Lecture 1: Business Process Management (BPM) - The art and science of overseeing how work is performed in an organization to ensure consistent outcomes and to take advantage of improvement opportunities ● Managing an entire chain of events, activities, and decisions that ultimately add value to the organization and its customers What is a Business Process?… It is a chain of events, activities and decisions ● Involves a number of actors and objects, ○ Is triggered by a need ■ Transforms inputs to outputs ● And leads to an outcome that is of value to a customer Components of a business process - - - - Actors A collection of activities Events [e.g start, end] Decision points Characteristics of a business process - - - - Goal oriented Value-driven Measurable Could be automated ↳examples: Need: Customer wants to order pizza, student wants to submit an assignment Events: Start, end, new message arrived Activities: Search for food menu, submit assignment Decisions: Pay in cash or credit card, go with promotion or not Outcome: Pizza ordered, assignment is submitted Value: tasty food given price paid, fulfilment of course requirements Customer: Students, other departments, clients Other example: ● Order to cash ○ Type of process performed by a vendor ■ Starts when a customer submits an order to purchase a product and ends when the product has been delivered to the customer & customer has made the payment Importance of Business Process - Process performance is fundamental to the success of an organization Allows us to describe what we are doing, meaning that we know what we ARE doing Overall Summary of Business Processes ● Process performance is fundamental to company success ● All good processes eventually become bad ● Benefits of an IT can be realized through understanding & improving processes ● Process innovation stimulates growth & productivity increase ● Personal growth is benefited from the understanding of business processes Process View of An Organization Functional Organization VS Process-Oriented Organization Department Focused Process Focused ● A silo view of an organization ● Emphasize on ○ Hierarchy ○ Functional Optimization ○ Department Based planning ● A integrated view of an organization ● Emphasize on ○ Coordination across departments ○ Process optimization ○ Process based on planning So whats Business Process Management A body of principles, methods & tools to design analyze, execute, and monitor business processes, with the aim of improving their performance ↳ Stakeholders in the BPM cycle ● Management Team ○ Overall processes of the company ● Process Owner ○ Middle Manager: ■ Planning, organizing, monitoring, controlling, ● Process Participants ○ Employees ■ Perform activities, support the implementation of new process design ● Process Analysts + System Engineers ○ Analysts ■ Process identification, discovery, analysis, and design ○ System Engineer ■ Focus on system requirements in redesign & implementation The BPM Lifecycle 1. Process Identification: Identify which process to improve 2. Process Discovery: Understand the business process (as-is) in detail 3. Process Analysis: Analyze the performance of the process 4. Process Redesign: Create a to-be process 5. Process Implementation: Execute the new process 6. Process Monitoring & Controlling: Monitor & control the execution of the new process 1. Process Identification A business problem is posed, processes relevant to the problem being addressed are identified, delimited, and related to each other Outcome: Is a new or updated process architecture that provides an overall view of the processes in an organization and their relationships 2. Process Discovery Understand the proess discovery in detail 3. Process analysis (As is) Analyze the performance of the process - Results with a list of issues to improve regarding the process 4. Process Redesign (To be) Create a to-be process - Goal is to identify changes to the process that would gelp the issues highlighted in the previous phase and allow the organization to meet their objectives 5. Process implementation Execute the new process - The changes needed to move from “as-is process” to the “to be process” are implemented Process implementation covers to aspects: ● Organizational change management ○ Refers to the set of activities required to change the working of all participants involved in the process ● Process Automation ○ Reders to the development and deployment of IT systems that support the to be process 6. Process monitoring and controlling Monitor & control the execution of the new process Lecture 2: Business Process Management (BPM) Body of Principles, methods and tools to design, analyze, execute and monitor business processes, with the aim of improving their performance Process Identification Process Identification: A set of activities aiming to systematically define the set of business processes of a company & establish clear criteria for prioritizing them - We are going to identify the process that is impacting the business [done by the organization, telling you they are] Purpose: ● Identify processes are executed in the organization ● Prioritize the process(es) that should be focused on process improvement “We are going to identify the process that is impacting the business [done by the organization, telling you the focus area]” Process Identification Steps 1. Designation Step → aka process architecture ● Define processes ● Identify their interrelationships ● Enumerate the main processes ● Determine process scope 2. Evaluation Step[aka Process Selection] Prioritize processes based on →prioritized process portfolio ● Importance ● Health [or dysfunction] ● Feasibility [must understand everything to move on to the next] Process Architecture: Hierarchical View Rember “designation step” is aka Process Architecture “ a conceptual model that shows the processes of company and makes their relationships explicit Level 1: Process Landscape ● Process landscape model ● Focuses on main processes on a very abstract level ● Contain process groups [departments, business units] - Understanding the bigger