MIST 5750 Exam 2
challenges of process discovery
- Fragmented process knowledge - Domain experts think on an instance level - Knowledge of process modeling is uncommon
advantages of simulation
-Can explore alternative models without implementing them (thus, cost savings) -Can handle variability -Easy to explain to others
process specialization
-Differentiate by customer classes, geographical locations, time periods (winter, summer), ... -Different activities, different resource pools
Seven sources of waste (sometimes 8)
Defects Overproduction Waiting (Non-Utilized talent) Transportation Inventory Motion Extra-Processing
DMAIC: the 5 step six sigma problem solving process
Define, Measure, Analyze, Improve, Control
kaizen
Japanese term for continuous improvement kai- take apart or change zen- make better, improve means small improvements
WARNING against technology and automation
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
5 categories of stakeholders
customers participants external parties (suppliers, sub-contractors) process owner and operational managers sponsor of improvement effort and other executives
over-do waste
defects over-processing over-production
interview strengths (1)
detailed inquiry into process
workshop strength
direct resolution of conflicting vies
lean improves...
efficiency (good process flow)
goals of lean
eliminate waste reduce cycle time (be more effective and efficient in everything we do!)
Non-value-adding activities
everything else besides VA and BVA. activities customers are unwilling to pay for includes 1. handovers 2.waiting times, rework loops, 3. rework or defect correction
process discovery methods
evidence based - document analysis - observation - automatic process discovery Interview based workshop based
transport losses
excess movement of paperwork and or materials
milieu
factors outside the scope of the process • Delays caused because of unresponsive external actors • Sudden increases of workload due to special circumstances
material
factors stemming from input materials or data -missing, incorrect, or outdated data
measurement
factors stemming from reliance on: • Inaccurate estimations • Miscalculations
machine
factors stemming from the technology used • Lack of suitable functionality in the supporting software applications • Poor User Interface (UI) design • Lack of integration between systems
method
factors stemming from the way the process is designed, understood, or performed • Unclear assignments of responsibilities • Unclear instructions • Lack of timely communication
man
factors stemming from wrong assessments or incorrect performance of steps attributable to: • Lack of training and clear instructions • Lack of motivation • Too high demands towards process workers
You would choose the service that is...
faster, better, and cheaper
lean focus
flow focused
stakeholder analysis
gathering data from multiple sources by interviewing stakeholders of different types and reconciling their viewpoints
process simulator
generates a large number of hypothetical instances of a process, executes these instances step-by-step, and records the results of each action
six sigma applied by itslef can result in
good products being made with non-value added steps (bad flow)
assuring the process mdoel quality
guarantee that the resulting process model meets different quality criteria. This phase is important for establishing trust in the process model.
External parties are concerned about
having a steady or growing stream of work from the process, being able to plan their work ahead, and being able to meet contractual requirements.
Two-Dimensional Prioritization: PICK Chart
high payoff, hard difficulty- challenge high payoff, easy difficulty- implement low payoff, hard difficulty- kill low payoff, easy difficulty- possible
waiting losses
idle time of a person, process, or machine waiting for a task to finish or an upstream activity to begin
to calculate cycle time with a rework loop...
if the activity is reworked 80% of the time, divide by 20%. If the activity is reworked 10% of the time, divide by 90%
six sigma as a quality control methodology/ approach
improving a process via reducing defects and improving quality of outputs
process analysis provides
insights on weaknesses and their impact
hold waste
inventory waiting
what is the six sigma numerical goal?
less than 3.4 defects per million (DPM) 0.0003% defect rate
Categories of causes- the 6 Ms
machine method material man measurement milieu
lean applied by itself can result in
making poor products fast
six sigma as a statistical measure
measure of the performance of a process or product (that is, a measure of the process' ability to minimize defects)
customer satisfaction
measured by customer feedback score
product quality
measured by defect rate
three categories of waste
move, hold, over-do
unnecessary movement losses
movement by a person more than required
Business value-adding activities
necessary or useful for the business to operate criteria -is this step requires in order to collect revenue, to improve of grow the business? -would the business suffer in the long-term if this step is removed? -does it reduce the risk of business losses? is it required for compliance? MINIMIZE
fat curve v skinny curve
not capable process v very capable process
WIP (Work in process)
number of cases that are running (started but not yet completed); for example the number of active and unfilled orders in an order to cash process
conducting the modeling task
organize the creation of the process model. the modeling methodology gives guidance for mapping out the process in a systematic way.
issue documentation and impact assessment
pareto chart issue register two-dimensional prioritization: PICK Chart
American productivity and quality control (APQC)
performance measures and benchmarks for processes in the process clarification framework (PCF)
IT Infrastructure Library (ITIL)
performance measures for IT service management processes
supply chain operations reference model (SCOR)
performance measures for supply chain management processes
process owner is usually concerned with
performance, be it high cycle times or high processing times. Also be concerned about common defects and wastes, and compliance with internal policy and external regulations.
