MTAT.03.

231
Business Process Management

Lecture 4 – Qualitative Process

Analysis

Marlon Dumas

marlon.dumas ät ut . ee

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Process Analysis
Process  
identification

Process  
Process  aarchitecture
rchitecture

Conformance  
Conformance  aand  
nd   Process   As-­‐is  
As-­‐is  pprocess
rocess
performance  
performance  iinsights
nsights discovery model
model

Process
monitoring  and   Process
controlling analysis

Executable  
Executable   Insights  
Insights  oonn
process
process weaknesses  
weaknesses  aand  
nd  
model
model their  
their  iimpact
mpact

Process Process
implementation To-­‐be  
To-­‐be  pprocess  
rocess   redesign
model
model
Process Analysis Techniques

Qualitative analysis
•  Value-Added & Waste Analysis
•  Root-Cause Analysis
•  Pareto Analysis
•  Issue Register

Quantitative Analysis
1.  Introduction
2.  Process Identification
3.  Essential Process Modeling
4.  Advanced Process Modeling
5.  Process Discovery
6.  Qualitative Process Analysis
7.  Quantitative Process Analysis
8.  Process Redesign
9.  Process Automation
10. Process Intelligence
Qualita've  analysis

Value-­‐Added  
Root-­‐Cause  
&  Waste  
Analysis  
Analysis  

Issue  
Register  &  
Pareto  
Charts  
Value-­‐added  analysis
•  Decorticate the process into steps
•  Steps performed before a task
•  The task itself, possibly decomposed into smaller steps
•  Steps performed after a task, in preparation for the next task
•  Classify each step
•  Value-adding (VA)
•  Business value-adding (BVA)
•  Non-value-adding (NVA)
Value-­‐adding  ac'vi'es  

•  Produces value or satisfaction to the customer.

•  Criteria:
•  Is the customer willing to pay for this step?
•  Would the customer agree that this step is necessary to achieve their
goals?
•  If the step is removed, would the customer perceive that the end
product or service is less valuable?
•  Examples:
•  Order-to-cash process: Confirm delivery date, Deliver products
•  University admission process: Assess application, Notify admission
outcome

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Business  value-­‐adding  ac'vi'es  

•  Necessary or useful for the business to operate.

•  Criteria
•  Is this step required in order to collect revenue, to improve or grow the
business?
•  Would the business (potentially) suffer in the long-term if this step was
removed? Does it reduce risk of business losses?
•  Is this step required in order to comply with regulatory requirements?
•  Example
•  Order-to-cash process: Check purchase order, Check customer’s credit
worthiness, Issue invoice, Collect payment, Collect customer feedback
•  University admission process: Verify completeness of application,
Check validity of degrees, Check validity of language test results

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Non-­‐value-­‐adding  ac'vi'es  

•  Everything else besides VA and BVA

•  Incudes:
•  Handovers, context switches
•  Waiting times, delays
•  Rework or defect correction
•  Examples
•  Order-to-cash: Forward PO to warehouse, Re-send confirmation,
Receive rejected products
•  University admission: Forward applications to committee, Receive
admission results from committee

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Extract of Equipment Rental Process

Fill request (VA)

Send request to clerk (NVA)

Check equipment availability (VA) – 1st time

Record recommended equipment (BVA)
Forward request to works engineer (NVA)

Open and read request (NVA) Produce PO (BVA)

Select suitable equipment (VA) – 1st time Submit PO to supplier (VA)

Open and examine request (BVA)

Communicate issues (BVA)
Forward request back to clerk (NVA)
Equipment Rental Process – VA Analysis
Waste analysis

"All we are doing is looking at the time line, from the

moment the customer gives us an order to the point when
we collect the cash.
And we are reducing the time line by reducing the non-
value-adding wastes ”
Taiichi Ohno
Seven  sources  of  waste  

Move  
•  Unnecessary  Transporta'on  
•  Mo'on  
Hold  
•  Inventory  
•  Wai'ng  (and  idleness)  
Over-­‐do  
•  Defects  
•  Over-­‐Processing  
•  Over-­‐Produc'on  

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Unnecessary  transporta'on  

• Send  or  receive  materials  or  documents  (incl.  electronic)  

taken  as  input  or  output  by  the  process  

Example:
•  To apply for admission at a University, students fill in an online
form. When a student submits the online form, a PDF
document is generated. The student is requested to download
it, sign it, and send it by post together with the required
documents: 1. Certified copies of degree and academic
transcripts. 2. Results of language test. 3. CV.
When the documents arrive to the admissions office, an officer
checks their completeness. If a document is missing, an e-mail
is sent to the student. The student has to send the missing
documents by e-mail or post depending on document type.  

