BPMN EXAM 2

Origins of Lean

"Toyota Production System" (Toyota's management philosophy and practices) TPS as a major precursor of the more generic "Lean manufacturing." Responsible for Toyota's rise to the top of the Automotive world The term "Lean" coined by MIT team in 1991, led by Jim Womack, co-author of Lean Thinking.

Lean & Kaizen (ch8)

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Measurements Are Critical ...

If we can't accurately measure something, we really don't know much about it. If we don't know much about it, we can't control it. If we can't control it, we are at the mercy of chance.

Cycle Time Efficiency

Measured as the percentage of the total cycle time spent on value adding activities. CT = Cycle Time (as defined before) TCT = Theoretical Cycle Time - this is the cycle time if we only counted value-adding activities and excluded any waiting time or handover time Count only processing times

Parallelism

More parallelism leads to improved performance: reduction of waiting times and better use of capacity. IT infrastructures which allow for the sharing of data and work enable parallelism.

Parties Involved

Domain Expert Process Analyst

Understand costs

Understanding the cost of the process helps the team understand the value of the process in real dollars to the organization. Examples of relevant questions: What is the total cost of the process? Can the process be broken up into small cost allocations? Is the cost in line with industry best practices? Is the cost absorbed by the customer directly or is it a cost of business?

Pareto chart

Useful to prioritize a collection of issues or factors behind an issue Bar chart where the height of each bar denotes the impact of each issue Bars sorted by impact Superposed curve where the y-axis represents the cumulative percentage impact

What is Six Sigma?

A statistical measure of the performance of a process or product (that is, a measure of the process' ability to minimize defects) A goal/outcome: the higher the sigma level, the better A quality control methodology / approach for improving a process via reducing defects and improving quality of outputs (DMAIC)

Why Waste Occurs?

Because we do not ask the question Why often enough Why do we have an increase in defects? Why did we not have enough last time? Why are we getting customer complaints? Why is that person not busy right now? Why do we need to run three different reports?

Triage

Consider dividing a general task into two or more alternative tasks or the integration of two or more alternative tasks into one general task.

Inventory Losses

Defined as: Any form of batch processing. Goods awaiting further processing or consumption All inventory above what the customer needs for an order. Any goods that are being retained for any length of time, inside or outside a designated area.

Defect Losses

Defined as: Any form of correction needed in a process flow. Data entry errors Incorrect confirmations Wrong trailer numbers on pick ticket Incomplete paperwork Mixed pallets not properly documented Damaged cases

Transport Losses

Defined as: Excess movement of paperwork and or materials. Movement of materials Any Fork truck movement Double handling of product Searching for product Poor layout, office, manufacturing or warehouse Re-deployment Movement of paperwork Multiple hand-offs Excessive email attachments

Waiting Losses

Defined as: Idle time of a person, process, or machine waiting for a task to finish or an upstream activity to begin. Waiting for email replies before taking action System downtime Information from carriers, customers, sales, etc. Waiting on equipment Waiting on "whoever" has the decision authority

Unnecessary Movement Losses

Defined as: Movement by a person more than required Turning around to get a part when it could have been staged in front of you Walking to/from copier, fax machine Central filing Searching for a file, pick ticket, piece of paper

Overproduction Losses

Defined as: Producing more, sooner, or faster than what is required by the next process. Any production above what is required to meet customer needs Pre-built inventory Extra production to "get through the weekend." Overstaffing

Unnecessary Processing Losses

Defined as: Work or activities that does not add value to the customer or meet the customer needs. Re-entering data Order checking Approvals Month end closing activities Incomplete standards Unnecessary or excessive reports or transactions

Intro to Simulation(chap6-7)

Definition: "An imitation of a system as it progresses through time". Uses a model of the system that is a simplified version of reality. A process simulator generates a large number of hypothetical instances of a process, executed these instances step-by-step, and records the results of each execution. Examples: Sim City , Flight Simulators, Avatar

Kaizen Principles

Discard conventional thinking about production Think of how to do it not why it can't be done. Don't make excuses. Question current practices. Don't seek perfection. Do it right away even for only 50% of target. Correct mistakes immediately Do not spend capital Hardship brings out wisdom Find root causes. Use Why Why and other tools Use the wisdom of the group Kaizen opportunities are infinite

Document Analysis

Documents point to existing roles, activities and business objects EX: Formal documentation in terms of Website Organizational chart Internal policies Glossaries and handbooks Etc.

