BUSINESS PROCESS MODELING, SIMULATION AND DESIGN

Transcription

1 BUSINESS PROCESS MODELING, SIMULATION AND DESIGN SECOND EDITION Manuel Laguna Johan Marklund Ltfi) CRC Press \ V J Taylor & Francis Group Boca Raton London New York CRC Press is an imprint of the Taylor St Francis Croup, an informa business A CHAPMAN & HALL BOOK

2 Preface xi 1. Introduction to Business Process Design What Is a Business Process? Process Types and Hierarchies Determinants of the Process Architecture Inputs and Outputs Flow Units Network of Activities and Buffers Resources Information Structure Workflow Management Systems Essence of Business Process Design Incremental Process Improvement and Process Design Illustrative Example Business Process Design, Overall Business Performance, and Strategy Business Process Design and Overall Business Performance Business Process Design and Strategy Why Do Inefficient and Ineffective Business Processes Exist? Summary 20 Discussion Questions and Exercises 21 References Process Management and Process-Oriented Improvement Programs Process Management and the Power of Adopting a Process View Phase I: Initialization Process Ownership / Analyzing Process Boundaries and Interfaces Phase II: Definition Phase III: Control Establishing Control Points Developing and Implementing Measurements Feedback and Control Illustrative Example: Managing a Document Distribution Process Assign Process Ownership Analyze Boundaries and Interfaces Define the Process Establish Control Points Develop and Implement Measures Perform Feedback and Control Summary and Final Remarks Six Sigma Quality Programs Six Sigma Definitions Six Sigma Cost and Revenue Rationale 44

3 vi Contents Cost or Efficiency Rationale Revenue or Effectiveness Rationale Six Sigma in Product and Process Design Six Sigma Framework Top-Management Commitment Stakeholder Involvement Training Measurement System Improvement Methodology Concluding Remarks: Key Reasons for the Success of Six Sigma Business Process Reengineering Reengineering and Its Relationship with Other Earlier Programs Brief History of Reengineering When Should a Process Be Reengineered? What Should Be Reengineered? Dysfunction Importance Feasibility Suggested Reengineering Frameworks Revolutionary versus Evolutionary Change Summary 69 Discussion Questions and Exercises 71 References Framework for Business Process-Design Projects Step 1: Case for Action and Vision Statements Step 2: Process Identification and Selection Step 3: Obtaining Management Commitment Step 4: Evaluation of Design Enablers Example: Internet-Enabling Change at Chase Manhattan Bank Example: New Technology as a Change Enabler in the Grocery Industry Step 5: Acquiring Process Understanding Understanding the Existing Process Understanding the Customer Step 6: Creative Process Design Benchmarking Design Principles Step 7: Process Modeling and Simulation Step 8: Implementation of the New Process Design Summary 103 Discussion Questions and Exercises 104 References Basic Tools for Process Design Process Flow Analysis General Process Charts Process Flow Diagrams Ill Process Activity Charts 114

4 vii Flowcharts Service System Maps Workflow Design Principles and Tools Establish a Product Orientation in the Process Eliminate Buffers Establish One-at-a-Time Processing Balance the Flow to the Bottleneck Minimize Sequential Processing and Handoffs Establish an Efficient System for Processing of Work Minimize Multiple Paths through Operations Additional Diagramming Tools From Theory to Practice: Designing an Order-Picking Process Summary 139 Discussion Questions and Exercises 140 References Managing Process Flows Business Processes and Flows Throughput Rate Work-in-Process Cycle Time Little's Law Cycle Time and Capacity Analysis Cycle Time Analysis Rework Multiple Paths Parallel Activities Capacity Analysis Rework Multiple Paths Parallel Activities Managing Cycle Time and Capacity Cycle Time Reduction Increasing Process Capacity Theory of Constraints Drum-Buffer-Rope Systems Summary 174 Discussion Questions and Exercises 174 References Introduction to Queuing Modeling The Basic Queuing Process, Queuing Systems, and Queuing Strategies The Basic Queuing Process Calling Population Arrival Process Queue Configuration Queue Discipline Service Mechanism Strategies for Mitigating the Effects of Long Queues 191