automatic discovery weakness
potential quality issue
six sigma focus
problem focused
who is involved in process discovery
process analyst, domain experts
process performance =
process model + performance of each activity
different waves
process redesign slide 5
per instance cost =
processing cost + cost of waste
cycle time =
processing time + waiting time
cycle time efficiency =
processing time / cycle time
Value adding activities
produce value or satisfaction to the customer criteria -is the customer willing to pay for the step? -would customer agree that this step is necessary to achieve their goals? -if step is removed, would customer perceive the end product to be less valuable? MAXIMIZE
roadmap
question-> data extraction -> data analysis -> presentations
six sigma goal
reduce variation
lean goal
remove waste
workshop weakness
requires availability of several stakeholders at the same time
customers are often concerned about...
slow cycle time, defects, lack of transparency, lack of traceability
3 simulation modes
step-by-step one-case multiple-cases
syntactic quality
structural correctness and behavioral correctness
variants analysis
take two event logs (corresponding to two variants of a process) and produce list of differences
in the simplest case a process consists of a sequence of activities on a sequential path
the average cycle time is the sum of the average activity times
process redesign
the creation of a new process (the to-be) that aligns the business with its strategy -must consider the results from a process analysis and then utilize the process modeling techniques to develop an improved process
waste
the elements of a process that add no value to the product or service. Waste only adds cost and time. -points to problems within the system -need to find an address the cause of waste
six sigma as a goal/outcome
the higher the sigma level, the better
The sponsor and other high-level managers are generally concerned with
the strategic alignment of the process and the contribution of the process to key performance indicators. Also concerned about the ability of the process to adapt to evolving customer expectations, competition, and market conditions.
cycle time analysis
the task of calculating the average cycle time for an entire process or process fragment
cycle time
the time between the start and completion of a process instance
resource utilization =
time spent per resource on process work / time available per resource for process work
waiting time
time taken by non-value-adding activities
processing time
time taken by value-adding activities
the devil's quadrangle
time, cost, flexibility, quality. a compromise is often required
how is a simulation used in business?
to determine how many/ how much
performance mining
to find bottlenecks and help answer questions "Why is the process slow?", or "Where do we waste the largest amount of time in a business process?"
conformance checking
to highlight differences between the business process model and what really happens. Help to uncover exceptions.
automated process discovery
to produce a business process model that matches the behavior observed in the event log
move waste
transportation motion
pragmatic quality
understandability and maintainability; usability -how well does the user understand the model
Process modeling quality assurance
validation- semantic quality certification- pragmatic quality verification- syntactic quality
semantic quality
validity and completeness
six sigma reduces
variation and improves quality in outputs
WIP is a form of
waste
processing cost
cost of value-adding activities
weaknesses of document analysis (2)
-outdated material -wrong level of abstraction
observation weaknesses (3)
-potentially intrusive -stakeholders likely to behave differently -only few cases
quantitative process analysis techniques
-quantitative flow analysis -queuing theory -process simulation
interview weakness
-requires sparse time of process stakeholders -several iterations required before signoff
Six Sigma
-statistical measure -goal/ outcome -quality control methodology/ approach (DMAIC)
Document analysis strengths (2)
-structured information -independent from availability of stakeholders
process performance reference models
-supply chain operations reference model (SCOR) -American productivity and quality control (APQC) -IT Infrastructure Library (ITIL)
input measures for simulation
-task duration -variation -resources -costs (per task, per resource) -etc
Qualitative process analysis techniques
-value-added analysis and waste analysis -stakeholder analysis -root-case analysis --cause-effect -why-why -issue documentation and impact assessment --pareto analysis --issue register
Product specification
-what the customers want in terms of product attributes -upper and lower specification limits
disadvantages of simulation
-May require detailed data collection -May oversimplify
process standardization
-Often, a significant variation in output is caused by many people doing the same process in different ways. -Aim to treat all cases equally (as much as possible) -Resources are pooled together
technology/automation
-Physical constraints in a business process may be removed by applying new technology. -Tasks may be automated with technology, e.g.:
Origins of lean
-Toyota production system (TPS) -term lean coined by jim womack in "lean thinking"
observation stregth
-context rich insight into the process
output measures from simulation
-cycle time -costs -bottlenecks -workloads -etc
document analysis
-documents point to existing roles, activities and business objects - may not be process-oriented and trustworthy -could be used to gather information before approaching domain experts
automatic discovery strengths (2)
-extensive set of cases -objective data
observation
-follow directly the processing of individual cases -trace business objects in the course of their lifecycle -active role: no big picture -passive role: participants' bias
workshops
-gather all key stakeholders together -interact to create shared understanding
Simulation does not work with
-inclusive gateways -non interrupting boundary events (simple models only)
process variability
-inherent variation in processes -limits on what can actually be achieved -defines and limits process capability
delivery quality
-on-time delivery rate -cycle time variance
ten basic kaizen principles
1. Discard conventional thinking about production 2. Think of how to do it not why it can't be done. 3. Don't make excuses. Question current practices. 4. Don't seek perfection. Do it right away even for only 50% of target. 5. Correct mistakes immediately 6. Do not spend capital 7. Hardship brings out wisdom 8. Find root causes. Use Why Why and other tools 9. Use the wisdom of the group 10. Kaizen opportunities are infinite
Process Discovery
1. defining the setting 2. gathering information 3. conducting the modeling task 4. assuring process model quality
organizing gathered material (5)
1. identify process boundaries 2. identify activities and events 3. identify resources 4. identify the control flow 5. identify additional elements
six sigma application guidelines
1.Define 2.Measure 3.Analyze 4.Improve 5.Control
lean application guidelines
1.Identify Value 2.IdentifyValue Stream 3.Flow 4.Pull 5.Perfection
value-added analysis
1.decortitate the process into steps 2. classify each step and VA, BVA, NVA
a non-manufacturing definition of lean
A Non-Manufacturing Definition: A philosophy that accelerates the speed of "any" process by eliminating waste in all its forms.
