IT 402 Saudi Electronic University Fantastic Pastry Shop Case Study

Description


College of Computing and Informatics
Case Study
Deadline: Tuesday 10/05/2022 @ 23:59
[Total Mark is 15]
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You must submit two separate copies (one Word file and one PDF file) using the Assignment Template on
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page.
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Use Times New Roman font for all your answers.
Pg. 01
FANTASTIC PASTRY SHOP CASE STUDY
Introduction about Fantastic Pastry Shop:
Fantastic Pastry Shop is a traditional pastry shop established in 1999. It is a
small shop owned by two persons. One of them was responsible for buying
goods and bringing them to the shop two times a day (every morning and late
afternoon). The other one is managing the shop activities and organizing shifts
for employees. They work 24/7 and have three shifts. They employ wellexperienced employees in each shift. The shop has three chefs for making the
dough and sauce, three well-trained employees for preparing and putting the
ingredients, and three well-trained employees for cooking the pastry and
controlling the oven heat. The owners work on this shop and have other
employees to help them.
The order process in Fantastic Pastry Shop:
The process starts by welcoming the customer and giving them the menu. The
customer looks into the menu then places their order. The cashier writes down
the order on a separate paper for each customer, calculates the prices, and then
asks the customer to pay (4 minutes). After getting the payment, the cashier
handed the paper of each order to the second employee. The next employee
then starts to prepare the dough based on the order (the shop has two bases of
dough: white flour dough and brown wholemeal flour dough) (4 minutes). The
next employee is responsible for filling the pastry with the ingredients based on
each customer’s order (2 minutes). The next employee takes the pastry, puts it
into the oven until it is ready, and then gets it back (2 minutes for white flour base
and 4 minutes for brown wholemeal flour base). The last employee cut the pastry
and packages it then hands it to the customer (2 minutes).
Pg. 02
The current situation of Fantastic Pastry Shop:
The shop starts to get a lot of orders that are over its capacity due to its
reputation. It usually gets around 20 orders from persons coming to their shop in
each hour. Each order – on average – includes 3-5 pastries of different bases
and ingredients. However, the shop lost a couple of its experienced employees
responsible for preparing and cooking pastries.
The Issues in Fantastic Pastry Shop:
The Fantastic Pastry Shop was very successful and had many customers and
significant revenue. However, the shop starts to lose many of its loyal customers
and receives a considerable number of complaints. The managers started to
investigate the complaints they received. They also contacted their loyal
customers to understand the different issues more clearly. After this deep
investigation, they categorized the issues into the following categories:

Some of the pastry’s bases and ingredients are unavailable in the early
afternoon or late night.

The waiting time becomes unacceptable to customers.

The quantity of ingredients is not always the same which affecting the
taste of the pastry.

The brown wholemeal flour base of pastries is sometimes undercooked.

The customers sometimes get some of their pastries cold.

