Session 1- Intro to Business Process

7/31/2019 Session 1- Intro to Business Process

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Session 1

Introduction to Business Process


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Session 1

Important Perspectives of BusinessBusiness Functions and its linksWhat is a business process?Business Process features

Three basic logics of a business processBusiness Process Supply Chain CaseSome examples of Core Business ProcessesDominos example


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The EnterpriseProcess

Perspective

FunctionPerspective

DataPerspective

Perspectives of a Business


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Business Functions & its links

Production Planning Demand managementMaster planning

Capacity planning

MRP

Order- Creation- Release- Confirmation

Shop floor controlCapacity levelingProcess planning

Quality Management Lot inspectionProcess charting

Warehouse management

Materials Management Direct requisitionPurchasingInventory managementGoods receiptMaterial valuation

Invoice verification

Preventive Maintenance Planned repairEmergency

Sales and Distribution

Customer orderprocessing

Shipping,billing, transport

Sales planningProfit planningForecasts

Project system


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What is a BUSINESS PROCESS?A business process is a collection of related structural activitiesthat produce a specific outcome for a particular customer.

It is a recipe for achieving a commercial result.Each business process has inputs, method and outputs.The inputs are a pre-requisite that must be in place before the

method can be put into practice.When the method is applied to the inputs, then certain outputs

will be created.

A business process can be part of a larger, encompassing processand can include other business processes that have to be includedin its method.

A business process can be thought of as a cookbook for running abusiness; "Answer the phone", "place an order", "produce aninvoice" might all be examples of a Business Process.


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A Business Process Features

A business process:

Driven by an eventHas a goalHas specific inputsHas specific outputsUses resourcesHas a number of activities that are performed in some order

May affect more than one organizational unit. Horizontalorganizational impactCreates value of some kind for the customer. The customermay be internal or external.


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EventProcess

Business processOutput

Information Resource Goal

A Business Process Model


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Logics of a Business Process

A business process is an aggregation of operationsperformed by people and software systemscontaining the information used in the process,along with the applicable business rules.Business process has to deal with information flowlogic, control flow logic and transaction logic.

determines input & outputinformation requirements for

each activity

determines the sequence of activities

determines values of output.


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Example : Paragon Leather Products Pvt. Ltd.

Paragon Leather Products P Ltd., receives a sales order for supply of

1,000 pairs of shoes (in different sizes) from a customer. This salesorder process may involve execution of transactions such asGeneration of Order document, Generation of Shipping document andGeneration Billing document in an ERP system.In practice, three different performers from Sales Office, Warehouse

and Accounts department may perform three transactions respectively,which comprises of

- Generation of Order document by sales office executive- Generation of Shipping document by warehouse executive- Generation of Billing document by accounts executive

This process requires enforcement of credit control by sales executivei.e., if the sales order exceeds the credit limit, a special approval isrequired from the sales manager before warehouse executive cangenerate shipping document.


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Example : Paragon Leather Products Pvt. Ltd.

The sales manager in order to take the decision needs the information

on order details, credit limit and credit history before he or she couldtake the decision.The sales office executive has to compute order value based onproducts ordered, no. of units ordered, sales price, discounts, duties &taxes applicable.The sales office executive also has to provide the delivery date basedon the availability of stock, production schedule and dispatch schedule.In the above activities, control flow logic determines the activityafter Generation of Order document, which could be eitherGeneration of Dispatch document or Approval from Sales Managerdepending upon credit control.

Information logic determines what information is to be provided(input) to and obtained (output) from the sales manager .Transaction logic determines the value of sales order and deliverydate or the decision by the sales manager.


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Business Process A Supply Chain Case

Suppliers

Intra-companyFabrication

Assembly

Distributors

CommercialBuyersConsumers

Retailers

Features:

Independent systemsto manage theinteraction betweenplayers in the supplychain

Great operationalflexibility

Problems inforecasting,transparency, accuracy,

speed

Conventional Supply Chain

Information

Material


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Business Process A Supply Chain Case

Features:

Integratedinformation

System optimizationpossible

Problems inflexible much moreformal infrastructureneeded to support the

systems

IT Enabled SupplyChain

Suppliers

Intra-company Fabrication

Assembly

Distributors

Commercial Buyers

Consumers

Retailers

ERP System

Web-order Processor

Information

Material


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Procurement Process(Procure-to-Pay)

PurchaseRequisition

Paymentto Vendor

NotifyVendor

Vendor Shipment

InvoiceReceipt Goods

Receipt

PurchaseOrder


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Purchase, Sales & Cash Process

SalesInquiries

Sales

FinishedGoods

Raw

Materials

Manufacturing

ResourcesPlanning

Labour

Customer

Profit Center

VendorAccountsPayable

AccountsReceivable

Cash

Cash Information Materials


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Pizza Development Process at Dominos

PIZZA CUTTING(15 SECONDS)

DOUGH MAKING

(1 MINUTE )TOPPING & BAKING IN

OVEN(6 MINUTES)

PIZZA PACKING( 1.5 MINUTES)


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Flow Logics in Dominos ExampleControl flow logic: 1. Customer calls outlet2. Customer details fed in system3. Order is taken over the phone4. The delivery process of 30 minutes starts here.

5. Bill is printed a copy of which is sent to the kitchen.6. Pizza is made and delivered to the customer

Information flow logic: 1. Customer details customer name, ph no. address is input to

customer master file2. Copy of bill generated acts as input to the cook for

processing order3. Order for raw material procurement is sent every alternate

day.

4. Payment details acts as input to the outlet


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Flow Logics in Dominos Example

Transaction flow logic:

1. Decisions about special offers and discounts.2. For area greater than 5 Kms customer is redirected to the

nearest outlet or a timeline is given.3. Sales reports sent on monthly basis to the headquarters at

Mumbai4. Depending upon number of orders decisions are taken to

either increase decrease or promote the available SDBs. 5. Performance of SDBs is evaluated and incentives are

provided

Documents

Session 1- Intro to Business Process