UNIT 5

PROCESS ANALYSIS AND REDESIGN

Qualitative Process Analysis

Qualitative Process Analysis involves examining business processes through principles and
techniques aimed at improving efficiency, eliminating waste, and identifying value-added elements.
The approach balances art and science, focusing on not only the technical side but also human
factors such as perspective and communication.

Value-Added Analysis
Purpose:
This technique aims to identify unnecessary steps in a process and eliminate them to optimize
operations.

By breaking down tasks into steps, we can classify them as either value-adding or not based on their
contribution to the customer’s desired outcome.

Process:

1. Decompose the Process into Steps:

Each task in the process is broken down into smaller steps. For example, a task like “Check
invoice” may include multiple sub-steps such as verifying amounts, product delivery, and
supplier details.

2. Identify the Customer and Desired Outcomes:

Identify the customer for the process and understand what they value. This defines what
constitutes value-adding (VA) steps. In an equipment rental process, the customer is the site
engineer who needs the equipment to be available when required.

3. Categorize Steps:

o Value-Adding (VA) Steps: Directly contribute to the customer’s positive outcomes.

▪ Example: In a washing machine repair process, diagnosing and repairing the

machine are VA steps since they directly solve the customer's issue.

o Business Value Adding (BVA) Steps: Necessary for the business but don’t add direct
value to the customer. They support operational efficiency, legal compliance, or
future business growth.

▪ Example: Recording defect information is BVA since it helps the company

track common issues and improve its service.

o Non-Value Adding (NVA) Steps: These do not contribute to the customer's

satisfaction nor to business needs. These are often steps that could be removed to
streamline the process.
 ▪ Example: Sending emails or reading emails that do not contribute directly to
the task at hand are NVA.

Analyzing a Process Example (Equipment Rental Process)

Step-by-Step Process Breakdown

1. Task: Lodging the Request

o Steps:

1. Site engineer fills out the request (VA).

2. Site engineer sends the request via email to the clerk (NVA).

3. Clerk opens and reads the request (NVA).

o Analysis:
The filling of the request adds value to the engineer’s task but sending and reading
the request does not.

2. Task: Selecting Suitable Equipment

o Step: Clerk selects equipment from the catalog (VA).

o Analysis:
This step adds value as it helps fulfill the site engineer's needs.

3. Task: Checking Equipment Availability

o Step: Clerk calls the supplier to check availability (VA).

o Additional Steps:

▪ Adding details to the rental request (BVA).

 ▪ Forwarding the request to the works engineer (NVA).

4. Task: Approving the Rental Request

o Step: Works engineer examines and approves or rejects the request (BVA).

o Analysis:
This ensures that equipment is needed and that it stays within the project’s budget,
which is crucial for the business.

5. Task: Creating and Sending the PO

o Steps:

▪ Creating the PO (BVA).

▪ Sending the PO to the supplier (VA).

o Analysis:
The creation of the PO is BVA, while sending it ensures the supplier knows when to
deliver the equipment, which is VA for the engineer.

Summary of Value-Added Analysis

• Value-Adding (VA) Steps: Directly contribute to the customer’s satisfaction and outcome.

• Business Value Adding (BVA) Steps: Necessary for the business’s operational or regulatory
needs but don’t directly satisfy the customer.

• Non-Value Adding (NVA) Steps: Steps that can be removed or streamlined, as they do not
benefit the customer or the business directly.

In the case of the equipment rental process, many administrative and handoff steps (like emails and
PO creation) are BVA or NVA, while actions that directly serve the customer’s needs (like equipment
selection and delivery) are VA. This helps streamline the process, eliminate unnecessary tasks, and
ensure that customer needs are met efficiently.