picture - The abstract level [process identification] = process landscape - Eg. - Looking at departments, who’s in charge of this, who do I need to talk to Level 2: Main Processes [e.g. BPMN] ● Level one main processes at a finer degree of granularity ● Still abstract - [Process discovery] = Start the BPM process - E.g - After finding the needed department, we try to expand our studies. Asking them how it is done, finding out who else is involved Level 3: Subprocesses, Tasks ● Shows the details of the processes including control flows, data inputs and outputs, and assignment of participants ● Contains sub-processes/ tasks Note: Process Architecture only involves: - Level one: Process Landscape - Level 2: Main Process - Level 3: Subprocesses & Tasks Process Groups Relations between Core, Support, and Management Processes Management Processes ● provide direction, rules & practices ○ Tells what order to accept, what not - Responsible for the direction of the company’s vision, mission, guidelines [processes] Core Processes: ● generate value as they are directly linked to external customers ○ Value = what benefit the company receives - Linked to the value of the company - Why the company exists - E.g - Toronto Metropolitan University - Since TMU is an educational institution, we achieve our value by providing students with knowledge/education Support Processes: ● Provide resources to be used by other processes ○ Provides resources that help the core supporting processes Reference Models: Designation via Reference Models A reference model is used as a template to design the process architecture Examples: - Process Classification Framework [PCF] - Information Technology Infrastructure Library [ITIL] - Supply Chain Operations Reference Model [SCOR] - Control Objectives for Information Technology [COBIT] ● Industry-Neutral Enterprise Model [Open standard for benchmarking] ○ Four levels: ■ Categories ■ Process group ■ Process ■ Activity SCOR COBIT Process Evaluation Prioritization [aka Process Selection/Evaluation Step] 1. Importance Which processes have the greatest impact on the organization’s strategic objectives? 2. Health [or Dysfunction] Which processes are in deepest trouble - What is causing us to be slow 3. Feasibility Which processes are most susceptible to successful process management - How feasibility impacts: - Not only about being easily implemented Case and Case Types: Case: is a product or service that is delivered by an organization to its customers or by one department of the organization to another department (p. 43) ● Case are classified by using any number of properties - We don't say product/service we say “case” … each case has a case type Case Type: Shows the type of cases that the organization handles ● Each case type is associated with a different organizational behaviour Common Properties to Distinguish Cases ● Product Type ○ The types of products handled by an organization ● Service Type ○ Types of services that the organization handles ● Channel ○ The channel [e.g. face-to-face, telephone] through which the organization contacts its customers ● Customer Type: ○ Different types of customers ● Region ○ An organization does things different in one region vs another Examples - - - Classified by properties Case types need to have 2 different properties Channel is what we call “properties” of the case Process Discovery Process Discovery: Defined as the act of gathering information about an existing process & organizing it into in terms of an as-is process model Discovery Methods Evidence-based discovery - - - Document analysis Observation Automatic process discovery Interview-based discovery - - Involve people who provide inputs & generate outputs Could involve followups Workshop- based discover - - - More participants More different roles involved Could entails multiple sessions Lecture 3: Basic Process Modeling How BPMN used ● ● ● ● ● ● Easier communication & collaboration to reach a goal Simple visual representation of the steps Ability to customized based on stakeholders’ roles Identify issues in the process that may need a solution Insights into potential areas for improvement Encourage higher-quality results Why BPM - - - - Standard: Owned by OMG , and supported by many software products [e.g., Visio, diagrams.net, LucidChart, Enterprise Ar] Simplicity Power of Expression Implementation in IT [Process automation] Components of a Modeling Language Modelling Language Definition Examples Vocabulary Set of Modeling elements of the language (BPMN: activities, gateways, events…) Syntax Set of rules to govern how these elements can be combined (BPMN: Starts events only have outgoing sequence flows whereas end events only have incoming sequence flows) Semantics Bind these elements, including their textual descriptions, to a precise meaning (In BPMN activities model something actively performed during the business process, while XOR gateways model exclusive decisions and simple merging points) Notations Set of graphical symbols for the visualization of the elements (In BPMN: labeled rounded boxes to depict activities and the circles with a thin border to depict start events) BPMN Basic Notations Based on popular graphical flowcharts: ● Core set of notation elements ● Each core element has various subtypes A BPMN process model is a graph consisting of four types of core elements: BPMN Core Elements - Activity Activities capture work performed in a process ● Semantics ○ Named by verb+noun ○ Avoud named with more than 5 words excluding prepositions & conjunctions ○ Avoid articles ● Notation ● Syntax ○ Can be linked to events, gateways, & other activities BPMN Core Elements - Event Events represent the process’ triggers (start event) & outcomes (end event) ● Semantics ○ Named by a noun + a verb in past participle form (e.g., invoice emitted, application received) ● Notation ● Syntax ○ A start event can have only outgoing flows, while an end event can have only incoming flows BPMN Core Elements - Gateway Gateways capture forking and joining paths in the control flow - Different types of gateways ● Semantics: For exclusive (XOR) and inclusive (OR) gateway, a condition has to be specified ● Notation ○ Will different from gateway to gateway ● Syntax ○ Can be linked to events, activities, and other gateways Gateways: XOR gateway An XOR Gateway captures decision points (XOR-split) and points where alternative flowers are merged (XOR-join) XOR-Split XOR-Join Takes one outgoing branch Proceeds when one incoming brach has completed XOR-Join acts as a passthrough Gateways: AND Gateway An AND Gateway provides a mechanism to create and synchronize “parrellel” flows AND-split Takes all outgoing braches AND-join Proceeds when all incoming branches have completed Gateways: OR Gateway An OR gateway provides a mechanism to create and sychronize n out of m parallel flows OR-Split Takes one or more branches depending on conditions OR-Join Proceeds when all active incoming branches have completed BPMN Core Elements -Sequence Flow Sequence flows represent the order in which activities and events will be performed ● Semantics ○ Do not name a sequence flow ● Notation ● Syntax ○ Used to connect activities, events, and gateways within a pool How to name a process A process model shall be named by a: - A noun, potentially preceded by an adjective (e.g., claim handling process) - Nouns can be in hyphenated forn (order-to-cash) - DONT CAPITALIZE the first word of process names Modelling Process Model Quality Assurance Process Model Evaluation: Syntax Syntax: set of BPMN syntactical rules & guidelines to govern how these elements can be combined (BPMN: starts events only have outgoing sequence flows whereas end events only have incoming sequence flows) What to verify: 1. Structural correctness: the types of elements that are used in the model and how they are connected 2. Behavioural correctness: potential sequences of execution should never reach a deadlock or a livelock Another example of BPMN guidelines Model-level rule: all flow nodes must be on a path from a start to an end event ● I.e. no dangling arcs or disconnected nodes ● Implies that a model should have at least one start and one end event Process Model Evaluation: Semantics Semantics: the goal of producing models that make true statements about the considered domain, either for existing as-is processes or future to-be processes What to verify: ● Validity ○ All statements in the model are correct & relevant to the problem ● Completeness ○ The model contains all relevant statements on process that would be correct Pragmatic Quality: Certification Pragmatic Quality relates to the usability of a process model Challenge = Anticipate the particular usage of the model Usability: - Understandability: how easy it is to read & comprehend the model - Maintainability: How easy it is to apply changes - Learning: How good a model reveals how it corresponding process works in reality Modeling Guidelines & Conventions Used to improve pragmatic quality by restricting 1. Vocabulary (e.g. banning the use of the OR gateway) 2. Structure (e.g. limiting the size of a model to max 30 models) 3. Semantics - RARE (e.g. using data objects to only capture information flow) 4. Appearance (e.g. enforcing a particular labeling or layout style) Concepts to apply Components of a modeling language Process, events, gateways, activities Evaluation criteria for process models: Syntax, semantics, and notation Lecture 4: Basic Process Modelling II Process Model Quality Assurance ● Semantic Quality - Validation ● Syntactic Quality - Verification ● Pragmatic Quality - Certification Process Model Validation: Semantic Quality Semantics: The goal of producing models that make true statements about the considered domain, either for existing as-is processes or future to be processes What it verify: - Validity: All statements included in the model are correct & relevant to the problem - Completeness: The model contains all relevant statements on a process that would be correct [semanitics is about creating a model that makes true statement - Most accurate & similar of the real process] ↳Example A model is high semantic quality if it is sematically correct: ● Valid [all model instances are correct & relevant) ● Complete: [all possible process instances are covered] Relevance: Model is about the process of making a pizza Correctness: The model captures the process of how we make pizza Completeness: All the steps, decisions points, and conditions of making different types of pizza are captured Process Model Verification: Syntactic Quality Syntax: set of BPMN syntactical rules & guidelines to govern how these elements can be combined (BPMN: Start events only have outgoing sequence flows whereas end events only have incoming sequence flows) ● Start event - only have outgoing sequence [ → ] ● End Event - only have an ingoing flow not outgoing, can only have one gateway inflow [ ← ] What to verify: 1. Structural Correctness : The types of elements that are used in the model & how they are connected 2. Behavioural Correctness: Potential sequences of execution should never never reach a deadlock or a livelock ● ● Livelock: A loop, no end ○ Ex. XOR with only one activity Deadlock: has an end, but info has no where to go “O” is OR gate “+” = AND gate Process Model Certification: Pragmatic Quality Pragmatic quality relates to the usability of a process model Challenge = anticipate the particular usage Usability: ● Understandability: how easy it is to read & comprehend the model ● Maintainability: How easy it is to apply changes ● Learning: How good a model reveals how its corresponding process works in reality Model characteristics that influence usability include size, structural complexity & layout Incorrect Correct ↳ Example Modelling Guidelines: Seven Process Modeling Guidelines [7PMG] G1: Use as few elements in the model as possible G2: Minimize the routing paths per element G3: Use one start event [per trigger] & one end event [per outcome] G5: Avoid OR gateways where possible G6: Use verb-object activity labels G7: Decompose a model with more than 30 elements G4: Model as structured as possible Additional BPMN guidelines + Model-level rule: All flow nodes must be on a path from a start to an end event ● I.e, no dangling arcs or disconnected nodes ● Implies that a model should have at least one start and one end event ● To Top left to bottom right Common Mistakes to Avoid A gateway cant make a decision BPMN Notation: Repetition Pool and Lane Resources Resource: a generic term that refers to anyone or anything involved in the performance of a process activity. Activity Resources: - Process participant - Software system - Equipment We represent those in the organization in pools and lanes Resource Class: A group of (active) resources that are interchangeable, e.g. a role, a organizational unit or the whole organization BPMN Elements - Pools & Lanes Pool: Captures a resource class. Generally used to model a business party (e.g. a whole company) Lane: Represent roles or organizational units that perform activities in the process ● Generally used to model departments (e.g. shipping, finance), internal roles (e.g. Manager, Associate), software systems (e.g. DBMS, CRM) or equipment (e.g. Manufacturing plant) ↳example BPMN Elements - Message Flow Message Flow: represent a flow of information or materials between two process parties (Pools) A Message Flow can connect: ● Directly to the boundary of a Pool ➡ captures a message to/from that party ● To a specific activity or event within that Pool ➡ captures a message that triggers a specific activity/event within that party Pools, Lanes & Message Flows: Syntax 1. The Sequence Flow cannot cross the boundaries of a Pool 2. Both Sequence and Message Flow can cross the boundaries of Lanes 3. A Message Flow cannot connect two flow elements within same pool When are messages sent or received? ● A Send activity will send the outgoing message upon activity completion ● A receive activity won’t start until the incoming message has been received - Always ensure if the activity has been completed Process (or Collaboration) Diagram Models a single business part and can be: Pubic View [Black Box] Private View [White box] BPMN Styles Rules If you can, model internal organizational units as lanes within a single process pool, not as separate pool. Separate pools imply independent processes - X(OR) gateway splits should be placed under the same lane as the preceding decision activity - A sequence flow may not connect a sequence flow, a pool, or a data object Information Artifacts Data Object Definition: Data objects represent information flowing in and out of activities. Examples: Include business documents, emails, letter, etc. Semantics: a noun phrase Syntax: A dotted arrow with an open arrowhead (called data association) is linked to a data object Notation: A dog eared page Data Store Definition: A data store represents a place where persistent data is stored. Could be a database or a file cabinet. It persists beyond the lifetime of the process instance Semantics: a noun phrase Syntax: A dotted arrow with an open arrowhead (called data association) is linked to a data object Notation: An empty cylinder with three top borders Lecture 5: Advanced Process Modeling I Process Decomposition Process Decomposition: An activity represents a unit of work performed in the process An activity in a process can be decomposed into a “sub-process” Need for Process Decomposition Use process decomposition to: 1. Improve understanding by breaking down large models 2. Improve diagram readability 3. Improve usability of sub-processes Process decomposition involves the following concepts: ● Sub-process: A self-contained, composite activity that can be broken down into smaller units of work ● Task: An activity capturing a unit of work that cannot be further broken down ○ Atomic ○ No internal Subparts Sub-processes Description - Compound - Contains subparts modeled as a child-level process (child of the main process identified) - Logical: group elements meaningfully (e.g. common business object) Value/benefits - Visualize end to end process - Enable top down modelling - Reduce complexity of a model when the model becomes to large [too large is greater than 30 nodes [activities, events, gates) - Clarify governance boundaries - Process reuse - A way that you can reuse a certain process in a difference process - Ex. shipping, you can reuse the shipping process for various different products Representing a Sub-process at the Child Level [Syntax] ● Use Start/end events ● Message flows can cross sub=process boundaries ○ To indicated messages emanating from/incoming into the sub-process ● Start with at least one start event ○ If multiple, first occurring will trigger the sub process ● Finish with at least one end event ○ The sub process will complete once all tokens have reached an end event. May need an (X)OR -split after sub-process to understand what end event(s) have been reached Notes: Sequence flows cannot cross sub-process boundaries ↳example ↳ Process Reuse In order to maximize reuse, it is possible to “extract” the subprocess and store it as a separate file in the process model repository - Such a subprocess is called “global” model, and is invoked via a “call activity” ↳example of process reuse Rework & Repetition - Three Types of Repetition - - - Loop Parallel (Multi-instances) Unstructured Loop Loop - a shorthand notation for a structured cycle - SESE(Single Entry Single Exit fragment) - i.r a fragment delimited by a single entry node and a single exit node (there are no other incoming arcs into the fragment or outgoing arcs from the fragment Notation for Loop Activities ● Loop is used to capture sequential repetition (one after another), meaning that instances of the loop are executed one after the other ● Loop activity is a shorthand notation for a block structured repetition which is delimited by a single entry point to the cycle, and single exit point from the cycle[SESE] BPMN provides loop activity notation to allow the repetition of a task or subprocess Example for Loop (Block Structured repetition[SESE]) As long as the loop symbol is there, there is no need for the XOR demonstration for the loop “Until approved displays