Process management (2)
International Business Program
Faculty of Management, University of Warsaw
prof. UW
dr hab. Krzysztof Klincewicz
[email protected]
TiMO (Department of Organization Theory and Methods)
www.timo.wz.uw.edu.pl
„The Fifth Discipline”
(Peter Senge)
• Management bestseller from the 1990s
• „Fifth discipline” = building learning organizations
• „The art of seeing the forest AND the trees”
– modelling interdependencies in organizations and their
environments
– learning from successes and mistakes
• „boiling a frog” and automobile industry
– delayed consequences of own’s experiences
• „butterly effect” (Edward Lorenz)
Systems dynamics
• Analytical approach, popularized by Senge
– developed by Jay W. Forrester, MIT, 1960s
– used to model business, social and ecological systems
– uncovering counter-intuitive relations
– Senge did not use equations (quantitative modelling) –
but original systems dynamics is quantitative
Software for systems dynamics
modelling
• Vensim PLE,
www.vensim.com
– free edition for non-commercial purposes
– helps:
• graphically describe interdependencies
• identify feedback loops
• quantitatively describe relations (build equations)
• simulate
Positive feedback loop
(reinforcing cycle)
• The rich are getting richer
• More X leads to… more X!
Negative feedback loop
(balancing/stabilizing system)
• Homeostatic mechanism
© Senge (1990) © Senge (1990)
Feedback loop with a delay
• Delays cause stability/adjustment problems
Archetype „Limits to growth”
• Combination of positive and negative feedbacks
Archetype „Limits to growth”
• Combination of positive and negative feedbacks
Archetype „Shifting the burden”
• Instead of fixing the problem, „solutions” induce
additional negative side effects
More complex models
More complex models
More complex models
More complex models
Modelling production systems
Two types of variables in systems
dynamics - stocks and flows
• Stock (level) – is accumulated, marked as rectangle
• Flow (rate) – is changing over time, marked as two
triangles
stock
stock
flow
Complex model: market growth
and capacity expansion
Assignment
• Use Vensim PLE to analyze challenges, described in the case
study „Bonnie Blaine”
• The systems dynamics model should include:
– stocks and flows (no equations, but „+”/”-” symbols for each arrow)
– at least 20 variables and at least one system archetype
– interpretation (explain how can systems dynamics model help solve
the problems in question)
• Essay accompanying the model, answering all 7 questions from
the case study based on the insights from the Vensim model
• Formal requirements
– PDF file send by e-mail by …
– Vensim model should be copied and integrated into the PDF file
– original work (plagiarism = failing the course)
Business Process Reengineering
• Management bestseller by Michael Hammer and
James Champy: "Reengineering the Corporation. A
Manifesto for Business Revolution”
• revolution not evolution - radical redesign not
incremental improvements
– traditional approaches to process management: how is
the process performed? how to shorten the process?
how to improve the performance? how to reduce
costs?
– BPR: why is the process performed? can it be done
differently?
BPR’s example – Ford (before)
400 employees at accounts payable
– compared with 5 employed by Mazda
BPR’s example – Ford (after)
invoiceless processing
75% reduction in headcount
BPR fundamentals (1)
• rethinking business processes - radical
redesign promises dramatic
improvements
• organization-wide processes - going
beyond single departments, everybody
has access to process data
• analysing relations between different
processes
BPR fundamentals (2)
• processes run regardless of hierarchies
and departmental divisions
• flattening of organizational structures
• cross-functional teams
• resources in disparate location should
be treated as if they were in the same
place
BPR fundamentals (3)
• importance of communication and
teamwork - as opposed to traditional
division of work and specialization
• joint responsibility for the outcomes of
the process
• everyday work becoming more
ambitious (work enrichment)
BPR fundamentals (4)
• less control of the everyday work, more
autonomy but verification of results
• focus on results not tasks
• process roles not organizational
positions
• performance-based pay
• internal customers (users of the process
results) involved in process performance
BPR fundamentals (5)
• the same results could be achieved in
different ways (e.g. automation, elimination,
outsourcing)
BPR fundamentals (6)
• importance of Information Technology
• use of central database and transaction
system
• access to data and information by all people
involved in the process
• workflow - coordination of work, distribution
of tasks, process control
BPR projects
Identify process customers
Define process goals
Map the current process
Redesign the process
Implement
Problems with BPR
• Lack of precise recommendations
• Implementation mistakes: downsizing instead of
process redesign
• Potential loss of knowledge
• Demotivation and layoff survivor syndrom
• Risks related to radical changes
Different change scenarios
revolution
evolution
top-down
bottom-up
with
consultants
self-sufficient
Business Process Improvement
(BPI)
• Continuous, evolutionary improvements instead of
revolutionary redesign
• Use of process benchmarking
• ESIA framework
– Eliminate - e.g. waiting time, paperwork, inventory,
movement, over-production, duplication of tasks,
reformatting data, transferring data, control
– Simplify - procedures, forms, communication methods
– Integrate - jobs, people, suppliers
– Automate - tedious, dirty and difficult tasks, data
capture, transfer and analysis
Process modelling
• Graphical representation of a process
• Helps analyze and modify
• Usually supported by computer software
– ARIS – the most popular commercial application for
process modelling
– ARIS Express – free version of ARIS, limited in
functionality but with similar user interface, can be
used as entry-level solution
www.ariscommunity.com
Business Process Modelling
Notation (BPMN)
• Standard notation for graphical representation of
processes
(one of many competing standards)
• Supported by
ARIS Express
Simple BPMN process model
• Credit approval process
Simple BPMN process model
• On-line auction process
BPMN elements
© White 2006
BPMN process with pools/lanes
BPMN process with pools/lanes
Gateways OR / AND
© Owen, Raj 2003
© Owen, Raj 2003
© Owen, Raj 2003 © Owen, Raj 2003
Event-based actions
© White 2006
Event triggering
subsequent actions
Data objects
© Owen, Raj 2003