Waste Analysis
• Waste analysis is a technique used to identify and eliminate waste throughout a business
process.
• Unlike value-added analysis, which focuses on positive outcomes and the value each step
contributes to the customer, waste analysis takes a negative approach.
• It focuses on identifying unnecessary activities, inefficiencies, or excesses in the process that do
not add value to the customer or the business.
• The concept of waste analysis was popularized by the Toyota Production System (TPS),
developed by Taiichi Ohno and his colleagues in the 1970s.
• The term muda, meaning waste in Japanese, is used to describe any activity that consumes
resources without adding value.
• The TPS framework categorizes waste into seven types, which can be grouped into three higher-
level categories for simplicity.
Types of Waste

1. Move (Waste related to movement):

o Transportation: Waste associated with unnecessary movement of materials, products, or

information. For example, moving items between multiple locations when it could be done
more efficiently.

o Motion: Waste related to unnecessary movements by people. This could include walking,
reaching, or searching for tools and information that could be more efficiently organized.

2. Hold (Waste arising from holding something):

o Inventory: Waste from holding more inventory than is needed for the process, which ties up
resources and increases costs.

o Waiting: Waste resulting from delays or waiting time between steps in the process. This
could be waiting for information, approval, or materials that are needed for the next task.

3. Overdo (Waste from doing more than necessary):

o Defects: Waste caused by producing defective products or services that require rework or
repair.

o Overprocessing: Waste from doing more work than necessary to meet customer needs or
regulatory requirements. For example, adding unnecessary features or performing
redundant steps in a process.

o Overproduction: Waste resulting from producing more than what is needed at a given time,
leading to excess inventory, storage costs, and waste.

Key Principles of Waste Analysis

• Identification of Waste: Waste analysis aims to identify all types of waste within a process,
whether they are obvious or hidden between process steps. Some waste may only be
revealed through careful observation, interviews, or tracking data.

• Focus on Process Efficiency: The goal of waste analysis is to streamline processes, reduce
unnecessary steps, and eliminate inefficiencies, thereby improving overall productivity and
reducing costs.

• Continuous Improvement: Waste analysis is an ongoing activity. Once waste is identified and
eliminated, new sources of waste may emerge, requiring constant monitoring and
improvement to maintain an efficient and effective process.
Move
In business processes, the term "Move" refers to waste related to the movement of materials,
information, or people. This waste can be classified into two types: transportation and motion.

1. Transportation Waste

• Transportation waste occurs when materials, documents, or information are moved from one
location to another without adding value to the customer or the process.
• In manufacturing, this could refer to moving raw materials from a warehouse to the production
facility.
• In business processes, transportation waste happens when documents or tasks are passed from
one participant to another, signaling a handoff of work.

Examples of Transportation Waste:

• Physical Document Exchanges: In the past, physical documents like purchase orders,
shipment notifications, and invoices were exchanged between parties. Nowadays, these are
often replaced by electronic exchanges via systems like Electronic Data Interchange (EDI).

However, even with electronic communication, waste still occurs when there are handoffs
between process participants. Each handoff can cause delays, especially when the person
receiving the task is occupied with other work.

• Process Models with Pools and Lanes: A process model with pools (representing different
departments or participants) and lanes (representing individual tasks or roles) can help
identify transportation waste.

For example, a sequence flow from one lane to another typically indicates a handoff, which
may involve transportation waste.
Example 6.2: Equipment Rental Process

In an equipment rental process, transportation waste occurs when:

• The site engineer hands off the rental request to the clerk.

• The clerk sends the request to the works engineer.

• The works engineer returns it to the clerk.

• The clerk sends the purchase order to the supplier.

Other instances of transportation waste occur when:

• The equipment is delivered to the site.

• The equipment is removed after the rental period.

• The supplier submits the invoice.

While some of these transportations are necessary (e.g., equipment delivery), efforts can still be
made to minimize costs or improve efficiency by:

• Batching deliveries to reduce transportation costs.

• Replacing physical documents with electronic exchanges.

• Reducing handoffs to minimize waiting times and unnecessary delays.

