2010-02-13

BPM reference model from a book about BPM, SOA and EA; fragment 03

... continued from fragment 02

1.3   Some existing disciplines for continual performance improvement


At present, there are several proven disciplines for continual performance improvement which are used in process-centric enterprises. Three of them ISO 9001 Quality Management System, Six Sigma and Lean production are described briefly below. These disciplines impact different areas of a process-centric enterprise business system as illustrated in figure 1.3.

The ISO 9001 Quality Management System [4] requires a formal description of processes and services, and the collection of evidence (in a form of audit trails and records) that business processes have been applied correctly. It provides some help in the creation and maintenance of a system for an enterprise to manage its business processes.

Unfortunately, many implementations of the ISO 9001 Quality Management System consist only of a written documentation of business operations (comprising possibly tens of complex interrelated documents). Any change in business operations necessitates also an update of some of this written documentation thus multiplying the effort to implement changes. As a result of this approach, the ISO 9001 Quality Management System is often not perceived as a useful tool, and nor is it if it is only documentation based.


Figure 1.3   Different continual performance improvement disciplines

Six Sigma [5] concentrates on describing processes and services as models suitable for applying statistical data-analysis methods to eliminate defects (defects which cause dissatisfaction of a customer). The approach is systematic and works well for reducing flaws in established processes, but the end result depends on the ability of people to create a "good" model which matches reality, and usually Six Sigma initiatives are limited to business units and not to the enterprise as a whole (i.e. there is no view of the big picture).

Lean production, which originated in the Toyota production system [6], provides a comprehensive set of heuristics (e.g. "eliminate waste", "see the big picture", "avoid sub-optimisation", etc.) for process improvement and a long-term philosophy in developing employees and partners. The success of Toyota has proven the usefulness of Lean, but the lack of some formalism in the "lean thinking" makes this discipline dependent on the skills of the people applying it.

All these disciplines use one or more of the following approaches:
  1. collection of performance data about the actual work done;
  2. use of a simulation model (although sometimes this is only in someone's head!).

At the same time, they offer different and complementary techniques for determining changes for improving the functioning of the enterprise business system.

Obviously, good simulation models (which are comprehensive, exact and formal) and accurate performance data enable substantial improvements in enterprise performance. Conversely, poor simulation models and non-accurate performance data may prevent enterprises from addressing simultaneously improvements in performance in the ways that enterprises need to:
  • operational performance -- do the things right and carry out corrective actions, on the basis of real-time information;
  • tactical performance -- implement continual improvement, and carry out predictive analysis to avoid wasting resources;
  • strategic performance -- predict how to do things differently, implement the necessary changes, carry out systematic creation and realisation of innovations in the core business;
  • competitivity -- quick and appropriate reactions to regulatory, market and technology changes.

To achieve the best possible improvements under the particular circumstances, an enterprise has to carry out optimisation of the enterprise as a whole.


... to be continued in fragment 04 ...

Thanks,
AS
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