Operations Management on Retail Banking

Only available on StudyMode
  • Download(s) : 385
  • Published : December 10, 2011
Open Document
Text Preview
Business Process Analysis

Operations
Search NetMBA Operations > Process Analysis

Accounting Economics Finance Management Marketing Operations Statistics Strategy

Process Analysis
Site Information Home About Privacy Reprints Terms of Use
An operation is composed of processes designed to add value by transforming inputs into useful outputs. Inputs may be materials, labor, energy, and capital equipment. Outputs may be a physical product (possibly used as an input to another process) or a service. Processes can have a significant impact on the performance of a business, and process improvement can improve a firm's competitiveness. The first step to improving a process is to analyze it in order to understand the activities, their relationships, and the values of relevant metrics. Process analysis generally involves the following tasks: q

Define the process boundaries that mark the entry points of the process inputs and the exit points of the process outputs. Construct a process flow diagram that illustrates the various process activities and their interrelationships. Determine the capacity of each step in the process. Calculate other measures of interest. Identify the bottleneck, that is, the step having the lowest capacity. Evaluate further limitations in order to quantify the impact of the bottleneck. Use the analysis to make operating decisions and to improve the process.

q

q

q

q

q

Process Flow Diagram
The process boundaries are defined by the entry and exit points of inputs and outputs of the process. Once the boundaries are defined, the process flow diagram (or process flowchart) is a valuable tool for understanding the process using graphic elements to represent tasks, flows, and storage. The following is a flow diagram for a simple process having three sequential activities:

Process Flow Diagram

http://www.netmba.com/operations/process/analysis/ (1 of 5)03/12/2011 12:10:39 PM

Business Process Analysis

The symbols in a process flow diagram are defined as follows: q

Rectangles: represent tasks Arrows: represent flows. Flows include the flow of material and the flow of information. The flow of information may include production orders and instructions. The information flow may take the form of a slip of paper that follows the material, or it may be routed separately, possibly ahead of the material in order to ready the equipment. Material flow usually is represented by a solid line and information flow by a dashed line. Inverted triangles: represent storage (inventory). Storage bins commonly are used to represent raw material inventory, work in process inventory, and finished goods inventory. Circles: represent storage of information (not shown in the above diagram).

q

q

q

In a process flow diagram, tasks drawn one after the other in series are performed sequentially. Tasks drawn in parallel are performed simultaneously. In the above diagram, raw material is held in a storage bin at the beginning of the process. After the last task, the output also is stored in a storage bin. When constructing a flow diagram, care should be taken to avoid pitfalls that might cause the flow diagram not to represent reality. For example, if the diagram is constructed using information obtained from employees, the employees may be reluctant to disclose rework loops and other potentially embarrassing aspects of the process. Similarly, if there are illogical aspects of the process flow, employees may tend to portray it as it should be and not as it is. Even if they portray the process as they perceive it, their perception may differ from the actual process. For example, they may leave out important activities that they deem to be insignificant.

Process Performance Measures
Operations managers are interested in process aspects such as cost, quality, flexibility, and speed. Some of the process performance measures that communicate these aspects include: q

Process capacity - The...
tracking img