2. Motion Waste

Motion waste refers to unnecessary movement of people or equipment during the execution of a
process. In manufacturing, this is common, as workers move parts or tools along the production line.
In business processes, motion waste is less prevalent but still exists.

Examples of Motion Waste:

• Manufacturing: Workers or machines move parts from one location to another to perform
different steps in the production process. Excessive movement can lead to inefficiencies.

• Business Processes: Motion waste also occurs when people move between applications or
systems to complete tasks. For instance, if a receptionist has to enter customer details in one
application and schedule an inspection in another, the transition between these applications
is motion waste.

• Vehicle Inspection Process: In the vehicle inspection process, workers may need to move
equipment or tools between inspection bases to perform various tests. These movements
are an example of motion waste.

Reducing Motion Waste:

• Robotic Process Automation (RPA): RPA tools can help minimize motion waste in digitized
processes. For example, RPA can automate the switching between applications, allowing
tasks to be completed more efficiently without the need for manual transitions.
Hold Waste
1. Inventory Waste
Inventory waste occurs when materials or work items are held unnecessarily. In manufacturing, it's
excess physical inventory; in business, it's Work-In-Process (WIP), which refers to tasks that are
started but not completed.

• Example: In vehicle inspections, vehicles that fail the first inspection due to minor issues
create WIP until they return for reinspection. These pending tasks represent unrealized value
and contribute to waste.

2. Waiting Waste
Waiting waste occurs when tasks or resources wait for availability.

• Types:

o Waiting: A task waits for a participant or resource.

o Idleness: A resource waits for a task.

• Example: In the vehicle inspection process, technicians may wait for vehicles to move
between inspection stages, causing idleness. Additionally, a travel request can be delayed if
the second approval is waiting for the participant to be available.

Connection:
Transportation waste often causes waiting waste. Handoffs between process participants can lead to
delays if the next participant is unavailable, adding to waiting waste.

Reducing Hold Waste

• Inventory Waste: Minimize WIP by speeding up task completion.

• Waiting Waste: Ensure tasks and resources flow smoothly to reduce idle times and delays.

Overdo Waste: Defects, Overprocessing, and Overproduction

1. Defect Waste
Defect waste occurs when work is performed to correct, repair, or compensate for defects in a
process. This includes rework, where tasks must be repeated due to errors.

• Example: In a travel requisition process, defect waste happens when a request is returned
for revision due to missing information.

2. Overprocessing
Over processing refers to unnecessary work performed to achieve an outcome that does not add
value. This can include excessive perfectionism or tasks that later turn out to be unnecessary.

• Example: In vehicle inspections, spending too much time on precise measurements that turn
out to be irrelevant to the outcome is overprocessing. Similarly, unnecessary tasks in travel
approval processes (like multiple approvals without budget checks) lead to wasted time.
3. Overproduction
Over production occurs when an entire process is executed, even though the outcome does not add
value or could have been foreseen as unnecessary.

• Examples:

o Quote-to-cash process: Generating quotes that are later rejected by the customer,
resulting in wasted effort.

o Travel approval: Creating travel requests that are later cancelled or rejected due to
foreseeable reasons like budget constraints.

Overproduction can be subtle but differs from overprocessing in that overproduction happens when
an instance is unnecessary from the start or when an outcome could have been predicted earlier.

Reducing Overdo Waste

• Defect Waste: Prevent errors by improving initial quality checks.

• Overprocessing: Avoid perfectionism and focus on value-added activities.

• Overproduction: Reduce unnecessary process initiation and validate needs earlier in the
process.

For example, a travel request that is rejected due to lack of budget, in a way that could have been
detected upfront, is an overproductionwaste.

This latter example illustrates that the boundary between overproduction and overprocessing is
sometimes subtle. The key difference is that overprocessing occurs when it is necessary to start the
process instance in order to discover that the instance cannot be fulfilled, whereas overproduction
occurs in two cases:

• When the instance ends up in a positive outcome, but it turns out that the instance was not
needed.

