Basic Tools for Business
Process Design
Chapter 4
Business Process Modeling, Simulation and
Design
1
Overview
• Introduction Basic Tools for BPD
• Graphical tools
–
–
–
–
–
General Process Charts
Process Activity Charts
Process Flow Diagrams
Flow Charts
Service System Mapping
• Workflow Design Principles and Tools
–
–
–
–
–
–
–
Establish product orientation in the process
Eliminate buffers
One-at-a-time processing
Balancing bottleneck flows
Minimize sequential processing and handoffs
Scheduling based on job characteristics
Minimize multiple paths
2
Basic Tools for Process Design
• Deterministic tools and modeling approaches to help
designers analyze processes and check proposed designs for
– Feasibility
– Completeness
– Efficiency
• Quantitative tools require data regarding important process
characteristics
– Steps required to complete the process
– Processing and activity times are key
• Tagging is an important technique for gathering process data
– Follow a job through the process
– Data is collected on a document (a tag) accompanying the job
– Particularly useful for gathering data on processing and activity times
3
General Process Charts
• Summarizes the current process the redesigned process and
the expected improvements
• Characterizes the process by
– The number of activities per category
– The amount of time spent in each activity category
– The percentage of the total processing time spent on each category
• Clearly indicates
– Major problems with the existing process
– How the redesigned process remedies these problems
• Problems measured in terms of the time and the percentage of
time spent on non-value adding activities
4
Illustration of a General Process
Chart
Activities
Current Process
Redesigned Process
No.
Time
%
No.
Time
%
Operations
Inspections
Transport.
Storage
Delays
5
3
10
0
7
30
60
120
0
90
10
20
40
0
30
5
1
2
0
1
30
20
20
0
10
37.5
25.0
25.0
0
12.5
Total
25
300
100
9
80
100
Difference
No.
0
-2
-8
0
-6
-16
Time
0
-40
-100
0
-80
-220
5
Process Activity Charts
• Complements the general process chart
– Provides details regarding the sequence of activities
• Disadvantages
– Only considers average activity times
– If the process includes several variants with different paths (i.e.
multiple paths through the process) each variant needs its own
activity chart
– Cannot depict parallel activities
6
Illustration of a Process Activity Chart
Symbols
Operation
Inspection
Process Activity Chart
1 of _____6
Page: ____
Adoption
Process: __________________________
9/14/99
Date: __________
Developed by: ____________________
Current Process
Proposed Process
Description
Time
Value code
(V/N/C)
1
Find where to go
2-10
N
2
Walk through
10-45
V
3
What’s next?
1-5
N
No.
X
Symbol
Storage
Delay
Transportation of
a physical item
For each activity, fill in the required information. Also, connect
the symbols to show the flow through the process.
The value code indicates whether the activity adds value (V),
does not add value (N), or controls (C).
7
Process Flow Diagrams (I)
• Provide a picture of the spatial relationships between
activities
– Typical application is for production floor layout problems.
• The diagram is used for measuring process performance in
units of time and distance
– Including both horizontal and vertical movements.
– Assumes that moving items requires a time proportional to the
distance.
• Can be used in conjunction with Process Activity Charts
– By labeling areas in the process flow diagram and by adding a
column to the activity chart, indicating for each activity which area
it belongs to.
– Alternatively, the flow diagram includes the activity numbers in
the activity chart.
8
Illustration of a Process Flow Diagram
Before Redesign
After Redesign
Finished request
A
D
F
A
B
E
D
B
C
F
C
E
Incoming request
Incoming request
Finished request
9
Process Flow Diagrams (II)
• Analysis geared towards reducing excessive and
unnecessary transportation and movements of items/jobs
–
–
–
–
Long distances
Crisscrossing paths
Repeated movements between the same activities
Other illogical flows
• Can be used as a basis for computing Load Distance (LD)
scores
– Useful for quantitatively comparing alternative designs/layouts
with regards to flow rates and distances
10
Load Distance Analysis
• LD(i,j) = LD score between work centers i and j
LD(i,j) = Load(i,j)*Distance(i,j)
• The LD score measures the attraction between two work
centers (activities)
– The larger the traffic volume the higher the score and the higher
the incentive to keep the work centers together
• The goal is to find a design that minimizes the total LD
score (the sum of individual scores between work centers)
• The Load Matrix summarizes the load (flow rate = # of
jobs) that needs to be shipped between each pair of work
centers
11
A Sample Load Matrix
A
A
B
C
D
B
20
C
D
20
10
E
F
80
75
15
90
70
• See also example exercise on LD Analysis
12
Flow Charts
• One of the fundamental graphical tools for process analysis
and design
– Typically depicts activities sequentially from left to right
– Can help to identify, loops, multiple alternative paths, decision
points etc.
