1、1,A Simulation Based Framework for Business Process Design Projects,Chapter 3Business Process Modeling, Simulation and Design,2,Overview,The Overall Framework Step 1: Case for Action and Vision Statement Step 2: Process Identification and Selection Step 3: Obtain Management Commitment Step 4: Evalua
2、te Design Enablers Step 5: Acquire Process Understanding Step 6: Creative Process Design Benchmarking Design Principles Step 7: Process Modeling and Simulation Step 8: Implementation of the New Process Design,3,A Simulation Based Framework for BPD Projects,4,A clear message about the need for change
3、 and where the change is going to take us is necessary for successfully selling the redesign concept to the companys employeesCase for Action Here is where we are as a company and this is why we cannot stay here Vision Statement This is what we as a company need to become Should include both quantit
4、ative and qualitative statements,Step 1: Case for Action and Vision Statements,5,Case for Action and Vision Statements (II),We are disappointed by the length of time we require to develop and register drugs in the United States and in major international markets.Our leading competitors achieve signi
5、ficantly shorter development cycles because they have established larger-scale, high-flexible, globally integrated R&D organizations that operate with a uniform set of work practices and information systems.The competitive trend goes against our family of smaller, independent R&D organizations, whic
6、h are housed in several decentralized operating companies around the world.We have strong competitive and economic incentives to move as quickly as possible toward a globally integrated model of operation. Each week we save in the development and registration process extends the commercial life of o
7、ur patent protection and represents, at minimum, an additional $1 million in annual pretax profit for each drug in our portfolio.,Example: Case for action in a pharmaceutical company,6,Vision Statement This is what we as a company need to become Should include both quantitative and qualitative state
8、ments Need not be excessively long but should not be simplistic,Case for Action and Vision Statements (III),7,Case for Action and Vision Statements (IV),We are a worldwide leader in drug development.We have shortened drug development and registration by an average of six months. We are acknowledged
9、leaders in the quality of registration submissions. We have maximized the profit potential of our development portfolio.We have created, across our operating companies, a worldwide R&D organization with management structures and systems that let us mobilize our collective development resources respo
10、nsibly and flexibly.We have established uniform and more disciplined drug development, planning, decision-making, and operational processes across all sites. We employ innovative technology-based tools to support our work and management practices at all levels and between all R&D sites. We have deve
11、loped and implemented common information technology architecture worldwide.,Example: Vision Statement in a pharmaceutical company,8,Process selection is critical for the success of a design project Core processes have the highest impact on overall performance but are also more costly and risky to ch
12、ange The implementation tactic cannot be ignored, even due to budget constraints Useful criteria for prioritization of projects are: Dysfunction Importance Feasibility Other relevant screening issues/questions are: What are the projects scope and costs involved? Can a strong and effective team be fo
13、rmed? Is it likely to obtain strong management commitment? Can other programs (e.g. continuous improvement) be used instead? Is the process obsolete or the technology outdated?,Step 2: Process Identification and Selection,9,Top management must set the stage both for the design project and the subseq
14、uent implementation Without top management support the improvement effort is bound to fail The more profound and strategic the change is the more crucial the top management support becomes,Step 3: Obtaining Management Commitment,Commitment assumes understanding and cannot be achieved without educati
15、on People are more likely to be fearful and resisting change if there is a lack of direction and they do not understand the implications of the change Occurrence of “resisting change” issues is particularly prevalent in rapid revolutionary change scenarios,10,New (information) technology is an essen
16、tial design enabler but could also reinforce old ways of thinking Automation redesign Do not look for problems first and then the technology to fix them Evaluating new technology needs inductive thinking New technology should not be evaluated within the structure of the existing process New technolo
17、gy enables us to break old rules and compromises To avoid the automation trap the question to ask is: How can new technology enable us to do new things or to do things in new ways?,Step 4: Evaluation of Design Enablers,11,Technology as a Mechanism to Break Rules and Compromises,12,Subtle difference