The customers sometimes get the wrong order.
Pg. 03
The requirements to solve Fantastic Pastry Shop process
issue:
Besides the available information, you are expected and allowed to make
assumptions, if you need, to improve the process and solve the issue of the
Fantastic Pastry Shop.
You are requested to solve the issue of the Fantastic Pastry
Shop and improve its process and performance by answering
the following questions.
Pg. 04
Learning
Outcome(s):
CLO1: Explain
the
interdisciplinary
concepts,
theories, and
trends in ES and
their role in
supporting
business
operations.
Question One
5 Marks
Explain the main Input, Process Activities, and Output of the Fantastic Pastry
Shop Process.
Then, calculate the current cycle time of the process?
Also, calculate the throughput for this process in 1 hour?
Further, find out the bottleneck activities?
Pg. 05
Learning
Outcome(s):
Question Two
4 Marks
CLO4: Design ES
architectural
Model current (As-Is) process using BPMN 2.0 utilizing any tool such as Visio?
models for
various business
Then analyze As-Is process from both time and quality perspectives (mention at
processes.
least 1 issue related to time and 1 issue related to quality in the process)?
Pg. 06
Learning
Outcome(s):
Question Three
6 Marks
CLO3: Discuss
the issues and
Suggest at least 3 ideas for improving the current process from the following
challenges
perspectives:
associated with
a) employees’ perspective,
implementing ES
b) equipment’s’ perspective,
and their impacts
c) IT & IS technologies perspective?
on corporate
enterprises.
Also explain how your suggestions will solve Fantastic Pastry Shop issues?
Finally, propose the To-Be process model using BPMN 2.0 by utilizing any
tools?
BPMN 2.0 – Business Process Model and Notation
Choreographies
Types specify the nature of
the action to be performed:
~
Sub-Process Marker
Send Task
Loop Marker
Receive Task
Parallel MI Marker
User Task
Sequential MI Marker
Manual Task
Ad Hoc Marker
Business Rule Task
Compensation Marker
Service Task
Pool
(Black Box)
has a condition
assigned that defines
whether or not the
flow is used.
Exclusive Event-based Gateway
(instantiate)
Each occurrence of a subsequent
event starts a new process
instance.
Complex Gateway
Complex merging and
branching behavior that is not
captured by other gateways.
Parallel Event-based Gateway
(instantiate)
The occurrence of all subsequent
events starts a new process
instance.
Attached
Intermediate
Timer Event
Link: Off-page connectors.
Two corresponding link events
equal a sequence flow.
Ad-hoc Subprocess
Manual Task
Task
End
Event
Timer
Intermediate
Event
Subprocess
Data
Store
Attached
Intermediate
Error Event
Looped
Subprocess
End
Event
Start
Event
Link
Intermediate
Event
~
Escalation
End Event
Signal
End
Event
Multiple: Catching one out of
a set of events. Throwing all
events defined
Parallel Multiple: Catching
all out of a set of parallel
events.
Terminate: Triggering the
immediate termination of a
process.
Collection
Text Annotation
Group
Data
Multi Instance
Task (Parallel)
condition
A Data Object represents information flowing
through the process, such as business
documents, e-mails, or letters.
Event Subprocess
Conditional
Start Event
Error End
Event
Call Activity
Send Task
Exclusive
Gateway
Task
Swimlanes
Parallel
Gateway
Task
Pools (Participants) and Lanes
represent responsibilities for
activities in a process. A pool
or a lane can be an
organization, a role, or a
system. Lanes subdivide pools
or other lanes hierarchically.
Message Flow symbolizes
information flow across
organizational boundaries.
Message flow can be attached
to pools, activities, or
message events. The Message
Flow can be decorated with
an envelope depicting the
content of the message.
A Collection Data Object represents a
collection of information, e.g., a list of order
items.
Message
End Event
Input
A Data Input is an external input for the
entire process.A kind of input parameter.
Output
A Data Output is data result of the entire
process. A kind of output parameter.
A Data Association is used to associate data
elements to Activities, Processes and Global
Tasks.
The order of message
exchanges can be
specified by combining
message flow and
sequence flow.
Data Store
© 2011
A Data Store is a place where the process can
read or write data, e.g., a database or a filing
cabinet. It persists beyond the lifetime of the
process instance.
Standard
Throwing
Boundary NonInterrupting
Conditional: Reacting to
changed business conditions
or integrating business rules.
Signal: Signalling across different processes. A signal thrown
can be caught multiple times.
Task
Data Object
When used to split the sequence flow, all outgoing
branches are activated simultaneously. When merging
parallel branches it waits for all incoming branches to
complete before triggering the outgoing flow.
Inclusive Gateway