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Mo'on  

•  Mo'on  of  resources  internally  within  the  process  

• Common  in  manufacturing  processes,  less  common  in  
business  processes  

Examples
•  Vehicle inspection process, a process worker moves with
the inspection forms from one inspection base to
another; in some cases inspection equipment also needs
to be moved around
•  Approval process, a process workers moves around the
organization to collect signatures

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17
Inventory  

•  Materials  inventory  
•  Work-­‐in-­‐process  (WIP)  

Examples  
•  Vehicle  inspec'on  process,  when  a  vehicle  does  not  pass  the  
first  inspec'on,  it  is  sent  back  for  adjustments  and  leU  in  a  
pending  status.  At  a  given  point  in  'me,  about  100  vehicles  
are  in  the  “pending”  status  across  all  inspec'on  sta'ons  
•  University  admission  process:  About  3000  applica'ons  are  
handled  concurrently  
 

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Wai'ng  

•  Wai'ng  for  materials  or  input  data  

•  Task  wai'ng  for  a  resource  
•  Resource  wai'ng  for  work  (resource  idleness)  
 
Examples  
•  Vehicle  inspec'on  process:  A  technician  at  a  base  of  the  
inspec'on  sta'on  wai'ng  for  the  next  vehicle  
•  Approval  process:  Request  wai'ng  for  approver  
•  University  admission  process:  Incomplete  applica'on  wai'ng  
for  addi'onal  documents;  batch  of  applica'ons  wai'ng  for  
commi^ee  to  meet  

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Defects  

•  Correc'ng  or  compensa'ng  for  a  defect  

•  Rework  loops  
 
Examples  
•  Vehicle  inspec'on:  A  vehicle  needs  to  come  back  to  a  sta'on  
due  to  an  omission  
•  Travel  approval:  Request  sent  back  to  requestor  for  revision  
•  University  admission:  Applica'on  sent  back  to  applicant  for  
modifica'on;  request  needs  to  be  re-­‐assessed  later  due  to  
incomplete  informa'on  
 

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Over-­‐processing  

•  Tasks  performed  unnecessarily  given  the  outcome  of  the  process  

•  Unnecessary  perfec'onism  
 
Examples  
•  Vehicle  inspec'on:  Technicians  take  'me  to  measure  vehicle  
emissions  with  higher  accuracy  than  required,  only  to  find  that  the  
vehicle  clearly  does  not  fulfill  the  required  emission  levels  
•  Travel  approval:  10%  of  approvals  are  trivially  rejected  at  the  end  of  
the  process  due  to  lack  of  budget  
•  University  admission:  Officers  spend  'me  verifying  the  authen'city  
of  degrees,  transcripts  and  language  test  results.  In  1%  of  cases,  
these  verifica'ons  uncover  issues.  
Verified  applica'ons  are  sent  to  the  admissions  commi^ee.  The  
admission  commi^ee  accepts  20%  of  the  applica'ons  it  receives  

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Over-­‐produc'on  

•  Unnecessary  process  instances  are  performed,  producing  

outcomes  that  do  not  add  value  upon  comple'on  

Examples  
•  Order-­‐to-­‐cash:  In  50%  of  cases,  issued  quotes  do  not  lead  to  
an  order  
•  Travel  approval:  In  5%  of  cases,  travel  requests  are  approved  
but  the  travel  is  cancelled  
•  University  admission:  About  3000  applica'ons  are  submi^ed,  
but  only  800  are  considered  eligible  aUer  assessment  
 

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Equipment rental process: wastes

Send request to clerk (Transp.)

Defect

Open and read request Forward request to

(Handover à transportation) works engineer (Transp.)

Forward request back to

clerk (Transp.)
Equipment  rental  process:  wastes  

Transporta'on  
•  Site  engineer  sends  request  to  clerk  
•  Clerk  forwards  to  works  engineer  
•  Works  engineer  send  back  to  clerk  

Inventory  
•  Equipment  kept  longer  than  needed  

Wai'ng  
•  Wai'ng  for  availability  of  works  engineer  to  approve  

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Equipment  rental  process:  wastes  
Defect  
•  Selected  equipment  not  available,  alterna've  equipment  sought  
•  Incorrect  equipment  delivered  and  returned  to  supplier  

Over-­‐processing  
•  Clerk  finds  available  equipment  and  rental  request  is  
rejected  because  equipment  not  needed  
•  Rental  requests  being  approved  and  then  canceled  by  site  
engineer  

Over-­‐produc'on  
•  Equipment  being  rented  and  not  used  at  all  

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Issue register
•  Purpose: to maintain, organize and prioritize perceived
weaknesses of the process (issues)
•  Sources of issues:
•  Input to a process modelling project
•  Collected as part of ongoing process improvement actions
•  Collected during process discovery (modelling)
•  Value-added/waste analysis
Issue  register  structure  

•  Can take the form of a table with:

•  Issue identifier
•  Short name
•  Description
•  Assumptions
•  Impact: Qualitative and Quantitative
•  Possible improvement actions
•  Larger process improvement projects may require issue
trackers

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Issue  example  

Issue  name  
•  Equipment  kept  longer  than  needed  

Descrip'on  
•  Site  engineers  keep  rented  equipment  longer  than  needed  by  asking  for  
deadline  extensions  to  the  supplier  