the end command” Example of Loop “A staff makes a pizza until all pizza orders aare fulfilled” - Happens one after another UNTIL all finished Parallel Repetition aka Multi-instance Parallel Repetition: Used for Multi instance activity [all occurring at the same time] which is executed multiple times concurrently - Example Amazon Go Other Examples: ● Request quotes from multiple suppliers ● Check the availability for each line item in an order separately ● Send & gather questionnaires from multiple witness in the context of an insurance claim ↳Example for Parallel Repetition (Multi Instance Activity) ↳Example of Parallel Repetition - - “A customer rep is inc charge of various tasks including answering general product inquiries & dealing with order related issuees” “A party hosts sends a invite to 100 guests”, send all at once Uncontrolled Repetion Uncontrolled Repetition: Represents an ad-hoc sub process [random] - Contains activities to be executed in arbitrary order[random order] and number of times - - May define order of sub-set of activities by sequence flow Can be used in an early version of a process diagram when the order of execution is still unknown Tips: You can tell its random bc theres no sequence flow ● When all steps are finished, no matter what order ○ The process "Review Company's KPIs" is over ■ Similar to SCRUM Example of Uncontrolled Repetition - “An IT team works on an IT project until it is approved by all stakeholders before moving on to the next project” - Uncontrolled, since you have to appease every stakeholder, that is an uncontrolled sequence and order - “A message is twittered and retwitterd by many twitter users” Lecture 6: Events What is an Event Events correspond to things that happen automatically, meaning that they have no duration. - An event… “something that happens” while the process is underway - In BPMN, events model something instantaneous happening during the execution of a process ● Currently we only know “start event” and “end event” - They affect the “process flow”: - - - Start Intermediate End “Intermediate event” are the new fundamental events introduced; anything that occurs after the start event will be called an intermediate event Timer doesn't have an end event, bc it cant end another event Events Example Message Customer acc info, scholar application, purchase order details Timer Deadline for an assignment, deadline for an application, time duration for an exam Signal Policy change, broadcast announcement Error Payment error, error 404, login error Compensate Refund flight ticket, purchased product, etc Terminate Withdraw application, course Be sure to: Always add intermediate when talking abt events Message Event Types - EXAM Message means any communication between the process and an outside entity - E.g. a customer, service provider, another process, IT system BPMN defines as Message.. - As “ the content of a communication between two participants”, and could take any form. Start Intermediate End Event Untyped Event: Indicates that an instance of the process is “created”[start] or completed[end], without specifying the cause of the creation/completion Start message event: Indicates that an instance of the process is created when a message is received End Message Event: Indicates that an instance of a process is completed when a message is sent Intermediate Message event: Indicated that an event is EXPECTED to occur during a process - The event is triggered when a message is Message Events Scenario: - CA is an entity - P&E court is an entity Two separate departments are communicating with each other ● Process started when admin sent a court calendar received ○ That triggered check PE ■ Throughout the process there was a back and forth between the entities ● E.g, intermediate catching “storage list received” Continues till yearly schedules sent When to use what Temporal Events Start Timer Event: Indicated that an instance of the process is created at certain date/time - E.g, start process at 6pm every friday Intermediate Timer Event: Triggered at cetrain date/time, or after a time interval has elapsed since the moment is “enabled”(delay) Example: Temporal events Note: Timer events are temporal events as well Exception Handling Exceptions Exceptions: Events that deviate process from its normal course ● A normal course is commonlt knowns as the “sunny-day scenario” ● Exceptions reflect a rainy day situation Examples of exceptions: - Business faults such as an out-of-stock or discontinued product - Technology faults such as a database crash, a network outage or a program logic violation Why exceptions NEED to be captured: ● Cause interuption to the normal process ● Abort the entire process Two Types of Exception ● Internal Exception : A specific activity in the process is affected ● External Exception: The occurrence of an external event that effects a running process Scope of a Boundary Event Boundary Event: Is applied to a task or a sub-process ● When a boundary event is applied to task, the scope of a boundary event is a single task, and the event is attached to the boundary of the task ● When a boundary event is applied to multiple activities , these activities need to encapsulated into a sub process before attracting to the boundary event Diff between subprocess and task [both referred to as an Activity] ● Sub-process: A self-contained, composite activity that can be broken down into smaller units of work ● Task: An activity capturing a unit of work that cannot be further broken down ○ Atomic ○ No internal Subparts Boundary Events - EXAM Boundary Event is attached to the boundary of an activity and triggers the recovery procedure[safety plan] through an outgoing branch called exception flow ● A boundary event can be either interrupting or non interrupting ○ Interupting Boundary Event: When an external event occurs during an activity, the activity is interrupted and the procedure triggered by the external event is followed instead ● “Having a backup plan” ○ Non-interupting Boundary Event: When an external event occurs during an activity, a procedure is triggered