Full title of the book: BUSINESS PROCESS IMPROVEMENT HANDBOOK FOR OFFICE & SERVICES, FOR EXPERTS & MANAGERS AN ADVANCED GUIDE, Zoltan Somogyi, 2016, ISBN 9789090296203 (more than 500 pages).
Applicable to many sectors as e.g.: FINANCIAL SERVICES: RETAIL BANKING, COMMERCIAL LENDING, INSURANCE, CREDIT CARDS, MORTGAGE BANKING, BROKERAGE, INVESTMENT ADVISORY, ASSET MANAGEMENT • PUBLIC SERVICES: HEALTHCARE, CENTRAL GOVERNMENT, LOCAL GOVERNMENT, POLICE AND JUSTICE, FIRE AND RESCUE SERVICE, EDUCATION • CONSUMER PRODUCTS AND RETAIL • TELECOM, MEDIA & ENTERTAINMENT • ALSO BUSINESS ADMINISTRATION, SALES, MARKETING, PURCHASING, HR, R&D, FINANCE,… IN MANY OTHER SECTORS.
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Short summary
Business Process Improvement (BPI) and Management (BPM) became a very important subject the last few years. In all of the sectors, without exception, there are BPI initiatives in progress. Because of the very severe legislation in the Financial sector (especially the last several years because of the financial crisis), because of the high risks (market risk, operational risk, etc.) and because of the often very complex processes involving very specialized work across several departments there are more and more business process improvement and management initiatives. Over the last few years there are huge changes in the Consumer products and Retail sector also because of the change in the way how consumers shop and what they expect from the retailers. It is not only because of technological innovation but also because of the globalization. Companies in the consumer products and retail sector are struggling to adapt to these changes. Online, mobile and social commerce are dramatically changing and complicating the processes of the organizations in the sector. In the Telecom, Media & Entertainment sector the growing number of often complex products and services, which are frequently changing, the management of the also growing number of new technologies all constitute to a lot of problems in most of the internal processes as sales, billing, customer support, maintenance, etc. Business process improvement became a necessity. In Public services the drivers for BPI are the reduction of cost, the development of efficient processes and to respond to policy.
This more than 500 pages handbook describes step by step in detail the systematic project based business process improvement methodology in office and services together with all necessary tools and techniques, with a lot of real world examples and with a comparison between the different sectors. Because of its importance, there is a chapter with ICT/software tools for BPI and BPM. There are also more than 250 pages dedicated to data analysis, variation analysis, decision modeling, queuing systems, networks of queues, etc. for BPI with many examples explained in MS Excel.
You may implement the whole methodology or you may use the parts which are interesting to you. The collection of methods and techniques presented is unique on the market, especially because of the focus on Office & Services!
The main objective of the book is to help the reader applying the presented methodology, tools and techniques. There are more than 40 examples presented with extensive explanation!
The book is accompanied with several ready to use professional MS Excel BPI tools and worked out examples!
1. Introduction 38
2. Identify the system by defining a High level system map 41
3. Redesign the system according to a Low level system map 48
CHAPTER 2. The Standardized Business Process Improvement Implementation Plan 89
1. Introduction 90
2. Reasoning/Executive Summary 92
3. Business Case/Goals 94
4. Link to the Strategy of the Organization 95
5. Define the reach of the BPI trajectory 100
6. Planning and Time Schedule 101
7. Progress Control and Reporting 109