Summary

Domain expert and process analyst have different strengths and limitations in process discovery There are various discovery methods Quality Assurance is important

Process Analysis(ch6-7)

In this phase, issues associated with the "as-is" process are identified, documented, and whenever possible quantified using performance measures. The output of this phase is a structured collection of issues. These issues are typically prioritized in terms of their impact, and sometimes also in terms of the estimated effort required to resolve them.

What do we measure?

Input measures: Task duration Variation Resources Costs (per task, per resource) Waiting Time Etc. Output measures: Cycle Time Costs Bottlenecks Workloads Etc.

Kaizen

Japanese term used to describe a continuous improvement team. The word means: Kai = take apart or change Zen = make better, improve Change for the better Generally means small improvements

What do you need to know to fully understand how to do Kaizen?

Kaizen is the building block of all the lean production methodologies and the foundation upon which all these methods have been built. The smallest ideas can lead to the greatest results. Understanding the Ten Basic Principles for improvement and applying them in the right spirit will ensure success in improvement efforts.

Lean and Six Sigma

Lean applied by itself can result in making poor products fast Six Sigma applied by itself can result in good products being made with non-value added steps ("bad flow") Lean and Six Sigma must be applied together to optimize the process:

Lean and Six Sigma 2

Lean improves efficiency (good process flow) Six Sigma reduces variation and improves quality in outputs Most companies combine Lean and Six Sigma approaches

Lean Process Overview

Lean is about eliminating waste so we can be more effective and efficient at everything we do. Waste: the elements of a process that add no value to the product or service. Waste only adds cost and time. Things to remember about waste: Waste points to problems within the system We need to find and address cause of waste

Cause-Effect (Fishbone) Diagrams

One possible categorization: the 6Ms: Machine (technology) - factors pertaining to the technology used Method (process) - factors stemming from the way the process is defined Material - factors stemming from materials, consumables, or data required Man - factors related to a wrong assessment or incorrectly performed step Measurement - factors related to measurements errors Milieu - factors stemming from the environment in which the process is

Resequencing

Order tasks based on cost/effect Put "knock-out checks" first - identify problems early Postpone expensive tasks until the end.

Task Elimination

Other tasks to consider for elimination: Print Copy Archive Store More generally: non-value adding (NVA) activities Task elimination can be achieved by delegating authority, e.g. No need for approval if amount less than Y Employees have budget for small expenses

(Re)design Heuristics

Parallelism Task elimination Capture Information Once at the Source and Share It Reduce Handoffs Provide a Single Point of Contact Ensure Quality at the Beginning Resequencing Specialization and Standardization Triage Outsourcing Technology / Automation

Understand performance metrics

Performance issues can be defined as gaps between how a process is currently performing in relation to how it should be performing to meet the organization's objectives. Examples of relevant questions: Does the process take too long and if so, why and what is the measurement of "too long"? How is data reported about the process, who views this data, and what do they do with it? Where should performance points be recorded so the process is accurately measured and monitored?

Issue Register

Purpose: to categorise identified issues as part of as-is process modelling Usually a table with the following columns (possibly others): Issue name Description/explanation Assumptions Impact: Qualitative vs. Quantitative Possible solution

Ensure quality at the beginning

Quality problems encountered in the first several steps of a process will create exponentially negative effects downstream. The time spent to fix inefficiencies by the downstream people can be excessive.

Quantitative Analysis

Quantitative Flow Analysis Cycle time Cycle time efficiency Cycle time and work-in-process (Little's Law) Queuing Theory (not covered) Process Simulation (covered later)

Process Discovery(ch5)

the act of gathering information about an existing process and organizing it in terms of an "as-is" process model

Process Mining

A.k.a. "automatic process discovery" Make use of event logs, or data captured by various information systems

Why-why diagram

Basic idea is to recursively ask the question: "Why has something happened" Do so until root cause is found

Six Sigma as a methodology

The 5-step Six Sigma Problem Solving Process DMAIC

Process Discovery

1. Defining the setting: assembling a team in a company that will be responsible for working on the process. 2. Gathering information: building an understanding of the process (we'll discuss different discovery methods to acquire information on a process.) 3. Conducting the modeling task: mapping out the process in a systematic way. 4. Assuring process model quality: make sure that the resulting process models meet different quality criteria.

Challenges

1. Fragmented Process Knowledge 2. Domain Experts think on Instance Level 3. Knowledge of process modeling is rare

Organizing the Gathered Material

1. Identify the process boundaries 2. Identify activities and events 3. Identify resources and their handovers 4. Identify the control flow 5. Identify additional elements.

