Exam1StudyGuide PDF

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Exam 1 Study Guide for bit3454 at Virginia Tech with professor Russell....

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BIT 3454 Exam 1 Review

Business Process Improvement: A structured approach for continually optimizing business processes through analysis, modeling and monitoring—a systematic approach for solving business problems and helping organizations meet their operational, service, and financial goals. Goals of BPI     

Improve product, service, and process quality Create competitive advantage Drive business results Increase organizational ability Lower costs and improve ability to innovate

Management Approaches to BPI    

Six sigma – traditional program for improvement Lean Total quality mgt(TQM) GE Work out

Principles of Statistical Thinking     

All work occurs in a system of interconnected processes Variation exists in all processes Understanding and reducing variation are keys to success Deming’s Theory of Knowledge(data driven) Only way to reduce common cause variation is to improve the system

Common Causes: are due to the process itself Special Causes: due to events external to the usual functioning of a system Theory of Knowledge: Data > Information > Knowledge 

Two jobs: Doing and Improving

Two types of improvement  

Process Improvement: series of activities aimed at fundamentally improving the performance of the process Problem Solving: Addresses specific problems that are not part of the normal behavior of the process

Statistical Approaches:  

Reengineering – fundamental rethinking and radical redesign of business processes TQM – focus on improving quality of all aspects of business to better satisfy customer

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Learning Organizations – Create change and improvement by learning how to work in more effective and efficient ways Self-Managed Work Teams – employees work together as a team using MGT guidelines Benchmarking – find the best practices in other organizations and adapt practices Six Sigma – seeks to find and eliminate causes of mistakes or defects in business processes

Quality Concepts Definition of Quality: Fitness for use, customer’s experience with product VS his requirements Dimensions of Quality      

Performance: Does it do its intended job? Reliability: How often does it work/fail? Durability: How long does it last? Service abaility: How easy is it to repair? Aesthetics Perceived Quality: What do users think?

Loss Function: Maps an event of one or more variables onto a real number representing some cost associated with the event  

Goal Post(Traditional view of quality): as long as output fell within specification limits, around a target(nominal) value, it was deemded good enough Taguchi Loss Function: More realistic curve in which losses begin to accrue as soon as a quality characteristic of a product deviates from nominal value

Cost of Quality     

Prevention: anything you do to keep a defect from happening, training, design Appraisal: Audit and inspection of process, taking out bad apples before sent out Internal Failure: Cost of correcting something before its sent out External Failure: Remedy defects discovered by customer Intangible Cost: Cost of your reputation

The Deming philosophy focuses on continual improvements in product and service quality by reducing uncertainty and variability in design, manufacturing, and service processes, driven by the leadership of top management.  

If data points are within limits with no pattern, common cause If data points are out of limits and pattern exists, special cause

Frameworks Six Sigma, Lean Six Sigma, BMP, Business Process Maturity Model Six Sigma   

Disciplined, data driven approach and methodology for eliminating defects in any process Data > Information > Knowledge > Competitive Advantage,,, takes awhile Wide array of statistical and analytics tools are used

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Belts o Master Black Belt: Highest level of expertise o Black Belt: professional who’s completed examination o Green Belt: Entry level in some orgs o Yellow Belt: Defects per million opportunities is the main metric o Most processes fall between 2-3 sigma Voice of the Customer: Process of capturing customer’s expectations, preferences and aversions Voice of the Process: What the process is telling you

Lean Six Sigma: reduces variation, waste, cycle time while promoting the use of work standardization Business Process Management: Systematic approach to making an organization’s workflow more effective, efficient, and capable of adapting to an ever changing environment 

Work simplification leads to Business management, IT, QC leads to BPM

The goal of BPI is to improve processes! A maturity model is a way to identify where your processes are and to track the impact of process imp efforts.- - an evolutionary improvement path to guide organizations from immature inconsistent processes to mature, disciplined processes.     