without interrupting the activity itself ■ “Staying on the same plan” Interrupting Boundary Events - Notation Practice Message Event Description Interrupting Message event A customer filed a complaint against a product recently purchased. However, having found that the product worked well, the customer withdrew the complaint A customer filed a complaint against a product recently purchased. When processing the complaint, the customer rep found some info. Was missing, so paused the process After filing a complaint against a product recently purchased, the customer changed his/her cell phone number so contacted the company for the info. Change. Non-interrupting message event X Order was already placed, and nothing was affected on my end X X Lec 8: Qualitative Process Analysis Process Analysis Techniques Qualitative Analysis ● Value-Added & Waste Analysis ● Root-Cause Analysis ● Issue Register Quantitative Analysis Qualitative Analysis for Meaningful Process Improvement Value-Added Analysis Value Adding Activities(VA) Business Value-adding Activites (BVA) Non-value-adding Activities (NVA) Produce value or satisfaction to the customer Necessary or useful for the business to operate Everything else besides VA and BVA. Activities the customer would be unwilling to pay for Criteria: -Is the customer willing to pay for this step? -Would the customer agree that this step is necessary to achieve their goals? -If the step is removed, would the customer perceive that the end product or service is less valuable? Criteria: -Is this step required in order to collect revenue & to improve or grow the business? -Would the business (potentially) suffer in the long-term if this step was removed? -Does it reduce risk of business losses? -Is this step required in order to comply with regulatory requirements? Includes: 1. Handovers, context switches 2. Waiting times, delays 3. Rework or defect correction Example: -Order-to-cash process: Confirm delivery date, Deliver products -University admission process: Verify completeness of the application, Check validity of degrees, Check validity of language test results Example: -Order-to-cash process: Check purchase order, Check customer’s credit worthiness, Issue invoice, Collect payment, collect customer feedback -University admission process: Verify completeness of application, Check validity of degrees, Check validity of language test results Example: -Order-to-cash process: Forward PO to warehouse, Re-send confirmation, Receive rejected products -University admission process: Forward applications to committee, Receive admission results from committee Short Description VA Customer wait in line to pick up ordered food BVA X Passenger stand in a street to hail a cab X TTC riders swipe their Presto card to board a TTC vehicle X Students need to submit their vaccination status before being allowed on campus Ordered products arrive within 24 hours X X ↳ Extract of Equipment Rental Process Seven sources of waste Move -Transportation -Motion Hold -Inventory -Waiting NVA Over-Do -Defects -Over-Processing (excess processing) -Over-Production Move (Transportation & Motion) Transportation Send or receive materials or documents (incl. electronic) taken as input or output by the process activities ↳Example: University admission process: to apply for admission at a university, students fill in an online form. When a student submits the online form. A PDF document is generated. The student is requested to download it, sign it, and send it by post together with the required documents: 1. Certified copies of degree and academic transcripts 2. Results of language test 3. CV When the documents arrive at the admission office, an officer checks their completeness. If a document is missing, an e-mail is sent to the student. The student has to email/post the missing documents depending on document type. Motion - Motion of resources internally within the process - Unnecessary movement of people or equipment Typically found within a workspace or process step rather than between steps ↳Example: - - - Walking to a community printer Searching through a toolbox to find the necessary tool for the job Clicking through multiple folders on the network drive to find the information needed Hold (Inventory & Waiting) Inventory - Materials inventory - Work-in-process ↳Examples Vehicle inspection process: when a vehicle does not pass the first inspection, it is sent bacl for adjustments and left in a pending status. At a given point in time, about 100 vehicles are in the “pending” status actress all inspection stations Waiting - - - Task waiting for materials or input data Task waiting for a resource Resource waiting for work (resource idleness) ↳Example: Vehicle inspection process: A technician at a base of the inspection station waiting for the next vehicle Application-to-Approval process: Request waiting for approver University admission process: Incomplete application waiting for additional documents; batch of applications waiting for committee to meet Hold (Defects, Over-Processing[excess processing], Over Production) Defects - - Correcting or compensating for a defect or error Rework loops ↳Example: Vehicle inspection process: A vehicle needs to come back to a station due to an omission Application-to-Approval process: Request sent back to requestor for revision University admission process: Application sent back to applicant for modification; request needs to be re-assessed later due to incomplete information Over-processing - - Tasks performed unnecessarily given the outcome of the process Unnecessary perfectionism ↳Example: Vehicle inspection process: technicians take time to measure vehicle emissions with higher accuracy than required, only to find that the vehicle clearly does not fulfill the required emission levels University admission process: Officers spend time verifying the authenticity of degrees, transcripts and language test results. In 1% of cases, these verifications uncover issues. Verified applications are sent to the admissions committee. The admission committee accepts 20% of the application it