Vorlesung

• Black box that uses resources (labour, capital) to transform inputs (raw materials, unserved customers) into outputs (finished materials, served customers)

• Usually has start and end points and a defined sequence of intermediate steps

• “Processes” are the core concept of operation management

1. Inventory

   • number of flow units contained within the process

   • In a production setting referred to as work-in-process (WIP)

2. Flow Time

   • time it takes a flow unit to get through the process

3. Flow Rate

   • The rate at which the process is delivering output

   • Measured in [flow units/unit of time]

Flow Unit:

• determined by the type of product or service the supply process is dealing with

• flows through processs, starting as an input and later leaving as an output

• Examples: vehicles in auto pant, travelers for an airline

A buisness process is a chain of events, activities and decisions

… involving a number of actors and objects,

… triggered by a need

and leading to an outcome that is of value to a customer.

Buisnes Process Management is

Body of principles, methods and tools to design, analyze, execute and monitor buisness porcesses, with the aim of improving their performance.

• Order-to-Cash

• Procure-to-Pay

• Application-to-Approval

• Fault-to-Resolution

• all conscious decisions are based on (mental) models

• mental models reduce complexity

  • easier evaluation > quicker decision

  • filtering of irrelevant information (“selective perception”)

Definition:

• relatively enduring and accessible, but limited, inter conceptual representation of an external system

• systems are complex

• smaller systems contained in a bigger system

• Systems show Eigen-Dynamics: they change and adapt

• Systems are non-linear, feedbacl loops exist

• “Every good regulator of a system must be a model of that system.”

• we must use models because otherwise cognitive and sensory overload would occur

• the choice is only if we conciously want to manage these models

• “good” models are essential fpr understanding and managing systems

  
  

  > Knowing how to build “good” models is therefore key for effective decision-making

Quantitified model of a real problem (simplified, precise, useful)

Purpose:

• simplifying a real situation

• describe and analyze systems precisely

Used for

• Simulation, prediction, verification and communication of complex processes

Examples

• Flowcharts, Petri nets, mathematical equations, BPMN diagrams

• Mathematical programming

• Decision and game theory

• Simulation models

• Heuristics

There are 3 categories:

• Management Processes

• Core Processes

• Support Processes

1. Sequence

2. Decomposition (Hierarchical)

3. Specialization

4. Parallel (concurrent)

5. Triggering (one starts another)

6. Looping

• it refers to systematically defining buisness processes and establishing criteria to select processes for improvement

• Output is a process architecture which represents processes and interrelations

• This Process Architecture serves as framework for defining priorities and scope of projects

• 
  

1. Clarify terminology: key terms, stakeholders, refernce models

2. Identify end-to-end processes (from supplier to customer)

3. Identify Sequential (intermediate) process steps

4. Identify Major Management and Suppor Processes (personnel, financial, information, materials)

5. Decompose and specialize buisness processes: until they can be managed by a singel process owner

6. Compile process profiles (boundaries, KPIs, resources)

7. Check completeness and consistency

• Strategic importance:

  • greatast impact on strategic goals

  • consider profitabtility

• Health

  • which processes are in the deepest trouble

• Feasibility

  • how susceptible to BPM initiatives is my process

  • 
    

1. Evidence base

   • document based

   • obersevation

2. Interview-based

   • forward vs. backward (with regard to process)

   • structured vs unstructured

3. Workshop-based

   • interaction of different domain experts

   • employing a moderator

1. Define the setting: assemble a team

2. Collect information: build an understanding of the process

3. Model the process (identify boundaries, activities, events, resources, control flow)

4. Assure model quality: guarantee that the result model meets different quality criteria

1. Frgamented process knowledge of different sources or people

2. Domain experts think on instance level

   • “every trip is different”

   • “you cannot compare…”

   • “too many special conditions”

3. Knowledge of process modelling is uncommon

4. 
   

Before sarting it is important to understand the culture and the sentiment of an organization

Differences in companys:

• preach and practise open culture: employees are encouraged to share utter their ideas and criticism > such companys benefit from workshops because participants are likely to present their ideas

• strictyl hierarchical organizations: it is necessary to take special care that everyone gets an qual share of parole

1. Segragate value-adding and non-value adding process steps

2. Indentify waste

3. Collect and organize issues (including all stakeholders), asses their impact, prioritize

4. Analyze Root causes of issues

1. Identify the process steps (including steps right before and after the process)

2. Classify each step into value-adding (VA), buisness value-adding (BVA) and non-value-adding (NVA)

VA: produces value or satisfaction to the customer

• customer is willing to pay

BVA: necessary for the buisness to operate

• required to collect revenue, improve or grow

• necessary to comply with regulatory requirements

NVA: basically everything else

• hand-overs, waiting times, delays, reworks

  -> WASTE

Move:

1. Unnecessary Transportation

2. Motion

Hold

1. Inventory

2. Waiting

Over-do

1. Defects

2. Over-Processing

3. Over-production

Everbody (including other departments or organizations) who can affect or is affected by activities, objectives, and policies related to a process.

1. Customers of the process

2. Process participants

3. External parties (supplier, sub-contractors) of the process

4. Process owner and operational managers

5. Sponsor of the process improvement effort and other executive managers who have stake in the process performance

1. Five- Why analysis

1. Cause effect (fishbone) diagram

Six categories of root causes (6Ms)

1. Machine

2. Method

3. Material

4. (Hu)man

5. Measurment

   • inaccurate estimations

6. Milieu

   • externally caused delays

   • sudden increase of workload due to special circumstances

• Maintain, organize and prioritizes perceived weaknesses of the process (issues)

• Pareto chart (80-20)

Mental

physical

formal (logical, mathematical)

• cost of experimentation

• compress and expand time to analyse long processes

• easy to manipulate -> policy changes can easily be implemented

• experiments may be illegal or dangerous

• solving the wrong problem > validity of simulation

• careful interpretation required

• tension between accuracy and preciseness

• state variables only change at discrete set points of time

• this set points are called events

• often stochastic, dynamic

Trade-Off

Ethical-Economical Trade-Off

1. Operational (runtime)

   • aimed fpr process workers and operational managers

2. Tactical (historical)

   • aimed at process owners / managers

   • anaylsis to detect bottle necks

3. Strategic (historical)

   • aimed at executives and managers

   • linking process performances to strategic goals

1. Forming

   testing behaviour pattern, mutual scanning,

2. Storming

   conflicts, opposing opinions lead to norms

3. Norming

   group sohesion develops, mutual acceptance, securing continuity

4. Performing

   actual task performance

1. Begin with the stocks

2. Add the flows

3. Specify the flows by using converters / auxiliary variables