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Business Process Management
Paolo Bottoni
Lecture 8: Quantitative Analysis
Adapted from the slides for the book :
Dumas, La Rosa, Mendling & Reijers: Fundamentals of Business Process Management, Springer 2013
http://courses.cs.ut.ee/2013/bpm/uploads/Main/ITlecture5.ppt
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Business Process Analysis
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Process Analysis Techniques
Qualitative analysisQualitative analysis
• Value-Added Analysis
• Root-Cause Analysis
• Pareto Analysis
• Issue Register
Quantitative AnalysisQuantitative Analysis
• Quantitative Flow Analysis
• Queuing Theory
• Process Simulation
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Process Performance Measures
• Link the identified processes to measurable objectives
• Quantify the benefits of improvement
Maximize revenues and
minimize costsUse resources efficiently while
satisfying customer needs
Satisfy customer needs (effectiveness)
in an efficient way (efficiency)
Profit maximizing firms Non-profit organizations
Maximize long term
shareholder value
Survive and grow
while satisfying customer needs
Inspired by a slide by Manuel Laguna & John Marklund
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Fill in the blanks
If you had to choose between two services,
you would typically choose the one that is:
• F…
• B…
• C…
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Process Performance Measures
6
Cost per execution
Resource utilization
Waste
CostCost
Cycle time
Waiting time / time spent in non-value-added tasks
TimeTime
Error rates (negative outcomes, wrong info)
Missed promise
QualityQuality
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Cycle Time Analysis
• Cycle time: Difference between a job’s start and end time
• Cycle time analysis: the task of calculating the average
cycle time for an entire process or process fragment
– Assumes that the average activity times for all involved activities
are available (activity time = waiting time + processing time)
• In the simplest case a process consists of a sequence of
activities on a sequential path
– The average cycle time is the sum of the average activity times
• … but in general we must be able to account for
– Alternative paths (XOR splits)
– Parallel paths (AND splits)
– Rework (cycles)
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Alternative Paths
CT = p1T1+p2T2+…+pnTn =
piTii1
n
Inspired by a slide by Manuel Laguna & John MarklundLecture8QuantitativeBusiness Process Management 8
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Alternative Paths – Example
• What is the average cycle time?
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• If two activities related to the same job are done in
parallel the contribution to the cycle time for the job is
the maximum of the two activity times.
Parallel Paths
CTparallel = Max{T1, T2,…, TM}
Inspired by a slide by Manuel Laguna & John Marklund
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Parallel Paths – Example
• What is the average cycle time?
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• Many processes include control or inspection points
where if the job does not meet certain standard, it is
sent back for rework
Rework
CT = T/(1-r)
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Rework – Example
• What is the average cycle time?
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Rework At Most Once – Example
• What is the average cycle time?
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Quick exercise
Calculate cycle time
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• Measured as the percentage of the total cycle time spent on value adding activities.
• CT = cycle time as defined before
• Theoretical Cycle Time (TCT) is the cycle time if we
only counted value-adding activities and excluded
any waiting time or handover time
– Count only processing times
Cycle Time Efficiency
Cycle Time Efficiency = CT
TimeCyclelTheoretica
Inspired by a slide by Manuel Laguna & John Marklund
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Flow Analysis
• The previous technique for cycle time analysis is
only one example of what can be done using
flow analysis techniques
• Other applications:
– Calculating cost-per-process-instance
– Calculating error rates at the process level
– Estimating capacity requirements
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Limitation 1: Not all Models are Structured
Start End
Check for completeness
Perform checks Make decision
Deliver card
Receive review
request
Request infoReceive info
Notify acceptance
Notify rejection Time out
complete? Decide
review request
Yes
No
reject
reviiew
accept
0.5
0.7
0.3
0.5
0.2
0.8
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Limitation 2: Fixed load + fixed resource
capacity
• Cycle time analysis does not consider waiting times
due to resource contention
• Queuing analysis and simulation address these
limitations and have a broader applicability
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• WIP = (average) Work-In-Process
– Number of cases that are running (started but not yet
completed)
– E.g. # of active and unfilled orders in an order-to-cash
process
• WIP is a form of waste (cf. 7+1 sources of waste)
• Little’s Formula: WIP = ·CT
– = arrival rate (number of new cases per time unit)
– CT = cycle time
Cycle Time & Work-In-Progress
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ExerciseA fast-food restaurant receives on average 1200 customers per
day (between 10:00 and 22:00). During peak times (12:00-
15:00 and 18:00-21:00), the restaurant receives around 900
customers in total, and 90 customers can be found in the
restaurant (on average) at a given point in time. At non-peak
times, the restaurant receives 300 customers in total, and 30
customers can be found in the restaurant (on average) at a
given point in time.
1. What is the average time that a customer spends in the restaurant
during peak times?
2. What is the average time that a customer spends in the restaurant
during non-peak times?
3. The restaurant plans to launch a marketing campaign to attract more
customers. However, the restaurant’s capacity is limited and becomes
too full during peak times. What can the restaurant do to address this
issue without investing in extending its building?Lecture8QuantitativeBusiness Process Management 21