Process Modeling With

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.