8. Prerequisites/Resources 112
9. Financing 113
10. Organization 114
11. Communication Plan 117
12. Training Plan 124
13. Project Re-launch plan 127
CHAPTER 3. BPI tools 129
1. Value Stream Mapping (VSM) 130
2. PDSA (PDCA) Model for Improvement 144
3. 5S 147
4. Root Cause Analyzes 151
5. Visual Management 154
6. Job Instruction (JI) 158
CHAPTER 4. Project planning tools and techniques 163
1. Introduction 164
CHAPTER 5. Data analyses in office & Services - Collecting, Analyzing and Making Decisions 177
1. Introduction 178
2. Collecting and Organizing the Data 179
3. Analyzing the Data and Making Decisions 207
4. Variation Analyzes and Process control 239
5. The ‘Six Sigma’ approach 271
6. Decision Making Tools 275
CHAPTER 6. Auditing Business Processes in office & services 435
1. Introduction 436
2. The Process Audit - The Process Enablers (PEMM) 436
3. The Business Audit - The Business Capabilities (PEMM) 443
4. How to report the PEMM audit results? 451
5. ISO 9001 Business Audit versus PEMM Business Audit 452
CHAPTER 7. Business Process Improvement in specific sectors 455
1. Introduction 456
2. Public Services 457
3. Financial Services 461
4. Consumer Products and Retail 466
5. Telecom, Media & Entertainment 470
CHAPTER 8. Software tools for Business Process Improvement 473
1. Introduction 474
2. Business Process Model and Notation Standard - BPMN 2.0 474
3. ADONIS 479
4. ProcessMaker 486
5. Conclusion 492
About The Author 34
CHAPTER 1. Business Process Improvement in office & services 37
1. Introduction 38
2. Identify the system by defining a High level system map 41
2.1 Identify all site level primary and support value streams 41
2.1.1 Do a Runners, Repeaters, Strangers (RRS) analysis 42
2.1.2 Define the Purpose of each Major task 42
2.1.3 Draw a high level map of the system 42
2.1.4 Understand the Demand put on each Major task 43
2.1.5 Check whether the system is Capable to meet the Load put on it 44
2.1.6 Analyze how value is delivered to the Customer 45
2.1.7 Rank the Primary and Support value streams according to importance and easy of implementation 46
2.1.8 Divide the Primary and Support value streams into stand-alone loops (sub-systems) 47
2.1.9 Define the system boundary 47
3. Redesign the system according to a Low level system map 48
3.1 Prepare the Current State Low level map 49
3.2 Analyze the System 50
3.2.1 Runners, Repeaters and Strangers (RRS) Analysis 50
3.2.2 Waste Analysis 51
3.2.3 Variation Analysis 55
3.3 Stabilize the System 57
3.3.1 Make sure that the system has predictable and repeatable output 57
3.3.2 Eliminate Failure Demand 57
3.3.3 Eliminate waste 57
3.3.4 Remove not necessary variation or delay adding it 57
3.3.4.1 ISO9001 59
3.3.4.2 Six Sigma 59
3.4 Standardize and Create Standard Work 62
3.5 Apply Lean Time Management Principles 64
3.6 Create ‘Pull’ Systems 65
3.6.1 Forms of ‘Pull’ Systems 65
3.6.1.1 Sequential Pull Systems 66
3.6.1.2 Supermarket Pull Systems 67
3.6.2 Steps to implement ‘Pull’ systems 67
3.6.2.1 Identify all locations where queues can be formed 68
3.6.2.2 Decide how to visualize the queues 69
3.6.2.3 Set up limits for the queues 69
3.6.2.4 Define how to control the queues 72
3.6.2.5 Balance the system 72
3.6.2.6 Train office workers on how to use the ‘Pull’ system 75
3.6.2.7 Monitor the ‘Pull’ system for effectiveness 75
3.7 Create ‘Flow’ 76
3.7.1 Combining several activities into a single role 77
3.7.2 Cross-functional co-located team following one piece flow 78
3.7.2.1 Balancing 79
3.7.2.2 Capacity utilization 80
3.7.3 Parallel processing 81
3.8 Determine Resource Requirements 83
3.8.1 Process Time (PT) 84
3.8.2 Takt time (TT) & Demand Rate 85
3.9 Draw the next Future State Low level map 86
3.10 Plan and Start the implementation project 86
3.11 Design and Integrate Business Process Management (BPM) ICT systems to the whole system as appropriate 87