Process Performance Measures

1.Cost 2.Time 3.Quality

Process Discovery Techniques

1.Evidence-based Document analysis* Observation Process mining 2.Interview-based* 3.Workshop-based

Process Modeling guidelines (Adapted from Bruce Silver)

1.Make the important information visible in the diagram. A process diagram should convey exactly how the process work without having to attach a narrative. 2.Use activities to represent work; label them VERB-NOUN. 3.Use gateways to represent pure routing logic (not work). 4.Have only one start event per process or sub-process. 5.Use multiple end events to classify end states. 6.Make your diagrams valid. BPMN has rules; follow them. 7.Continually test your model: once you design a model, always act "as if" you are a token going through the model to test it.

Quality Assurance

1.Syntactic Quality 2.Semantic Quality 3.Pragmatic Quality

Seven sources of waste

1.UNNECESSARY PROCESSING 2.INVENTORY/STORAGE 3.TRANSPORTATION 4.WAITING 5.DEFECTS 6.MOTION 7.OVERPRODUCTION 8.TALENT

Reduce handoffs

A "handoff" occurs when ownership of an activity or information is passed from one individual to another Handoffs between individuals or functional groups present an opportunity for a breakdown in the process Simplify / limit handoffs when possible May need to merge tasks and expand job scope so that a employees accomplish more. May require cross-training and change in compensation to reward knowledge or pay for new skills.

Provide a single point of contact

A common symptom of not having a single point of contact is multiple transfers of customers' calls. A single point of contact can be a person such as a project manager, process consultant, or customer service representative.

Understand the human element

Activities performed by real people are more complex as they involve judgment and skill that cannot be automated. People do not always do the same task in the same way. Examples of relevant questions: How much variability is introduced by the human element? Is the variability tolerable? How complex is the task? What are the skill sets required? How are performers trained for the task?

Advantages and disadvantages

Advantages Explore alternative models without implementing them (thus, cost savings) Can handle variability Easy to explain to others Disadvantages May require detailed data collection May oversimplify

Understand capacity

Analyzing the capacity of the process tests upper and lower limits and determines whether the resources (machine or human) can appropriately scale to meet the demands. Examples of relevant questions: Is the process scalable and if inputs were increased, at what point will the process break down? What would happen if the process slowed down and what is the cost of the idle time of the process? If idle, can those resources be put to work on other processes? What happens when the process cannot get supplies and materials quickly enough to meet demand?

Identify handoffs

Any point in a process where work or information passes from one system, person or group to another is a handoff for that process. Handoffs are very vulnerable to process disconnections and should be analyzed closely. Typically, the fewer number of handoffs, the more successful the process. Examples of relevant questions: Which of the handoffs are most likely to break down the process? Are there any bottlenecks of information or services as a result of handoffs?

Technology / automation 2

BUT! One of the worst things an organization can do is take the "as-is" flowchart and lay technology on top of it. This is bad for two reasons: IT can be expensive Despite the investment, the problem might not be solved and automating it could magnify the issue

Identify business rules

Business rules create constraints that impact the nature and performance of the process. Often, business rules are created without an understanding of why they exist or are so outdated that they no longer apply but because of organizational culture they still are being followed. Examples of relevant questions: Do the current business rules cause obstacles by requiring unnecessary approvals, or steps, that should be eliminated? Are the business rules in alignment with the objectives of the organization? Who created the business rules and upon what were they based? If the rules were eliminated, what would be the result?

Value-Added Analysis

Classify each activity of a process into: Value-adding (VA): Produces value or satisfaction to the customer. Is the customer willing to pay for this step? Business value-adding (BVA): Necessary or useful for the business to run smoothly, or required due to the regulatory environment, e.g. checks, controls Would the business potentially suffer in the long-term if this step was removed? Non-value-adding (NVA) - everything else including handovers, delays and rework GOAL: Minimize or Eliminate NVA tasks!

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 and one end event G4 Model as structured as possible G5 Avoid OR routing elements G6 Use verb-object activity labels G7 Decompose a model with more than 30 elements

Workshops

Gather all key stakeholders together One process analyst, multiple domain experts Participants interact to create shared understanding Often: software-supported, a model is directly created during the workshop (separate role) Model is reference point for discussions

Process Boundaries

How do you name the process of interest? Under which condition does the process start? With which result, or results, does it end?

Capture information once at the source

If a process requires entering the same data more than once, then the design principle is appropriate. Remove data redundancy, re-keying, reconciliation, and errors.

