Transcript Process Analysis & Reengineering

Process Analysis
&
Reengineering
2002.4.2
MAI Lab. Seminar
Park Jung Joon
Process Analysis & Reengineering
Armen Zakarian*, Andrew Kusiak**
* Department of Industrial and Manufacturing Systems Engineering,
University of Michigan, Dearborn, Dearborn, MI 48128-1491, USA
** Department of Industrial Engineering, Intelligent Systems Laboratory,
The University of Iowa, Iowa City, IA 52242-1527, USA
Computers & Industrial Engineering 41(2001) 135-150
Revised 2 May 2001; accepted 27 June 2001.
Contents
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Introduction
IDEF methodology
Stream analysis approach
Analysis methodology
Dynamic analysis of processes
Conclusions
Introduction
 Process reengineering is concerned with the redesign of
strategic, value adding processes, systems, policies, and
organizational structures to optimize the processes of an
organization
 Hammer* estimated that 50¯70% of companies that
attempt to reengineer their processes fail
 To increase the likelihood of a successful change, a
comprehensive modeling methodology is required
*Hammer, M.S. and Champy, J.Reengineering the corporation: a manifesto for business
revolution (1993)
Table.1 The differences between process improvements and process reengineering
 To perform the change process successfully,
– Be flexible to be easy to learn
– Ask a question all aspects of processes and their activities, both
as they exist now, and later
– Provide a mechanism to identify and evaluate the impact of the
process changes incorporated as well as an alternative vision for
process being reengineered
To perform analysis and reengineering of processes
Structured and unified approach is required
Framework based on
IDEF methodology
Stream analysis approach
Dynamic simulation
Methodologies & Tools
 Process modeling methodologies
– CIM-OSA methodology (European and Beekman)
– O-O Modeling Methodology ( Kim, Kim & Choi, 1993)
– MOSYS software tool ( Mertins, Rabe & Stiegennnroth, 1993)
– Petri Nets ( Peterson, 1981)
– IDEF (US Air Force 1981)
 Process modeling tools
– ARIS (Germany)
– FirstStep (Canada)
– PrimeObjects (Italy)
– TEMAS (Switzerland)
IDEF(ICAM DEFinition)
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IDEF0 (IDEF Function Modeling)
IDEF1 (IDEF Information Modeling)
IDEF1X (IDEF Data Modeling)
IDEF2 (IDEF Dynamics Modeling)
IDEF3 (IDEF Process Modeling)
Use
 IDEF4 (IDEF Object-Oriented Design)
 IDEF5 (IDEF Ontology Description Capture)
IDEF methodology
Fig. 1 IDEF activity box and interface arrows
 Inputs (I) enter the box from the left, are transferred by the function,
and exit the box to the right as an output (O)
 Control (C) enters the top of the box and influences or determines the
function performed
 Replacing activity of the IDEF3 block in Fig. 1 with a function and
entering a mechanism (M) interface from the bottom of box results in
an IDEF0 block
IDEF Example (1/3)
Fig.2 IDEF0 Function Box & Interface Arrows
Fig.3 IDEF3 Process Description Diagram
IDEF Example (2/3)
Fig.4 IDEF1 Diagram
IDEF Example (3/3)
Fig.5 Organization of the IDEF4 Model
Stream diagnostic chart
 In order to improve a process, it is important to identify
the core problems causing its ineffective functioning
 Road map is required
– To guide the diagnosis of process deficiencies, to track down the
core problem issues, and to set the stage for effective changes of
the process
 Stream analysis* approach
– Be based on the systems theory and it assumes that a process is
open, consisting of subsystems, each including a stream of
variables, with many of these variables connected either causally
or merely relationally within the same stream or across streams
*Porras, J.I. Stream analysis: a powerful way to diagnose and manage organizational
change (1990)
Fig.6 Stream diagnostic chart
Fig.7 Stream analysis and simulation applied to process models
 The stream analysis approach is used for analysis, diagnosis, and
management of process changes represented with an IDEF3 model