• When the instance ends up in a negative outcome that could have been foreseen prior to the
instance being created.

Stakeholder Analysis and Issue Documentation

• When analyzing a business process, it's important to recognize that even well-established
processes can always be improved.
• Business processes often have errors, misunderstandings, unnecessary steps, and waste that
hinder performance.
• A process analyst's role is to identify and document these issues to optimize the process.

Stakeholder Analysis

Stakeholder analysis involves gathering data from multiple sources, particularly from process
participants, owners, and managers, to understand the different perspectives on process
performance. Each stakeholder sees the process differently:
 • Process Owners/Managers typically focus on performance objectives and constraints (e.g.,
compliance or regulatory requirements).

• Process Participants may highlight resource shortages, tight timelines, or errors caused by
others or customers.

Issue Register

An issue register is used to document the issues in a structured format. This register ensures that all
identified issues are recorded clearly and can be tracked for resolution.

Pareto Analysis and PICK Charts

To prioritize issues for further analysis and redesign, Pareto analysis helps identify the most
significant issues (typically, 80% of the problems come from 20% of the causes). PICK charts classify
issues into four categories:

• Possible: Easy to implement and likely to have a positive impact.

• Implementable: More difficult to implement but high impact.

• Challenging: Difficult to implement with a potential but unclear impact.

• Kill: Issues that are not worth addressing due to low impact or feasibility.

Stakeholder Analysis
• Stakeholder analysis is a key technique used in project management and business process
improvement (BPI) to identify and understand the various parties involved in a process.
• By conducting stakeholder analysis, an analyst can gather insights from different perspectives,
which helps in identifying issues affecting process performance.
• These insights are crucial for process improvement efforts.
• Stakeholder analysis typically occurs at the start of a project, and it is particularly valuable in
BPM for identifying and addressing process inefficiencies and waste.

Categories of Stakeholders in BPM:

1. Customers of the Process:

o Concerns: Slow cycle time, defects, lack of transparency, or inability to track the
process.

o Perspective: Customers are mainly concerned with the final output, quality, and
timeliness.

2. Process Participants:

o Concerns: High resource utilization, stress, defects, and inefficiencies within their part
of the process.

o Perspective: Participants focus on the challenges they face during day-to-day

operations, including internal defects and collaboration difficulties.

3. External Parties (e.g., Suppliers, Sub-contractors):

 o Concerns: Steady work streams, predictability, meeting contractual obligations.

o Perspective: External parties are concerned with maintaining consistent and

predictable processes that align with their own operations and contracts.

4. Process Owner and Operational Managers:

o Concerns: Process performance, cycle times, processing costs, defects, compliance with
policies and regulations.

o Perspective: Process owners and managers are focused on efficiency, reducing costs,
ensuring compliance, and meeting performance goals.

5. Sponsor and Executive Managers:

o Concerns: Strategic alignment, process contribution to key performance indicators

(KPIs), adaptability to market changes, and potential opportunities for growth.

o Perspective: High-level executives focus on broader goals such as business growth, cost
reductions, and process alignment with organizational strategy.

Example: Equipment Rental Process at BuildIT

Consider the equipment rental process at BuildIT, where the purchasing manager is concerned about
growing rental expenses. The process owner (purchasing manager) aims to reduce expenses by 5%,
in line with a broader company-wide cost reduction target.

Stakeholders Identified:

1. Customer: Site engineers, who rely on equipment for construction projects.

2. Process Participants: Clerks, works engineers, and the accounts payable team.

3. Process Owner and Operational Managers: Purchasing manager, construction project

managers, accounts payable team lead.

4. Upper Management: CFO, who sponsors the cost reduction effort.

5. External Party: Equipment rental suppliers.

Perceived Issues Identified:

• From the Process Owner:

o Equipment is rented for longer than necessary, leading to inventory waste.

o Penalties are paid to suppliers due to late returns or unsuitable equipment.

