Business Process analysis methods

There are various methods that have been adopted by researchers to analyse business processes and these methods include Six Sigma and Value Stream Mapping, which are discussed in more detail in this subsection.

2.2.1.1 Business process analysis using Six Sigma

Six Sigma has been discussed by a number of authors but was defined by Tjahjono et al. (2010) as a business strategy that focuses on the improvement of customer requirements, business productivity and financial performance. Markarian (2004), also contributing to the definition, describes Six Sigma as a top-down methodology which requires detailed analysis, fact-based decisions and a controlled plan to ensure continuous quality control of a process. Gremyr and Fouquet (2012) took a different view, and they argued that Six Sigma on its own is not sufficient to analyse business processes and is more effective when used alongside other process analysis methods. A more comprehensive definition is provided by Tjahjono et al. (2010), who define Six Sigma as a set of statistical tools, an operational philosophy of management, a business culture and an analysis methodology which makes use of scientific methods, with all of these aspects overlapping. With the definition from Tjahjono et al. (2010), Six Sigma is a quality initiative which supports the reduction of variations in a process and helps to reduce the cost of products

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as well as processes. Therefore, it is considered a quality management tool (Deshmukh and Chavan, 2012) rather than business process reengineering method.

2.2.1.2 Business process analysis using Value Stream Mapping (VSM)

The lean thinking paradigm developed by Toyota was created as a holistic approach to manufacturing business processes (Womack and Jones, 1996a). This was motivated by the need to strengthen the implementation of Toyota’s lean principles; increasingly holistic approach for mapping and evaluating business processes have been developed (Rother and Shook, 1999, Jones and Womack, 2002), and this is called Value Stream Mapping (VSM).

VSM is argued to be an essential tool in analyzing how various activities impact on the overall business process (Hines et al., 1999, Lasa et al., 2008a). VSM has also been conceptualised as a tool to make an organisation’s business processes leaner by reducing activities that do not add value to the product or service (Shararah, 2013). VSM is therefore defined as the process of making a production or service business process lean. This is done by eliminating or minimizing functions and activities that do not add value to the product or service being delivered (Garcia, 2002) using the customer’s definition of value (Shararah, 2013).

Using VSM, waste within the business process is highlighted and opportunities for improvement identified (Garcia, 2002, Lasa et al., 2008a). Where value is not being added to a service process, there is possibility that it could be adding cost instead. Using VSM, activities and actions that do not add value to the service process are first identified and then can be eliminated or minimized (Dennis et al., 2000, Garcia, 2002, Lasa et al., 2008a).

Garcia (2002) highlighted how various tools can be used to conduct VSM, such as hand drawing, MS Visio and MS Excel, although he discouraged the use of Autocad. Among the newest drawing tools which can be used to visualise data for VSM is ‘Edraw’. Edraw gives the user an advantage in representing the data gathered compared with other visualisation tools. Although MS Visio could be used in a similar way, it does not provide the same flexibility which Edraw offers in representing the data to visualise business processes. Among the advantages Edraw provides is the ability to use the same tool to develop process flows and system design maps.

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A link is thus established between business process analysis using VSM and process automation using ERP systems, as illustrated in the conceptual framework.

2.2.2.1 VSM and other methods for systems redesign

Although a multitude of applications have been developed in recent years for use across industries, such as service distribution and manufacturing, VSM’s roots are mainly grounded in the analysis and improvement of business process environments with disconnected flow lines (Lasa et al., 2008a). To enable accuracy and clarity in practical application, VSM can be broken down into five phases and carried out by a dedicated team for the purpose of applying VSM to a specific business process (Rother and Shook, 1998). These phases are:

 identification and selection of a product family;

 representation of the current state mapping;

 representation of the future state mapping;

 defining how the future state can be put in practice and drafting a working plan; and

 implementation of the working plan.

Rother and Shook (1998) also made it clear that guidelines are needed for the definition of the future state map and the lean framework provides these guidelines to outline how this map should be drawn. These guidelines are summarized below:

 The production rate must be determined by the rate of demand for the product. Touch

time, also known as Takt time, defines the exact time taken to complete an activity within the business process and the concept of Takt time reflects such a rate.

 Establishment of continuous flow where possible (unique product transfer batches).

 Employment of pull systems between different work centres when continuous flow is not possible.

