Business process modeling, simulation, and design

Cover......Page 1
Brief Contents......Page 5
Contents......Page 6
Preface......Page 12
 1.1 What Is a Business Process?......Page 16
  1.1.1 Process Types and Hierarchies......Page 18
  1.1.2 Determinants of the Process Architecture......Page 20
  1.1.3 Workflow Management Systems......Page 24
 1.2 The Essence of Business Process Design......Page 25
  1.2.1 Incremental Process Improvement and Process Design......Page 27
  1.2.2 An Illustrative Example......Page 28
  1.3.2 Business Process Design and Strategy......Page 31
 1.4 Why Do Inefficient and Ineffective Business Processes Exist?......Page 33
 1.5 Summary......Page 34
 1.6 References......Page 35
 1.7 Discussion Questions and Exercises......Page 36
 2.1 Process Management and the Power of Adopting a Process View......Page 39
  2.1.1 Phase I: Initialization......Page 41
  2.1.2 Phase II: Definition......Page 45
  2.1.3 Phase III: Control......Page 46
  2.1.4 An Illustrative Example: Managing a Document Distribution Process......Page 48
 2.2 Six Sigma Quality Programs......Page 53
  2.2.1 Six Sigma Definitions......Page 54
  2.2.2 The Six Sigma Cost and Revenue Rationale......Page 55
  2.2.3 Six Sigma in Product and Process Design......Page 58
  2.2.4 The Six Sigma Framework......Page 59
  2.2.5 Concluding Remarks: Key Reasons for the Success of Six Sigma......Page 63
 2.3 Business Process Reengineering......Page 64
  2.3.1 Reengineering and Its Relationship with Other Earlier Programs......Page 65
  2.3.2 A Brief History of Reengineering......Page 68
  2.3.3 When Should a Process Be Reengineered?......Page 69
  2.3.4 What Should Be Reengineered?......Page 71
  2.3.5 Suggested Reengineering Frameworks......Page 74
 2.4 Revolutionary Versus Evolutionary Change......Page 77
 2.5 Summary......Page 79
 2.6 References......Page 81
 2.7 Discussion Questions and Exercises......Page 82
Chapter 3: A Simulation-Based Framework for Business Processes Design Projects......Page 85
 3.1 Step 1: Case for Action and Vision Statements......Page 87
 3.2 Step 2: Process Identification and Selection......Page 89
 3.4 Step 4: Evaluation of Design Enablers......Page 91
  3.4.1 Example: The Internet-Enabling Change at Chase Manhattan Bank......Page 93
  3.4.2 Example: New Technology as a Change Enabler in the Grocery Industry......Page 94
  3.5.1 Understanding the Existing Process......Page 96
  3.5.2 Understanding the Customer......Page 98
 3.6 Step 6: Creative Process Design......Page 99
  3.6.1 Benchmarking......Page 100
  3.6.2 Design Principles......Page 102
 3.7 Step 7: Process Modeling and Simulation......Page 108
 3.8 Step 8: Implementation of the New Process Design......Page 111
 3.9 Summary......Page 112
 3.10 References......Page 113
 3.11 Discussion Questions and Exercises......Page 114
Chapter 4: Basic Tools for Process Design......Page 116
 4.1 Process Flow Analysis......Page 117
  4.1.2 Process Flow Diagrams......Page 120
  4.1.3 Process Activity Charts......Page 124
  4.1.4 Flowcharts......Page 125
  4.1.5 Service System Mapping......Page 127
 4.2 Workflow Design Principles and Tools......Page 130
  4.2.1 Establish a Product Orientation in the Process......Page 132
  4.2.2 Eliminate Buffers......Page 133
  4.2.3 Establish One-at-a-Time Processing......Page 134
  4.2.4 Balance the Flow to the Bottleneck......Page 135
  4.2.5 Minimize Sequential Processing and Handoffs......Page 139
  4.2.6 Establish an Efficient System for Processing Work......Page 140
  4.2.7 Minimize Multiple Paths Through Operations......Page 144
 4.3 Additional Diagramming Tools......Page 145
 4.4 From Theory to Practice: Designing an Order-Picking Process......Page 147
 4.5 Summary......Page 148
 4.7 Discussion Questions and Exercises......Page 149
 5.1 Business Processes and Flows......Page 154
  5.1.1 Throughput Rate......Page 156
  5.1.2 Work-in-Process......Page 157
  5.1.4 Little's Law......Page 159
  5.2.1 Cycle Time Analysis......Page 161
  5.2.2 Capacity Analysis......Page 166
  5.3.1 Cycle Time Reduction......Page 170
  5.3.2 Increasing Process Capacity......Page 172
 5.4 Theory of Constraints......Page 173
 5.6 References......Page 178
 5.7 Discussion Questions and Exercises......Page 179
