1: Introduction to Business Process Design

Discussion Questions and Exercises

1.1 Requisition process*: A large company is having trouble processing requisition forms for supplies and materials. Just getting through the initial approval process seems to take forever. Then, the order must be placed, and the supplies and materials must be received and delivered to the correct location. These delays usually cause only minor inconveniences. However, a lack of supplies and materials sometimes stops an entire operation. After one such instance, a senior manager has had enough. The manager wants to know the reason for the excessive delays. The manager also wants to know where to place blame for the problem!

A process analysis is done at the manager's request. The requisition process is bro¬ken down into three subprocesses: (1) requisition form completion and authorization, (2) ordering, and (3) receiving and delivery. The process analysis also reveals that the first subprocess consists of the steps shown in Table 1.3.
a. Classify the activities in this process.
b. Who is the customer?
c. Translate what you think the customer wants into measures of process performance.
d. How is the process performing under the measures defined in part (c)?
e. Comment on the manager's attitude.

TABLE 1.4

Steps in the Receiving-and-Delivery Process

1.2 Receiving-and-delivery process*: The company in exercise 1 has a large manufactur¬ing site that is spread over a large area. You are assigned to study the receiving¬and-delivery subprocess in order to make recommendations to the senior manager for streamlining the process. The subprocess begins with receiving goods on the warehouse loading dock, and it ends with the goods being delivered to the correct location. Before you were assigned to this project, the senior manager had a student intern do a simple process analysis. The manager instructed the student to observe the process and describe the various steps. Also, the student was told to find average processing times for each step in the process. The information collected by the student is summarized in Table 1.4.
a. Classify the activities in this process.
b. Who is the customer?
c. Translate what you think the customer wants into measures of process performance.
d. How is the process performing under the measures defined in part (c)?
e. Comment on the instructions given to the intern by the senior manager in reference to the process analysis.

1.3 Hospital administrative processes*: A director of administration for a large hospital receives some disturbing news. A recent auditor's report states that 28% of all hos¬pital costs are related to administrative costs. The director is determined to lower this figure. She has read some magazine and newspaper articles about business process design and has decided to try it to see if it works. She calls a special off-site meeting. The meeting is held at a luxury hotel, and only senior-level manag¬ers are invited. At the meeting, she presents her concerns. She then states that the purpose of the meeting is to redesign the various administrative processes.

A brainstorming session is conducted to identify potential problems. The prob-lems are then prioritized. The meeting breaks for lunch.
After lunch, everyone works on developing some solutions. A number of high-level process maps are taped to the wall, and the director discusses each of the identified problems. One suggested solution is reorganization. Everyone loves the idea. Instead of 12 major divisions, it is suggested to reorganize into 10. After the meeting is over, the director spends 4 h hammering out the details of the reorganization. She returns to work the next day and announces the reorganization plan. Sitting in her office, she reflects on her first process redesigning efforts. She is pleased.
a. How would you rate the director's redesign project? Would you give her a pay raise?
b. How would you conduct this process redesigning effort?

1.4 Environmental computer models*: An environmental company specializes in devel¬oping computer models. The models display the direction of groundwater flow, and they are used to predict the movement of pollutants. The company's major customers are state and federal agencies. The development of the computer models is a fairly complex process. First, numerous water wells are drilled in an area. Then probes are lowered into each well at various depths. From instruments attached to the probes, a number of recordings are made. Field technicians, who record the data on paper forms, do this. The data consist mostly of long lists of numbers. Back in the office, a data entry clerk enters the numbers into a computer. The clerk typically enters hundreds of numbers at a time. The entered data are then used to develop the computer models.

Recently, the company has experienced numerous problems with data quality. Numerous data entry errors have resulted in the generation of inaccurate models. When this happens, someone must carefully review the entered data. When incor¬rect numbers are identified, they are reentered, and another computer model is gen¬erated. This rework process often must be repeated more than once. Because it takes a long time to generate the models, such errors add considerable cost and time to a project. However, these additional costs cannot be passed on to the customer. Prices for the computer models are based on fixed bids, so the company must pay all rework costs. Alarmingly, rework costs have skyrocketed. On the last two jobs, such addi¬tional costs eliminated almost all profits. The company has decided to fix the prob¬lem. The company's first step has been to hire an expert in data quality.

The consultant makes a series of random inspections. First, the consultant checks the original numbers recorded by the field technicians. They all seem correct. Next, the consultant examines the data entered by the data entry clerks. Numerous transposition errors are identified. Some of the errors are huge. For example, one error changed 1927 to 9127; another changed 1898 to 8198. The con¬sultant proposes some process changes, including adding an inspection step after the computer data entry step. The consultant suggests that someone other than the data entry clerk should perform this inspection. Because each model has hun¬dreds of numbers, the additional inspection step will take some time. However, the consultant can think of no other way to prevent the data entry errors. The proposed process is outlined in Table 1.5.

Table 1.5.

Proposed Process for Environmental Computer Models

Step                                                Description

1     Field technicians record data on paper forms.

2      Data entry clerks then enter the data into a computer.

3      A printout of the database is made and a second group of employees cross-check the data and the original forms.

4      Any necessary corrections are made.

5       The computer model is generated.

The consultant was paid and left for what he described as a "well-deserved vacation" in Hawaii. The company currently is hiring people to staff the third step in the process.
a. What measures should be used to assess the performance of this process?
b. How would the consultant's proposed process perform according to the measures defined in part (a)?
c. Do you agree with the consultant's methodology and improvement strategies?
d. Would you propose a different process?

1.5 Some time ago Toronto Pearson Airport implemented a new process to connect inter¬national flights (e.g., those arriving from Europe) and U.S.-bound flights. The new process was described on connection information cards that were made available to arriving passengers. The card outlined the following nine steps for an "easy and worry-free connection":
a. Complete Canadian and U.S. forms during the flight.
b. Proceed through Canada Immigration/Customs.
c. Follow signage upstairs to baggage claim and pick up your bags.
d. Hand Canada customs card to the customs officer; follow sign for connecting customers.
e. Proceed to the connecting baggage drop-off belt and place your bags on the belt.
f. A frequent shuttle bus to terminal 2 leaves from the departure level (upstairs).
g. Disembark at U.S. Departures; proceed to the carousel behind U.S. check-in coun¬ters ("Connecting to U.S.A.") and pick up your bags.
h. Proceed through U.S. Customs and Immigration.
i. Leave your bags on the baggage belt before going through security to your gate.
Construct a list of activities and include all non-value-adding activities associated with waiting (e.g., waiting for luggage, waiting for an immigration officer, waiting for a shuttle). Estimate the percentage of time passengers spend on value-adding activities versus the time spent on non-value-adding activities. Identify potential sources of errors or additional delays that can result in a hassle to the passengers. Do you expect this process to deliver on the promise of an "easy and worry-free connection"?

1.6 A city council hires a consultant to help redesign the building permit process of the city. After gaining an understanding of the current process, the consultant suggests that the best solution is to create a one-size-fits-all process to handle all building-related applications. What is your opinion about the consultant's solution?

Textbook - BUSINESS PROCESS MODELING, SIMULATION AND DESIGN - SECOND EDITION by Manuel Laguna and Johan Marklund