• Symbols often used in flow charting
Operation
Storage
Transportation of a
physical item
Inspection
Delay
Transportation of
information
13
Illustration of a Sample Flow Chart
Operator
takes phone
order.
Orders wait
to be picked
up.
Order waits
for sales rep.
Orders
wait for
supervisor.
No
Is order
complete?
Orders are
moved to
supervisor’s
in-box.
Supervisor
inspects
orders.
Yes
Order is
fulfilled.
14
Activity Times and Path Frequencies (I)
• Flowcharts may be used to estimate the total average process
time from the estimated activity times
(Unit processing time)*(batch size)+setup time
Average activity time =
Efficiency
– Assumes that the standard processing time is known (estimated)
– Assumes that the standard setup time is known (estimated)
– The standard times assumes 100% worker efficiency. If the worker is
less efficient the times must be adjusted as above.
15
Activity Times and Path Frequencies (II)
Example: Inspection activity
•
•
•
•
Inspection of one unit takes 3 minutes
Each inspection batch includes 10 units
It takes 15 minutes to prepare for the inspection of a batch
The inspector is new on the job and it currently takes 25%
longer time to inspect a batch than when she is fully trained
What is the estimated activity time for inspecting a batch?
 The average activity time = ((3*10) + 15)/0.75 = 60 minutes
16
Service System Mapping (I)
• An extension of traditional flowcharting
– Illustrates how effectively a business process satisfies customers across all
encounters
– Documents the role played by the customer in the service delivery process
– A combination of service blue printing and traditional flowcharting
• Goals with SSM
–
–
–
–
–
–
Build consistent perceptions of customer’s experience with core processes
Identify all points of contact between the process and its customers
Provide a basis for developing an economic business model
Identify opportunities within the process
Provide a design framework
Aid in pinpointing control points and strategic performance measures
17
Service System Mapping
• An extension of traditional flowcharting
– Illustrates how effectively a business process satisfies customers across all
encounters
– Documents the role played by the customer in the service delivery process
SSM Horizontal Bands
• The purpose is to organize activities according to the people or “players in
the process. – Who does what?
• A SSM typically consists of 5 bands
1.
2.
3.
4.
5.
Customer band – end user
Frontline or distribution channel band
Back-room activity band
Centralized support or information systems band
Vendor or supplier band
SSM Process Segments
• A process segment or sub process is a set of activities that produces a well
defined output given some input
18
Sample SSM for an Order Fulfillment
Process
Receiving
Filling
Shipping
Billing
Customer
Band
Front line
Band
Back-room
Band
IS
Band
Supplier
Band
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Additional Diagramming Tools
• Software products for flowcharting and diagramming…
 Micrografx
 RFFlow
 SmartDraw
 PaceStar
 Visual Thought
 TeamFlow
 Tension Software
 Visio 2000
• A specialized approach for “enterprise modeling and
analysis” is the so called IDEF methodology
–
–
–
A family of structured methods (functional, information and data
modeling)
Based on an established graphical language SADT (Structured
Analysis and Design Technique)
Used by many consulting firms not least in design of information
systems
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Workflow Design Principles and Tools (I)
Organizing Activities
• Two basic ways of organizing activities
1. By process (Process Orientation)
2. By product (Product Orientation)
• Process orientation (functional layout) groups activities or
workstations according to function
–
–
Most common when the same activity is used for producing
different products or services or when serving many different
customers
Utilization of equipment and personnel tends to be high
21
Workflow Design Principles and Tools (II)
• Product orientation groups all necessary activities to
complete a finished product into an integrated sequence of
work nodes or work stations
– A typical example is an assembly/production line for making a
particular car model
– Activities are organized around the route (needs) of a particular
product or service
– Advantages with product orientation include
• Faster processing rate
• Lower WIP
• Less unproductive time due to setups
• Less transportation time
• Less handoffs
– A capital intensive way of organizing activities
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Product v.s. Process Orientation
Process Orientation
Product Orientation
Customer A
1
Customer A
2
1
2
4
5
3
5
3
1
4
2
5
3
4
Customer B
(a)
Customer B
(b)
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A Hybrid Orientation
• To justify a product orientation from a resource utilization
perspective the product/service volumes must be quite high.
