introduction to business process reengineering. slide 2 introduction the need for process...
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Introduction to Business Process
Reengineering
Slide 2
Introduction The need for process improvement Process improvement methodologies
TQM, Lean, CMMI, Six Sigma
Slide 3
Process Improvement (Origins) Process improvement and project
management started with some very large projects and finding better ways to manage them Shipbuilding Large scale engineering
Slide 4
The Need for Process Improvement Business and technology changes over
time and process must reflect those changes Look at the impact of the mobile phone on
businesses Companies improve processes to
Become more efficient (share data, communicate across the enterprise)
Slide 5
Process Ownership Different employees (stakeholders) has
a stake in one or more processes There should be one individual or group
who is responsible for a process (process owner)
The process owner should be responsible for the improvement of the owned process
Slide 6
Process Improvement (Introduction) It’s about making processes better
It’s not about fighting fires It’s not about blaming someone for
inadequate existing processes It’s a problem solving approach (there
are various approaches) to fix what’s broken
Slide 7
Process Improvement (Goals) Reduce variation Remove activities that contribute no
value Improve customer satisfaction Eliminate waste of money, people,
materials, time Improve safety and ergonomics
Slide 8
Common Process Improvement Questions What processes should be improved? What resources are needed to improve
those processes? How can we set understand those
processes we are trying to improve? How can the improved process be
institutionalized?
Slide 9
General Process Improvement (Steps) Balanced Scorecard The following are summarized from the
document http://www.balancedscorecard.org/Portals/0/PDF/bpihndbk.pdf
Slide 10
General Process Improvement (Steps) Select the process to be improved and
how it will be improved Clear metrics should be defined These are often customer-centric It’s best to start small and define clear
process boundaries Pareto charts or diagrams are a form of
bar graph with which to analyze frequency of problems or causes in a process
Slide 11
General Process Improvement (Steps)
Slide 12
General Process Improvement (Steps) Example
Simplify a process Removing an unnecessary form Quantify expected labor and paper
savings
Slide 13
General Process Improvement (Steps) Define the team that will improve the
process It’s important to select the right people
who have time The team should have a clear level of
authority and a team leader Consider team size
Larger teams (8-10) tend to have difficulty reaching consensus and achieving objectives
Define resources needed by the team
Slide 14
General Process Improvement (Steps) Fully define the existing process
Reverse engineer the process using a tool such as BPMN
The team should be clear thatthe flowchart is accurate
Beware of cross-functionalprocesses
Slide 15
General Process Improvement (Steps) Define the simplified
process Remove redundant or
unnecessary activities
Slide 16
General Process Improvement (Steps) Collect baseline data on the
existing process Time to execute the process Amount of material waste
Use this data to judge efficacy of the improved process
Slide 17
General Process Improvement (Steps) Assess process stability
Does the process have exceptions? What are those exceptions
A run chart is a line plotted over time A control chart is a graph used to study
how a process changes over time Used to look at process variation
Slide 18
Control Chart (Example) Shows max, min, mean, and goal values
over time
Slide 19
Control Chart (Outcomes) Look at the root causes of variation and
try to remove if Was the root cause temporary in nature
Slide 20
General Process Improvement (Steps) We do this after the process is
“stabilized” Is the process capable
Are there unusual pattern in the data? Can it be further improved? Are the data points within the specification
limits If not, the process is not capable
Look to ways to remove process exceptions
Slide 21
General Process Improvement (Steps) If necessary, identify root causes of why
a process is not stable and capable Change process redesign, as necessary
This can be iterative
Slide 22
General Process Improvement (Steps) Plan and implement
the process change
Slide 23
General Process Improvement (Steps) Collect new performance data and
compare with baseline data Did the process improve as expected? Did we improve process stability
(exceptions)? Did we improve process capability
(efficiency)? Do the data collection metrics need to be
changed Assess feasibility of further
improvements
Slide 24
General Process Improvement (Steps)
Slide 25
CMMI (Introduction) The Capability Maturity Model
Integration approach is a way of assessing the strengths and weaknesses of existing processes for the purpose of improving them
It’s a set of best practices (framework) to improving processes
It’s a way of getting your customers what they want
Slide 26
CMMI (Introduction) CMMI is a model for improving process
but is not a process itself It’s managed by the CMMI institute at
cmmiinstitute.com It’s origins are in
Industry Government Academia
Slide 27
CMMI (History)
Slide 28
CMMI (Process Capability Levels) CMMI defines capability levels and
maturity levels – as the name implies Capability