Assump'ons  
•  3000  pieces  of  equipment  rented  p.a.  
In  10%  of  cases,  equipment  is  kept  two  days  more  than  needed  
Average  rental  cost  is  100  per  day  

Quan'ta've  impact  
•  0.1  ×  3000  ×  2  ×  100  =  60,000  p.a  

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 Issue Register Example  
Name Explanation Assumptions Qualitative Quantitative
Impact Impact

Equipment Site engineers keep 3000 pieces of equipment rented p.a. 0.1 × 3000 ×
kept longer equipment longer In 10% of cases, equipment kept two 2 × 100 =
than needed than needed via days longer than needed. 60,000 p.a.
deadline extensions Rental cost is 100 per day

Rejected Site engineers reject 3000 pieces of equipment rented p.a. Disrupted 3000 × 0.05
equipment delivered equipment 5% of them are rejected due to an schedules. × 100 =
due to non- internal mistake Employee 15,000 p.a.
conformance to their For each equipment rejected due to an stress and
specifications internal mistake, BuildIT is billed 100. frustration

Late Late payment fees 3000 pieces of equipment rented p.a. Poor 0.1 × 3000 ×
payment incurred because Average rental time is 4 days reputation 4 × 100 ×
fees invoices are not paid Rental cost is 100 per day. with suppliers 0.02 = 2400
by their due date Each rental leads to one invoice. p.a.
About 10% of invoices are paid late.
Penalty for late payment is 2%.
Pareto chart

•  Useful to prioritize a collection of issues

•  Bar chart where the height of the bar denotes the impact
of each issue
•  Bars sorted by impact
•  Superposed curve of cumulative percentage impact
Pareto chart example
Two-Dimensional Prioritization: PICK Chart
 Root-­‐cause  analysis  

Why-­‐why  diagram  
   
Factors   Issue  
   
Cause-­‐effect  
diagram  
Why-why diagram

Contributing
Factor

Contributing ...
Factor

Contributing
Factor
Five levels
Issue of nesting
Contributing
Factor
“Five
Contributing
Factor ... Why’s”
Contributing
Factor
 Why-­‐why  diagram  example  

Site  engineers  keep  equipment  longer,  why?  

• Site  engineer  fears  that  equipment  will  not  be  available  later  
when  needed,  why?  
•  'me  between  request  and  delivery  too  long,  why?  
•  excessive  'me  spent  in  finding  suitable  equipment  and  approving  
the  request,  why?    
•  'me  spent  by  clerk  contac'ng  possibly  mul'ple  suppliers  sequen'ally;  
•  'me  spent  wai'ng  for  works  engineer  to  check  the  requests;    
Cause-­‐effect  (Fishbone)  diagram  
Causal Factors Issue

Measurement Material Machine

Primary Primary Primary

ry
d ar
y
n da d ary
c on co con
Se Se Se

Primary Primary Primary

Issue

Primary Primary Primary

Se Sec
co n Sec o
da ond nda
ry a ry ry

Primary Primary Primary

Milieu Man Method

Categories  of  causes:  Six  Ms  

1.  Machine:  factors  stemming  from  technology  used  

•  Lack  of  suitable  func'onality  in  the  suppor'ng  soUware  applica'ons  
•  Poor  User  Interface  (UI)  design  
•  Lack  of  integra'on  between  systems  
2.  Method:  factors  stemming  from  the  way  the  process  is  
designed,  understood  or  performed  
•  Unclear  assignments  of  responsibili'es  
•  Unclear  instruc'ons  
•  Insufficient  training  
•  Lack  of  'mely  communica'on  
3.  Material:  factors  stemming  from  input  materials  or  data  
•  Missing,  incorrect  or  outdated  data  

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Categories  of  causes:  Six  Ms  

4.  Man:  factors  stemming  from  wrong  assessments  or  

incorrect  performance  of  steps  a^ributable  to:  
•  Lack  of  training  and  clear  instruc'ons  
•  Lack  of  mo'va'on  
•  Too  high  demands  towards  process  workers  
5.  Measurement:  factors  stemming  from  reliance  on:  
•  Inaccurate  es'ma'ons  
•  Miscalcula'ons  
6.  Milieu:  factors  outside  the  scope  of  the  process  
•  Delays  caused  because  of  unresponsive  external  actors  
•  Sudden  increases  of  workload  due  to  special  circumstances  

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Cause-­‐effect  diagram  example  
Causal Factors Issue

Measurement Material Machine

Clerk
selected equipment The system does not keep
with incorrect specs the site engineer informed

Inaccurate
equipment description in
provider's catalogue

Equipment
rejected at
delivery

Clerk is entirely responsible

Incomplete or inaccurate
for equipment selection
requirements from site engineer

Clerk Site engineer does not

misunderstood validate the choice of equipment
site engineer's requirement

Milieu Man Method

Summary  

1.  Segregate  value-­‐adding,  business  value-­‐adding  and  non-­‐

value-­‐adding  steps  
2.  Iden'fy  waste  
3.  Collect  and  systema'cally  organize  issues,  assess  their  
impact  
4.  Analyze  root  causes  of  issues