Chapter 4 Case Study: Swim Lane Process Map For A Medical Procedure

Chapter 4 Case Study: Swim Lane Process Map For A Medical Procedure

Which process steps should be more standardized? Which process step’s should be more artistic? Explain.

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Introduction to Operations and Supply Chain Management

Fifth Edition

Chapter 4

Business Processes

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Chapter Objectives (1 of 2)

Be able to:

Explain what a business process is and how the business process perspective differs from a traditional, functional perspective.

Create process maps for a business process and use them to understand and diagnose a process.

Calculate and interpret some common measures of process performance.

Discuss the importance of benchmarking and distinguish between competitive benchmarking and process benchmarking.

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Chapter Objectives (2 of 2)

Be able to:

Describe the Six Sigma methodology, including the steps of the DMAIC process.

Use and interpret some common continuous improvement tools.

Explain what the Supply Chain Operations Reference (SCOR) model is and why it is important to businesses.

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Business Processes (1 of 3)

Process – A set of logically related tasks or activities performed to achieve a defined business outcome.

© 2016 APICS Dictionary

Primary process – A process that addresses the main value-added activities of an organization.

Support process – A process that performs necessary, albeit not value-added activities

Development process – A process that seeks to improve the performance of primary and support processes.

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Business Processes (2 of 3)

Table 4.1 Examples of Business Processes

Primary Processes Support Processes Development Processes
Providing a service Evaluating suppliers Developing new products
Educating customers Recruiting new workers Performing basic research
Manufacturing Developing a sales and operations plan (S&OP) Training new workers

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Business Processes (3 of 3)

Figure 4.1 Examples of Business Processes That Cut across Functions and Organizations

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Mapping Business Processes (1 of 6)

Mapping – The process of developing graphic representations of the organizational relationships and/or activities that make up a business process.

Purposes of Mapping

It creates a common understanding of the content of the process: its activities, its results, and who performs the various steps.

It defines the boundaries of the process.

It provides a baseline against which to measure the impact of improvement efforts.

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Mapping Business Processes (2 of 6)

Process Map – A detailed map that identifies the specific activities that make up the informational, physical, and/or monetary flow of a process.

Process Mapping Rules

Identify the entity that will serve as the focal point.

Identify clear boundaries and starting and ending points.

Keep it simple

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Mapping Business Processes (3 of 6)

Figure 4.4 Common Process Mapping Symbols

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Mapping Business Processes (4 of 6)

Figure 4.5 Process Map for the Bluebird Café

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Example 4.1 – Distribution Center (1 of 4)

San Diego Distribution Center (DC)

Process:

Dealer emails an order to the DC which is automatically printed on the copier. One out of 25 orders are lost because the copier jams or an employee accidentally throws it away.

Printed order sits in an inbox around 2 hours (0 to 4) until internal mail picks it up.

Internal mail takes about one hour on average to deliver the order to the picking area. One out of 100 orders are delivered to the wrong place.

Order sits in clerk’s inbox until it is processed for 0 to 2 hours (average 1 hour). Processing time takes 5 minutes.

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Example 4.1 – Distribution Center (2 of 4)

San Diego Distribution Center (DC)

Process:

If item is in stock, worker picks and packs order

(Average = 20 minutes, with range from 10 to 45 minutes).

Inspector takes 2 minutes to check order. Still, one out of 200 orders are completed incorrectly.

Transport firm delivers order with average delivery time of 1 to 3 hours (average 2 hours).

If the item is out of stock, the clerk notifies the dealer and passes the order along to the plant while arranging a special shipment directly to the dealer, usually within a week.

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Example 4.1 – Distribution Center (3 of 4)

Figure 4.6 Order-Filling Process for In-stock Items

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Example 4.1 – Distribution Center (4 of 4)

Average Time between Ordering and Delivery for an in-stock item is 6.4 hours (387 minutes)

Can be as long as 11.3 hours (682 minutes)

If an item is not in stock, it will take even longer.

Of the 6.4 hours an order spends on average in the process, a full 3 hours is waiting time.

5 percent of the orders are “lost” before they even get to the picking area.

For the orders that do survive to this point, 1 out of 200 will be shipped with the incorrect items or quantities.

