people to one person o Coproduction activities o Automating the task, thereby eliminating human activity o Outsourcing 3) Steps to do the value-added analysis · Deconstruct the process into steps · Classify each step into: VA, BVA or NVA · 18 3. Issue Register:​ The ​issue register ​complements the output of root cause analysis by providing a more detailed analysis of individual issues and their impact 1) Purpose: to categorise identified issues as part of as-is process modelling 2) Format: usually a table with following columns · Issue number · Name of the issue · Description · Priority · Assumptions · ​Qualitative impact:​ such as impact of the issue on customer satisfaction, employee satisfaction, long- term supplier relationships, company's reputation or other intangible impact that is difficult to quantify. · ​Quantitative impact:​ An estimate of the impact of the issue in quantitative terms, such as time loss, revenue loss or avoidable costs. · Possible solution 4. Techniques for root cause analysis (issue analysis) 1) Cause-effect diagram: Cause–effect diagrams depict the relationship between a given ​negative effect a ​ nd its causes. In the context of process analysis, a negative effect is usually either a recurrent issue or an undesirable level of process performance. Causes can be divided into causal and contributing factors · Categorisation for cause-effect analysis o Machine: factors pertaining to the technology used o Method: factors stemming from the way the process is defined or understood or in the way it is performed. o Material: factors stemming from the raw materials, consumables or data required as input by the activities in the process o Man (human): factors related to a wrong assessment or an incorrectly performed step o Measurement: factors related to measurements or calculations made during the process. o Milieu: factors stemming from the environment in which the process is executed 2) Why-why diagram: the basic idea is to recursively ask the question: Why has something happened? This question is asked multiple times until a factor that stakeholders perceive to be a root cause is found. (5 why principle- ask why 5 times) 3) Pareto charts: identify which issues or which causal factors of an issue should be given priority. In other words: · A small subset of issues in the issue register are likely responsible for the largest share of impact. · For a given issue, a small subset of factors behind this issue are likely responsible for the largest share of occurrences of this issue. 19 ->Also known as 80-20 principle, meaning that 20% of issues are responsible for 80% of the effects a) Component of pareto chart: · A bar chart where the height of the bar denotes the impact of each issue and the bar sorted by impact · Superposed curve where the y-axis represents the cumulative percentage impact Week 8 Quantitative Evaluation of process 1. Performance measures 1) Measures: the importance of measuring the performance of a process cannot be overstated or over estimated. Aligning process performance to organisational goals is the primary reason for undertaking process management practices --- “if you can’t measure it, you can’t manage it” 2) Key process performance definition a) Time · ​Cycle time: ​the time that it from the start of a process to the completion of that process in terms of the output · ​Processing time:​ the time that resources spend on actually handling the case · ​Waiting time: ​the time that a case spends in idle model b) ​Cost:​ the monetary value associated with a process · ​Fixed costs: ​overhead costs which are not affected by the intensity of processing · ​Variable cost: ​positively correlated with variable quantity · ​Resource cost: ​measurement of the monetary value of the resources (human and non-human) required to complete a process · ​Opportunity cost: ​the value that is lost from the process by not getting the resultant output of the process. E.g. sales order is lost due to an error in the sales order c) Capacity:​ amount or volume or feasible output associated with a process (e.g. the number of transactions associated with a process, usually has a revenue connotation; throughput connotation) d) Quality · ​External quality: ​measured as the client’s satisfaction with either the product or the process o ​Satisfaction:​ customer satisfaction with a product/service expectation · ​Internal quality​: a business process related to the process participant’s viewpoint o ​Variation:​ amount, extent, rate, or degree of change between the actual and target or expected result. E.g. error or defect rate. 20 e) Flexibility​: flexibility can be defined in general terms as the ability to react to changes 2. Flow Analysis: Flow analysis is a family of techniques that allow us to estimate the overall performance of a process given some knowledge about the performance of its activities. 1) Calculating Cycle Time i. Purely sequential fragment of a process is the sum of the cycle times of the activities in the fragment. ii. Between the XOR-split and the XOR join is the weighted average of the cycle times of the branches in-between iii. Parallel gateways – determined by the slowest of the two activities (longer time taken) Critical part of the process - sequence of tasks that determines the cycle time of the process, meaning that the cycle time of any instance of the process is never lower than the sum of the cycle times of this sequence of task. 21 iv. Rework 2) Cycle Time Efficiency · Ratio of overall processing time relative to the overall cycle time. o Close to 1 – little room for improving cycle time o Close to 0 – significant amount of room for improving cycle time by reducing waiting time · ​Theoretical cycle time​ - overall amount of time that is spent doing actual work · Waiting time - portion of the cycle time where no work is being done to advance the process · Processing time - time that actors spend doing actual work. Calculate Cycle Time 22 Week 9 Process Redesign · 1. Why Redesign? Business process redesign is all about improving the quality of products and services by rethinking and re-organizing business processes. a. Organizations change · Upgrades in technology · Changed focus · Habitual behaviours · Business processes tend to evolve organically over time. o ​Grow more