receives Over-production - Unnecessary process instances are performed, producing outcomes that do not add value upon completion ↳Example: Quote-to-cash process: In 50% of cases, issued quotes do not lead to an order Travel approval process: in 5% of cases, travel requests are approved but the travel is cancelled Hospital care process: Over 50% of beds are empty Marketing process: 70% of product brochures are not distributed Lecture 9: Qualitative Process Analysis Problem is not cause, Factors are NOT the causes An issue is the result (effect) of factors (causes) Qualitative Analysis for Meaningful Process Improvement Root-cause Analysis Example: The Titanic Factor: - Iceberg - Captain distracted and not looking Cause: - The ship sank because it wasn’t built to be prepared for a water intake at that level Root Causes Symptoms vs Root Causes Problem is NOT the cause Key Characteristics of Root Causes ● Fundamental driver of a non-conformance ● Consequences are no longer acceptable ● Resolving the root cause would significantly improve performance ● Identifying root causes is an evidence-based exercise ● All options are considered ● The purpose is to identify effective corrective actions ↳Practice: Symptoms vs Root Causes Symptom Unhappy couple Problem(s) Always argue, fighting, no common ground Root Cause(s) - Miscommunication Short of cash Increase in gas bills Cost of gas increasing More consumption Increase in car insurance premium Why-Why Diagram (5 Whys Diagram) Five levels of nesting - “Five Why’s” 5 levels into finding the contributing factors 5 Why Example: ● Why did the machine stop? ○ There was an overload and the fuse blew ● Why was there an overload? ○ The bearing was not sufficiently lubricated ● Why was it not lubricated sufficiently? ○ The lubrication pump was not pumping sufficiently ● Why was it not pumping sufficiently? ○ The shaft of the pump was worn and rattling ● Why was the shaft warn out? ○ There was no strainer attached and the metal scrap got in - When to Stop [ the 5 whys diagram] - - - - How relevant are the questions and answers to the original X or Y you are investigating Did you find a root cause that helps you control or avoid the situation Are the questions and answers significant enough, considering your project scope? The questions “why?” should be asked until it is no longer possible or logical to dig deeper into a root cause ↳Examples of 5 whys Misapplied Caught Speeding ● Late for work ○ Got up late ■ My mom didnt wake me up on time ● Mom slept in Late for work ● Bus was late ○ It rained outside ■ There was a storm in the states ● Global warming caused the storm Cause-Effect (Fishbone) Diagrams Categories of causes: Six Ms 1. Machine Factors stemming from equipment/technology used ● Lack of suitable functionality in the supporting software applications ● Poor user interface (UI) design ● Lack of integration between systems 2. Method Factors stemming from the ways the process is designed, understood or performed ● Unclear assignments of responsibilities ● Uncle instructions ● Insufficient training ● Lack of timely communication 3. Material Factors stemming from input materials or data ● Missing, incorrect, or outdated data 4. Man Factors stemming from wrong assessments or incorrect performance of steps attributable to: ● Lack of training and clear instructions ● Lack of motivation ● Too high demand towards process workers 5. Measurement Factors stemming from reliance on: ● Inaccurate estimations ● Miscalculations 6. Milieu Factors outside the scope of the process ● Delays caused because of unresponsive external actors ● Sudden increases of workload due to special circumstances Steps for Creating a Cause-Effect Diagram Issue Register Issue register is used… ● Is used for issue documentation and issue prioritization ● Is used to determine how and to what extent each issue is impacting on the performance of the process ● Complenents the output of root cause analysis by providing a more detailed analysis of individual issues and their impacts ● Mostly useful for registering top-level issues, which have a direct business impact ● Can be used in combination with why-why diagrams and cause-effect diagrams which document factors underpinning top-level issues Issue register structure Can take the form of a table with: ● Issue identifier ● Short name ● Description ● Assumption ● Impact: Qualitative and Quantitative ● Possible improvement actions Larger process improvement projects may require issue trackers Lecture 10: Quantitative Analysis Qualitative Analysis Review Quantitative Analysis Time Processing: Time Spent on actually handling the process Wating Time: Two types… - Queue Time: No resources available ● Having resources but busy with something else - Idle Time: Waiting for input/other process/activity to complete ● We have resources but do not have the input Cycle Time: The average time taken between the moment the process starts and the moment completes (Total time) Common Time-Related Measures Flow Analysis Flow analysis… - Is a technique for estimating the overall performance of a process given some knowledge about the performance of its activities - Can be used to calculate the average cost of a process What is the followings average cycle time? Sequence: XOR Cycle time= 10 + 20= 30 Cycle Time= 10+ (0.9x20)+(0.1x10)= 29 Parallel Paths: AND Rework: Loop Cycle Time = 10+ (20/0.01)=2010 Cycle Time = 10+20/0.8=35 For and Cycle time= 10+20=30 - For the AND gate Flow analysis Equations for Cycle Time Cycle Time efficiency Flow analysis: scope and limitations We have seen how to use flow analysis for processing and cycle time calculations Flow analysis can also be used applied to calculate: ● Time taken to complete a process ● The average cost of process instances (assuming we know the cost of each activity) ● The number of times on average each activity is executed BUT flow analysis doesn't take into account: 1. The rate at which new process instances are created (arrival rate) 2. Resource capacity One and Little’s Law Other Measures of Process Performance Costs ● Fixed costs ● Variable costs ● Operational costs Quality External - - Customer satisfaction with product Customer satisfaction with process ● Imp bc it is how the customer is reacting Internal - - Level of variation Wastes generated Flexibility Significance of Process Analysis What is the Balanced Scorecard (BSC)? Financial Perspective Question to ask: ● What are our financial objectives to succeed financially? Sample goal: Continuous growth overall and a bigger increase in new products/services ↳ Measures to assess whether the goal(s) are achieved ● Net income ● Revenue from new products/services ● Share price Financial Perspective Question to ask: ● How should be appear to our customers? ● What is our value proposition in serving them? Sample goal: Number one in delivering customer value ↳ Measures to assess whether the goal(s) are achieved ● Time to market ● Product defect ● Share of key accounts’ purchases ● Industry survey on customer satisfaction Internal business Perspective Question to ask: ● What business process shall we excel at to support customer and financial goals? Sample goal: Improve productivity by 5% and reduce defect rate to 0.03% ↳ Measures to assess whether the goal(s) are achieved ● Productivity ● Defect rate ● Cycle time improvement Internal learning and growth Perspective Question to ask: ● How to sustain our ability to change and grow? Sample goal: Improve employee loyalty and innovativeness ↳ Measures to assess whether the goal(s) are achieved ● Employee satisfiaction ● Turnove rate ● New innovations ● Employee suggestions Lecture 11: Process Redesign Reasons for Redesign ● ● ● ● Inefficiency (e.g., time, waste) Costs Quality Flexibility ● Impact on organizational performance ● Feasibility ● External forces What constitutes redesign? Customer ● Changes customer interaction Business Process Operation ● Number of activities and nature of each Business Process behaviour ● The order in which activities are executed and how these are scheduled and assigned for execution Organization ● Organization structure (e.g., departments) and population (process participants) Information ● Used or created by the process Technology ● Used by the process External environment ● Where the process is situated ↳What is changed? Description Company Z outsourced the HR function to a third party Company A started to offer its products online Ryerson University switched all teaching online due to COVID A health clinic allows patients to book appointments online Elements that are changed (customer, operation, behaviour, organization, information, technology, external environment) Design Challenges The Devil’s Quadrangle Heuristics Heuristics derived from the Greek word meaning “to discover” -Represents a mental shortcut for decision making & problem solving ● Has the benefits to: ○ Timely decision ○ Effort reduction ○ Flexible Design Heuristics The methodology that starts from an existing process to achieve gradual performance improvement - A methodology is defined as a collection of problem-solving methods governed by a set of principles and a common philosophy for solving targeted problems Customer Heuristics General purpose: Improve the interaction with customer Three Customer Heuristics: - Control relocation - Contact reduction - Integration Control Relocation: Purpose: Move controls (checks and reconciliation) towards the customer Contact Reduction: Purpose: Reduce the number of contacts with customers and third parties Integration Consider the integration with a busines process for the customer or a supplier Business Process Operation Heuristics General purpose: Focus on the elements of a business process Three Business Process Operation Heuristics: - Activity elimination - Triage - Activity composition Activity Elimination Eliminate non-value-adding steps wherever these can be isolated ● Forward, send, receive… Consider reducing manual control steps (checks & approvals) by: ● Skipping them where feasible ● Replacing them with statistical controls ● Skipping them selectively Triage Specialize a task: Divide a general task into two or more alternative tasks Task Composition Consider composing two tasks to eliminate transportation & reduce “context switches”, OR Business Process behaviour Heuristics General purpose: Improve the flow of a process Three Business Process behaviour Heuristics: - Resequencing - Parallelism - Knock-out Re-sequencing Re-order tasks according to their cost/effect ratio to minimize over-processing ● Postpone expensive tasks that may end up not being necessary until the end ● Put knock-out checks first in order to identify problems early Parallelism Substitute parallel processes for sequential processes Purpose: ● Reduce cycle time ● Reduce cost Knock-out Knock-out: termination of a part of a business process Order knock-outs in an increasing order of effort and in a decreasing order of termination probability Purpose: - Reduce wastes - Reduce costs Information Heuristics General purpose: Improve information quality, access, and control Two Information Heuristics: - Control addition - Buffering Control Addition Check the completeness and correctness of incoming materials and check the output before it is sent to customers Purpose: - Improve quality - Reduce rework Buffering Instead of requesting information from an external source, buffer it and subscribe to updates Purpose: ● To have information directly available when required Technology Heuristics General purpose: Improve efficiency and quality, reduce delays, decrease variation Two Technology Heuristics: - Activity automation - Integral technology Activity automation (Technology heuristics) Consider automating activities Purpose: - Reduce processing time - Reduce variations in activities Integral technology/centralization (Technology heuristics) Integral Technologies ● Comprehensive ● Support of different functional departments through centralized databases Try to address physical constraints in a business process by applying new technology Purpose: ● To reduce time/effort in non-value added & business-value added activities ● Improve flexibility