CHAPTER 2. The Standardized Business Process Improvement Implementation Plan 89
1. Introduction 90
2. Reasoning/Executive Summary 92
3. Business Case/Goals 94
4. Link to the Strategy of the Organization 95
4.1 Competitive Advantage 95
4.2 Customer Intimacy 97
4.3 Operational Excellence 98
4.4 Globalization 98
4.5 Company Culture 98
4.6 Training & Development 99
4.7 Performance Measurement 99
5. Define the reach of the BPI trajectory 100
6. Planning and Time Schedule 101
6.1 Defining the BPI Project 102
6.1.1 Objectives 103
6.1.2 Scope 103
6.1.3 Strategy 103
6.2 Planning the BPI Project 103
6.2.1 Identify the activities in the project 104
6.2.2 Estimate the times and resources for activities 105
6.2.2.1 Project planning tools and techniques 106
6.2.3 Identify the relationships and dependencies between the activities 106
6.2.4 Identify time and resources schedule constraints and fix the schedule 107
7. Progress Control and Reporting 109
7.1 Assessing the performance of the project with appropriate measures 110
7.2 When will you check progress? 111
8. Prerequisites/Resources 112
9. Financing 113
10. Organization 114
10.1 BPI Program Management Board 115
10.2 BPI Project Board 115
10.3 BPI Project Manager 115
10.4 BPI Project Collaborators and Ambassadors 116
11. Communication Plan 117
11.1 Change Management 118
11.1.1 Resistance to Change 118
11.1.2 Overcoming resistance to change and leading a successful transformation Program 119
11.1.3 The common denominators of change; the DICE score 120
11.1.3.1 Duration (D) 121
11.1.3.2 Integrity (I) 121
11.1.3.3 Commitment (C1, C2) 121
11.1.3.4 Effort (E) 121
11.1.3.5 Calculate the DICE score of your project 121
12. Training Plan 124
12.1 Job Instruction 125
12.2 Knowledge Management 126
13. Project Re-launch plan 127
CHAPTER 3. BPI tools 129
1. Value Stream Mapping (VSM) 130
1.1 Available Time 130
1.2 Customer Information 131
1.3 Process Information 131
1.3.1 The Process Box 131
1.3.2 The Process Data Box 131
1.4 Queues 132
1.5 Interactions 133
1.6 VSM Example: Order - Entry – Invoicing loop 134
1.6.1 Work in process (WIP) 135
1.6.2 The Takt time and resource allocation 136
1.6.3 Improvements 136
1.6.4 The timeline 137
1.7 VSM Example: Recruiting loop 139
1.7.1 The different roles in the loop 139
1.7.2 The actions and interactions in the recruiting process are the following 140
1.7.3 Short analyzes of the recruiting VSM 143
2. PDSA (PDCA) Model for Improvement 144
2.1 Plan 145
2.2 Do 145
2.3 Study 145
2.4 Act 146
3. 5S 147
3.1 How to sustain or maintain a 5S organization? 148
4. Root Cause Analyzes 151
4.1 5Whys technique 151
4.2 Fishbone or cause and effect diagram 152
5. Visual Management 154
5.1 5S workplace organization visual management 156
5.2 Standard work instructions and checklists 156
5.3 Progress and performance reporting 156
5.4 Time and task management 157
5.5 Resource allocation 157
5.6 Exception handling 157
5.7 Mistake proofing 157
6. Job Instruction (JI) 158
6.1 How to choose the trainer 158
6.2 How to prepare to instruct 158
6.3 How to conduct the training 159
6.4 Instruction cards 161
CHAPTER 4. Project planning tools and techniques 163
1. Introduction 164
1.1 Gantt charts 164
1.2 Network analysis with the Critical Path Method (CPM) 165
1.2.1 The critical path 168
1.2.2 Calculate the time window for each activity 168
1.2.3 Resource constraints 170
1.3 Network analysis with PERT 172
1.4 Project Management Methodologies 173
1.5 Project Management Software 174
CHAPTER 5. Data analyses in office & Services - Collecting, Analyzing and Making Decisions 177
1. Introduction 178
2. Collecting and Organizing the Data 179
2.1 What to measure - Goals and Metrics 179
2.1.1 The Metric Development Model 180
2.1.2 The Balanced Scorecard and other balancing measures models 184
2.1.2.1 The Balanced Scorecard 185