When splitting, one or more
branches are activated. All
active incoming branches must
complete before merging.
Event-based
Gateway
Receive Task
Message
Start Event
Lane
Parallel Gateway
Escalation: Escalating to
an higher level of
responsibility.
Compensation: Handling or
triggering compensation.
Collapsed
Subprocess
Is always followed by catching events or receive tasks.
Sequence flow is routed to the subsequent event/task
which happens first.
Timer: Cyclic timer events,
points in time, time spans or
timeouts.
Cancel: Reacting to cancelled
transactions or triggering
cancellation.
Message Flow
Parallel
Link
Intermediate Multiple
Intermediate
Event
Event
None: Untyped events,
indicate start point, state
changes or final states.
Error: Catching or throwing
named errors.
Pool (Black Box)
Lane
Event-based Gateway
When splitting, it routes the sequence flow to exactly
one of the outgoing branches. When merging, it awaits
one incoming branch to complete before triggering the
outgoing flow.
Choreography
Task
Participant C
Response
Message
(decorator)
Pool
Exclusive Gateway
Participant A
Participant B
Collaboration Diagram
Lane
Gateways
Participant B
Participant B
Participant C
Conditional Flow
is the default branch
to be chosen if all
other conditions
evaluate to false.
a decorator depicting
the content of the
message. It can only
be attached to
Choreography Tasks.
Sub-Conversation
Pool (White Box)
defines the execution
order of activities.
Choreography
Task
Choreography
Task
Message
Multi Instance Pool
(Black Box)
Participant A
Participant
B
Participant
A
(Black Box)
Lane
Default Flow
Initiating
Message
(decorator)
End
Message: Receiving and
sending messages.
Participant A
denotes a set of
Participants of the
same kind.
Conversation
A Call Choreography is a
wrapper for a globally
defined Choreography Task
or Sub-Choreography. A call
to a Sub-Choreography is
marked with a
symbol.
Choreography Diagram
Pool
Script Task
Sequence Flow
A Sub-Choreography contains
a refined choreography with
several Interactions.
Multiple
Participants Marker
Conversation Diagram
Participant B
Participant B
Participant C
A Choreography Task
represents an Interaction
(Message Exchange)
between two Participants.
Events
Intermediate
Pool
Markers indicate execution
behavior of activities:
Participant B
Pool
Task Types
Call
Choreography
Pool
(Black
Box)
Activity Markers
Sub-Choreography
A Conversation Link connects
Conversations and Participants.
A Call Activity is a wrapper for a globally defined
Task or Process reused in the current Process. A
call to a Process is marked with a
symbol.
Call Activity
Choreography
Task
Start
Boundary
Interrupting
Event
Sub-Process
An Event Sub-Process is placed into a Process or
Sub-Process. It is activated when its start event
gets triggered and can interrupt the higher level
process context or run in parallel (noninterrupting) depending on the start event.
Participant A
Catching
A Transaction is a set of activities that logically
belong together; it might follow a specified
transaction protocol.
Participant A
Event Sub-Process
Non-Interrupting
Transaction
A Call Conversation is a wrapper for a
globally defined Conversation or SubConversation. A call to a Sub-conversation
is marked with a
symbol.
Task
Participant A
Event Sub-Process
Interrupting
A Task is a unit of work, the job to be
performed. When marked with a
symbol
it indicates a Sub-Process, an activity that can
be refined.
A Conversation defines a set of
logically related message exchanges.
When marked with a
symbol it
indicates a Sub-Conversation, a
compound conversation element.
Standard
Conversations
Activities
http://bpmb.de/poster
‫ر‬
‫الجامعة السعودية االلكتونية‬
‫ر‬
‫االلكتونية‬
‫الجامعة السعودية‬
‫‪26/12/2021‬‬
College of Computing and Informatics
IT402
Integrated Enterprise Systems
IT402 – Integrated Enterprise Systems
Week 11 – EPMS for Business Process Improvement
Contents
1. Business Process Reengineering and Strategic Planning for Enterprise
Business Process Reengineering
2. Selecting Business Processes for Business Process Reengineering
3. Lean System, Six Sigma, and Theory of Constraints
4. Activity-Based Customer Responsiveness, Activity-Based Costing,
Time- Driven Activity-Based Costing and Responsive Activity Pricing
Weekly Learning Outcomes
1. Understand Business Process Reengineering
2. Understand
Enterprise
Business
Process
Redesign
or
Reengineering Methodology
3. Understand
Enterprise-Wide
Continuous
Programs
4. Understand Time-Based Competition
Improvement
Required Reading
1. Chapter 15: EPMS for Business Process Improvement
Recommended Reading
1. Dunn, C., Cherrington, J., & Hollander, A. (2005). Enterprise information
systems: A pattern based approach (3rd ed.). New York: McGraw Hill
Higher Education. ISBN: 007240429 (print), 9781308469676 (e-text).
2. Business Process Reengineering

