MTAT 03 231MTAT.03.231 Business Process Management ......MTAT 03 231MTAT.03.231 Business Process Management (BPM) (for Masters of ETM) Lecture 4: Process Analysis & Improvement Marlon

MTAT 03 231MTAT.03.231Business Process Management (BPM)

(for Masters of ETM)

Lecture 4: Process Analysis & Improvement

Marlon Dumas

marlon.dumas ät ut . ee

Agenda for TodayAgenda for Today

Ti C t tTime Contents

10.15-11.45 Review of homework

12.15-13.45 Process analysis

13.45-14.30 Lunch break

14.30-16.00 Process analysis (cont.)

16.15-17.45 Process Re-Design

2

Process Analysis

Once I’ve got a model what’s next?Once I ve got a model, what s next?

Analyze:Analyze:– Cycle time

C it tili ti– Capacity, resource utilization– Cost (Activity-Based Costing)– QoS– Risk– …

4

Process Analysis Typical QuestionsWhat processes do we perform?

Process Analysis – Typical Questions

What objectives do the processes have?What value do they generate?Wh t i k b dd d i thi ?What risks are embedded in this process? What are general benchmarks and how close are we?What is the internal benchmark? What is ‘best-in-class’? What constraints exist (e.g. policies, IT, culture etc.)?What are the perceived and actual process problems? What technology is (will be) available?Wh t th t t ti f thWhat are the customers expectations of these processes?

5© M. Rosemann

Process Analysis – Typical Questions

How much do existing processes cost?

(cont.)How much do existing processes cost? How scalable and flexible are processes?How are processes interrelated - horizontally & vertically?H d li ith t t ?How do processes align with strategy?How do existing processes facilitate new strategies?

When will changes be implemented (internal/environment)?

Where are the critical customer interfaces?

Why are the processes executed this way?Why are the processes executed this way?

Who is accountable for these processes?

6© M. Rosemann

Business Process Analysis TechniquesBusiness Process Analysis Techniques• Qualitative analysisy

– Scenario analysis– Cause-Effect-Analysisy– Issue Register– Human Performance Analysis (paper on “AnalyzingHuman Performance Analysis (paper on Analyzing

Activities” in readings list)• Quantitative AnalysisQuantitative Analysis

– Cycle Time Analysis– Capacity AnalysisCapacity Analysis– Queuing Theory– Process Simulation

7

– Process Simulation

Scenario Analysisynot O.K. O.K.

checkingcalculations of

interest

checkingcalculation of

costs

calculationschecked but not

verified

deciding whoinforms the

claimant

decided for theregistrar

decided not forthe registrar

Module 1

informing theclaimant

asking claimantto adjust the

applicationwithin 4 weeks

claimantinformed and

asked

registrar giveswriting office

order tocompose a letter

letter composed

transmitting theletter and order

to the courtsoffice

transmitted tothe courts office

adding the orderto the file

transmitting theletter to the post

office

issueingpayment order

informing thedefendand about

his options

payment orderisssued

defendandinformed

giving order tothe courts officeto serve payment

order

order given order not given

registrar

writing office

courts office

registrar

office

order added letter transmitted

sending letter toclaimant

letter sent toclaimant

comissioning toserve the

payment order

served by thepost

served by thepolice

checking ifserving wassuccessful

sendingobjection to the

post officedefendand

objectionreceived by the

post office


courts officepost office

objection sent

adding objectionto the file

transmittingobjection to

registrarcourts office

Module 2

successfulincorrect/incomplete document

transmitting theserving

document to thecourt

servingdocument

transmitted

examining theserving

document

registrar

servingdocumentexamined

giving order todemand a

repeated servingto the post

informing theparties (module1)

serving has notbeen possible

informingclaimant&ask him toadjust the direction

of the defendandwithin 3weeks

registrar

objection added transmitted toregistrar

informing claimantabout objection andhis options to react

(Module1)

claimantinformed

checking if claimantwants to engage the

ordinary legalprocedure

claimantinformed

using Module 1!order given parties informed

registrar

registrar

executing theprocedure

yes no

applying for thedivesture to the

judge

paying the costsfor an ordinary

procedure

applied costs payed

giving an order toinform the central

costs office to sendhim the file

registrar

claimant

transfering theprocedure to thecompetent court

transfered

issueing theenforcement orderupon application of

the claimant(Module2)

declaration about all payments

enforcementissued

checking ifapplication is

conform to thetime limit

issueing aexecuted copy

executed copyissued

registrar

arranging thearchiving of the

file

procedure hasfinished

arranged

registrar

archiving the file courts office

checking if file isarchived three

file archived

order given

sending file toclaimant cost office

sent to claimant

executing the file

file was executed

sending back thefile to courts

officeclaimant

informing theparties about the

transfer(Module1)

parties informed

check if procedureshould be

transferred to othercourt upon request

of claimant

no request ofclaimant

request ofclaimant

informingdefendand about

the requestregistrar

O.K.not O.K.

