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Process Analysis

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Title: Process Analysis


1
Process AnalysisReengineering
  • 2002.4.2
  • MAI Lab. Seminar
  • Park Jung Joon

2
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.

3
Contents
  • Introduction
  • IDEF methodology
  • Stream analysis approach
  • Analysis methodology
  • Dynamic analysis of processes
  • Conclusions

4
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 5070 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)

5
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

6
(No Transcript)
7
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)

8
IDEF(ICAM DEFinition)
  • IDEF0 (IDEF Function Modeling)
  • IDEF1 (IDEF Information Modeling)
  • IDEF1X (IDEF Data Modeling)
  • IDEF2 (IDEF Dynamics Modeling)
  • IDEF3 (IDEF Process Modeling)
  • IDEF4 (IDEF Object-Oriented Design)
  • IDEF5 (IDEF Ontology Description Capture)

9
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

10
IDEF Example (1/3)
Fig.2 IDEF0 Function Box Interface Arrows
Fig.3 IDEF3 Process Description Diagram
11
IDEF Example (2/3)
Fig.4 IDEF1 Diagram
12
IDEF Example (3/3)
Fig.5 Organization of the IDEF4 Model
13
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)

14
Fig.6 Stream diagnostic chart
15
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

16
Analysis methodology
  • System diagnosis
  • Planning intervention
  • Forming a change management team
  • Collecting data
  • Categorizing problems
  • Identifying interconnections
  • Analyzing the problem chart
  • Formulating an action plan

17
Illustrative example
Fig.8 IDEF3 model of an RD project
  • Consider the IDEF3 representation of the research
    and development (RD) process in a manufacturing
    company (see Fig. 8)
  • Assume that the team responsible for management
    of large scale RD projects intends to redesign
    the project management process to minimize the
    time overruns

18
Fig.9 Stream diagnostic chart corresponding to
the IDEF3 model in fig.8
19
Fig.10 Stream diagnostic chart to the IDEF3 model
in fig.8
20
Fig.11 Modified IDEF3 process model corresponding
to the stream planning chart in Fig.10
21
Fig.12 The system flow diagram of the IDEF3
process model in Fig.11 represented with the
notation of system dynamics
22
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)

23
Fig.13 Simulation output for the initial level of
PERSONNEL10
24
Fig.14 Simulation output for the initial level of
PERSONNEL110
25
Fig.15 Simulation output for the initial level of
PERSONNEL50
26
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

27
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

28
Contents
  • Introduction
  • SCM BPR
  • Inter-organizational relations
  • Approach
  • A case study of a motorcycle manufacturer
  • Discussions and conclusions

29
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)

30
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

31
Inter-organizational relations(1/2)
  • Virtual organization
  • One of the advantages of forming a virtual
    organization is its 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

32
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)

33
Approach - BPR framework
Fig.1 A proposed business process reengineering
framework
34
7 steps in BPR framework
  • Creating vision
  • Identifying core processes to be redesigned -gt
    CPAM
  • Analyzing current core processes -gt OOS
  • Designing for innovation -gt IT structure process
  • Evaluating the new processes -gt OOS
  • Selecting the best -gt MCDM
  • Transforming and implementing the resulting
    design
  • CPAM(Core process analysis matrix)
  • MCDM(Multi-criteria decision-making method)

35
The core process analysis matrix(CPAM)
lt HOWs gt Customer relationship Customer
service Demand Order fulfillment Manufacturing
flow Procurement Development
commercialization
lt WHATs gt Strategic View Function View Logistics
View Information - Management view
Fig. 2. The structure of core process analysis
matrix (CPAM)
36
  • WHATs criteria and viewpoints affecting business
    vision
  • HOWs candidate business processes
  • WHYs weighting factors on WHATs
  • The relative evaluation value
  • The adjusted criteria (WHATs) importance
  • WHATs versus HOWs

37
  • Target Mix
  • An index of importance for each business process
    can next be calculated
  • The raw importance index
  • where CI is criteria importance and CO is the
    correlation between business processes and
    perspectives
  • The importance index for business process

38
Strong 9 Medium 5 Weak 1
Table 1. An example of CPAM (by a group member)
associated with seven processes and four criteria
views
39
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

40
O-O Modeling Method
  • 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

41
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 26 of the
    framework

42
Fig. 3 The components of a simulation system
43
Fig. 4 Process described with an activity diagram
44
Identify core processes (CPAM)
Table 2. Averaged importance for each process
  • Group decision making method
  • Product Development
  • Procurement
  • Demand Management

45
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

46
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

47
Evaluate new processes
Fig. 5 MADs for current process and a number of
forecasting methods
48
Fig. 6 Simulation data with exponential smoothing
forecasting and real market demand (normal
distribution) per month during 5 years
49
Innovation - the procurement processes
  • Policies
  • Current procurement
  • Adjusting orders in the current
    period(delay/cancel)
  • Shortening the cycle time of productionmarketing
    joint meeting and purchasing

50
Fig. 7 Cost impacts for current procurement
process and two new policies at current safety
stock level
51
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 AA1,A2,...,An be a set of alternatives and
    CC1,C2,...,Cm be a set of criteria
    characterizing the decision situation. Moreover,
    Ww1,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.

52
  • 1. Universe of discourse domainLet
  • 2. Membership functions for u
  • for k2, 3, 4, 5, 6

53
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)
54
Fig. 9 Membership functions of the two
alternatives of the new procurement processes
according to the fuzzy approach.
55
BPR cycle focusing on strategic alliance
  • New process that shortens the purchasing and
    productionmarketing cycle time to 2 weeks
  • The order sharing policies for a virtual
    organization imply
  • All orders are allocated to companies on the
    basis of equal capacity utilization (policy 1)
  • All orders are allocated to companies on the
    basis of predefined percentages (policy 2)
  • 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)
  • 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)

56
Table 3. Comparisons of capacity utilization
57
Table 4. Comparisons of lost quantities
58
Discussions and conclusions
  • BPR framework
  • CPAM OOS schema
  • Systematic approach for industrial practice
  • This is expected to reduce the high failure rate
    of BPR projects.
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