chapter 8 business process (bp). objectives after studying the chapter, students should be able to.....
TRANSCRIPT
Chapter 8 Business Process (BP)
Objectives
After studying the chapter, students should be able to..•Explain definition of Business Process •Describe elements of business process•Create process maps for a business process and use them to understand and diagnose a process•Calculate and interpret some common measures of process performance•Explain how understanding of ERP contribute the businesses create management innovation.
Contents
Business Processes
Mapping Business Processes
Managing and Improving Business Processes
Ten Best Practices of Business Processes
Business Process Challenges
Summary
Business Processes
Mapping Business Processes
Managing and Improving Business Processes
Ten Best Practices of Business Processes
Business Process Challenges
Summary
Business Processes
Business Process Definition•A set of logically related tasks or activities performed to achieve a defined business outcome (Bozarth & Handfield: 92)
• Outcome can be… • Physical nature• Informational nature• Monetary nature
Business Processes
Business Process Elements
Business ProcessesImproving Business Processes
Business Processes
Mapping Business Processes
Managing and Improving Business Processes
Ten Best Practices of Business Processes
Business Process Challenges
Summary
Mapping Business ProcessesPurposes of mapping Business Processes •Create a common understanding of the content of the process: its activities, its results, and who performs the various steps•Define the boundaries of the process•Provide a baseline against which to measure the impact of improvement efforts
Mapping Business ProcessesDefinition and Rules of Process map •Process map: a detailed map that identifies the specific activities making up the informational, physical, and/ or monetary flow of a process•Rules:
• Identify the entity that will serve as the focal point
• Identify clear boundaries and starting and ending points
• Keep it simple
Mapping Business ProcessesCommon process mapping symbols
Mapping Business Processes
Process map for the Bluebird Café
Mapping Business Processes
Process mapping at Distribution Center: order-filling process for in-stock items
Mapping Business ProcessesGuideline for improving a process
Mapping Business ProcessesSwim lane process map •A process map that graphically arranges the process steps so that the user can see who is responsible for each step.
•Mapping advantages:• Indicate “hand-off” once changes of
process flow• Show who sees each part of the process
Mapping Business ProcessesSwim lane process map
Swim lane process map for order-filling process
Business Processes
Mapping Business Processes
Managing and Improving Business Processes
Ten Best Practices of Business Processes
Business Process Challenges
Summary
Managing and Improving Business Processes
Asking before improvement•How do we know if a business process is meeting customers’ needs? Even if their needs are being met, how do we know whether the business process is being run efficiently and effectively?•How should we organize for business process improvement? What steps should we follow? What roles should people play?•What types of tools and analytical techniques can we use to rigorously evaluate business processes? How can we make sure we manage based on fact and not opinion?
ApproachMeasure First – Then Improve
1. Identify business objectives and select Key Performance Indicators.2. Measure where you are now.3. Determine what’s working and what isn’t.4. Fix and improve problem areas.5. Calculate value creation
Managing and Improving Business Processes
Managing and Improving Business Processes
• Measuring business process performance productivity Efficiency Cycle time
• Improving business process performance Benchmarking The Six Sigma methodology
• Continuous improvement tools
Managing and Improving Business Processes
• Measuring business process performance Productivity : a measure of process
performance; the ratio of outputs to inputs
productivity = output/ input
Examples of productivity measures:Productivity= number of customer calls handled/ support staff hoursProductivity= number of items produced/ machine hoursproductivity= sales dollars generated/ labor, material, machine cost
Managing and Improving Business Processes
• Measuring business process performance> productivity
Measuring productivity at BMA software
Step 1
Managing and Improving Business Processes
• Measuring business process performance> productivity
Measuring productivity at BMA software
Step 2
Managing and Improving Business Processes
• Measuring business process performance Efficiency : a measure of process
performance; the ratio of actual outputs to standard outputs. Usually expressed in percentage terms
Efficiency = 100% ( actual outputs/ standard outputs)
Examples of efficiency measures:Suppose each painters is expected to paint
30 units an hour. Bob actually paints 25 unit/hour while Casey paint 32 unit/hour. The efficiency of each painters is…..EfficiencyBob = 100% (25/30) = 83%
EfficiencyCasey = 100% (32/30) = 107%
Managing and Improving Business Processes
• Measuring business process performance> efficiencyExamples of efficiency measures:In week 16, Sawanya hires a new sole sewer, Daeng Doungdee. After five weeks on the job Daeng has recorded the results in table below.
FINISHED SOLES
Managing and Improving Business Processes
• Measuring business process performance> efficiencyExamples of efficiency measures:Sawanya calculates Daeng’s efficiency by dividing the actual finished soles produced each week by the standard value of 1,800. therefore, Daeng’s efficiencies for week 16-20 are calculated as:
FINISHED SOLES
Managing and Improving Business Processes
• Measuring business process performance Cycle time : The total elapsed time
needed to complete a business process. Also called throughput time.
In order to measure cycle time in absolute terms, often useful to look at the percent value-added time being simply the percentage of total cycle time spent on activities actually providing value
percent value-added time = 100% ( value added time/ total cycle
time)
Managing and Improving Business Processes
• Measuring business process performance> cycle timeExamples of cycle time measures:What is the percent value-added time for the typical “quick change” oil center? Even though the customer may spend an hour in the process, it usually take only about 10 minutes to actually perform the work. According to such equation, then,
Percent value-added time = 100% (10minutes/60minutes) =
Managing and Improving Business Processes
• Improving business process performance Benchmarking : The process of
identifying, understanding, and adapting outstanding practices from within the same organization or from other businesses to help improve performance
2008 competitive benchmarking results for North American Automakers
Managing and Improving Business Processes
• Improving business process performance Six Sigma Methodology : The process of
identifying, understanding, and adapting outstanding practices from within the same organization or from other businesses to help improve performance
Six Sigma focuses an organization on:• Understanding and managing customer
requirement• Aligning key business processes to achieve
those requirement• Utilizing rigorous data analysis to understand
and ultimately minimize variation in those processes
• Driving rapid and sustainable improvement to business processes
Managing and Improving Business Processes
• Continuous improvement tools The philosophy that small, incremental
improvements can add up to significant performance improvements overtime.• Cause-and-Effect diagram• Five Why• Scatter plot• Check sheet• Pareto chart• Bar graph• Histogram• Runchart
Managing and Improving Business Processes
• Continuous improvement tools
Managing and Improving Business Processes
• Continuous improvement tools
Managing and Improving Business Processes
• Continuous improvement tools
Business Processes
Mapping Business Processes
Managing and Improving Business Processes
Ten Best Practices of Business Processes
Business Process Challenges
Summary
Ten Best Practices of BPM1. Think process; be process2. Get smart!3. Adopt an executive4. Great expectations5. Pick a methodology6. The right technology7. Hear the voice of the customer8. Pick a project9. Measure first10.Plan to change
Business Processes
Mapping Business Processes
Managing and Improving Business Processes
Ten Best Practices of Business Processes
Business Process Challenges
Summary
Business Process Challenges• Some processes are artistic in nature.
That is, they require flexibility in carrying out the various steps. Furthermore, customers actually value variability in the outcome
• Some processes may be so broken or mismatched to the organization’s strategy that only a total redesign of the process will do
• Some processes cross organizational boundaries introducing additional challenges
Business Processes
Mapping Business Processes
Managing and Improving Business Processes
Ten Best Practices of Business Processes
Business Process Challenges
Summary
Summary