2.1.2.2 Malcolm Baldrige National Quality Award Criteria (MBNQA) 187
2.2 Collecting the Data 190
2.2.1 Historical data which is available in the most of the organizations in some form 192
2.2.2 Inspections/Observations 192
2.2.3 Use of Special Technical Equipment 193
2.2.3.1 Time Study 193
2.2.4 Surveys and Interviews 196
2.2.5 Case Studies 198
2.2.6 Systematic Variation in the Data 198
2.3 Organizing the Data 199
2.4 Sampling 199
2.4.1 The number of data to collect – Sample size 200
3. Analyzing the Data and Making Decisions 207
3.1 Viewing the data in different ways 207
3.1.1 Making a chart 208
3.2 The different statistical properties of the dataset 210
3.2.1 The Mean 210
3.2.2 The Median 210
3.2.3 The Minimum, Maximum and the Range 211
3.2.4 The measures of Variability: Standard Deviation and Variance 211
3.3 The frequency table and histogram 213
3.4 The distribution of the analyzed data 219
3.4.1 The normal distribution 219
3.4.1.1 Test for normality 221
3.4.2 The binomial distribution 225
3.4.3 The Poisson distribution 227
3.4.4 The exponential distribution 227
3.5 The relationship between two datasets and trends in the data 229
3.5.1 Time series plots 229
3.5.2 Scatter plots 230
3.5.3 Regression Analyses and Correlation 231
3.5.3.1 Nonlinear relationship and regression 234
3.5.3.2 Multiple regression 235
3.5.4 Forecasting 235
3.5.4.1 The different components of the time series data 236
4. Variation Analyzes and Process control 239
4.1 Customer-Introduced external Variability 239
4.2 Internal Process Variability 241
4.3 How to analyze and remove variation 242
4.3.1 Control charts 244
4.3.1.1 Data requirements 245
4.3.1.2 Rational Sub-grouping 246
4.3.1.3 Data Type Conversion 246
4.3.1.4 X&R Control Charts 247
4.3.1.5 X&S Control Charts 256
4.3.1.6 u-Chart (c-Chart) 256
4.3.1.7 p-Chart (np-Chart) 260
4.3.1.8 How to use Control charts 265
4.3.1.9 Conclusion 269
5. The ‘Six Sigma’ approach 271
6. Decision Making Tools 275
6.1 Pareto Analyses 275
6.2 Decision Analysis and Modeling 277
6.2.1 Introduction To Modeling 277
6.2.2 Simple Models 279
6.2.3 MS Excel Solver 281
6.2.3.1 Solver parameters 282
6.2.3.2 Solver Options 283
6.2.3.3 Tips for using the Solver 284
6.2.3.4 How to use the Solver for linear models 285
6.2.4 Deterministic Optimization Models 287
6.2.4.1 Static Deterministic Optimization Models 288
6.2.4.2 Dynamic Deterministic Optimization Models 305
6.2.4.3 Deterministic Network Optimization Models 322
6.2.4.4 Conclusion 340
6.2.5 Probabilistic Models 341
6.3 Queuing or ‘Waiting line’ Analyses 344
6.3.1 Introduction to queuing systems and models 346
6.3.1.1 Customer Arrivals - Population Size 348
6.3.1.2 Customer Arrivals - Statistical Distribution of the Arrivals 348
6.3.1.3 Customer Arrivals - Behavior of Customers 350
6.3.1.4 Queue – Capacity 350
6.3.1.5 Queue – Discipline 351
6.3.1.6 Service Facility – Design 352
6.3.1.7 Service Facility - Statistical Distribution of the Service Times 352
6.3.1.8 Which properties of queuing system are important and why 354
6.3.2 Notation and Basic Relationships 355
6.3.3 Short introduction to probability concepts 358
6.3.3.1 Probability calculations 358
6.3.3.2 Probability Distribution for Discrete Random Variables 359
6.3.3.3 Cumulative Probability Distribution for Discrete Random Variables 360
6.3.3.4 Probability Density Functions (PDF) of Continuous Random Variables 361
6.3.3.5 The Normal Distribution 363
6.3.4 M/M/1 system – steady state analyzes 365
6.3.5 M/M/1/K system – steady state analyzes 369
6.3.6 M/M/c system – steady state analyzes 373
6.3.7 M/M/c/K system (with limited queue) – steady state analyzes 383
6.3.8 M/M/c/c system – steady state analyzes 389
6.3.9 M/G/1 system – steady state analyzes 392
6.3.10 M/G/c system – steady state analyzes 395
6.3.11 G/G/c system – steady state analyzes 397
6.3.12 M/D/1 system – steady state analyzes 399