arranging theserving

procedureregistrar

servingprocedurearranged

years

no yes

destructing allcostituent parts ofthe file except forthe enforcement

order

destructed

signalizing on thefile if executeddoc has been

issued

8

file received incourts office

asking ifdefendand

agrees (Module2)

defendandagrees to

transfer toanother court

defendandagrees not

the request(Module 1)

g

defendandinformed

signalized

destroying thewhole file after

30years

file destroyedafter 30 years

Scenario Analysisynot O.K. O.K.

checkingcalculations of

interest

checkingcalculation of

costs

calculationschecked but not

deciding whoinforms the

claimant

decided for theregistrar

decided not forthe registrar

Module 1

checked but notverified

informing theclaimant

asking claimantto adjust theapplication

within 4 weeks

claimantinformed and

asked

registrar giveswriting office

order tocompose a letter

letter composed

transmitting theletter and order

to the courtsoffice

transmitted tothe courts office

adding the order transmitting theletter to the post

issueingpayment order

informing thedefendand about

his options

payment orderisssued

defendandinformed

giving order tothe courts officeto serve payment

order

order given order not given

registrar

writing office

courts office

registrar

gto the file letter to the postoffice

order added letter transmitted

sending letter toclaimant

letter sent toclaimant

order given

comissioning toserve the

payment order

served by thepost

served by thepolice

checking ifserving wassuccessful

order not given


post officedefendand

objectionreceived by the

post office


courts officepost office

objection sent

adding objection transmittingobjection to

courts office

courts office

Module 2

successfulincorrect/incomplete document

transmitting theserving

document to thecourt

servingdocument

transmitted

examining theserving

document

registrar

servingdocumentexamined

giving order todemand a

repeated servingto the post

informing theparties (module1)

serving has notbeen possible

informingclaimant&ask him toadjust the direction

of the defendandwithin 3weeks

g jto the file objection toregistrar

objection added transmitted toregistrar

informing claimantabout objection andhis options to react

(Module1)

claimantinformed

checking if claimantwants to engage the

ordinary legalprocedure

claimantinformed

using Module 1!order given parties informed

registrar

courts office

registrar

executing theprocedure

yes no

applying for thedivesture to the

judge

paying the costsfor an ordinary

procedure

applied costs payed

giving an order toinform the central

costs office to sendhim the file

registrar

claimant

transfering theprocedure to thecompetent court

t f d

issueing theenforcement orderupon application of

the claimant(Module2)

declaration about all payments

enforcementissued

checking ifapplication is

conform to thetime limit

issueing aexecuted copy

executed copyissued

registrar

arranging thearchiving of the

file

procedure hasfinished

arranged

registrar

archiving the file courts office

checking if file ishi d th

file archived

order given

sending file toclaimant cost office

sent to claimant

executing the file

file was executed

sending back thefile to courts

officeclaimant

transfered

informing theparties about the

transfer(Module1)

parties informed

check if procedureshould be

transferred to othercourt upon request

of claimant

no request ofclaimant

request ofclaimant

informingdefendand abouti t

O.K.not O.K.

arranging theserving

procedureregistrar

servingprocedurearranged

archived threeyears

no yes

destructing allcostituent parts ofthe file except forthe enforcement

order

destructed

signalizing on thefile if executeddoc has been

issued

9

office

file received incourts office

asking ifdefendand

agrees (Module2)

defendandagrees to

transfer toanother court

defendandagrees not

de e da d aboutthe request(Module 1)

registrar

defendandinformed

signalized

destroying thewhole file after

30years

file destroyedafter 30 years

Issue RegisterIssue Register

• Purpose: categorise identified issues as part of as-is p g pprocess modelling

• contents:– Issue number– name

description– description– consequence– priorityp y– type (IT / organ. / policy)– short term / long term– Impact: Qualitative vs. Quantitative– possible solution

10

Process Throughput

Inflow and Outflow rates typically vary

ocess oug put

• Inflow and Outflow rates typically vary over time– IN(t) = Arrival/Inflow rate of jobs at time t– OUT(t) = Departure/Outflow rate of finished

jobs at time t– IN = Average inflow rate per time unit– OUT = Average outflow rate per time unit

• A stable system must have IN=OUT=λ– λ = the process flow rateλ the process flow rate– λ = process throughput

11© Laguna & Marklund

Work-In-Process• Jobs that have entered the process but

not yet left itnot yet left it• A long lasting trend in manufacturing has

been to lower WIP by reducing batchbeen to lower WIP by reducing batch sizes– The JIT philosophyp p y– Forces reduction in set up times and set up

costs

WIP A k i ti• WIP = Average work in process over time• WIP(t) = Work in process at time t