• From Process Participants:

o Site Engineers: Concerned about delays in equipment delivery, which is often 3.5
days. Sometimes equipment is unsuitable for the job.

o Clerks: Experience issues with unclear requirements from engineers, slow approval
times, and inaccurate catalog descriptions.
Waste Analysis in Stakeholder Analysis:

The process owner’s observations relate to waste analysis, highlighting inefficiencies such as
inventory waste (excessive rental times) and defects (unsuitable equipment or late returns). These
issues align with the types of waste identified in process improvement methodologies, such as:

• Transportation Waste: Delays in equipment delivery.

• Waiting Waste: Delays in approvals and processing times.

• Defects: Equipment that does not meet the requirements.

By identifying these waste types, the analyst can narrow down the specific inefficiencies in the
process, and through stakeholder interviews, gather deeper insights into the process flow.

Next Steps:

The analyst will continue conducting interviews with the process participants and external
stakeholders to validate the perceived issues, cross-check the information, and build a
comprehensive issue register. This data will form the basis for the process improvement effort.

Issue Register
An issue register is a tool used to organize and document issues identified during a stakeholder
analysis, and it helps assess the issues' impact both qualitatively and quantitatively. It provides a
detailed analysis of each issue in a structured format, typically presented as a table with several
predefined fields.

Here are the typical fields in an issue register:

1. Name of the issue:

o A short, clear name (2–5 words) that is easily understood by all stakeholders.

2. Description:

o A brief description (1–3 sentences) of the issue itself, focusing on the issue rather
than its consequences.

3. Priority:

o A number indicating the relative importance of the issue (e.g., 1, 2, 3). Multiple
issues can have the same priority.

4. Data and assumptions:

o Any data or assumptions used in estimating the impact of the issue, such as how
often a negative outcome occurs or estimated loss per occurrence. Initially, these
may be rough estimates, which get refined over time as actual data becomes
available.

5. Qualitative impact:
 o Describes the impact in qualitative terms, like how the issue affects customer
satisfaction, employee morale, supplier relationships, or company reputation.

6. Quantitative impact:

o Estimates the impact in quantitative terms, such as time loss, revenue loss, or
avoidable costs. It bridges qualitative and quantitative analyses by linking them to
actual business impact.

Additional fields can be added, such as possible resolution, which describes potential mechanisms
for addressing the issue.

Example of Issue Register:

Consider the equipment rental process in the example. Issues raised by the process owner, site
engineer, and other participants were identified. The analyst decided to focus on issues raised by the
process owner, as these had direct business impacts. After gathering data about frequency and
impact, an issue register was prepared.

Two Approaches to Handling Issues and Factors:

1. Combining Issues and Factors: Add fields like “caused by” and “is cause of” to indicate
relationships between issues and factors. This helps identify cause-effect relationships,
making it easier to analyze the impact of related issues together.

2. Focus Only on Top-Level Issues: Only document issues that directly impact business
performance in the issue register. Factors contributing to these issues are analyzed
separately using tools like root cause analysis (e.g., why-why diagrams or cause-effect
diagrams).
Issue Tracking System:

In large organizations or BPM programs covering multiple processes, the number of issues may
become large (e.g., in the hundreds). In such cases, an Issue Tracking system can be used to maintain
the issue register. This system allows users to:

• Create, document, and edit issues

• Comment on issues

• Generate filtered and sorted lists of issues according to various criteria

This system enhances collaboration and ensures that all stakeholders have access to up-to-date
information about the issues.

Pareto Analysis and PICK Charts

Pareto Analysis:

• Purpose: Identify which issues or factors should be prioritized for improvement.

• 80-20 Rule: A small number of issues (e.g., 20%) are responsible for a large portion (e.g.,
80%) of the impact.