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Mapping Business Processes (5 of 6)

Swim lane process map – A process map that graphically arranges the process steps so that the user can see who is responsible for each step.

Figure 4.7 Swim Lane Process Map for Order-Filling Process

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Mapping Business Processes (6 of 6)

Table 4.2 Guidelines for Improving a Process

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Measuring and Improving Business Processes (1 of 20)

Questions to ask:

How do we know if a business process is meeting customers’ needs? Even if customers’ needs are being met, how do we know whether the business process is being run efficiently and effectively?

How should we organize for business process improvement? What steps should we follow? What roles should people play?

What types of tools and analytical techniques can we use to rigorously evaluate business processes? How can we make sure we manage based on fact and not opinion?

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Measuring and Improving Business Processes (2 of 20)

Measures of Process Performance

Quality

Performance quality, Conformance quality, Reliability

Cost

Labor, Material, Quality-related costs

Time

Delivery speed, Delivery reliability

Flexibility

Mix flexibility, Changeover flexibility, Volume flexibility

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Measuring and Improving Business Processes (3 of 20)

Productivity – A measure of process performance.

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Measuring and Improving Business Processes (4 of 20)

Single-factor productivity – A productivity score that measures output levels relative to single input.

Multifactor productivity – A productivity score that measures output levels relative to more than one input.

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Measuring and Improving Business Processes (5 of 20)

Single-factor

productivity ratio:

Multifactor

Productivity ratio:

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Measuring and Improving Business Processes (6 of 20)

Efficiency – A measure of process performance; the ratio of actual outputs to standard outputs. Usually expressed in percentage terms.

Standard output – An estimate of what should be produced, given a certain level of resources.

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Measuring and Improving Business Processes (7 of 20)

Cycle Time – The total elapsed time needed to complete a business process. Also called throughput time.

Percent Value-Added Time – The percentage of total cycle time that is spent on activities that actually provide value.

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Measuring and Improving Business Processes (8 of 20)

Benchmarking – The process of identifying, understanding, and adapting outstanding practices from within the same organization or from other businesses to help improve performance.

Cook, 1995

Competitive Benchmarking – The comparison of an organization’s processes with those of competing organizations.

Process Benchmarking – The comparison of an organization’s processes with those of noncompetitors that have been identified as having superior processes.

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Measuring and Improving Business Processes (9 of 20)

Table 4.7 Competitive Benchmarking Data for Selected U.S. Airline Carriers

Airline Carrier Percentage of Flights Arriving on Time, 12 Months Ending March 2016 Percentage of Flights Cancelled, March 2016 Mishandled Baggage Reports Per 1,000 Passengers, March 2016
American 81.3% 0.5% 3.19
Delta 86.7% 0.1% 1.57
Frontier 77.5% 2.6% 2.62
Hawaiian 89.9% 0.1% 2.78
JetBlue 76.7% 0.5% 1.60
Southwest 81.0% 1.1% 2.65
United 79.9% 1.1% 2.58
Virgin America 79.4% 1.2% 0.82

Source: Based on U.S. Department of Transportation, “Air Travel Consumer Report,” May 2016, www.dot.gov/sites/dot.gov/files/docs/2016MayATCR.pdf.

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Measuring and Improving Business Processes (10 of 20)

Six Sigma – A business improvement methodology that focuses an organization on:

Understanding and managing customer requirements

Aligning key business processes to achieve those requirements

Utilizing rigorous data analysis to understand and ultimately minimize variation in those processes

Driving rapid and sustainable improvement to the business processes.

www.motorolasolutions.com

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Measuring and Improving Business Processes (11 of 20)

Six Sigma People

Champion – Senior-level executive

Master Black Belt – Full-time Six Sigma expert

Black Belt – Fully trained Six Sigma expert

Green Belt – Individuals with basic Six Sigma training

Team Members – Six Sigma project members

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Measuring and Improving Business Processes (12 of 20)

Six Sigma Methodology – DMAIC

Define the goals of the improvement activity

Measure the existing process

Analyze the process

Improve the process

Control the new process

DMADV

Define, Measure, Analyze, Design, Verify (Chapter 15)

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Measuring and Improving Business Processes (13 of 20)

Continuous Improvement – The philosophy that small, incremental improvements can add up to significant performance improvements over time.

