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ILI2N3 – Pemodelan dan Rekayasa Proses Bisnis Logistik

Introduction to Business
Process Design
Jurusan Teknik Logistik
Fakultas Rekayasa Industri
Gasal 20/21

Buku Acuan: Manuel Laguna and Johan Marklund (2019): "Business Process Modeling, Simulation, and Design", 3 Eds. FYL
 Application Area in Interaction With 2

Business Process Modeling

Zukunft & Rump (1996)

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 What Is a Business Process? 3

• describes how something is done in an organization.

Business: an organizational entity that deploys resources to provide customers

with desired products or services

Process: specifies the transformation of inputs to outputs

• Physical, for instance, the transformation of raw materials to a finished
product
• Locational, for instance, the transportation service provided by an
airline
• Transactional, for instance, banking and transformation of cash into
stocks by a brokerage firm
• Informational, for instance, the transformation of financial data into
information in the form of financial statements

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 What Is a Business Process? 4

• Example of generic business processes:

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 Process Types and Hierarchies 5

• Process Type:
a) Individual processes: carried
out by separate individuals;
b) Vertical or functional
processes: contained within a
certain functional unit or
department;
c) Horizontal or cross-
functional processes: cut
across several functional
units (or, in terms of supply
chains, even across different
companies)

Core processes are defined as all the functions and the sequence of activities (regardless of
where they reside in the organization), policies and procedures, and supporting systems
5 required to meet a marketplace need through a specific strategy.
 The high improvement potential of cross- 6

functional business processes

• Improvements in cross-functional business processes have not kept up
with improvements in manufacturing processes over the years. In other
words, the current margin for improvement is greater in
nonmanufacturing-related business processes.
• Waste and inefficiency are more difficult to detect in cross-functional
processes than in functional processes due to increased complexity.
• Cross-functional business processes often devote as little as 5 percent
or less of the available process time to activities that deliver value to
the customers.
• Customers are five times more likely to take their business elsewhere
because of poor service-related business processes than because of
poor products.

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 Process Architecture/ Process Structure 7

Five main components or elements:

1. the inputs and outputs,
• can be tangible (raw materials, cash, and customers) or intangible (information, knowledge, energy, and time)
• establish the interaction between the process and its environment

2. the flow units,

• “transient entity* that proceeds through various activities and finally exits the process as finished output
• can be a unit of input (e.g., a customer or raw material), a unit of one or several intermediate products or
components (e.g., the frame in a bicycle-assembly process), or a unit of output (e.g., a serviced customer or
finished product)
• It is customary to refer to the generic flow unit as a job,
3. the network of activities and buffers,
• process is composed of activities.

a process would be as a network of activities and buffers through which the flow units or jobs
have to pass to be transformed from inputs to outputs.

• most processes also include buffers between activities, allowing storage of jobs between them. Ex: waiting
rooms at a hospital, finished goods inventory,
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 Process Architecture/ Process Structure 8

Five main components or elements:

3. the network of activities and buffers,
• 2 approaches Classification of activities

Value-adding activities : the activities essential for the process to meet the customers’ expectations

doing the right things in the right ways

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being effective being eficient
 Process Architecture/ Process Structure 9

Five main components or elements:

3. the network of activities and buffers,
• Example: classification of these activities into the categories of value adding, non–value adding, and business
value adding appears

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 Process Architecture/ Process Structure 10

Five main components or elements:

4. the resources,
• tangible assets that are necessary to perform activities within a process
• As opposed to inputs, which flow through the process and leave, resources are used rather than consumed
5. the information structure
• which information is required and which is available to make the decisions necessary for performing the
activities in a process
A business process is a network of connected activities and buffers with well-defined boundaries and precedence
relationships, which use resources to transform inputs into outputs for the purpose of satisfying customer requirements.

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 Workflow Management Systems 11

• how a job flows through the process, the activities that are performed
on it, the people involved, and the information needed for its
completion.
• the flow units along with the network of activities and buffers, the
resources, and the information structure
• Management of administrative processes often is referred to as
workflow management
• information systems that support workflow management are called
workflow management systems
• With its expanded scope and flexibility, modern workflow management
software is often referred to as business process management (BPM)
software systems
•

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 The Essence of Business Process Design 12

• Business process design is concerned with configuring the process

architecture (i.e., the inputs and outputs, the flow units, the network of
activities and buffers, the resources, and the information structure), so
that customer requirements are satisfied in an efficient way
• how to do things in a good way (good refers to process efficiency and
process effectiveness)
• Example:
a) Adam Smith’s model → the need for handing off work from one
station to the next and for coordinating the flow of jobs in the
process
b) the traditional approach to designing new products illustrated by Shafer
and Meredith (1998) → R&D design a feature that manufacturing
cannot produce or one that can be produced only at a high cost →
handoff and increases the delay in introducing the new product
Completing a set of activities sequentially, one at a time, tends to Try to do as many activities
increase the time required to complete the entire process (known as as possible in parallel
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over-the-wall design problem). (concurrent engineering)
 Incremental Process Improvement VS 13

Process Design
• Incremental improvement refers to the transformation or change that
brings a system closer to standard or normal operating conditions.
• Starts with a problem definition
✓ The process does not meet its established goals.
✓ The process does not yield predicted results.
✓ The process does not operate as initially intended.

• Process design also involves transformation and change. However,

design is a creative process that questions the assumptions on which
old forms have been built.
• It demands a completely new outlook to generate innovative solutions
with the capability of increasing process performance significantly.

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 Incremental Process Improvement VS 14

Process Design

Example process design at the insurance industry.

• decided to overhaul its process for handling claims regarding replacement of automobile
glass.

as little as 24 hours

New improved design of

Original claims-handling process. the claims-handling process
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(1–2 weeks ) (As little as 24 hours)
 Business Process Design, Overall Business 15

Performance, and Strategy

• Overall business performance regardless of the explicitly

stated objectives is to satisfy customer requirements in an
efficient way
• In general terms, strategy can be defined as “the unifying
theme that aligns all individual decisions made within an
organization.”
✓ Strategic fit refers to a match between the strategic (or competitive) position the
organization wants to achieve in the external marketplace and the internal capabilities
necessary to take it there.

Market driven strategy, a process-driven strategy, or most

commonly, a combination of the two.
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 Why Do Inefficient and Ineffective Business 16

Processes Exist?

Why were inefficient and ineffective (i.e., broken) processes

designed in the first place?
• Most of the broken processes and procedures seen in a business are not designed at al
• Example: the purchasing process of a company

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 Why Do Inefficient and Ineffective Business 17

Processes Exist?

Inefficient or ineffective processes can be the result of:

✓ an organization’s inability to take advantage of changes in the external and
internal environments that have produced new design enablers such as IT.
✓ the local adjustments made to deal with changes in the external and
internal environments. When these incremental changes accumulate over
time, they create inconsistent structures.

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