6.3.13 M/M/1/K/K system – steady state analyzes 401
6.3.14 M/M/c/K/K system – steady state analyzes 404
6.3.15 M/M/c Non-Preemptive Priority system – steady state analyzes 410
6.3.16 M/M/c Preemptive Priority system – steady state analyzes 414
6.3.17 Networks of Service Facilities (network of queues) 418
6.3.17.1 General Networking Rules 418
6.3.17.2 Jackson Network Rules 419
6.3.17.3 Jackson’s Theorem 420
6.4 Sensitivity Analysis 428
CHAPTER 6. Auditing Business Processes in office & services 435
1. Introduction 436
2. The Process Audit - The Process Enablers (PEMM) 436
3. The Business Audit - The Business Capabilities (PEMM) 443
4. How to report the PEMM audit results? 451
5. ISO 9001 Business Audit versus PEMM Business Audit 452
CHAPTER 7. Business Process Improvement in specific sectors 455
1. Introduction 456
2. Public Services 457
3. Financial Services 461
3.1 Big Data in financial services 464
4. Consumer Products and Retail 466
5. Telecom, Media & Entertainment 470
CHAPTER 8. Software tools for Business Process Improvement 473
1. Introduction 474
2. Business Process Model and Notation Standard - BPMN 2.0 474
3. ADONIS 479
4. ProcessMaker 486
4.1 ProcessMaker main features 486
4.1.1 Workflow Designer (Designer) 486
4.1.2 Digital Forms Designer (Dynaform Builder) 487
4.1.3 Document/Report Builder 488
4.1.4 Web Services API Trigger Builder 488
4.2 How to measure queue length, lead time, process time, etc. in office/service/business administration 489
4.3 Business Process/Standard Work Automation 490
4.4 Developing a Plugin for ProcessMaker 491
4.5 Installation and usage 492
5. Conclusion 492
References & Further Reading 496
Index 501
Contents
CHAPTER 1. Business Process Improvement in office & services 371. Introduction 38
2. Identify the system by defining a High level system map 41
3. Redesign the system according to a Low level system map 48
CHAPTER 2. The Standardized Business Process Improvement Implementation Plan 89
1. Introduction 90
2. Reasoning/Executive Summary 92
3. Business Case/Goals 94
4. Link to the Strategy of the Organization 95
5. Define the reach of the BPI trajectory 100
6. Planning and Time Schedule 101
7. Progress Control and Reporting 109
8. Prerequisites/Resources 112
9. Financing 113
10. Organization 114
11. Communication Plan 117
12. Training Plan 124
13. Project Re-launch plan 127
CHAPTER 3. BPI tools 129
1. Value Stream Mapping (VSM) 130
2. PDSA (PDCA) Model for Improvement 144
3. 5S 147
4. Root Cause Analyzes 151
5. Visual Management 154
6. Job Instruction (JI) 158
CHAPTER 4. Project planning tools and techniques 163
1. Introduction 164
CHAPTER 5. Data analyses in office & Services - Collecting, Analyzing and Making Decisions 177
1. Introduction 178
2. Collecting and Organizing the Data 179
3. Analyzing the Data and Making Decisions 207
4. Variation Analyzes and Process control 239
5. The ‘Six Sigma’ approach 271
6. Decision Making Tools 275
CHAPTER 6. Auditing Business Processes in office & services 435
1. Introduction 436
2. The Process Audit - The Process Enablers (PEMM) 436
3. The Business Audit - The Business Capabilities (PEMM) 443
4. How to report the PEMM audit results? 451
5. ISO 9001 Business Audit versus PEMM Business Audit 452
CHAPTER 7. Business Process Improvement in specific sectors 455
1. Introduction 456
2. Public Services 457
3. Financial Services 461
4. Consumer Products and Retail 466
5. Telecom, Media & Entertainment 470
CHAPTER 8. Software tools for Business Process Improvement 473
1. Introduction 474
2. Business Process Model and Notation Standard - BPMN 2.0 474
3. ADONIS 479
4. ProcessMaker 486
5. Conclusion 492
Detailed Contents
Foreword 30About The Author 34
CHAPTER 1. Business Process Improvement in office & services 37
1. Introduction 38
2. Identify the system by defining a High level system map 41
2.1 Identify all site level primary and support value streams 41