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Measuring and Improving Business Processes (14 of 20)

Root cause analysis – A process by which organizations brainstorm about possible causes of problems (referred to as “effects”) and, through structured analyses and data gathering efforts, gradually narrow the focus to a few root causes.

Open Phase – Brainstorm root causes

Narrow Phase – Pare down list of possible causes to a manageable number

Closed Phase – Validate the suspected root cause(s) through the analysis of available data.

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Measuring and Improving Business Processes (15 of 20)

Tools used in Root Cause Analysis

Cause-and-Effect Diagram – A graphical tool used to categorize the possible causes for a particular results. Also known as a fishbone diagram or Ishikawa diagram.

Figure 4.8 Cause-and-Effect Diagram

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Measuring and Improving Business Processes (16 of 20)

Tools used in Root Cause Analysis

Five Whys – An approach used during the narrow phase of root cause analysis to brainstorm successive answers to the question “Why is this a cause of the original problem?” The name comes from the general observation that the questioning process can require up to five rounds.

Scatter Plot – A graphical representation of the relationship between two variables.

Check Sheet – A sheet use to record how frequently a certain event occurs.

Pareto Chart – A special form of bar chart that shows frequency counts from highest to lowest.

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Measuring and Improving Business Processes (17 of 20)

Figure 4.10 Example Scatter Plot Showing the Relationship between Overtime Hours (Cause) and Defect Rate (Effect)

Table 4.9 Check Sheet Results for Healthy Foods

Cause Frequency
Price check 142
Register out of money 14
Bagger unavailable 33
Register out of tape 44
Customer forgot item 12
Management override needed due to incorrect entry 86
Wrong item 52
Other 8
Total Delays 391

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Measuring and Improving Business Processes (18 of 20)

Figure 4.11 Pareto Chart Ranking Causes of Unexpected Delays at Checkout Counter

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Measuring and Improving Business Processes (19 of 20)

Other Visual Tools

Run chart – A graphical representation that tracks changes in a key measure over time.

Bar graph – A graphical representation of data that places observations into specific categories.

Histogram – A special form of bar chart that tracks that number of observations that fall within a certain interval.

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Measuring and Improving Business Processes (20 of 20)

Figure 4.12 Additional Data Analysis Tools

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Business Process Challenges and the SCOR MODEL (1 of 6)

Some processes are not reasonably well-understood processes that can be analyzed, improved, and controlled due to:

Some processes are artistic in nature. That is, they require flexibility in carrying out the various steps. Furthermore, customers actually value variability in the outcomes.

Some processes may be so broken or so mismatched to the organization’s strategy that only a total redesign of the process will do.

Some processes cross organizational boundaries, which introduces additional challenges.

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Business Process Challenges and the SCOR MODEL (2 of 6)

How Standardized Should Processes Be?

Some consider tools such as process mapping and DMAIC to be “overused” and applied in environments where flexibility in the process and variability in outcomes are valued.

Four Types of Processes

Mass processes – Output is the same every time.

Mass customization – Variation is controlled.

Artistic processes – Variability in process and outputs are valued.

Nascent (broken) process – Mismatch between what the customer wants and what the process is currently capable of providing.

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Business Process Challenges and the SCOR MODEL (3 of 6)

Business Process Reengineering – A procedure that involves the fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements in such critical measures of performance as cost, quality, service, and speed.

© 2013 APICS Dictionary

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Business Process Challenges and the SCOR MODEL (4 of 6)

Supply Chain Operations Reference (SCOR) model – A comprehensive model of the core management processes and individual process types that, together, define the domain of supply chain management.

Five core processes for Level 1

Source

Make

Deliver

Return

Plan

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Business Process Challenges and the SCOR MODEL (5 of 6)

Level 2 Processes – Break down Level 1 processes into more detail.

For example: Differentiate between “make” processes – make-to-stock, make-to-order and engineer-to-order

Level 3 Processes – Describe in detail the actual steps required to execute level 2 processes.

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Business Process Challenges and the SCOR MODEL (6 of 6)

Figure 4.18 Overview of the SCOR Model Showing the Five Level 1 Processes

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Business Processes Case Study

Swim Lane Process Map for a Medical Procedure

 

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Copyright

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