• A popular hybrid between product and process orientation in
manufacturing is known as Group Technology (or product
clustering)
– Groups products with similar characteristics into families and organizes
activities around these families instead of around the individual
products
– “Product Family” orientation
• The equivalent in business processes would be to group jobs
with similar characteristics into families.
• The hybrid orientation simplifies customer routings, reduces
process time and can be justified even if the volumes of
individual products/services are not that large
24
Illustration of a Hybrid Orientation
Customer A
1
2
Customer C
3
Cell AC
4
5
3
1
Customer B
Cell BD
3
4
Customer D
2
5
1
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Workflow Design Principles and Tools (III)
Buffer Elimination
• Buffers are put in place to protect against variability in demand,
processing times, etc.
– Jobs stacked up at different parts of the process, waiting to be processed.
• WIP = Work In Process inventories.
– All jobs currently in the process, i.e. in queues/buffers, under
transportation or under processing.
• Buffers tend to cause logistical and communication problems
due to slower information feedback.
– Implies the need for advanced tracking systems to identify what job is in
which buffer.
• Product orientation implies less WIP but needs to be well
balanced in order to minimize buffers.
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Workflow Design Principles and Tools (IV)
One-at-a-time Processing
• Reduction of the batch size to the size of one unit
• By reducing batch sizes (and setup times) the throughput
time and WIP can be minimized
• Two types of batches
1. Process batch
– All jobs being processed before the resource needs to be
changed to process jobs of a different kind
2. Transfer batch
– Number of items/jobs transported together to the next resource for
processing
– Usually  the process batch
– By reducing the transfer batch total processing time and WIP are also
reduced
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Example – Effect of Reducing Batch Sizes
• Three activities in
sequence 1, 2 & 3
• Processing times:
1 h/job in 1&3 and
0.5 h/job in
activity 2
• Consider the total
throughput time
for a batch of 100
units when the
transfer batch size
is: A) 100 B) 20
Process Transfer
Batch Batch
1
2
3
100
100
100
50
100
100
100
100
100
250
Process Transfer
Batch Batch
1
100
20
2
20
20
100
20
3
20
130
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Workflow Design Principles and Tools (V)
Balancing bottleneck flows
• Linked to the OM principle known as Theory of Constraints
(TOC) popularized by Eliyahu Goldrat in his book The Goal
– Balance flow not capacity!
– Keep bottlenecks fed!
• Historically manufacturers had tried to balance capacity
across processes to match market demands
– Making all activity capacities the same makes sense only if processing
times are constant or display marginal variability
– Variation in processing times causes inventory build up and idleness
at different parts of the process
• Only two ways of handling variation
– Increase WIP to smooth variation
– Differentiate/balance capacity according to the job flows
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Workflow Design Principles and Tools (VI)
Line Balancing
• A useful approach when processing times are fairly constant
–
Should not be used when processing times display high variability
• The goal is to balance the capacity of the different workstations
constituting the production line (the process)
Procedure
1. Specify sequential (precedence) relationships among the activities
using a precedence diagram
2. Use market demand to determine the line’s desired cycle time per
work station (C)
C=
Process time per day
Market demand per day (in # of jobs)
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Workflow Design Principles and Tools (VII)
Line Balancing Procedure (continued)
3. Determine the theoretical minimum # of workstations (TM)
TM =
Sum of activity times
C
4. Select a primary rule to assign activities to workstations and a
secondary rule to break ties
5. Assign activities one at a time to workstation 1 as long as the
sum of activity times  C. Repeat this for workstations 2,3, …
– Must satisfy the activities’ precedence relationships
6. Evaluate the line efficiency = Total process time/(C*#stations)
7. Rebalance using a different priority rule in case the efficiency is
unsatisfactory
31
Workflow Design Principles and Tools (VIII)
Potential Line Balancing Complications
• Market demand may require a work station
cycle time shorter than the longest activity time
 Need to change the process in some way!