2.1.1 Do a Runners, Repeaters, Strangers (RRS) analysis 42
2.1.2 Define the Purpose of each Major task 42
2.1.3 Draw a high level map of the system 42
2.1.4 Understand the Demand put on each Major task 43
2.1.5 Check whether the system is Capable to meet the Load put on it 44
2.1.6 Analyze how value is delivered to the Customer 45
2.1.7 Rank the Primary and Support value streams according to importance and easy of implementation 46
2.1.8 Divide the Primary and Support value streams into stand-alone loops (sub-systems) 47
2.1.9 Define the system boundary 47
3. Redesign the system according to a Low level system map 48
3.1 Prepare the Current State Low level map 49
3.2 Analyze the System 50
3.2.1 Runners, Repeaters and Strangers (RRS) Analysis 50
3.2.2 Waste Analysis 51
3.2.3 Variation Analysis 55
3.3 Stabilize the System 57
3.3.1 Make sure that the system has predictable and repeatable output 57
3.3.2 Eliminate Failure Demand 57
3.3.3 Eliminate waste 57
3.3.4 Remove not necessary variation or delay adding it 57
3.3.4.1 ISO9001 59
3.3.4.2 Six Sigma 59
3.4 Standardize and Create Standard Work 62
3.5 Apply Lean Time Management Principles 64
3.6 Create ‘Pull’ Systems 65
3.6.1 Forms of ‘Pull’ Systems 65
3.6.1.1 Sequential Pull Systems 66
3.6.1.2 Supermarket Pull Systems 67
3.6.2 Steps to implement ‘Pull’ systems 67
3.6.2.1 Identify all locations where queues can be formed 68
3.6.2.2 Decide how to visualize the queues 69
3.6.2.3 Set up limits for the queues 69
3.6.2.4 Define how to control the queues 72
3.6.2.5 Balance the system 72
3.6.2.6 Train office workers on how to use the ‘Pull’ system 75
3.6.2.7 Monitor the ‘Pull’ system for effectiveness 75
3.7 Create ‘Flow’ 76
3.7.1 Combining several activities into a single role 77
3.7.2 Cross-functional co-located team following one piece flow 78
3.7.2.1 Balancing 79
3.7.2.2 Capacity utilization 80
3.7.3 Parallel processing 81
3.8 Determine Resource Requirements 83
3.8.1 Process Time (PT) 84
3.8.2 Takt time (TT) & Demand Rate 85
3.9 Draw the next Future State Low level map 86
3.10 Plan and Start the implementation project 86
3.11 Design and Integrate Business Process Management (BPM) ICT systems to the whole system as appropriate 87
CHAPTER 2. The Standardized Business Process Improvement Implementation Plan 89
1. Introduction 90
2. Reasoning/Executive Summary 92
3. Business Case/Goals 94
4. Link to the Strategy of the Organization 95
4.1 Competitive Advantage 95
4.2 Customer Intimacy 97
4.3 Operational Excellence 98
4.4 Globalization 98
4.5 Company Culture 98
4.6 Training & Development 99
4.7 Performance Measurement 99
5. Define the reach of the BPI trajectory 100
6. Planning and Time Schedule 101
6.1 Defining the BPI Project 102
6.1.1 Objectives 103
6.1.2 Scope 103
6.1.3 Strategy 103
6.2 Planning the BPI Project 103
6.2.1 Identify the activities in the project 104
6.2.2 Estimate the times and resources for activities 105
6.2.2.1 Project planning tools and techniques 106
6.2.3 Identify the relationships and dependencies between the activities 106
6.2.4 Identify time and resources schedule constraints and fix the schedule 107
7. Progress Control and Reporting 109
7.1 Assessing the performance of the project with appropriate measures 110
7.2 When will you check progress? 111
8. Prerequisites/Resources 112
9. Financing 113
10. Organization 114
10.1 BPI Program Management Board 115
10.2 BPI Project Board 115
10.3 BPI Project Manager 115
10.4 BPI Project Collaborators and Ambassadors 116
11. Communication Plan 117
11.1 Change Management 118
11.1.1 Resistance to Change 118
11.1.2 Overcoming resistance to change and leading a successful transformation Program 119
11.1.3 The common denominators of change; the DICE score 120
11.1.3.1 Duration (D) 121
11.1.3.2 Integrity (I) 121
11.1.3.3 Commitment (C1, C2) 121
11.1.3.4 Effort (E) 121