 To evaluate the impact of changes considered, support the process
analysis, and to model performance of the proposed process, a
dynamic simulation is used
Analysis methodology
1. System diagnosis
2. Planning intervention
1. Forming a change management team
2. Collecting data
3. Categorizing problems
4. Identifying interconnections
5. Analyzing the problem chart
6. Formulating an action plan
Illustrative example
Fig.8 IDEF3 model of an R&D project
 Consider the IDEF3 representation of the research and
development (R&D) process in a manufacturing company
(see Fig. 8)
 Assume that the team responsible for management of
large scale R&D projects intends to redesign the project
management process to minimize the time overruns
Fig.9 Stream diagnostic chart corresponding to the IDEF3 model in fig.8
Fig.10 Stream diagnostic chart to the IDEF3 model in fig.8
Fig.11 Modified IDEF3 process model corresponding to the stream
planning chart in Fig.10
Fig.12 The system flow diagram of the IDEF3 process model in Fig.11
represented with the notation of system dynamics
Dynamic analysis of processes
 DYNAMO modeling language*
 The model represents a set of linked differential equations
describing a closed loop feedback system
 Assumption
– Project is divided into 45,000 tasks and the required completion
date of the project is 30 months
– Average person productivity is 30 tasks/person/month
– Management wants to determine the optimal level of the initial
personnel thus resulting in less hiring/firing and allowing
completion of the project on time
*Richardson, G.P. and Pugh, A.L. Introduction to system dynamics modeling with
DYNAMO (1991)
Fig.13 Simulation output for the initial level of PERSONNEL=10
Fig.14 Simulation output for the initial level of PERSONNEL=110
Fig.15 Simulation output for the initial level of PERSONNEL=50
Conclusion
 Comprehensive modeling tool
 Allow easy integration of IDEF3 methodology with the
dynamic simulation approach
 The significance of the results presented in the paper
arises from the fact that many companies*
*Lockheed-Martin, General Motors, Rockwell International, are using IDEF for
representing their processes
Supply chain reengineering using a core process
analysis matrix and object-oriented simulation
S. Wesley Changchien, and Hsiao-Yun Shen
Department of Information Management, Chaoyang University of Technology, 168
GiFeng E. Road, WuFeng, Taichung County, Taiwan, ROC
Information and Management 39(2002) 345-358
Revised 13 April 2000; accepted 16 March 2001
Contents
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Introduction
SCM & BPR
Inter-organizational relations
Approach
A case study of a motorcycle manufacturer
Discussions and conclusions
Introduction
 Today, companies face severe competitive challenges
 The agility of a company's response to customer demand
 Supply chain management (SCM)
 But, Companies to rethink the way they perform
operations
 Business process reengineering (BPR)
SCM & BPR
 Both need fundamental rethinking and consideration of
strategies and are process-based
 Also they generally reduce the duration of the processes
 Information technology is used as a catalyst for both
Inter-organizational relations(1/2)
 Virtual organization
– One of the advantages of forming a virtual organization is its
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flexibility
Creation or assembly of new production resources very quickly
Creation or assembly of new productive resources frequently and
concurrently
Access to a wider range of world-class competencies
Information system + Computer Network
Inter-organizational relations(2/2)
 Strategic alliances ( R.M. Kanter* , eight I's criteria)
– Individual excellence
– Important
– Interdependence
– Investment
– Information
– Integration
– Institutionalization
– and Integrity
* R.M. Kanter, Collaborative advantage. Harvard Business Review
72 4 (1994)
Approach - BPR framework
Fig.1 A proposed business process reengineering framework
7 steps in BPR framework
1.
2.
3.
4.
5.
6.
7.