a manufacturing definition of lean
A philosophy that shortens the lead time between the customer order and the shipment by eliminating waste.
inventory losses
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.
defining the setting
assemble a team in a company that will be responsible for working on the process
issue register structure
Can take the form of a table with: • Issue identifier • Short name • Description • Assumptions • Impact: Qualitative and Quantitative • Possible improvement actions Larger process improvement projects may require issue trackers
Discovery and Culture
before starting with process discovery, it is important to understand the culture and sentiment of an organization (open culture vs strictly hierarchical organizations)
capture information once at the source
If a process requires entering the same data more than once, then applying this design principle is appropriate. Remove • Data redundancy • Re-keying • Reconciliation • Errors
business process reengineering
Michael Hammer collected the following insights: • No successful organization relies on piecemeal improvement of what was already carried out. Rather, strong ambition leads to huge rewards • While information technology is a crucial asset in redesigning business processes, it is necessary to go beyond pure automation of what is already being done
gathering information
build an understanding of the process. different discovery methods can be used to acquire information in the process
overproduction losses
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
outsourcing
can free the organization to focus on other more strategic processes that add greater value to the organization
Root-cause analysis
cause-effect (fishbone) diagram why-why diagram
"All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value-adding wastes"
Taiichi Ohno, toyota
cost of waste
cost of NVA activities
resource cost
cost of person-hours employed per process instance
process mining
The use of exploratory data analysis to provide insights about a business process and identify potential improvements
material cost
cost of tangible or intangible resources used per process instance
little's formula
WIP= lambda X Cycle time
unnecessary processing losses
Work or activities that does not add value to the customer or meet the customer needs.
Process Mining
about discovering processes based on logs available in most IT systems • An advantage is that event logs capture the execution of a process very accurately • A disadvantage is that some log information can be misleading
the redesign orbit
ambition -transactional -transformational nature -analytical methods -creative methods perspective -inward-looking -outward-looking
simulation
an imitation of a system as it progresses through time
defect losses
any form of correction needed in a process flow (ex: data entry errors, incomplete paperwork, damaged cases)
lambda
arrival rate
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 project manager • Process consultant • Customer service representative
transformational methods
• Aim to achieve breakthrough innovation • Put into question the fundamental assumptions and principles of the existing process structure
process model canvas
• Allows firms to reason about the value proposition behind their business processes.
why does waste occur
• Because we do not ask the question Whyoften 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?
outward-looking methods
• Consider the process from an outsider's perspective • Are driven by external opportunities and developments
inward-looking methods
• Consider the process from the perspective of the internal organization • Draw fromobje
parallelism
• More parallelism leads to improved performance • Reduction of waiting times • Better use of capacity • IT infrastructures which allow for the sharing of data and work enable parallelism
resequencing
• Order tasks based on cost/effect • Put "knock-out checks" first -identify problems early • Postpone expensive tasks until the end
redesign 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 • Outsourcing • Technology / Automation
task elimination
• Print • Copy • Archive • Store • More generally: non-value adding (NVA) activities
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.
creative methods
• Rely on human creativity and ingenuity • Embrace group dynamics
transactional methods
• Seek to identify problems and resolve them incrementally, one step at a time • Do not challenge the current process structure
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
analytical methods
• Tend to have a strong mathematical and quantitative focus • Embrace tools and technology
pareto chart
• Useful to prioritize a collection of issues • Bar chart where the height of the bar denotes the impact of each issue • Bars sorted by impact • Superposed curve of cumulative percentage impact
sic sigma assumptions
•A problem exists •Figures and numbers are valued •System output improves if variation in all process inputs is reduced
process participants are concerned about...
•High resource utilization, working under stress. •Defects arising from handoffs in the process and wastes.
the essence of six sigma
•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)
why use simulation
•To obtain a better understanding and identify needed improvements to a system •To compare and contrast several scenarios, which can be developed quickly and cheaply
lean assumptions
•Waste removal will improve business performance •Many small improvementsare better than system analysis
