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Value-Focused Process Engineering. Porter & Millar [1985] – value chain Keeney [1992] – value-focused thinking Rossi et al. [2005] supply chain network a complex system SUPPLY CHAIN RISK MANAGEMENT : reducing supply chain vulnerability Identify and correct malfunctions & disruptions.

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value focused process engineering

Value-Focused Process Engineering

Porter & Millar [1985] – value chain

Keeney [1992] – value-focused thinking

Rossi et al. [2005] supply chain network a complex system

SUPPLY CHAIN RISK MANAGEMENT:

reducing supply chain vulnerability

Identify and correct malfunctions & disruptions

Finland 2010

supply chain risk management
Supply Chain Risk Management

Areas of vulnerability & risk (in supply chains)

  • Identification– Hallikas et al. [2002; 2004]
    • Recognize future uncertainties
    • Identify organizational exposure to uncertainty
    • Known, unknown, unknowable risks
  • Assessment
  • Analysis
  • Treatment

Finland 2010

supply chain risk identification methodology
Supply Chain Risk Identification Methodology
  • Value-Focused Process Engineering (Neiger et al. [2003; 2004, 2006])
      • Neiger, D.; Churilov, L.; zur Muehlen, M.; Rosemann, M., Integrating risks in business process models with value focused process enginnering, Proceedings of the 2006 European Conference on Information Systems (ECIS2006), Goteborg, Sweden 12-14 June 2006
    • Reduce level of uncertainty
    • Identify process-based risks
    • Holistic perspective
      • Supply chain a set of interconnected value-adding processes
      • Risk reduction expressed as business objectives
      • Process, Objectives, Risk Source

Finland 2010

risk identification
Risk Identification
  • Use Organizational objectives to identify, assess risk
    • Treat risks as natural attributes of organizational value-adding mechanisms
  • Include risks as part of objectives structure
    • They claim not adequately implemented
  • Link risks to Supply Chain activities
  • Link risks to individual risk sources
  • Quantify risks
    • Fault tree analysis; Event tree analysis
  • Enable cross-organizational risk visibility
    • They claim not adequately implemented
  • Decompose risk by process flow

Finland 2010

value focused process engineering5
Value-Focused Process Engineering
  • Systems methodology
    • Holistic representation of business
    • Value-Focused Thinking (Keeney 1992)
      • Link business processes, objectives
      • Fundamental objectives – hierarchy of business purposes
      • Means objectives – methods to achieve ends
    • Extended Event-driven Process Chain process modeling methodology (Scheer 1999)
      • Intuitive graphical business process description in terms of business logic
  • VFPE ties objectives & processes

Finland 2010

vfpe neiger churilov 2004
VFPENeiger & Churilov [2004]
  • Company values
    • Hierarchy of fundamental objectives
        • What do you mean by that?
      • DECISION MAKER VALUES
    • 1st Level means objectives(how can you achieve?)
        • What objectives, activities aim to accomplish this?
      • VALUE ADDED CHAIN
  • Means of Achieving
    • Network of means objectives
        • What objectives, activities aim to accomplish this?
      • HIERARCHY OF DECOMPOSED PROCESSES

Finland 2010

risk identification process
Risk Identification Process
  • Activity driven identification or risk objectives
  • Objective driven identification of risk objectives
  • Synchronized decomposition
  • E-EPC taxonomy of risk sources
  • Joining events structure to objectives structure

Finland 2010

example
Example

Finland 2010

example9
Example
  • 1. Activity-based risk identification
    • Each high level functional objective separated into risk, performance-based objectives
    • Put risk in context of other performance dimensions
  • 2. Objectives-driven risk identification
    • Min risk of supplier non-conformance
    • Min poor supplier collaboration
    • Min supplier financial instability
    • Min nonstandard workflow
    • Min dependence on supplier
    • Min risk of supplier becoming competitor

Finland 2010

tie each decomposed function to objectives in 2
Tie each decomposed function to objectives in 2.
  • 3. Synchronized decomposition
    • Choose contracting out method
    • Choose basis for contract reimbursement
    • Define supplier selection criteria
    • Involve authorized suppliers
    • Involve external suppliers
    • Weight selection criteria
    • Send Request for Proposal
    • Provide quote
    • Evaluate offers

Finland 2010

5 join events to objectives
5. Join Events to Objectives
  • Paper emphasized identification aspect
  • Another methodology of thinking of all possible things that can go wrong
  • Good
    • Systems view
    • Consideration of organizational objectives
    • Supply chain view (interorganizational)

Finland 2010

value ranking
Value Ranking

Finland 2010