WIP(t) i h IN(t) OUT(t)– WIP(t) increases when IN(t)>OUT(t)– WIP(t) decreases when IN(t)

Little’s Formula (D t J D C Littl (1961))

• Cycle time: Difference between a job’s start time and end

(Due to J.D.C. Little (1961))

y jtime

• Fundamental and general relationship between the average: WIP, Throughput (= λ) and Cycle time (CT)

• Implications, everything else equal

Little’s Formula: WIP = λ·CT

p , y g q– Shorter cycle time ⇔ lower WIP– If λ increases ⇒ to keep WIP at current levels CT must be reduced

• Laguna & Marklund, chapter 5, exercise 3


Cycle Time Analysis• Cycle time analysis: the task of calculating the average

cycle time for an entire process or process segmenty p p g– Assumes that the average activity times for all involved activities

are available (activity time = waiting time + processing time)

• In the simplest case a process consists of a sequence of activities on a single path

The a erage c cle time is j st the s m of the a erage acti it– The average cycle time is just the sum of the average activity times involved

• … but in general we must be able to account for… but in general we must be able to account for – Rework– Multiple paths– Parallel activities


Rework• Many processes include control or inspection points

where if the job does not conform it will be sent back jfor rework– The rework will directly affect the average cycle time!

• Definitions– T = sum of activity times in the rework loop– r = percentage of jobs requiring rework (rejection rate)

• Assuming a job is never reworked more than onceCT = (1+r)T

• Assuming a reworked job is no different than a regular job CT = T/(1-r)


Example – Rework effects on the l tiaverage cycle time

C id i ti f• Consider a process consisting of – Three activities, A, B & C taking on average 10 min. each– One inspection activity (I) taking 4 minutes to complete.p y ( ) g p– X% of the jobs are rejected at inspection and sent for rework

0.75A B C I 0.75A(10)

B(10)

C(10)

I(4)

What is the average cycle time?a) If no jobs are rejected and sent for rework

0.25

a) If no jobs are rejected and sent for rework.b) If 25% of the jobs need rework but never more than once.c) If 25% of the jobs need rework but reworked jobs are no different

i lit th di j b16

in quality than ordinary jobs.© Laguna & Marklund

Multiple Paths

• It is common that there are alternative routes through ththe process– For example: jobs can be split in “fast track”and normal jobs

• Assume that m different paths originate from a decision point

Th b bilit th t j b i t d t th i– pi = The probability that a job is routed to path i – Ti = The time to go down path i

CT = p T +p T + +p T = ∑m

TpCT = p1T1+p2T2+…+pmTm= ∑=1i

iiTp


Example – Processes with Multiple P thPaths

• Consider a process segment consisting of 3 activities A, B & C with activity times 10,15 & 20 minutes respectively

• On average 20% of the jobs are routed via B and 80% go straight to g j g gactivity C.

0.8A(10)

C(20)

0.2B

(15)

What is the average cycle time?

(15)


Processes with Parallel Activities

• If two activities related to the same job are done in parallel the contribution to the cycle time for the job is the maximum of the two activity times.

• Assuming– M process segments in parallel

T = Average process time for process segment i to be– Ti = Average process time for process segment i to be completed

CTparallel = Max{T1, T2,…, TM}


Example – Cycle Time Analysis of P ll l A ti iti

• Consider a process segment with 5 activities A B C D

Parallel Activities Consider a process segment with 5 activities A, B, C, D & E with average activity times: 12, 14, 20, 18 & 15 minutes BB

(14)

A(12)

C(20)

E(15)

D(18)

What is the average cycle time for the process segment?

20

g

© Laguna & Marklund

Cycle Time Efficiency• Measured as the percentage of the total cycle time

spent on value adding activitiesspent on value adding activities.

Cycle Time Efficiency = TimeCyclelTheoreticaCycle Time Efficiency = CT

• Theoretical Cycle Time = the cycle time which we would have if only value adding activities were performedperformed– That is if the activity times, which include waiting times, are

replaced by the processing times

• See example – Cycle time analysis Exercise 9 & 10, Laguna & Marklund Chapter 5

21

g p


Cycle time ReductionCycle time analysis provides valuable information b t f

y

about process performance– Helps identify problems

Increases process understanding– Increases process understanding– Useful for assessing the effect of design changes

• Ways of reducing cycle times through processWays of reducing cycle times through process redesign

1. Eliminate activities2. Reduce waiting and processing time3. Eliminate rework4 P f ti iti i ll l4. Perform activities in parallel5. Move processing time to activities not on the critical path