• Process:

1. Define the Effect: Choose a measurable effect (e.g., financial loss, time loss, number
of occurrences).

2. Identify Issues: List all relevant issues contributing to the effect.

3. Quantify Issues: Use data from the issue register to quantify each issue.

4. Sort and Create Pareto Chart: Sort issues by impact and plot them as a bar chart,
with a cumulative percentage curve.

Example:

• For equipment delays, issues like "Slow approval process" caused the most financial loss
(78% of unnecessary rental expenditure).

PICK Chart:

• Purpose: Evaluate the balance between the payoff and difficulty of addressing issues.

• Four Quadrants:

1. Possible (Low payoff, easy to do): Issues with low impact but easy to address.

2. Implement (High payoff, easy to do): Priority issues to be addressed immediately.

3. Challenge (High payoff, hard to do): High impact but requires significant effort;
should be tackled with caution.

4. Kill (Low payoff, hard to do): Low impact and difficult to address; avoid these issues
or deprioritize them.
Practical Use:

• Pareto focuses on maximizing impact by addressing high-priority issues.

• PICK complements Pareto by factoring in the difficulty of addressing each issue, helping to
make decisions about where to allocate resources effectively.

Both tools provide a structured approach to problem-solving by focusing on the most impactful and
feasible issues.

Root Cause Analysis (RCA)

Purpose:
Root Cause Analysis (RCA) is a set of techniques used to identify the underlying cause of problems or
undesirable events. It is widely used in business process analysis, accident investigation, and
manufacturing to address issues that hinder process performance or lead to defects in products.

Applications:

• Business Process: To understand issues preventing process optimization and performance.

• Accidents/Incidents: To investigate the causes of accidents and prevent recurrence.

• Manufacturing: To analyze defects in products and improve production processes.

Key Techniques in Root Cause Analysis

1. Cause-and-Effect Diagrams :
o Purpose: To visualize and analyze the possible causes of a problem, breaking down
complex issues into manageable factors.

o Structure: The diagram is shaped like a fishbone, with the "head" representing the
problem and the "bones" branching out to show potential causes.

o Benefit: This method helps identify all potential contributing factors, encouraging
comprehensive problem-solving.

The 6 M’s is a well-known categorization for cause-effect analysis, especially in process

improvement and quality management.

Below is an explanation of each of the 6 M’s along with their sub-categories:

1. Machine (Technology)

This category covers factors related to the technology or equipment used in a process, such as
hardware, software, network systems, or any technological issues that could cause failures.
Sub-categorization:

• Lack of functionality in application systems: Missing features or capabilities in software

tools that are required for the process.

• Redundant storage of data across systems: Issues such as double data entry, leading to data
inconsistencies across systems.

• Low performance of IT or network systems: Slow response times or outages that hinder
process performance.

• Poor user interface design: Interface issues that cause confusion or errors, like missing or
hard-to-find data fields.

• Lack of system integration: Insufficient integration between internal systems or with

external systems (e.g., suppliers or customers), causing inefficiencies.

2. Method (Process)

This category focuses on how a process is defined, understood, or performed. It includes issues
arising from unclear procedures or incorrect execution of processes.

Sub-categorization:

• Unclear, unsuitable, or inconsistent assignment of responsibilities: Ambiguities in who is

responsible for what in the process, leading to gaps in execution.

• Lack of empowerment of process participants: When participants can't make decisions on

their own, leading to delays or inefficiencies.

• Excessive empowerment of process participants: Giving too much discretion can cause
issues such as inconsistency or mistakes.

• Lack of timely communication: When process participants or customers do not receive

necessary information in a timely manner.

3. Material

This category refers to the factors related to the raw materials, consumables, or data needed for the
process.

Sub-categorization:

• Incorrect data: Using incorrect or incomplete data during process execution, leading to poor
decision-making or errors.

• Raw materials: Issues related to the quality or availability of the materials needed for the
process.

• Consumables: Problems related to the consumable goods or inputs required for the process.