Level 0: process is not performed or partially performed
Level 1: process is performed Level 2: process is managed Level 3: process is fully standardized and
documented (defined)
Slide 29
CMMI (Process Maturity Levels) Level 1 – Initial
Processes are ad hoc and chaotic Characterized by a tendency to
overcommit Level 2 – Managed
Business understands its processes Processes are periodically monitored
Level 3 – Defined Processes are well-characterized and
understood and improve over time
Slide 30
CMMI (Process Maturity Levels) Level 4 – Quantitatively managed
Quantitative objectives are established for quality and process performances
Process performance is predictable Level 5 – Optimizing
Characterized by continuous improvement based on quantitative metrics
Slide 31
CMMI Taxonomy CMMI calls them constellations
CMMI for Acquisition CMMI for Development CMMI for Service
Plus the People Capability Maturity Model (People CMM) to help manage workforce
http://cmmiinstitute.com/cmmi-solutions/
Slide 32
CMMI Process Areas Solutions are organized process areas
(types) 16 core processes
And specialized processes for Acquisition Development Services
Slide 33
CMMI Process Areas (Core) (I HAVE NOT LISTED THEM ALL) Configuration Management (CM)
(software) Maintain the integrity of work products
using configuration identification, configuration control, configuration status accounting, and configuration audits
Version control, document control, build management, release control
Slide 34
CMMI Process Areas (Core) Integrated Project Management (IPM)
Produce and maintain the project planning Project monitoring and control Quantitative project management
Percentage of defects removed by software testing activities, for example
Slide 35
CMMI Process Areas (Core) Measurement and Analysis (MA) As mentioned, what we measure is what
we get Measurement objectives
Reduce time to delivery Reduce total lifecycle cost Deliver specified functionality completely Improve prior levels of quality Improve prior customer satisfaction ratings Maintain and improve the acquirer/supplier
relationships
Slide 36
CMMI Process Areas (Core) Organizational process definition (OPD Organizational performance
management (OPM) Organizational Training (OT) Organizational Process Focus (OPF)
Slide 37
CMMI Process Areas (Core) Process and Product Quality Assurance Object evaluation processes, work
products and services Evaluation reports Noncompliance reports Corrective actions
Establish records Evaluation logs, QA reports, reports of
quality trends
Slide 38
CMMI Process Areas (Core) Requirements management (for
projects) Managing all changes to the requirements Maintaining the relationships among the
requirements, the project plans, and the work products
Identifying inconsistencies among the requirements, the project plans, and the work products
Taking corrective action Risk management
Slide 39
CMMI Process Areas (Acquisition) Acquisition Requirements Development
(ARD) Solicitation and Supplier Agreement
Development (SSAD) Agreement Management (AM) Acquisition Technical Management
(ATM) Acquisition Verification (AVER) Acquisition Validation (AVAL)
Slide 40
CMMI Process Areas (Development) Product integration Technical solutions
Slide 41
CMMI Process Areas (Services) Incident prevention and resolution Service continuity and delivery Service transition Strategic service management
Slide 42
Six Sigma (Introduction) Using standard measurement
techniques (statistical techniques) to measure operational performance
Motorola (Engineer Bill Smith was given credit for it in 1984)
Further developed at Texas Instruments Adopted by General Electric, in 1995
A central focus of GE’s business
Slide 43
Six Sigma (Objectives) Improve quality of process outputs by
identifying and removing errors (defects)
Minimize variability in business processes and manufacturing
Uses a set of quality management methods (statistical) and create method experts
Slide 44
Six Sigma (Methodology) 3.4 defects per million opportunities
There is a methodology to again this goal Define, Measure, Analyze, Improve,
Control (DMAIC)
Defects per million opportunities (DPMO)
Slide 45
Six Sigma (Example)
Slide 46
Six Sigma (Features) Focus on measureable and quantifiable
financial returns Emphasis on strong leadership and
passionate management Special infrastructure
Master black belt, black belt, green belt, red belt
Decision-making based on verifiable data No assumptions or guesswork
Slide 47
Six Sigma (Methodologies) DMAIC (duh-may-ick)
Use to improve existing business processes
DMADV (duh-mad-vee) Use to create new product or process
designs
Slide 48
Six Sigma (DMAIC) Define the problem Measure key aspects of the process and
collect relevant data Analysis the data
Understand cause-and-effect relationships Improve or optimize the current process Control deviations
Slide 49
Six Sigma (DMADV) Define design goals Measure characteristics critical to
quality Analyze and develop design alternatives Design details and optimize the design Verify the design
Set up pilot runs Implement the production process
Slide 50
ISO 9001 A set of process and quality
management standards https://
www.bsigroup.com/Documents/iso-9001/resources/BSI-ISO-9001-implementation-guide.pdf A good overview
Slide 51
ISO 9000 Principles Customer focus Leadership Involvement of people Process approach System approach to management Continual improvement Quantitative (factual) approach to
decision making