Example – Critical Activity Reduction

• Consider a process with three sequences or paths

A

B

C E14

A C

D

E12 1

518

20

18

Sequence (Path) Time required (minutes)1 A B E 12+14+15 41

Critical path1. A→B →E 12+14+15 = 412. A→C →E 12+20+15 = 47 = CT

3 A →D →E 12+18+15 = 45

⇒ By moving 2 minutes of activity time from path 2 to path 1 the cycle time is reduced by 2 minutes to CT=45 minutes

3. A →D →E 12+18+15 = 45


ExerciseExercise

• Laguna & Marklund, chapter 5, exercises 7, 8

24

Capacity Analysis• Focus on assessing the capacity needs and resource

utilization in the processutilization in the process1. Determine the number of jobs flowing through different process

segments2. Determine capacity requirements and utilization based on the

flows obtained in 1.3 Determine bottlenecks3. Determine bottlenecks

• Complements the cycle time analysis…


The Effect of Rework on Process Flows• A rework loop implies an increase of the flow rate for that

process segmentprocess segment• Definitions

– N = Number of jobs flowing through the rework loopN Number of jobs flowing through the rework loop– n = Number of jobs arriving to the rework loop from other parts

of the process– r = Probability that a job needs rework

• Assuming a job is never reworked more than once

N = (1+r)n

• Assuming a reworked job is no different than a regular jobN = n/(1-r)


Example – Capacity Analysis with ReworkRework

100 jobs 125 jobs 125 jobs 125 jobs

0.75A B C I

100 jobs 125 jobs 125 jobs 125 jobs

0.25

N = (1+r)n = (1+0.25)100 = 125


Multiple Paths and Parallel ActivitiesMultiple Paths and process flows

p

• The flow along a certain path depends on– The number of jobs entering the process as a whole (n)

The probability for a job to go along a certain path– The probability for a job to go along a certain path• Defining

– Ni = number of jobs taking path ii j g p– pi = Probability that a job goes along path i

Ni = n·pi

Parallel Activities and process flowsAll j b till h t th h ll ti iti

Ni n pi

• All jobs still have to go through all activities – if they are in parallel or sequential does not affect the

number of jobs flowing through a particular activity

28

j g g p y


Analyzing Capacity Needs and UtilizationNeed to know

P i ti f ll ti iti

y g y

– Processing times for all activities– The type of resource required to perform the activity– The number of jobs flowing through each activityThe number of jobs flowing through each activity– The number of available resources of each type

Step 1 – Calculate unit load for each resourcep• The total resource time required to process one job

– Ni = Number of jobs flowing through activity i for every new job entering the process

– Ti = The processing time for activity i in the current resourceM = Total number of activities using the resource– M = Total number of activities using the resource

Unit load for resource j = ∑ ⋅M

ii TN

29

∑=1i

ii


Analyzing Capacity Needs and Utilization

Step 2 – Calculate the unit capacity

y g y

• The number of jobs per time unit that can be processed

Unit capacity for resource j = 1/Unit load for resource j

Step 3 – Determine the resource pool capacity

Unit capacity for resource j = 1/Unit load for resource j

Step 3 Determine the resource pool capacity• A resource pool is a set of identical resources available

for use• Pool capacity is the number of jobs per time unit that can

be processed– Let M = Number of resources in the pool

Pool capacity = M⋅Unit capacity = M/unit load


Process Capacity and Capacity Utilization

• The process capacity is determined by the bottleneck

y y

– The bottleneck is the resource or resource pool with the smallest capacity (the slowest resource in terms of jobs/time unit)The slowest resource will limit the throughput– The slowest resource will limit the throughput

Capacity UtilizationTh th ti l it i bt i d b f i• The theoretical process capacity is obtained by focusing on processing times as opposed to activity times

Delays and waiting times are disregarded– Delays and waiting times are disregarded⇒ The actual throughput ≤ The theoretical capacity!

Capacity Utilization =CapacityocessPrlTheoretica

ThroughputActual


Limitations of Cycle Time/Capacity AnalysisLimitations of Cycle Time/Capacity Analysis

• Cycle time analysis and capacity do not consider waiting times due to resource contention

• Cycle time & capacity analysis do not consider cost• Queuing analysis and simulation address theseQueuing analysis and simulation address these

limitations and have a broader applicability

32

Queuing Theory: Notation

State of the system = number of customers in the systemy yQueue length = (state of the system) – (number of customers being served)

λ = Average arrival intensity (= # arrivals per time unit)μ = Average service intensity for the system (average cycle time)ρ = Utilization factor = Fraction of time that the service facility is used


Why is Queuing Analysis Important?• Capacity problems are very common in industry and

one of the main drivers of process redesign

y g y p

one of the main drivers of process redesign– Need to balance the cost of increased capacity against the

gains of increased productivity and service• Queuing and waiting time analysis is particularly

important in service systemsLarge costs of waiting and of lost sales due to waiting– Large costs of waiting and of lost sales due to waiting

Prototype Example – ER at a Hospital• Patients arrive by ambulance or by their own accord• Patients arrive by ambulance or by their own accord• One doctor is always on duty• More patients seeks help ⇒ longer waiting timesMore patients seeks help ⇒ longer waiting times

Question: Should another MD position be instated?