4. Man (Human Factors)

This category addresses human errors or misjudgments during process execution, like incorrect
decision-making or poor performance.

Sub-categorization:
 • Lack of training or unclear instructions: Inadequate knowledge or guidance for process
participants can lead to mistakes.

• Lack of incentive systems: If participants are not motivated enough, they may not perform
optimally.

• Overly hectic schedules: High workload expectations that cause stress and errors.

• Inadequate recruitment: Hiring the wrong people or not having the right number of people
for the job.

5. Measurement

This category focuses on factors related to measurements, calculations, or assessments made during
the process.

Example:

• Miscalculation of insurance claim amounts: Incorrect estimations of damages leading to

wrong payments or decisions.

6. Milieu (Environment)

This category includes factors from the external environment, such as customers, suppliers, or other
outside actors, which may affect the process.

Sub-categorization:

• External actors: Problems originating from outside the control of the process participants,
such as inaccuracies in data provided by third parties.

• Environmental conditions: Factors such as weather, regulatory changes, or economic

conditions that can affect process performance.

Example: In an insurance claims process for car accidents, the accuracy of police reports might affect
the quality of claim handling, and this factor is largely outside the control of the insurance company.

2. Why-Why Diagrams (5 Whys):

o Purpose: A simple but powerful technique to drill down into the root cause by
repeatedly asking "why" until the fundamental cause is revealed.

o Process:

1) Start with the problem and ask "Why did this happen?"
2) For each answer, ask "Why?" again, typically five times (or as needed) to reach
the root cause.

o Example:

▪ Problem: Equipment failure.

▪ Why?: The equipment broke down.

 ▪ Why?: The motor failed.

▪ Why?: The motor overheated.

▪ Why?: The cooling system malfunctioned.

▪ Why?: The maintenance schedule was not followed.

o Benefit: The technique is simple and allows teams to explore deeper levels of causes
quickly.

REDESIGN
Definition of Process Redesign
Process redesign refers to making substantial, intentional changes to an existing business process to
improve its efficiency, effectiveness, or customer satisfaction. It involves altering various aspects of a
process, including its operations, behaviors, information flow, technology, and organizational
structure, to address performance issues or capitalize on innovation opportunities.

Need for Redesign:

1. Innovation:

o Organizations focus on product innovation initially but eventually shift toward

process innovation to maintain competitive advantage and efficiency.

o Process innovation (like Amazon’s 1-Click ordering or warehouse robots) helps

organizations stay relevant and improve service delivery.

2. Organizational Entropy:

o Over time, business processes naturally become more complex and inefficient (e.g.,
redundant steps or outdated methods).

o Without redesign, inefficiencies grow, leading to wasted resources and poor

performance (e.g., unnecessary checks or outdated steps in processes).

3. Overcoming Resistance:

o Employees may resist rethinking processes because they focus on executing tasks
without considering structural improvements.

o Process redesign helps break the inertia and promotes continuous improvement.

4. Adapting to Change:

o Organizations must adapt their processes to changing customer expectations,

technological advances, or market conditions.

o Redesign ensures the process evolves to meet new challenges and opportunities.

5. Maintaining Performance:
 o Businesses experience performance degradation over time due to outdated practices
or inefficiencies.

o Redesign addresses these issues by rethinking how tasks are structured and
executed.

In essence, process redesign is crucial for addressing the challenges of growth, inefficiencies, and
adapting to market changes while maintaining competitive edge and improving overall performance.

Heuristic Process Redesign

• Focus: Analytical approach using a wide range of redesign heuristics (rules of thumb) to
improve processes systematically.

• Stages:

1. Initiate:

▪ Set up the project team and goals.

▪ Understand the existing process using modeling and analysis techniques.

▪ Set performance goals (Devil’s Quadrangle).

2. Design:

▪ Use a fixed list of redesign heuristics to generate improvement actions.