11.1.3.5 Calculate the DICE score of your project 121
12. Training Plan 124
12.1 Job Instruction 125
12.2 Knowledge Management 126
13. Project Re-launch plan 127
CHAPTER 3. BPI tools 129
1. Value Stream Mapping (VSM) 130
1.1 Available Time 130
1.2 Customer Information 131
1.3 Process Information 131
1.3.1 The Process Box 131
1.3.2 The Process Data Box 131
1.4 Queues 132
1.5 Interactions 133
1.6 VSM Example: Order - Entry – Invoicing loop 134
1.6.1 Work in process (WIP) 135
1.6.2 The Takt time and resource allocation 136
1.6.3 Improvements 136
1.6.4 The timeline 137
1.7 VSM Example: Recruiting loop 139
1.7.1 The different roles in the loop 139
1.7.2 The actions and interactions in the recruiting process are the following 140
1.7.3 Short analyzes of the recruiting VSM 143
2. PDSA (PDCA) Model for Improvement 144
2.1 Plan 145
2.2 Do 145
2.3 Study 145
2.4 Act 146
3. 5S 147
3.1 How to sustain or maintain a 5S organization? 148
4. Root Cause Analyzes 151
4.1 5Whys technique 151
4.2 Fishbone or cause and effect diagram 152
5. Visual Management 154
5.1 5S workplace organization visual management 156
5.2 Standard work instructions and checklists 156
5.3 Progress and performance reporting 156
5.4 Time and task management 157
5.5 Resource allocation 157
5.6 Exception handling 157
5.7 Mistake proofing 157
6. Job Instruction (JI) 158
6.1 How to choose the trainer 158
6.2 How to prepare to instruct 158
6.3 How to conduct the training 159
6.4 Instruction cards 161
CHAPTER 4. Project planning tools and techniques 163
1. Introduction 164
1.1 Gantt charts 164
1.2 Network analysis with the Critical Path Method (CPM) 165
1.2.1 The critical path 168
1.2.2 Calculate the time window for each activity 168
1.2.3 Resource constraints 170
1.3 Network analysis with PERT 172
1.4 Project Management Methodologies 173
1.5 Project Management Software 174
CHAPTER 5. Data analyses in office & Services - Collecting, Analyzing and Making Decisions 177
1. Introduction 178
2. Collecting and Organizing the Data 179
2.1 What to measure - Goals and Metrics 179
2.1.1 The Metric Development Model 180
2.1.2 The Balanced Scorecard and other balancing measures models 184
2.1.2.1 The Balanced Scorecard 185
2.1.2.2 Malcolm Baldrige National Quality Award Criteria (MBNQA) 187
2.2 Collecting the Data 190
2.2.1 Historical data which is available in the most of the organizations in some form 192
2.2.2 Inspections/Observations 192
2.2.3 Use of Special Technical Equipment 193
2.2.3.1 Time Study 193
2.2.4 Surveys and Interviews 196
2.2.5 Case Studies 198
2.2.6 Systematic Variation in the Data 198
2.3 Organizing the Data 199
2.4 Sampling 199
2.4.1 The number of data to collect – Sample size 200
3. Analyzing the Data and Making Decisions 207
3.1 Viewing the data in different ways 207
3.1.1 Making a chart 208
3.2 The different statistical properties of the dataset 210
3.2.1 The Mean 210
3.2.2 The Median 210
3.2.3 The Minimum, Maximum and the Range 211
3.2.4 The measures of Variability: Standard Deviation and Variance 211
3.3 The frequency table and histogram 213
3.4 The distribution of the analyzed data 219
3.4.1 The normal distribution 219
3.4.1.1 Test for normality 221
3.4.2 The binomial distribution 225
3.4.3 The Poisson distribution 227
3.4.4 The exponential distribution 227
3.5 The relationship between two datasets and trends in the data 229
3.5.1 Time series plots 229
3.5.2 Scatter plots 230
3.5.3 Regression Analyses and Correlation 231
3.5.3.1 Nonlinear relationship and regression 234
3.5.3.2 Multiple regression 235
3.5.4 Forecasting 235
3.5.4.1 The different components of the time series data 236
4. Variation Analyzes and Process control 239
4.1 Customer-Introduced external Variability 239
4.2 Internal Process Variability 241
4.3 How to analyze and remove variation 242
4.3.1 Control charts 244
4.3.1.1 Data requirements 245
4.3.1.2 Rational Sub-grouping 246