5 viii Contents 6.2 Analytical Queuing Models The Exponential Distribution and Its Role in Queuing Theory The Exponential Distribution, The Poisson Distribution, and The Poisson Process Terminology, Notation, and Little's Law Revisited Birth-and-Death Processes The M/M/l Model The M/M/c Model The M/M/c/K Model The M/M/c/oc/N Model Queuing Theory and Process Design Determining WC Determining SC Decision Model for Designing Queuing Systems Summary 237 Appendix 6A: Mathematical Derivations and Models with Generally Distributed Service Times 238 Discussion Questions and Exercises 242 References Introduction to Simulation Simulation Models Discrete-Event Simulation Getting Started in Simulation Modeling Illustrative Example Spreadsheet Simulation of a Process Successful Simulation in Practice When Not to Simulate Summary 278 Discussion Questions and Exercises 279 References Modeling and Simulating Business Processes with ExtendSim Developing a Simulation Model: Principles and Concepts Model Verification ; Model Validation ExtendSim Elements ExtendSim Tutorial: A Basic Queuing Model Basic Data Collection and Statistical Analysis Adding Randomness to Processing Times and the Use of Attributes Adding a Second Underwriting Team Modeling Resources and Resource Pools Customizing the Animation Calculating Activity-Based Costs Cycle Time Analysis Modeling Advanced Queuing Features Blocking Balking 320

6 ix Reneging Priorities and Priority Queues Modeling Routing in Multiple Paths and Parallel Paths Multiple Paths Parallel Paths Model Documentation and Enhancements Summary 333 Discussion Questions and Exercises 334 References : Input and Output Data Analysis Dealing with Randomness Characterizing Probability Distributions of Field Data Goodness-of-Fit Tests Using Stat::Fit for Distribution Fitting Choosing a Distribution in the Absence of Sample Data Random Number Generators Runs Test Generation of Random Variates Analysis of Simulation Output Data Nonterminating Processes Terminating Processes Confidence Intervals Confidence Interval for a Population Mean Sample Size Calculation Comparing Output Variables for Different Process Designs Modeling and Analysis of Process-Design Cases Process Design of a Call Center for Software Support Modeling, Analysis, and Recommendations Design of a Hospital Admissions Process Summary Training Cases Case 1: Improving the X-Ray Process at County Hospital Case 2: Process Modeling and Analysis in an Assembly Factory Case 3: Redesign of a Credit Applications Process Case 4: Redesigning the Adoption Process in a Humane Society Case 5: Performance Analysis and Improvement of an Internet Ordering Process 404 Appendix 9A: Hypothesis Testing, Confidence Intervals, and Statistical Tables 407 Exercises 419 References Optimizing Business Process Performance Business Process Optimization Role of Simulation-Optimization in Business Process Management Simulation-Optimization with ExtendSim Tutorial: Process Optimization with ExtendSim Alternative Optimization Models 441

7 10.4 Optimization of Process Simulation Models Configuring a Hospital Emergency Room Process Staffing Levels for a Personal Insurance Claims Process Summary 448 Appendix 10A: Evolutionary Computation 448 References Business Process Analytics Competing on Analytics Business Process Management Systems Business Rules Data Mining Monitor and Control Process Mining > Process Benchmarking Graphical Analysis of the Ratio Model Efficiency Calculation Linear Programming Formulation of the Ratio Model Learning from Best-Practice Organizations Final Thoughts 486 Appendix 11A: Excel Add-In for Data Envelopment Analysis 487 Discussion Questions and Exercises 493 References 497 Appendix: Instructions for Downloading ExtendSim Demo or LT 499 Index 501