Cycle Time Analysis

NEED MORE WORK

Semantic Quality: Validation

Need to compare your model with the real-world business process Check for correctness and completeness

Syntactic Quality: Verification

Need to make sure that the content of the model complies with the syntax, as defined by the process modeling language in use

Observation

Observe what people do at their workplace Trace business objects in the course of their life cycle Inspect the work environment

Technology / automation

Physical constraints in a business process may be removed by applying new technology. Tasks may be automated with technology. E.g.: Replace materials (e.g. paper document) flow with information flow Increase communication speed: e-mail, SMS Enable self-service (e.g. online forms) Use tracking technology to locate resources (e.g., Bar code, RFID) Automate tasks and decisions Capture and automate business rules where effective Automate end-to-end processes (see next lecture BPMS)

Process Re(Design) chap(8)

Process (re)design is the creation of a new process (the "to-be") that aligns the business with its strategy. The design of business processes needs to consider the results from a process analysis and then utilize process modeling techniques to develop an improved process

Why do Process Analysis?

Process analysis generates the information necessary for the organization to make informed decisions about the business process. Without it, decisions are made based on opinion or intuition rather than documented, validated facts.

Identify process controls

Process controls are put in place to ensure adherence to legal, regulatory or financial constraints or obligations. Examples of relevant questions: Are there any legal controls that must be considered in relation to the process? Who are the regulatory or governing agencies that will regulate the process and do they need to be informed of the process change?

Specialization and Standardization

Process specialization Differentiate by customer classes, geographical locations, time periods (winter, summer), ... Different activities, different resource pools Process standardization Often, a significant variation in output is caused by many people doing the same process in different ways. All cases treated equally (as much as possible) Resources are pooled together

Product Specification and Process Variation

Product specification What the customers want in terms of product attributes: length, weight, thickness, color, ... Upper and lower specification limits Process variability Inherent variation in processes Limits what can actually be achieved Defines and limits process capability Process may not be capable of meeting specification!

Interviews

Semi-structured format May need to involve many domain experts if process knowledge is fragmented (it usually is!)

Outsourcing

Several organizations may decide that the best course of action is to outsource one or more processes to companies that specialize in the performance of that process. Outsourcing certain processes can free up the organization to focus on other more strategic processes that add greater value to the organization.

Origins of Six Sigma

Started at Motorola during the 1980's Resulted in significant improvements and ultimately a Baldrige Award Made famous at General Electric Success stories (results $) has lead to the interest spreading in most large companies and many small ones

Pragmatic Quality: Certification/Graphical Layout

The goal is create a process model of good usability, which includes several aspects: Understandability Maintainability Size Structural complexity Graphical layout Etc.

Why use simulation?

To obtain a better understanding and identify improvements to a system. To compare and contrast several scenarios, which can be developed quickly and cheaply

Keys Areas of Investigation

Understand the business environment / organizational culture Understand performance metrics Understand customer interactions Identify the handoffs Identify the business rules Understand capacity Understand variation Understand costs Understand the human element Identify process controls

Understand customer interactions

Understanding the customer interactions with the process is critical. Generally, the fewer the number of required interactions between the customer and a given service, the more satisfies the customer. Examples of relevant questions: How many times does a customer interact with the process? Is it too many? Are there redundancies in the interactions? How do we know if they are satisfied? How does the customer want to interact with the process?

Qualitative Process Analysis

Value-Added Analysis Root-Cause Analysis Cause-Effect Why-why Issue Documentation and Impact Assessment Pareto Analysis Issue Register

Understand variation

Variation inevitably slows down the process and requires more resources to properly scale. Examples of relevant questions: How much variation is tolerable for the process? Is variation necessary or desirable? Where are the points where variation is most likely to occur? Can they be eliminated and if so, what are some recommendations? Can automation help eliminate variation?

Little's Law

WIP - On average, how many flow units are within process boundaries at any point in time. λ - On average, how many flow units pass through the process per unit of time (throughput). CT - On average, how much time does a typical flow unit spends within process boundaries WIP= λ x CT Note that Little's Law only applies to a stable process, where Average Inflow = Average Outflow

Calculating cost

We calculate the cost of a process more or less the same way as we calculate cycle time The only difference is in the treatment of AND-blocks: the cost of such a block is the sum of the costs of the branches If the numbers in the tasks are costs, what is the total cost of this process?

The Essence of Six Sigma

Y = f(x) "Y is equal to the function of X" Inputs and processes activities (X) have a profound affect on the output (Y) Controlling the inputs, their interactions and the activities will improve the output Attempting to manage results (Y) only causes increased costs due to rework, test and inspection (early quality control efforts)