complex and their performance gradually deteriorates. · People who are busy with carrying out day-to-day operations are usually neither inclined nor equipped to start rethinking the overall structure of operations within an organization o ​Only know their own operation 23 b. Environments change · Advances in technology · Competitive landscape o ​New competitors enter the marketplace that can deliver the same product or service that you can, but against lower cost or tailored to a customer’s specific needs. · Change of customer preferences 2. What is redesign? a. The 7-point framework: · Customers · Business process operation view – how a business process is implemented specifically number of activities · Business process behaviour view – way a business process is executed specifically the order of activities · Organization o ​Organization structure (elements: roles, user, department) o ​Organization population (individuals: Relationship of activity with assigned agent) · Information · Technology · External Environment b. Manufacturing domain – transforming raw materials into tangible products, which often relies on the use of robots and sophisticated machinery. c. Service domain – knowledge is involved in the processing of information to deliver a particular service 3. The Devil’s Quadrangle: contention of the 4 performance dimensions · a. improving a process in one dimension may have a weakening effect on another Time Dimension i. Cycle time, including 24 · · · service time (including set-up) transport time (can often be reduced) waiting time o ​Due to resource contention (limited capacity) o ​Due to external communication (waiting for client/partner) ii. Several ways to improve time properties: · Improve average · Improve variance · Increase ability to meet due dates b. Quality Dimension i. Product · Product meets specifications and/or expectations ii. Process, e.g. · Promises made to customers and (reasonable) customer expectations are met · Data and documents are handled correctly · Decisions made in the process are correct · Correct & timely information is provided to the customer c. Cost Dimension i. Type of costs · fixed or variable · per time unit, per use (consumable resources) · processing, management, or support. · human, system (hardware/software), or external, d. Flexibility Dimension i. Ability to react to changes. · Flexibility of o ​resources (ability to execute many tasks/new tasks) o ​process (ability to handle various cases and changing workloads) o ​management (ability to change rules/allocation) o ​organisation (ability to change the structure and responsiveness to demands of market or business partners) 4. Redesign Heuristics a. Task elimination · Sometimes "checks" may be skipped: trade-off between the cost of the check and the cost of not doing the check. · Targets for elimination: o ​Non-value adding activities · Task elimination can be achieved by delegating authority, e.g. o ​No need for approval if amount less than Y o ​Employees have budget for small expenses 25 b. c. d. e. f. g. · (T+,Q-,C+/-) Task composition (merge or split) · Pros of splitting: o ​less work to commit, allows for specialisation. o ​Opportunity to enable partial self-service, e.g.decouple scanning and payment in a supermarket · Cons of splitting: o ​setup time, fragmentation, less commitment​. · Pros of merging: o ​setup reduction, no fragmentation, less transportation time, more commitment · Cons of merging: o ​more work to commit, one person needs to be qualified for both tasks being merged · (T+,F-) Triage · Consider dividing a general task into two or more alternative tasks or the integration of two or more alternative tasks into one general task. · (T+,F-) Resequencing · Order tasks based on cost/effect · Put “knock-out checks” first – identify problems early · Postpone expensive tasks until the end. · In other words: order the tasks using the ratio “costs/effect”. · (T+,C-) Parallelism · More parallelism leads to improved performance: reduction of waiting times and better use of capacity. · IT infrastructures which allow for the sharing of data and work enable parallelism. · (T++) Process specialisation and standardisation i. Process ​specialisation · Differentiate by customer classes, geographical locations, time periods (winter, summer), … · Different activities, different resource pools, ii. Process ​standardisation · All cases treated equally (as much as possible) · Resources are pooled together · F+/-, C+/Resource optimisation 26 h. i. · · · · i. Centralization: Treat geographically dispersed resources as if they are centralised · Avoid one group of people overloaded and another (similar) group waiting for work. ii. Case assignment: “Let workers perform as many steps as possible for single cases” · The extreme scenario is to have “case managers” iii. Flexible assignment: “Assign work in such a way that maximal exibility is preserved for the near future” iv. Empower: "Give workers most of the decision-making authority instead of relying on middle management” · Empowerment should go hand-in-hand with accountability v. T+,QCommunication optimisation · Reduce the number of messages to be exchanged with customers and business partners o ​But avoid overly front-loading the process · Try to automate the handling of messages (send/receive). · Use standardised, programmatic whenever economical (EDI, XML, Web services) o ​Prevents communication errors · If possible, use asynchronous instead of synchronous communication. · T+,Q+,C+/-,FAutomation Use data sharing (Intranets, ERPs) to: o ​Increase availability of information to improve decisions or visibility (subject to security/privacy) o ​Avoid duplicate data entry, paper copies Use network technology to: o ​Replace materials (e.g. paper document) flow with information flow § E.g. querying government agency DBs replacing document flow o ​Increase communication speed: e-mail, SMS § Note: e-mails are unavoidable, but not always desirable o ​Enable self-service (e.g. online forms) Use tracking technology to identify/locate materials and resources where reasonable o ​Identification: Bar code, RFID o ​Location: indoor positioning, GPS Automate tasks and decisions o ​Capture and automate business rules where effective 27 · · Automate end-to-end processes (T+,Q+/-,C+/-,F-) 28