A Cost/Capacity Tradeoff Model

Total

Cos

t

Cost of

cost

service

Cost of waiting

Process capacity


Probability Distributions: UniformProbability Distributions: Uniform

36

Probability Distributions: NormalProbability Distributions: Normal

37

Probability Distributions: Negative Exponential

38

Steady State vs. Transienty

• Steady State condition– Enough time has passed for the system state to be independentEnough time has passed for the system state to be independent

of the initial state as well as the elapsed time

• Transient condition– Prevalent when a queuing system has recently begun operations– The state of the system is greatly affected by the initial state and

by the time elapsed since operations startedby the time elapsed since operations started

Generally, queuing theory focuses on steady state analysis


Transient and Steady State Conditions

• Illustration of transient and steady-state conditions– N(t) = number of customers in the system at time t, ( ) y ,– E[N(t)] = represents the expected number of customers in

the system.

Transient condition

25

30

(t)

Steady State condition

15

20

the

syst

em, N

E[N(t)]N(t)

10

mbe

r of

jobs

in E[N(t)]N(t)

0

5

0 5 10 15 20 25 30 35 40 45 50

Num

40

0 5 10 15 20 25 30 35 40 45 50

time, t


Queuing theory: basic conceptsQ g y p

arrivals waiting service

λ

Basic characteristics:

μc

Basic characteristics:• average number of arrivals per time unit: λ

(mean arrival rate)• average number that can be handled by one

server per time unit: μ (mean service rate)• number of servers: c

41© Wil van der Aalst

Queuing theory concepts (cont.)Q g y p ( )

λμc

Wq LqWq,Lq

W,L

Given λ , μ and c, we can calculate :• occupation rate: ρ• Wq = average time in queue • W = average time in system• Lq = average number in queue (i e length of queue)• Lq = average number in queue (i.e. length of queue)• L = average number in system average (i.e. Work-in-Progress)

42© Wil van der Aalst

M/M/1 queueM/M/1 queue

λμ1 μ1

Assumptions:• time between arrivals and

λDemandCapacityservice time follow a negative exponential distribution

• 1 server (c = 1)μλ

CapacityAvailableDemandCapacityρ ==

1 server (c = 1)• FIFO

L=ρ/(1- ρ) Lq= ρ2/(1- ρ) = L-ρW=L/λ=1/(μ- λ) Wq=Lq/λ= λ /( μ(μ- λ))


M/M/c queueq• Now there are c servers in parallel, so the expected

capacity per time unit is then c*

λDemandCapacity

capacity per time unit is then c*μ

μλ

==ρ*cCapacityAvailable

DemandCapacity

Little’s Formula ⇒ Wq=Lq/λ

W=Wq+(1/μ)

Little’s Formula ⇒ L=λW= λ(Wq+1/ μ) = Lq+ λ/μ


Example – ER at County HospitalSituation

P ti t i di t P i ith i t it

p y p

– Patients arrive according to a Poisson process with intensity λ (⇔ the time between arrivals is exp(λ) distributed.

– The service time (the doctor’s examination and treatment f ) ftime of a patient) follows an exponential distribution with

mean 1/μ (=exp(μ) distributed)⇒ The ER can be modeled as an M/M/c system where c=the

number of doctorsData gathering⇒ λ = 2 patients per hour⇒ λ = 2 patients per hour⇒ μ = 3 patients per hour

Questions– Should the capacity be increased from 1 to 2 doctors?– How are the characteristics of the system (ρ, Wq, W, Lq

and L) affected by an increase in service capacity?

45

) y p y


Queuing Analysis – Hospital Scenario

• Interpretation – To be in the queue = to be in the waiting room– To be in the system = to be in the ER (waiting or under treatment)

Characteristic One doctor (c=1) Two Doctors (c=2)ρ 2/3 1/3L 4/3 patients 1/12 patientsLq 4/3 patients 1/12 patientsL 2 patients 3/4 patients

Wq 2/3 h = 40 minutes 1/24 h = 2.5 minutesqW 1 h 3/8 h = 22.5 minutes

• Is it warranted to hire a second doctor ?