▪ Heuristics are applied based on performance goals.

▪ Clustering heuristics into scenarios for different redesign alternatives.

3. Evaluate:

▪ Evaluate the different redesign scenarios (qualitative and quantitative).

▪ Choose the best scenario or adjust goals if no scenario is viable.

▪ Evaluation may lead to returning to the design stage or discontinuing the

project.

• Iterative Process: Stages are iterative and overlap in practice.

Key Redesign Heuristics:

• Parallelism: Put activities in parallel instead of sequentially for faster processes.

• Case-based Work: Eliminate batch processing and periodic activities to speed up processing.

• Activity Elimination: Remove unnecessary activities that no longer add value (e.g., control
activities).

• Empowerment: Give workers decision-making authority to reduce middle management and

costs.
 • Triage: Split an activity into alternative versions to handle different cases more effectively.

• Case Assignment: Assign cases to the same participant to build case knowledge.

• Flexible Assignment: Keep generic participants free for future work by assigning tasks to
specialized workers.

• Centralization: Use technology (e.g., BPMS) to centralize geographically dispersed resources.

Example: Car Rental Agency Process Improvement:

• Current Process: Four steps: interview, exterior inspection, interior inspection, customer
invoice.

• Improvements:

o Parallelism: Carry out interview, exterior, and interior inspection simultaneously.

o Quality:

▪ Apply triage for different inspection processes (e.g., off-road vehicles).

▪ Consider case assignment for consistency (not used due to parallelism

decision).

• Scenario Generation: The process highlights clustering heuristics and evaluating their
feasibility based on specific goals (time and quality). Only one scenario (parallelism) was
selected for implementation.

This simplified structure focuses on the main points while retaining the essence of the method.

Product-Based Design
Origin: Developed at Eindhoven University of Technology, early 2000s.

Nature: Analytical, algorithmic process aimed at transforming business processes.

Key Concepts:

• Focus on the Product: The product (or service) that a business process delivers is central.
The process is designed by considering the features of the product first, then deriving the
necessary steps to produce that product.
 • Example: If you want to build a red, electric car with four wheels, the design process must
account for acquiring parts (chassis, wheels, battery, paint) and the logical dependencies
between these steps (e.g., paint after chassis is assembled).

Goals:

• Lean, Efficient Process: By focusing on the product’s characteristics, the aim is to develop the
most efficient and performative process for creating the product.

• Information Products: Designed for informational products like decisions, proposals,

documents, permits, etc.

• Product Data Model: Similar to a bill-of-materials (BOM), it’s a model that represents the
product and its features. This helps design the process.

Iterative Process:

• The phases are sequential but iterative. Errors discovered in the evaluation phase may lead
to rework in the design phase.

Product Data Model:

• Purpose: Captures the information elements, their logical dependencies, and the rules for
deriving new information elements.
 • Example: In a loan application process, key information elements might include the purpose
of the loan, the requested amount, and the applicant’s financial status. The production rule
might determine if a loan is granted based on these inputs.

• Graphical Representation: A tree structure, showing information elements as nodes and

dependencies as arcs. Each path through this tree can represent a different method to
achieve the same end result.

Deriving the Process:

• Walking Through the Product Data Model: Each valid business process is essentially a path
through the product data model.

• Different Paths: There are multiple ways to derive the same result, each with different
performance characteristics (e.g., cost, speed).

o Example: For hiring a helicopter pilot, you might first check eyesight or reflex quality.
The choice of path can depend on the performance goals (e.g., cost minimization vs.
speed).

• Process Design Flexibility: In modern versions of the method, participants can choose the
best path for a given case, rather than following a fixed sequence.

Conclusion:

• Product-Based Design helps create optimized processes for producing informational

products by first analyzing the product’s features, dependencies, and logic. This leads to
efficient, flexible, and adaptable process designs, ensuring that the business process aligns
perfectly with the product's needs and performance goals.