Sunday, July 7, 2013

Business Process Efficiency Engineering - Improvement

Business Process Efficiency Improvement or Engineering must involve process re-design to obtain processes that achieve the same (functional) goals, while increasing efficiency of the process (decreasing the cost of the process)

Maxine Attong - COD Business Process Improvement Manual, (Page 145)

Process Measurements

Three sets of  measures are used to gauge the process.

1. Process efficiency - measures the time that activities take to covert inputs to outputs.
2.Output effectiveness - measures how well the output meets the design requirements.
3. Output effectiveness and customer satisfaction - measures how well output meets customers' needs.

Process Efficiency Measures

Ideally, one measures identifies the minimum possible resources to be consumed during the process. Actual resource consumption is quantified and assessed against set standards as a variance, variation or deviation. The results lead to the control (managerial actions)  of people, materials, methods, environment and the way each resource or factor interacts with the other. Resource consumption is an easy measure since it is tangible.  Standards are set based on the experience or scientific investigations (Scientific Management).

Example - Accounts Payable Process Efficiency Measures

Inputs - Purchase invoices received per month.
Time - The cycle time and the basic work time taken for an invoice to be processes and for the vendor to receive payment.
People - Payroll cost, Level of training or skilled labor used in the process
Equipment - Utilization and cost
Output - The number of accurate payments generated per month and reasons for delays

Detailed description of measurements made is available in the book.

Purpose of Efficiency Measures

Efficiency measures are used to drive decision making around improving the process. Each measurement tells the story about the process. The process owner, process designer, and efficiency engineer (industrial engineer) have to know the causes before changes can be made to improve the process.

Efficiency Analysis of Inputs

Efficiency Analysis of Time

Efficiency Analysis of People

Details given in the book.

Using Business Process Re-engineering to Increase Process Efficiency of E-Catalogue
Distribution System
Zulkhairi Md Dahalin and Siti Fatimah Yusof
IBIMA Publishing
IBIMA Business Review
Vol. 2012 (2012), Article ID 731793, 8 pages

A More Comprehensive Approach to Enhancing Business Process Efficiency
Seung-Hyun Rhee1, Nam Wook Cho2, and Hyerim Bae3 􀁧
1 Department of Industrial Engineering, Seoul National University,
151-742, Seoul, Republic of Korea
2 Department of Industrial and Systems Engineering,
Seoul National University of Technology,
139-743, Seoul, Republic of Korea
3 Department of Industrial Engineering, Pusan National University,
635-709, Busan, Republic of Korea

Abstract. Whereas Business Process Management (BPM) systematically
guides employee participation in business processes, there has been little
support, use or development of user-friendly functions to improve the
efficiency of those processes. To enhance business process efficiency, it is
necessary to provide automatic rational task allocation and work-item
importance prioritization, so that task performers no longer need to be
concerned with process performance. In the context of BPM, two different
perspectives, the Process Engine Perspective (PEP) and the Task Performer
Perspective (TPP), are considered. Accordingly, we developed a comprehensive
method that considers those two perspectives, in combination rather than

Development and testing of a business process orientation model to improve employee and
organizational performance
Arshad Zaheer,  Kashif Ur Rehman, and Muhammad Aslam Khan
October 2009

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