 Only one process, called the pacemaker process, should command the production of the

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Other methods may be used in business process improvement, however whether the other methods specifically focus on improvement and redesign of the service and manufacturing system, as is in the VSM application context, has not been indicated. A literature review conducted by Lasa et al. (2008a) shows that methods currently used in some areas do not cover the same framework as VSM does, and neither do they cover the same objectives nor the same level of completion of target business processes of service/manufacturing (hybrid) systems design. Below is a summary of some of the established methods for modelling business processes and their characteristics.

A well known method used for modelling business systems is process mapping, which involves creating a flow chart of the types of activity being undertaken at each time point during the process (Hines and Rich, 1997). Hines and Rich (1997) have supported this technique for two reasons: firstly, because it is based on the measurement and analysis of quantitative data (Hammer, 1990); and secondly, it can be flexibly applied using the various languages spoken across the globe thereby making it practical and useful (Baudin, 2002). However, process mapping is arguably too generic and not properly suited to modelling complex hybrid service and manufacturing systems (Kateel et al., 1996).

Icam DEFinition Zero (IDEFO) is another method that can be used for process mapping. It is specifically orientated towards and developed for the manufacturing industry and as a result is best suited to typical manufacturing processes (Lasa et al., 2008a). In order to describe the activities of the manufacturing system in a hierarchical way, this method carries out a structured analysis which is a data flow approach to system design (Lasa et al., 2008a). It fails, however, to accommodate the analysis of quantitative data from the production process since it is explicitly a qualitative method (Wu, 1996).

It has been shown from the discussion of characteristics above that VSM is grounded in the manufacturing and service industries, and has a more robust application method compared with other methods used in re-engineering business processes.

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industry, whilst Brunt (2000) and Abdulmalek and Rajgopal (2007) used VSM for process improvement and re-engineering in a steel manufacturing industry. Emiliani and Stec (2004) used VSM for process improvement in leadership development and McManus and Millard (2002) applied VSM in product development and in the re-engineering of aerospace manufacturing firms.

Despite the usefulness of VSM as evidenced by the studies cited above, researchers have also suggested that it has some limitations. Chitturi et al. (2007) explored VSM’s limitations from practical view-point, finding issues such as VSM’s difficulty to handle different family types when mapping operations in job shop operations. That is operations that deal with one-of-a- kind or short-run output like goods or services (Bassett, 1991), using standard VSM. Chitturi et al. (2007) agreed, however, that to get the best out of VSM, information gathering should be tailored to suit the industry and the business process being re-engineered. In their research, they adopted a method of collecting data from the last to the first operation (bottom to top), in contrast to this research which adopted a top to ‘bottom approach’. Although the ‘bottom to top’ is a good approach it was not adopted for this research because of its service orientation. Had this research been a production-based study then collecting data from the last to the first operation might have been suitable because in production, the output (the product) is defined. Unlike in service where the service rendered to the customer involves multiple variables such as the uncertainty of items required to successfully carry out the service. Chitturi (2007) also argued that the future state of the business is not certain and could fall short of being achievable. Poor planning and assumptions made during the design of the VSM future state, and in software developments, could lead to unachievable goals.

2.2.2.2 Justification for using VSM

Like Value Stream Mapping, Six Sigma focuses on improvements from the customer’s perspective, that is, eliminating activities that do not add value to the product or service delivered to the customer (Antony et al., 2005). Essentially eliminating activities termed as waste from customer’s point of view. The high level of investment required to implement Six Sigma and the organisation’s lack of resources in providing statistical-related training for its staff are the main weaknesses associated with Six Sigma (Deshmukh and Chavan, 2012). Although Six

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Sigma has been successfully implemented in large organisations there is less documented evidence of its implementation in SMEs, and therefore it tends to be unpopular among SMEs (Antony et al., 2005).

Section 2.2 discussed business process analysis, identifying Six Sigma and Value Stream Mapping (VSM) as the popular methods of carrying out business process analysis in information systems studies. Other methods of process analysis mentioned are IDEFO and Process Mapping. The justification for selecting Value Stream Mapping is in its ability to allow the user to analyse processes from the perspective of value to the process. Another justification from this section is the ability to use VSM in mapping the current business process and the production of a value stream diagram of the future state business process. Section 2.3 will then discuss the hybrid service and manufacturing business process and enterprise resource planning systems.

Methodologically and conceptually, VSM is adding a conceptual understanding at a lower level of data abstraction when compared to OIPT which provides overarching organisational view of information needs and capabilities. In the current study, conceptually, VSM is operationally strengthening OIPT when it comes to data analysis and visualisation as it comes with a predefined codes and notations. The particular attraction of VSM to this study is that the data collection allows its synergy with OIPT.