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Process Modeling With

Process Modeling With. An introduction to process modeling with is/Modeler using an order fulfillment process example. Introduction. This presentation provides background information on a sample business process for order fulfillment.

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Process Modeling With

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  1. Process Modeling With An introduction to process modeling with is/Modeler using an order fulfillment process example

  2. Introduction • This presentation provides background information on a sample business process for order fulfillment. • Next, you will see how to create a process model for the order fulfillment process. • Finally, you will see how to use the model in making business decisions.

  3. Overview: Intergalactic Widgets Order Fulfillment Process Intergalactic Widgets (IW)sells and distributes widgets solely by a mail order process. Last year IW received 260,000 orders from new and existing customers. Additionally, IW received an average of 200 orders per week that it was unable to fill immediately, due to out-of-stock status. Once stock was replenished, these orders were placed back into the normal workflow. The equipment used to sort incoming orders from other correspondence is leased, and costs IW $20,000 per month. The carts, trucks, and forklifts in the warehouse are also rented, and cost $12,000 per workday ($3,120,000 annually) including rental fees and maintenance contracts. The order system computer compiles all of the orders that are entered during the course of a day and prints out a list of items to be shipped the following morning . It takes a supervisor about 45 minutes a day to pull the list from the order system, and about three hours each day to create a picking schedule.

  4. Overview (continued) Customers are notified by mail if their order is back-ordered. It takes about 15 minutes to correctly set-up each order that has back-ordered components in the system. Once a week, back-order notification letters are manually created and sent to customers, in a process that takes about 12 hours each week. The staff for order fulfillment breaks down as follows: • Mail Room Clerk $12.00 per hour • Order Clerk $18.00 per hour • Warehouse Picker $20.00 per hour • Warehouse Supervisor $50,000 per year Additionally, the IS department has determined that the average cost per order entered for computer time is $2.00.

  5. Building a Process ModelStep 1: Identify Activity Steps Identify the key process steps: • Receive order • Enter Order • If not in stock, notify customer • If in stock, pull and ship

  6. Add Key Activities to the Process Map

  7. Building a Process ModelStep 2: Identify Resources • Create resources for each of the departmental staff positions (not individuals) identified earlier: • Mail Room Clerk $12.00 per hour • Order Clerk $18.00 per hour • Warehouse Picker $20.00 per hour • Warehouse Supervisor $50,000 per year

  8. Add Resources to Process Map

  9. Building a Process ModelStep 3: Identify Customers and Stores • In this example, the only customer is the one who submits the order. In real world enterprises have hundreds of customers, both external and internal. • Stores represent where data or physical items are kept. • Order Form - Paper • Order System - Computer • Warehouse - Building

  10. Add Customers and Stores to Process Map

  11. Building a Process ModelStep 4: Identify Process Metrics • Identify process metrics such as time, cost, and volume data • From the background information we know that IW processes approximately 200 orders per week that were back-ordered

  12. Add Process Metrics to the Process Model • Volume data is kept in the connector dialog. • Time data is kept in the Activity dialog box. • Cost of consumption data is kept in the Resource dialog box.

  13. Using the Process Model The process models you create with is/Modeler can help you answer tough business questions: • What is the current cost to notify customers that part of their order is out of stock? • Is it cost-effective to automate the order system? • What is the cost and personnel requirements of the order entry process? • Which steps in the process are the most / least costly / lengthy?

  14. Using the Process Model • You can generate reports to show cost and time for individual activities, select groups of activities (connected in a “path” or sharing common characteristics) or entire processes. • You can show resource and system utilization.

  15. Using the Process Model (continued) • Any data that you can measure or quantify, can be stored in your process model. • Any data you have entered into your model can be accessed using either the standard report formats, or through custom report formats you create. • Models can be merged together to create more comprehensive enterprise models.

  16. Using the Process Model (continued)

  17. Benefits of Process Modeling with is/Modeler • Business process models provide a common means of communicating about business processes. • Modeling is an easy, fast, and effective way to understand your business and the factors that influence its performance. • Models can accurately describe the way you do business, and can be easily altered to meet changing business requirements. • Models provide a single repository of many kinds of business information and improve coordination of business activities.

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