4.3.1.3 Data Type Conversion 246
4.3.1.4 X&R Control Charts 247
4.3.1.5 X&S Control Charts 256
4.3.1.6 u-Chart (c-Chart) 256
4.3.1.7 p-Chart (np-Chart) 260
4.3.1.8 How to use Control charts 265
4.3.1.9 Conclusion 269
5. The ‘Six Sigma’ approach 271
6. Decision Making Tools 275
6.1 Pareto Analyses 275
6.2 Decision Analysis and Modeling 277
6.2.1 Introduction To Modeling 277
6.2.2 Simple Models 279
6.2.3 MS Excel Solver 281
6.2.3.1 Solver parameters 282
6.2.3.2 Solver Options 283
6.2.3.3 Tips for using the Solver 284
6.2.3.4 How to use the Solver for linear models 285
6.2.4 Deterministic Optimization Models 287
6.2.4.1 Static Deterministic Optimization Models 288
6.2.4.2 Dynamic Deterministic Optimization Models 305
6.2.4.3 Deterministic Network Optimization Models 322
6.2.4.4 Conclusion 340
6.2.5 Probabilistic Models 341
6.3 Queuing or ‘Waiting line’ Analyses 344
6.3.1 Introduction to queuing systems and models 346
6.3.1.1 Customer Arrivals - Population Size 348
6.3.1.2 Customer Arrivals - Statistical Distribution of the Arrivals 348
6.3.1.3 Customer Arrivals - Behavior of Customers 350
6.3.1.4 Queue – Capacity 350
6.3.1.5 Queue – Discipline 351
6.3.1.6 Service Facility – Design 352
6.3.1.7 Service Facility - Statistical Distribution of the Service Times 352
6.3.1.8 Which properties of queuing system are important and why 354
6.3.2 Notation and Basic Relationships 355
6.3.3 Short introduction to probability concepts 358
6.3.3.1 Probability calculations 358
6.3.3.2 Probability Distribution for Discrete Random Variables 359
6.3.3.3 Cumulative Probability Distribution for Discrete Random Variables 360
6.3.3.4 Probability Density Functions (PDF) of Continuous Random Variables 361
6.3.3.5 The Normal Distribution 363
6.3.4 M/M/1 system – steady state analyzes 365
6.3.5 M/M/1/K system – steady state analyzes 369
6.3.6 M/M/c system – steady state analyzes 373
6.3.7 M/M/c/K system (with limited queue) – steady state analyzes 383
6.3.8 M/M/c/c system – steady state analyzes 389
6.3.9 M/G/1 system – steady state analyzes 392
6.3.10 M/G/c system – steady state analyzes 395
6.3.11 G/G/c system – steady state analyzes 397
6.3.12 M/D/1 system – steady state analyzes 399
6.3.13 M/M/1/K/K system – steady state analyzes 401
6.3.14 M/M/c/K/K system – steady state analyzes 404
6.3.15 M/M/c Non-Preemptive Priority system – steady state analyzes 410
6.3.16 M/M/c Preemptive Priority system – steady state analyzes 414
6.3.17 Networks of Service Facilities (network of queues) 418
6.3.17.1 General Networking Rules 418
6.3.17.2 Jackson Network Rules 419
6.3.17.3 Jackson’s Theorem 420
6.4 Sensitivity Analysis 428
CHAPTER 6. Auditing Business Processes in office & services 435
1. Introduction 436
2. The Process Audit - The Process Enablers (PEMM) 436
3. The Business Audit - The Business Capabilities (PEMM) 443
4. How to report the PEMM audit results? 451
5. ISO 9001 Business Audit versus PEMM Business Audit 452
CHAPTER 7. Business Process Improvement in specific sectors 455
1. Introduction 456
2. Public Services 457
3. Financial Services 461
3.1 Big Data in financial services 464
4. Consumer Products and Retail 466
5. Telecom, Media & Entertainment 470
CHAPTER 8. Software tools for Business Process Improvement 473
1. Introduction 474
2. Business Process Model and Notation Standard - BPMN 2.0 474
3. ADONIS 479
4. ProcessMaker 486
4.1 ProcessMaker main features 486
4.1.1 Workflow Designer (Designer) 486
4.1.2 Digital Forms Designer (Dynaform Builder) 487
4.1.3 Document/Report Builder 488
4.1.4 Web Services API Trigger Builder 488
4.2 How to measure queue length, lead time, process time, etc. in office/service/business administration 489
4.3 Business Process/Standard Work Automation 490
4.4 Developing a Plugin for ProcessMaker 491
4.5 Installation and usage 492
5. Conclusion 492
References & Further Reading 496
Index 501