• Approaches:
– Split the activity
– Use parallel workstations
– Train the workers or upgrade machinery
for faster processing time
– Work overtime
– Redesign the entire process
32
Workflow Design Principles and Tools (IX)
Minimize Sequential Processing and Handoffs
• Sequential processing implies longer process throughput time
– Operations are dependent constrained by the slowest activity
– No one person is responsible for the entire service encounter
Illustrative example (see figure on next slide)
• A process with 4 activities, throughput time 30 minutes and
processing times 10, 7, 8 & 5 minutes in the 4 activities
• Sequential set up – each individual performs a different activity
– The process output is 60/10=6 jobs per hour
– The efficiency = (10+7+8+5)/(10*4) = 75%
• Parallel set up – each individual performs all 4 activities
– The process output is now 4*(60/30) = 8 jobs per hour
– The efficiency = 30/30 = 100%
33
Illustrative Example – Sequential v.s.
Parallel Processing
Sequential processing
10
min
7
min
8
min
5
min
6 jobs/hour
Parallel processing
30
min
30
min
30
min
30
min
8 jobs/hour
34
Workflow Design Principles and Tools (X)
Scheduling based on job characteristics (I)
• Scheduling involves sequencing the order at which a number of
different jobs are to pass through a workstation or process with
limited capacity
– Becomes more important as the diversity of jobs increases
• Characteristics that are commonly used as a basis for scheduling
–
–
–
–
Arrival time
Estimated processing time
Due date
Importance
35
Scheduling Based on Job Characteristics (II)
• Finding the “right”objective function and the best scheduling
characteristic to satisfy this objective is tricky
• Three common overall objectives
– Maximize process output over a given time period
– Satisfying customer desires for quality and promptness
– Minimizing current out-of-pocket costs
• Common surrogate objectives that are easier to quantify
– Minimize the makespan (the throughput time for a defined set of jobs)
– Minimize total (or average weighted ) tardiness (the time by which the
completion time surpasses the due date)
– Minimize the maximum tardiness
– Minimize the number of tardy jobs
• The weighted tardiness is obtained as the product between the
tardiness value and the importance weight of the job in question
36
Scheduling Based on Job Characteristics (III)
• Commonly used priority rules are
– First-In-First-Out (FIFO) – scheduling according to arrival times
– Earliest-Due-Date first (EDD)
– Shortest Processing Time first (SPT)
(See example illustrating the application and effect of the different rules)
• Observations for a single server situation
– EDD render the optimal solution to the problem of minimizing the
maximum tardiness
– SPT render the schedule that minimizes the average throughput time
per job for a given set of jobs
37
Scheduling Based on Job Characteristics (IV)
Moore’s Algorithm
• A method for minimizing the number of tardy jobs, when all
jobs are considered equally important
1. Order the jobs according to the EDD rule.
2. Stop if no jobs are tardy – the optimal solution is found!
Go to step 6.
3. Find the first tardy job in the sequence.
4. Assuming that this tardy job is the kth in the sequence. Find and
remove job j (j=1, 2, 3, …, k) with the longest processing time.
5. Revise the completion times and return to step 2
6. Insert the removed jobs at the end of the sequence in the order
they were removed
• See example illustrating the application of Moore’s algorithm
38
Workflow Design Principles and Tools (XI)
Minimize the number of multiple
paths through the process
• Reduces complexity and confusion
– Simplifies resource management and
scheduling
– Fewer jobs are routed the wrong path and need
to be rerouted or reworked
• One way of reducing the number of paths without
compromising the efficiency and customization ability is to
use case teams, i.e., horizontal compression of work flow
39