Process Simulation

• Drawbacks of queuing theory:– Generally not applicable when system includes parallel

activities– Requires case-by-case mathematical analysisRequires case by case mathematical analysis

• Process simulation is more versatile (also more popular)• Process simulation = run a large number of processProcess simulation run a large number of process

instances, gather data (cost, duration, resource usage) and calculate statistics from the output

• Simulation ≠ animation– Simulation is a batch process, animation is interactive– Some tools allow one to animate while simulating, but in

practice this is too slow!

47

Process SimulationProcess Simulation

• Basic steps in evaluating a process model with simulation

1 Building the simulation model1. Building the simulation model2. Running the simulation3. Analyzing the simulation results (performance3. Analyzing the simulation results (performance

measure)4. Evaluation of alternative scenarios

48

Elements of a simulation modelElements of a simulation model

• The process model including:The process model including:– Activities, control-flow relations (flows, gateways)– Resources and resource pools (i e roles)Resources and resource pools (i.e. roles)

• Resource requirements: mapping between activities and resource poolsand resource pools

• Processing times (per activity, or per activity-i )resource pair)

• Costs (per activity, or per activity-resource pair)• Arrival rate (also called: token creation)• Conditional branching probabilities (XOR gateways)

49

Conditional branching probabilities (XOR gateways)

Simulation Example BPMN modelSimulation Example – BPMN model

50

Resource Pools (Roles)Resource Pools (Roles)

• Two options to define resource poolsTwo options to define resource pools– Define individual resources of type clerk– Or assign a number of “anonymous” resources allOr assign a number of anonymous resources all

with the same cost• E gE.g.

– 3 anonymous clerks with cost of € 10 per hour, 8 hours per dayhours per day

– 2 individually named clerks • Jim: € 12, 4 hours per day , p y• Mike: € 14, 8 hours per day

– 1 manager John at € 20 per hour, 8 hours per day

51

Resource pools and execution timesTask Role Execution Time

Normal distribution: mean and std deviationstd deviation

Receive application system 0 0

Check completeness Clerk 30 mins 10 mins

Perform checks Clerk 2 hours 1 hourPerform checks Clerk 2 hours 1 hour

Request info system 1 min 0

Receive info (Event) system 48 hours 24 hours

Make decision Manager 1 hour 30 mins

Notify rejection system 1 min 0

Time out (Time) system 72 hours 0

Receive review request (Event) system 48 hours 12 hours

Notify acceptance system 1 min 0

Deliver Credit card system 1 hour 0

Alternative: assign execution times to the tasks only (like in cycle time analysis)

52

Arrival rate and branching probabilitiesArrival rate and branching probabilities

10 applications per hour (one at a time)Poisson arrival process (negative exponential)

0.50.3

0.70.5

Alternative: instead of branching probabilities one can assign “conditional expressions” to the branches based on input data

53

Simulation output: KPIsSimulation output: KPIsResource UtilizationResource Cost

80.00%

90.00%

100.00% $ 4,260.95

3,500.00

4,000.00

4,500.00

50.34%50.00%

60.00%

70.00%

2 000 00

2,500.00

3,000.00

3,500.00

Cycle Time - Histogram

12

18.82%

5 04%

20.00%

30.00%

40.00%

$ 898.45

$ 285 00500 00

1,000.00

1,500.00

2,000.00

6

8

10

PI's

5.04%

0.00%

10.00%

Clerk Manager System

$ 285.00

0.00

500.00

Clerk Manager System2

4

6

# P

00 10 20 30 40 50 60

Days

54

Simulation output: detailed logsp g

Process Instance # Activities Start End Cycle Time Cycle Time (s) Total Time

6 5 4/06/2007 13:00 4/06/2007 16:26 03:26:44 12403.586 03:26:44

7 5 4/06/2007 14:00 5/06/2007 9:30 19:30:38 70238.376 19:30:38Process Instance Activity ID Activity Name Activity Type Resource Start End

11 5 4/06/2007 18:00 5/06/2007 12:14 18:14:56 65695.612 18:14:56

13 5 4/06/2007 20:00 5/06/2007 13:14 17:14:56 62095.612 17:14:56

Process Instance Activity ID Activity Name Activity Type Resource Start End

6aed54717-f044-4da1-b543-82a660809ecb Check for completeness Task Manager 4/06/2007 13:00 4/06/2007 13:53

16 5 4/06/2007 23:00 5/06/2007 15:06 16:06:29 57989.23 16:06:29

22 5 5/06/2007 5:00 6/06/2007 10:01 29:01:39 104498.797 29:01:39

6a270f5c6-7e16-42c1-bfc4-dd10ce8dc835 Perform checks Task Clerk 4/06/2007 13:53 4/06/2007 15:25

677511d7c-1eda-40ea-ac7d-886fa03de15b Make decision Task Manager 4/06/2007 15:25 4/06/2007 15:26