Creating vision
Identifying core processes to be redesigned -> CPAM*
Analyzing current core processes -> OOS
Designing for innovation -> IT structure process
Evaluating the new processes -> OOS
Selecting the best -> MCDM**
Transforming and implementing the resulting design
* CPAM(Core process analysis matrix)
** MCDM(Multi-criteria decision-making method)
The core process analysis matrix(CPAM)
< HOWs >
< WHATs >
Customer relationship
Customer service
Demand
Order fulfillment
Manufacturing flow
Procurement
Development &
commercialization
Strategic View
Function View
Logistics View
Fig. 2. The
Information
- structure of core process analysis matrix (CPAM)
Management view
 WHATs criteria and viewpoints affecting business vision
 HOWs candidate business processes
 WHYs weighting factors on WHATs
1. The relative evaluation value
2. The adjusted criteria (WHATs) importance
 WHATs versus HOWs
 Target Mix
–
An index of importance for each business process can next be
calculated
1. The raw importance index
–
where CI is criteria importance and CO is the correlation
between business processes and perspectives
2. The importance index for business process
*Strong 9
Medium 5
Weak 1
Table 1. An example of CPAM (by a group member) associated with
seven processes and four criteria views
Object-oriented simulation framework
 A system consists of objects and processes in accordance
with business rules
– The system component perspective describes the static, structural
components of the system
– The system workflow perspective represents the processes during
system execution
– The system control perspective describes dynamic system state
changes
 The UML notation is used for implementing the
simulation modeling method
O-O Modeling Method
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Step 1 - Initialize objects in the system
Step 2 - Put objects into the object list ordered by their time attribute
Step 3 - Get the most recent object from the object list
Step 4 - Check its type
Step 5 - Process the object and perform tasks according to its type
Step 6 - Delete the processed object or add it into the object list, if
necessary
 Step 7 - If needed, create new objects and go to Step 2
 Step 8 - Check the condition for termination. If not termination, go to
Step 3
 Step 9 - Terminate
Case study of motorcycle manufacturer
 Motorcycle manufacturer in Taiwan
 Companies face severe competitive challenges
– Customer demand
– Cost Reduction, Quality improvement, Competitors…
 Production management division is the main concern
 This example focuses on Steps 2¯6 of the framework
Fig. 3 The components of a simulation system
Fig. 4 Process described with an activity diagram
Identify core processes (CPAM)
Table 2. Averaged importance for each process
 Group decision making method
– Product Development
– Procurement
– Demand Management
Analyze current core processes
 Collected data on one specific motorcycle model
 A decision making group is then formed of people from
the production and marketing divisions
 Demand Management – Forecasting activity
– Mean absolute difference (MAD) between market sales and
manufacturer forecasting is 209 units
– MAD between manufacturing forecasting and sales to franchisee
is 156 units
 Procurement - Procurement process
Design innovation
 Forecasting activity
– Abandoning the old multi-stage forecasting process
– Moving average
– Exponential Smoothing
– Factors decomposition
– Bayesian methods
 Procurement process
– The original monthly procurement policy was changed to bi-
weekly procurement
– Quick response by adjusting purchasing orders or shortening the
cycle time of the joint meeting during the procurement process
Evaluate new processes
Fig. 5 MADs for current process and a number of forecasting methods
Fig. 6 Simulation data with exponential smoothing forecasting and
real market demand (normal distribution) per month during 5 years
Innovation - the procurement processes
 Policies
1. Current procurement
2. Adjusting orders in the current period(delay/cancel)
3. Shortening the cycle time of production¯marketing joint meeting
and purchasing
Fig. 7 Cost impacts for current procurement process and two new
policies at current safety stock level
Select a new process
 The manufacturer next considered the implementation
cost, the applicability of the process, and whether
suppliers could accommodate the new process
 An appropriate multi-criteria decision making method
was required
 Let A={A1,A2,...,An} be a set of alternatives and
C={C1,C2,...,Cm} be a set of criteria characterizing the
decision situation. Moreover, W={w1,w2,...,wm} is a set
of weights that indicates the relative importance of
criteria set C
 The universe of discourse, U, is a finite set of fuzzy
numbers within [0, 1] ; They are used to express an
imprecise concept or level.
 1. Universe of discourse domainLet
 2. Membership functions for u
 for k=2, 3, 4, 5, 6
Fig. 8 Membership function for universe of discourse*
*E. Triantaphyllou and C.T. Lin
Development and evaluation of five fuzzy multi-attribute decision-making methods (1996)
Fig. 9 Membership functions of the two alternatives of the new
procurement processes according to the fuzzy approach.
BPR cycle focusing on strategic alliance
 New process that shortens the purchasing and production¯marketing
cycle time to 2 weeks
 The order sharing policies for a virtual organization imply
1. All orders are allocated to companies on the basis of equal capacity
utilization (policy 1)
2. All orders are allocated to companies on the basis of predefined
percentages (policy 2)
3. Each order is first allocated to the company that originally received the
order. If that company's capacity is inadequate, the excess portion is
reallocated to a company that has the least current capacity utilization
(policy 3)
4. If a company capacity is inadequate, the excess portion of the order is
reallocated to a company that has the least current accumulated capacity
utilization (policy 4)
Table 3. Comparisons of capacity utilization
Table 4. Comparisons of lost quantities
Discussions and conclusions
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BPR framework
CPAM & OOS schema
Systematic approach for industrial practice
This is expected to reduce the high failure rate of BPR
projects.