Chapter 6: Introduction to Queuing and Simulation......Page 186
 6.1 Queuing Systems, the Basic Queuing Process,and Queuing Strategies......Page 189
  6.1.1 The Basic Queuing Process......Page 190
  6.1.2 Strategies for Mitigating the Effects of Long Queues......Page 194
 6.2 Analytical Queuing Models......Page 195
  6.2.1 The Exponential Distribution and Its Role in Queuing Theory......Page 197
  6.2.2 Terminology, Notation, and Little's Law Revisited......Page 202
  6.2.3 Birth and Death Processes......Page 206
  6.2.4 The M/M/1 Model......Page 215
  6.2.5 The M/M/c Model......Page 220
  6.2.6 The M/M/c/K Model......Page 224
  6.2.7 The M/M/c/oo/N Model......Page 227
  6.2.8 Queuing Theory and Process Design......Page 232
 6.3 Introduction to Simulation......Page 237
  6.3.1 Simulation Models......Page 239
  6.3.2 Discrete Event Simulation......Page 241
  6.3.3 Spreadsheet Simulation of a Single-Server Process......Page 243
 6.4 Summary......Page 246
 6.6 Discussion Questions and Exercises......Page 247
Chapter 7: Introduction to Extend......Page 255
 7.1 Extend Elements......Page 257
 7.2 Extend Tutorial: Basic Queuing Model......Page 259
 7.3 Basic Data Collection and Statistical Analysis......Page 262
 7.4 Adding Randomness to Processing Times......Page 266
 7.5 Adding a Second Underwriting Team......Page 269
 7.6 Adding a Labor Pool......Page 271
 7.7 Customizing the Animation......Page 273
 7.8 Calculating Costs and Using the Flowchart View......Page 275
 7.11 Discussion Questions and Exercises......Page 278
 8.1 General Modeling Concepts......Page 282
  8.1.2 Length of a Run and Number of Runs......Page 283
  8.2.1 Generating Items......Page 285
  8.2.3 Prioritizing Items......Page 289
  8.3.1 Blocking......Page 290
  8.3.3 Reneging......Page 291
  8.3.4 Priority Queues......Page 293
  8.4.1 Multiple Paths......Page 295
  8.4.2 Parallel Paths......Page 298
 8.5 Processing Time......Page 300
 8.6 Botching......Page 302
 8.7 Resources......Page 304
 8.8 Activity-Based Costing......Page 306
 8.9 Cycle Time Analysis......Page 309
 8.10 Model Documentation and Enhancements......Page 310
 8.11 Process Design Case: Software Support......Page 313
  8.11.1 Modeling, Analysis, and Recommendations......Page 314
 8.12 Process Design Case: Hospital Admissions......Page 317
 8.14 References......Page 327
 8.15 Discussion Questions and Exercises......Page 328
  8.16.2 X-Ray Process3......Page 333
  8.16.3 Adoption Process in a Humane Society......Page 335
  8.16.4 Internet Ordering Process......Page 337
  8.16.5 An Assembly Factory......Page 338
Chapter 9: Input and Output Data Analysis......Page 341
 9.1 Dealing with Randomness......Page 342
 9.2 Characterizing the Probability Distribution of Field Data......Page 343
  9.2.1 Goodness-of-Fit Tests......Page 346
  9.2.2 Using Stat::Fit to Fit a Distribution......Page 352
  9.2.3 Choosing a Distribution in the Absence of Sample Data......Page 354
 9.3 Random Number Generators......Page 358
  9.3.1 The Runs Test......Page 360
 9.4 Generation of Random Variates......Page 361
 9.5 Analysis of Simulation Output Data......Page 364
  9.5.1 Nonterminating Processes......Page 366
  9.5.2 Terminating Processes......Page 368
  9.5.3 Confidence Intervals......Page 371
  9.5.4 Sample Size Calculation......Page 376
  9.5.5 Hypothesis Testing......Page 377
 9.8 Exercises......Page 381
 Cases......Page 386
 10.1 Introduction to Optimization by Evolutionary Computation......Page 390
 10.2 Optimizing Processes......Page 392
 10.3 Process Optimization Tutorial......Page 396
 10.4 Alternative Optimization Models......Page 402
 10.6 References......Page 403
  10.7.1 Staffing a Process with Multiple Job Types......Page 404
  10.7.2 Loan Applications......Page 405
Chapter 11: Process Benchmarking with Data Envelopment Analysis......Page 407
 11.1 Graphical Analysis of the Ratio Model......Page 410
  11.1.1 Efficiency Calculation......Page 411
 11.2 Linear Programming Formulation of the Ratio Model......Page 414
 11.3 Excel Add-in for Data Envelopment Analysis......Page 416
 11.4 DEA in Practice......Page 421
 11.7 Discussion Questions and Exercises......Page 423
Appendix: Statistical Tables......Page 426
Index......Page 430