27 8 5/06/2007 10:00 6/06/2007 12:33 26:33:21 95600.649 26:33:216099a64eb-1865-4888-86e6-e7de36d348c2 Notify acceptance IntermediateEvent (none) 4/06/2007 15:26 4/06/2007 15:26

60a72cf69-5425-4f31-8c7e-6d093429ab04 Deliver card Task System 4/06/2007 15:26 4/06/2007 16:26

7aed54717-f044-4da1-b543-82a660809ecb Check for completeness Task Manager 4/06/2007 14:00 4/06/2007 14:31

7 270f5 6 7 16 42 1 bf 4 dd10 8d 835 P f h k T k Cl k 4/06/2007 14 31 5/06/2007 8 30

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7a270f5c6-7e16-42c1-bfc4-dd10ce8dc835 Perform checks Task Clerk 4/06/2007 14:31 5/06/2007 8:30

Simulation in Websphere BM: Data Model

56© Marek Zäuram

Simulation in BM: Additional Conceptsp

• Simulation snapshot:– Copy of the process model to be simulated– It is typical to simulate multiple “variants” of a process

d l l i l hmodel, so multiple snapshots• Simulation profile:

– Copy of simulation settings • Costs, durations, resource requirements• Token creation settings• Steady state delay, breakpoints.

Multiple simulation profiles per simulation snapshot– Multiple simulation profiles per simulation snapshot– A default simulation profile is automatically derived

from the process model when a snapshot is created58

from the process model when a snapshot is created

Demo timeDemo time

• Demo of IBM Websphere and simulation capabilities

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Process Re-Design:Process Re-Design:From “as is” to “to be”

Material borrowed from Wil van der Aalst (www workflowcourse com)(www.workflowcourse.com)

Re Design CriteriaRe-Design Criteria

A process design is evaluated on the basis of four key issues:• time• quality• costs• flexibility

Often there is a trade-off!

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Design criterion 1: Time

• Throughput time (see earlier), including

Design criterion 1: Time

Throughput time (see earlier), including– service time (including set-up)– transport time (can often be reduced)transport time (can often be reduced)– waiting time

• sharing of resources (limited capacity)sharing of resources (limited capacity)• external communication (trigger time)

• Several ways to improve time properties:Several ways to improve time properties:– Improve average– Improve varianceImprove variance– Increase ability to meet due dates– Increase perception of wait time

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– Increase perception of wait time

Design criterion 2: Quality

External: satisfaction of the customer

Design criterion 2: Quality

• External: satisfaction of the customer– Product: product meets specification/expectation.

P th th d t i d li d ( i– Process: the way the product is delivered (service level)

I t l diti f k• Internal: conditions of work– challenging– varying– controlling

There is often a positive correlation between external and internal quality.

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Design criterion 3: CostDesign criterion 3: Cost

• Type of costs– fixed or variable– per time unit, per use (consumable resources)– processing, management, or support.– human, system (hardware/software), or external,

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Design Criterion 4: Flexibility

• Ability to react to changes

Design Criterion 4: Flexibility

• Ability to react to changes.• Flexibility of

( bilit t t t k / t k )– resources (ability to execute many tasks/new tasks)– process (ability to handle various cases and

changing orkloads)changing workloads)– management (ability to change rules/allocation)

i ti ( bilit t h th t t d– organization (ability to change the structure and responsiveness to demands of market or business partnerspartners

65

Trade off

Costs

Trade-off

Costs

TimeFl ibilitFlexibility

Quality (T+/-,Q+/-,C+/-,F+/-)

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(1) Check the necessity of each task• Sometimes "checks" may be skipped: trade-off between

the cost of the check and the cost of not doing the check

( ) y

the cost of the check and the cost of not doing the check.

(T+,Q-,C+/-)

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(1) Check the necessity of each task (cont.)( ) y ( )

• Other tasks to consider for elimination:– Print– Copy– Archive– Store– More generally: non-value adding activities

• Task elimination can be achieved by delegatingTask elimination can be achieved by delegating authority, e.g.– No need for approval if amount less than YNo need for approval if amount less than Y– Employees have budget for small expenses– Employees keep track of their own holidays no

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Employees keep track of their own holidays, no authorization, just notification

(2) Re-consider the size of each task: merge or split

Pros: less work to commit, allows for specialization.Cons: setup time, fragmentation, less commitment.

Pros: setup reduction, no fragmentation, more commitment.Cons: more work to commit, one person needs to beCons: more work to commit, one person needs to be qualified for both parts.

Also consider the trade-off between the complexity of the process and the complexity of a task.

(T+,F-)

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(3) Order tasks based on cost/effect(3) Order tasks based on cost/effect

• Consider the class of “knock-out processes” e g hiringConsider the class of knock out processes , e.g., hiring people, handling claims, etc.