18、between redesigning an existing process and designing a new currently non-existing process In both cases we need to understand the purpose of the process and what the customers desire from it If the process exists, we need to understand what it is currently doing and why it is unsatisfactory Busines
19、s Process Benchmarking may be a useful tool To gain process understanding To inspire creative new designs,Step 5: Acquiring Process Understanding,13,Questions the design team needs to answer What is the existing process doing? How well does it perform? What are the critical issues that impact the pr
20、ocess performance? The redesign team must understand the process but should not overanalyze it in order to avoid “analysis paralysis” Becoming so familiar with the process it is impossible to think of new ways of doing it Essential activities for building process understanding Configure the redesign
21、 team Build a high level process map Test the initial scope and scale Identify the process owner,Understanding the Existing Process,14,Configure the redesign team A mix of business insiders (managers and workers directly involved in the current process) and business outsiders (consultants and employ
22、ees not involved in the process) Build a high level process map Neither a low level flow chart nor an organizational chart Shows interactions between sub-processes, not the flow of data Focuses on customers and business outcomes Objectives1. Build common understanding 4. Use a cross functional vocab
23、ulary2. Highlight critical sub-processes 5. Test initial scope and scale3. Identify key interfaces 6. Pinpoint redundancies and waste,Activities for Building Process Understanding (I),15,High Level Process Map for a Telecom Company,Capacity Provisioning,Service Assurance,Markets & Planning,Local Net
24、work Operations,Mass Markets Service Delivery,Customer Transactions and Billing,Customers,Carrier Service Delivery,16,3. Test the initial scope and scale Self examination Environmental scanning/benchmarking Customer visits 4. Identify the process owner The person that will take responsibility and be
25、 accountable for the performance of the new process,Activities for Building Process Understanding (II),17,Understanding the Customer,The customer end is the best place to start understanding a business process What are the customers real requirements? What do they say they need and what do they real
26、ly need? What problems do they have? What do they do with the process output?The ultimate goal with a business process is to satisfy the customers real needs in an efficient way!,18,Creative Process Design (I),Designing new processes is more of an art than a science Cannot be achieved through a form
27、alized methodMost existing processes were not designed; they just emerged as new parts were added iteratively to satisfy immediate needsThe end result of any design is very much dependent on the order in which information becomes available Inefficient processes are created when iterative design meth
28、ods are applied,19,Illustration Process Evolution (I),Two pieces of plastic are given to you with instructions to arrange them in an easily described shape,20,Illustration Process Evolution (II),Then a third piece is added still the objective is to build a simple shape,21,Illustration Process Evolut
29、ion (III),Two more pieces are added, but very few people are able to incorporate these and still obtain a simple shape,?,22,Illustration Process Evolution (IV),Considering the pieces independently of the sequence by which they appear leads to a much better solution!,23,Benchmarking,Comparing the fir
30、ms/processs activities and performance with what others are doing In the same company, in the same industry or across industries Every benchmarking relationship involves two parties The initiator firm who initiates contact and observes (the pupil) The target firm (or benchmark) who is being observed
31、 (the master) Fruitful benchmarking relationships are usually characterized by reciprocity Two basic benchmarking purposes To assess the firms/processs performance relative to the competition identify performance gaps and goals To stimulate creativity and inspire innovative ideas for how to do thing
32、s better, i.e. improve process designs & process performance For BPD projects both purposes are relevant,24,Business Process Benchmarking (I),Focus on how things are done Typically the most involved type of benchmarking The underlying idea is to learn and be inspired by the best The best in a certai
33、n industry (best-in-class benchmark) The best across industries (best-of-the-best benchmark) Generally, the further away from the firms own industry that the design team goes Higher potential for getting breakthrough design ideas More difficult to identify and translate similarities between processe