This Presentation is mainly dependent on the textbook: Enterprise Information Systems: Contemporary Trends and Issues
EPMS for Business Process Improvement
EPMS for Business Process Improvement
• Process improvement programs range right from disruptive to
continuous improvement programs and the first of these corresponds
to business process reengineering programs, while the latter
corresponds to continues improvement programs like lean, Six Sigma,
and the Theory of Constraints (TOC).
• Business process reengineering programs
• Continues improvement programs
Business Process Reengineering
Business Process Reengineering
• BPR can be broadly termed as the rethinking and change of business
processes to achieve dramatic improvements in the measures of
performance aspects such as cost, quality, service, and speed.
• Some of the principals advocated by Hammer are as follows:
• Organize around outputs, not tasks.
• Place the decisions and control, and hence all relevant information, into the
hands of the performer.
• Have those who use the outputs of a process perform the process, including
the creation and processing of the relevant information.
Business Process Reengineering
• BPR in practice has developed a focus on changing capability/capacity in
the short-term to address current issues. This short-term change in
capability/capacity is usually driven by the need to:








Reduce the cycle time to process customer orders
Improve quotation times
Lower variable overhead costs
Increase product range to meet an immediate competitor threat
Rebalance resources to meet current market needs
Reduce work-in-progress stocks
Meet changed legislation requirements
Introduce short-term measures to increase market-share (e.g., increased credit limit
from customers hit by recessionary trends)
Business Process Reengineering
• An overview of a seven-step methodology is as follows:
• Develop the context for undertaking the BPR and in particular reengineer the
enterprise’s business processes. Then, identify the reason behind redesigning
the process to represent the value perceived by the customer.
• Select the business processes for the reengineering effort.
• Map the selected processes.
• Analyze the process maps to discover opportunities for reengineering.
• Redesign the selected processes for increased performance.
• Implement the reengineered processes.
• Measure the implementation of the reengineered processes.
Business Process Reengineering
• A detailed customer value analysis analyzes the value gaps and helps
in further refining the goals of the process reengineering exercise. The
value gaps are as follows:
• Gaps that result from different value perceptions in different customer groups
• Gaps between what the company provides and what the customer has
established as the minimum performance level
• Gaps between what the company provides and what the competition
provides
• Gaps between what the organization perceives as the MAV for the identified
customer groups and what the customer says are the corresponding MAVs
Enterprise Business Process Redesign or Reengineering
Methodology
• The seven steps in a BPR methodology. These steps are as follows:
• Develop the context for undertaking the BPR and, in particular, reengineer the
enterprise’s business processes. Then, identify the reason behind redesigning
the process to represent the value perceived by the customer.
• Select the business processes for the design effort.
• Map the selected processes.
• Analyze the process maps to discover opportunities for design.
• Design the selected processes for increased performance.
• Implement the designed processes.
• Measure the implementation of the designed processes.
Enterprise Business Process Redesign or Reengineering
Methodology
Strategic Planning for Enterprise Business Process Reengineering
• All markets are fluid to some degree, and these dynamic forces and shifting
customer values necessitate changes in a company’s strategic plans.
• The competitive gap can be defined as the gap between the customer’s
minimum acceptance value (MAV) and the customer value delivered by the
enterprise.
• Critical value determinants (CVDs) are those business imperatives that
must happen if the enterprise wants to close the competitive gap and are
similar to the critical success factors at the enterprise level.
Strategic Planning for Enterprise Business Process Reengineering
• CVDs are expressed in terms of factors such as
• Time (e.g., lead time, cycle time)
• Flexibility (e.g., customization, options, composition, resource network
interfaces)
• Responsiveness (e.g., lead time, duration, number of hand-offs, priority,
number of queues)
• Quality of work (e.g., rework, rejects, yield)
Strategic Planning for Enterprise Business Process Reengineering
• Identifying the Business Processes in the Company
• All business process in an enterprise are identified and recorded.
• A process can be defined as a set of resources and activities necessary and
sufficient to convert some form of input into some form of output.
• A process itself can consist of various substeps. The substeps in a process may
include:
• Value-added steps
• Non-value added steps
• Legal and regulatory steps (which are treated as value-added steps)
Selecting Business Processes for Business Process Reengineering
• Selecting the right processes for an innovative process reengineering effort
is critical.
• The processes should be selected for their high visibility; relative ease of
accomplishing goals; and, at the same time, their potential for great impact
on the value determinants.
• The MAVs must be charted in detail. MAV is dependent upon several
factors, such as:
• The customer’s prior general and particular experience base with an industry,
product, and/or service
• What the competition is doing in the concerned industry, product, or service
• What effect technological limitations have on setting the upper limit
Selecting Business Processes for Business Process Reengineering
• CVDs can be defined by obtaining data through the following:




The customer value survey
Leaders in noncompeting areas
The best-in-class performance levels
Internal customers
• A detailed customer value analysis analyzes the value gaps and helps
in further refining the goals of the process reengineering exercise.
Creating Process Maps
• A process map documents the flow of one unit of work (the unit may be
one item, one batch, or a particular service that is the smallest unit
possible to follow separately) or what actually happens to the work going
through the process.
• It documents both value-added and non-value-added steps. A process map
could either be sequential or concurrent in nature.
• A process could be mapped in the following two forms:
• Workflow chart form
• Work breakdown structure form
Creating Process Maps
• Process workflows fall into three categories: continuous workflows,
balanced workflows, and synchronized workflows.
• Workflow becomes nonsynchronized because of the following:
• Steps or tasks being produced at different rates—that is, an imbalanced
workflow
• Physical separation of operations causing work to move in batches
• Working in batches, causing intermittent flow
• Long setup or changeover times resulting in batched work along with
associated problems
• Variations in process inputs in terms of quality availability on time
Analyzing Processes for Breakthrough Improvements
• An enterprise’s competitive strength lies in eliminating as many costly nonvalue-added steps and wait-times as possible.
• For breakthrough improvements, the process maps are analyzed for the
following:
• Enterprise complexity: Commonly organizational issues are a major deterrent to
efficiency of the processes.
• Number of handoffs, especially those other than those associated with resource
network interfaces.
• Work movement: Workflow charts are utilized to highlight move distances
• Process problems: Several factors may have a severe effect on the continuity,
balance, or synchronicity of the workflow. Examples are loops of non-value-added
steps designed to address rework, errors, scraps, and so on.
Innovative Breakthrough Improvement in Processes
• The steps involved in innovative problem-solving methods are as
follows:





Define a problem.
Find alternate solutions.
Evaluate the solutions.
Implement the best solution.
Measure and monitor the success.
Innovative Breakthrough Improvement in Processes
• The responsive process consists of the following components:




Diagnosing customer need(s)
Developing customized solutions specific to organizational interfaces
Dynamically assigning work to the appropriate delivery unit
Tracking performance as each task is completed
• Business issues fall into three basic categories:




System problems (e.g., methods, procedures)
Technical problems (e.g., engineering, operational)
People problems (e.g., skills, training, hiring)—these problems arise because of the
concept of “if you change what a person does, then you change what he or she is”
Implementing Designed Processes
• This involves the following:






Reengineered vision and policies
Reengineered strategies and tactics
Reengineered systems and procedures
Reengineered communication environment
Reengineered organization architecture
Reengineered training environment
Measuring the Performance of Designed Processes
• Measuring the performance of any process is very important, because
a lack of measurement would make it impossible to distinguish such a
breakthrough effort from an incremental improvement effort of a
total quality management program.
• Measurements are essential because they are:
• Useful as baselines or benchmarks
• A motivation for further breakthrough improvements, which are important
for future competitiveness
Enterprise-Wide Continuous Improvement Programs
EPMS for Business Process Improvement
• Process improvement programs range right from disruptive to
continuous improvement programs and the first of these corresponds
to business process reengineering programs, while the latter
corresponds to continues improvement programs like lean, Six Sigma,
and the Theory of Constraints (TOC).
Enterprise-Wide Continuous Improvement Programs
• Operating strategy can be expressed in terms of the degree of
responsiveness expected for an customer order. It can be defined as
• Degree of Responsiveness (DOR) = As an illustration, in the order of magnitude, the
DOR can range from 0.01 to about 5, corresponding to
• Purchase from a retail outlet
• One-of-a-kind product or project
• Lean is a proven approach for becoming an excellent operational system,
• Six Sigma is a program for attaining world-class quality improvement,
• The TOC is an unsurpassed tool for identifying and removing bottlenecks.
Lean System
• Lean System is based on the Toyota production system, which Toyota
Motor Corporation (Toyota, Japan) has been perfecting for more than
five decades.
• The Toyota production system was inspired by the Ford production
system (Ford Motor Company, Dearborn, MI, USA).
• In 1950, when Toyota was in trouble, Eiji Toyoda went to Detroit to
learn from the legendary Ford Motor Company about how to improve
his family’s business.
Lean System
• Lean identifies five key concepts:
• Value is defined by the customer.
• Value stream is the information and material flow from suppliers’ suppliers to
customers’ customers.
• Flow is the synchronized continuous movement of material through the value
stream.
• Pull is a product usage signal from the customer to other participants in the
supply chain.
• Perfection is the neverending pursuit of zero waste.
Lean System
• It specifies seven forms of waste to be eliminated:






Overproduction: making more than is needed
Transport: excessive movement of materials
Motion: inefficient movement of people
Waiting: underutilization of people
Inventory: material lying around unused
Overprocessing: manufacturing to a higher quality standard than expected by
the customer
• Defect correction: time spent fixing defects, including the part that gets
thrown away and the time it takes to make the product correctly
Six Sigma
• Six Sigma is a business improvement approach that seeks to find and
eliminate causes of mistakes or defects in business processes by focusing
on outputs that are of critical importance to customers.
• Six Sigma projects should be customer-focused.
• Six Sigma can be applied to any process that needs improvement.
• Once the projects are defined, the five step Six Sigma Define, Measure,
Analyze, Improve, and Control (DMAIC) process is used.
Six Sigma
• The five phases are as follows:
• Define: this phase clearly defines the goal of the project by asking the
following:






What is the undesirable process variability or defect that must be eliminated?
What is the benefit if there is zero waste and a well-defined project charter, which
Is driven by a business strategy and a business plan improvement goal?
Reflects the voice of the customer in project metrics?
Clearly defines project objectives?
Defines the scope of the project appropriately to ensure it can be accomplished in four
to six months or less?
Six Sigma
• Measure: this phase clearly defines the current process, establishes metrics,
and validates the measurement quality by asking:
• What is the measurement of the output defects (Ys)?
• Analyze: this phase clearly defines the root causes of variation:
• Selecting enough input variables (Xs) to make analysis feasible
• Using multiple-variable studies to determine which Xs have the most impact on the
output defect(s) (Ys)
• Planning initial improvement activities
Six Sigma
• Improve: this phase clearly identifies relationships between critical Xs; the output
defect(s) (Ys) are quantified and selected to verify the proposed solutions by:
• Determining the effect critical Xs have on the output defect(s) (Ys) using designed
experiments
• Developing the sequence of experiments
• Identifying the critical inputs that need to be controlled
• Defining and piloting solutions to resolve problem root causes
• Control: this phase ensures that the process maintains the gains achieved, is neutral
or positive for customers, and controls the critical Xs through the following:
• A well-executed control plan
• The identification of the control plan process owner
• Tracking of financial results for one year
Theory of Constraints
• The TOC was developed by Eli Goldratt and collaborators. It became
broadly known in 1984 when Goldratt’s book, Goal, was published.
• The TOC views an enterprise as a system with resources linked
together to meet the enterprise’s goals.
• TOC improvement tools are effective both for continuous
improvement and breakthrough problem-solving.
Theory of Constraints
• These principles led to the following universal five-step methodology
for business improvement:





Identify the system’s constraints.
Decide how to exploit the system’s constraints.
Subordinate everything else to the earlier decision.
Elevate the system’s constraints.
If in the previous steps, a constraint has been broken, go back to step 1.
Theory of Constraints Tools
• The TOC employs five tools as follows:
• What to change? (Current reality tree)
• Objective for change (Evaporating cloud and Future reality tree)
• How to change? (Prerequisite tree and Transition tree)
Time-Based Competition
Time-Based Competition
• TBC was invented by George Stalk and his colleagues from the Boston
Consulting Group (Boston, MA).
• TBC is defined as the extension of just-in-time (JIT) principles into
every facet of the value delivery cycle, from research and
development through to marketing and distribution.
• TBC considers the whole value chain and focuses on the total time
required to produce and deliver products and services.
Time-Based Competition
• Time reduction essential for achieving TBC can be achieved through measures
such as:
• Simplification, or removing process complexity that has accumulated over time
• Integration, or improving information flows and linkages to create enhanced operability and
visibility
• Standardization, or using generic best-practice processes, standardized components and
modules, and information protocols
• Concurrent working, or moving from sequential to parallel working by using, for example,
teams and other forms of process integration
• Variance control, or monitoring processes, and detecting problems at an early stage so that
corrective action can be taken to avoid problems with quality and waste
• Automation, which is applied to improve the effectiveness and efficiency of entities and
activities within the supply-chain process
• Resource planning, or allocating resources in line with operational best practice; for example,
a company can plan by investigating bottleneck activities and considering the use of
multiskilled workforces to provide resource flexibility
Activity-Based Customer Responsiveness
• Enterprises that deploy customer responsive activities have the
following objectives:
• Building relationships so that customers become “conditioned” to contact the
enterprise first whenever they have a need
• Establishing the enterprise to provide effective diagnoses and responses
whenever customers establish such contact with the enterprise
• Creating the capability and processes to enable customer-facing members to
cultivate deep and long-term relationships with the customers and costeffectively coordinate each individual delivery of benefits
Activity-Based Customer Responsiveness
• Therefore, for an enterprise to be totally flexible in responding to
individual customers, the enterprise must develop the following three
things:
• Process(es) for interacting with individual customers and defining their
individual needs
• Conditional best-practice guidelines for defining how the organization will
respond to various type of customer requests
• A dynamic assigning system that allows JIT assignment of work for delivery to
resources with appropriate capability and capacity
Activity-Based Costing
• ABC is a way of linking an enterprise’s market positioning to its
internal cost structure, i.e., capability.
• The ABC data is useful as a source to support:
• Profitability management, such as costing and profitability analysis, customer
and product mix decisions, and support for marketing decisions
• Revenue and performance management, such as resource to volume and
service level changes, activity budgeting, and cost driver analysis
Activity-Based Costing
• The BPM effort helps in identifying a list of cost drivers that are
allocated to the various activities. These could include:
• The

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