• Execute highly selective tasks first.Execute highly selective tasks first.• Postpone expensive tasks until the end.• In other words: order the tasks using the ratio “costs/effect”.In other words: order the tasks using the ratio costs/effect .

(T+,C-)

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ExampleExample

Purchase Request process

Consider re-submission

Check purchase

request for 1stapproval

Check purchase

approved

rejected

rejectedPurchase Request

purchase request for 2nd

approvalapproved

Send approved request to requestor

Make copy of purchase request

Forward to purchase

department

Purchase Order process

Approved Purchase Request

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(4) Introduce parallelism(4) Introduce parallelism

• More parallelism leads to improved performance: p p preduction of waiting times and better use of capacity.

• Two types of parallelism: semi and real parallelism.• IT infrastructures which allow for the sharing of data

and work enable parallelism.

A B

AA

B(T++)+ +

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(5) Generic process vs multiple versions(5) Generic process vs. multiple versions

• Process customization– Differentiate by customer classes, geographical

locations, time periods (winter, summer), …– Different activities, different resource pools,

• Process standardization– All cases treated equally (as much as possible)q y ( p )– Resources are pooled together

F+/-, C+/-,

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(6) Generic task vs multiple specialized(6) Generic task vs. multiple specialized tasks

• Similar considerations.• Specialization may lead to:p y

– the possibility to improve the allocation of resources

– more support when executing the task– less flexibilityy– a more complex process– monotonicityy

(T+,F-)

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( , )

(7) Improve allocation of resources(7) Improve allocation of resources

• Use resources as if they are in one room: avoid one ygroup of people overloaded and another (similar) group waiting for work.

• Let people do work that the are good at. However, avoid inflexibility as a result of specialization!

• Stimulate resources to build routine.• When allocating work to resources, consider the

fl ibilit i th f tflexibility in the near future.• Avoid setups as much as possible. There are two

kinds of setups: (1) case setups and (2) task setupskinds of setups: (1) case setups and (2) task setups.

(T+,Q-)

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(8) Improve communication structure(8) Improve communication structure

• Reduce the number of messages to be exchangedReduce the number of messages to be exchanged between the process and the environment.

• Try to automate the handling of messages (send/receive).Try to automate the handling of messages (send/receive).• Avoid communication errors (EDI, XML, Web services)• If possible, use asynchronous instead of synchronousIf possible, use asynchronous instead of synchronous

communication.

A B CA B Crequestcommand

information

(T+,Q+,C+/-,F-)request

information

response

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(9) Investigate IT-driven improvements(9) Investigate IT driven improvements

• Data sharing (Intranets, ERPs)– Increase availability of (subject to security/privacy)

information to improve decisions or visibility– Avoid duplicate data entry, paper copies

• Use network technology to:– Increase communication speed: e-mail, SMS– Enable self-service (e.g. online forms)– Replace materials flow with information flow

• Tracking: RFID, GPS tracking• Automation of tasks, automated support for tasks• First re-design, then automate! (T+,Q+/-,C+/-,F-)

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g

(10) Appoint process/case managers(10) Appoint process/case managers

• A process manager monitors a process to see whether there are bottlenecks, capacity problems and delayed cases Management instruments: motivating the peoplecases. Management instruments: motivating the people involved in the process and control parameters.

• Case managers are assigned to a case They are• Case managers are assigned to a case. They are responsible and execute as many tasks as possible for the case. Benefits:– commitment– reduction of setup timep– one contact person

(Q+)

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Homework

Continuation of homework 11. Identify key issues to be addressed / measures

to be improved2.Re-design process model

“to-be” process modelto be process model3.Quantify costs and benefits of moving from “as-

is” to “to-be”is to to-be sketch a business case

Deliverables: To be process diagrams + oral• Deliverables: To-be process diagrams + oral presentation next sessionC b d i f 4

79• Can be done in groups of up to 4

Additional ActivitiesAdditional Activities

• In preparation for the project– Install IBM Websphere BM (if you can)– Complete the step-by-step tutorials

• Modeling• Simulation (optional, but desirable)• See lab notes for practice 4, 5 and 5 at:

http://courses cs ut ee/2009/bpm/Main/Practicals– http://courses.cs.ut.ee/2009/bpm/Main/Practicals

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ReadingsReadings

(See course web page for links)• P. Harmon. Analyzing Activities BPTrends

Advisor, April 2003. • P. Harmon. Analyzing and Improving Customer-y g p g

Facing Processes BPTrends Advisor, December 2003.

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Documents

MTAT 03 231MTAT.03.231 Business Process Management ......MTAT 03 231MTAT.03.231 Business Process Management (BPM) (for Masters of ETM) Lecture 4: Process Analysis & Improvement Marlon