34、s After choosing a target firm a good starting point for a business process benchmarking effort is the 5w2h framework (Robinson 1991) Can also be used to understand an existing process to be redesigned,25,Business Process Benchmarking (II),The 5w2h framework,26,Design Principles,General people-orien
35、ted and conceptual process design principles,Coordination of activities, simplification of flows, elimination of waste and rework,27,Organize work around outcomes not tasks Focus on horizontal integration of activities Eliminates unnecessary handoff and control steps Process complexity is reduced wh
36、ile activity complexity grows This integration approach often referred to as case management Let those who use the output perform the process Work should be carried out where it makes most sense to do it Risk of coordination inefficiencies due to excessive delegation decreases Merge information proc
37、essing and data gathering activities The people collecting the data should also process it into information Reduces the risk of errors and incorrect information 4. Capture information once at the source Reduces costly reentry and frequency of erroneous data Speeds up the process, increases the quali
38、ty of information and reduces costs,Ten Conceptual Design Principles (I),28,5. Put the decision point where the work is performed and build control into the process Case management compresses processes horizontally and employee empowerment compresses them vertically Workers are taking over previous
39、management responsibilities Treat geographically dispersed resources as though they were centralized IT breaks spatial compromises through virtual co-location Geographically disbursed resources should not constrain the design team to only consider decentralized approaches Link/coordinate parallel ac
40、tivities instead of just integrating their results If parallel activities are operated independently operational errors are not detected until the outcomes are integrated Reduces the amount of rework,Ten Conceptual Design Principles (II),29,8. Design the process for the dominant flow not for the exc
41、eptions Reduces the risk of fragmentation and overly complex processes with inherent coordination problems 9. Look for ways to mistake-proof (or fail-safe) the process Design so that certain critical errors cannot occur Mistake-proofing = Poka Yoke Examining interactions to avoid sub-optimization By
42、 neglecting interactions, isolated improvements to sub-processes will lead to sub-optimal solutions Known in systems theory as “disjointed incrementalism”,Ten Conceptual Design Principles (III),30,Stems from the field of industrial engineering Successfully used for designing manufacturing systems fo
43、r decades,Seven Workflow Oriented Design Principles,31,Conceptual process designs need to be tested before they are implemented in full scale Pilot projects or process modeling techniques Business processes are often too complex and dynamic to be analyzed only with simple tools like flowcharts and s
44、preadsheets Discrete event simulation is a powerful and realistic tool to complement the more simplistic methods Allows exploration of the redesign effects without costly interruptions of current operations Helps reduce the risks inherent in any design/change project Compared to pilot projects simul
45、ation is faster and cheaper Simulation not good for capturing soft people issues and attitudes Simulation and pilots complement each other,Step 6: Process Modeling and Simulation (I),32,A discrete event simulation model mimics the real world but in compressed time Focus only on events when the state
46、 of the system changes and skips the time between these events Basic steps in evaluating a process design through discrete event simulation Building the simulation model Running the simulation Analyzing performance measures Evaluation of alternative scenarios,Process Modeling and Simulation (II),33,
47、Advantages with discrete event simulationPromotes creativity by enabling easy testing of ideas Captures system dynamics but avoids disturbances of current process Can capture interactions between sub-processes Mitigates the risk of sub-optimization Graphical reporting features promotes better proces
48、s understanding and facilitates communication The quantitative nature brings a sense of objectivity into the picture,Process Modeling and Simulation (III),34,Detailed implementation issues beyond the scope of the design projectHigh level implementation issues need to be considered when selecting a p
49、rocess to design No point in designing a process which cannot be implementedCrucial high level implementation issues Time Cost Improvement potential Likelihood of success,Step 7: Implementation of the Process Design (I),35,Conceptually an implementation strategy can be characterized as revolutionary, evolutionary or on a continuum in between A rapid revolutionary approach tends to require more external resources Regardless of the implementation tactic important factors for a successful implementation are Strong leadership Buy-in from line managers and employees Training of the workforce,