Initial - business processes performed in inconsistent and sometimes ad hoc ways with results that are difficult to predict Managed - management stabilizes the work within work groups to ensure that it can be performed repeatable way. However work units may perform tasks using different procedures. Standardized - common standard processes are developed from best practices. Predictable - capabilities enabled by standard processes are exploited. Process performances is managed statistically.(TOK) Innovating – proactive, opportunistic improvement actions are undertaken to seek innovation that can close the gap between current capabilities and design capabilities.

Project Selection Project identification, project selection, completion, and management The goal of BPI is to progress from identifying symptoms of problems to identifying their causes to find solution Project Identification   

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Identification and selection overlap – collect data and information to identify potential projects and then later use that data to select projects VOC: Brainstorming, pareto analysis: prioritized list of whats causing problems Customer Satisfaction Dimensions: These dimensions are used to measure how an organization is doing at meeting the customer needs and helping the customer meet their objectives – these are tied to quality of service. Analyzing these dimensions can help a company identify customer requirements, expectations, etc. ServPerf: model for measuring customer satisfaction of service quality, performance component of servqual, dimensions of Tangibles, Reliability, Responsiveness, Assurance, Empathy

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Servqual Survey: used to measure the dimensions of service quality and use those to identify gaps = the service the customer received VS the perceived level of service o Gap 1 Knowledge gap - gap between customer’s real expectations and manager’s perceptions of those expectations. o Gap 2 – Standards Gap – the gap that exists when internal performance stds do not adequately or accurately reflect customer expectations o Gap 3 – Performance gap – the difference between operational std and actual performance o Gap 4 – Communications gap – difference between a company’s actual performance and what a company communicates about its performance (relates to things like overpromising) o Gap 6 – Satisfaction gap – difference between perceived performance and the customer’s expectation regarding performance o Gap 5 – Perception gap – when customer’s perceive performance to be different than what is actually provided Cost of poor quality is a measure used to identify different projects Project Selection Now must choose best project based on completion in reasonable timespan and delivering tangible results Criteria: Impact on critical business issue, time to complete, ease of completion, MGT priority Scoring/selection/prioritization matrix AHP(analytic hierchial processing) is a rational and structured approach for organizing and analyzing complex decisions – AHP is a type of group decision-making process. Identify criteria, determine the relative importance of each criteria (feasibility, cost, impact on customer, etc.) and then do a series of pairwise comparisons using linear algebra. Data envelopment analysis - DEA is an application of operations research that uses linear programming (LP) to obtain an effective, non-parametric efficiency measure. DEA has the ability to compare the multiple input and output parameters simultaneously, so that a scalar measure of overall performance is obtained.

Project Management      

Project Chartet and plan – Scope(creep) Project Life Cycle: Stages – Initiation, planning, assurance, control, closure Team Memership Team Tools: group decision making, conflict resolution Team Dynamics and performance Change agent

Define Define and describe the process, Define CTx(critical reuirements), Determine what data is available on process performance and what additional data needs to be collected Tools for defining the process Process Flow Diagram

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Easy to understand diagram that shows the steps in a process Identify Boundaries, identify steps, sequence steps, draw charts, test flow, finalize

Business Process Modeling and Notation(BPMN) 

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The primary goal of the BPMN effort was to provide a notation that is readily understandable by all business users, from the business analysts that create the initial drafts of the processes, to the technical developers responsible for implementing the technology that will perform those processes, and finally to the business people who will manage and monitor those processes. Events are circles, activities rectangle, and gateways are diamonds Types of BPMN Sub-models o Process o Collaboration: Lanes for each participant o Choreography: Coordinating interactions

Spaghetti Diagram  

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Physical Movement of product or worker A spaghetti diagram is a visual representation using a continuous flow line tracing the path of an item or activity through a process. The continuous flow line enables process teams to identify redundancies in the work flow and opportunities to expedite process flow. Highlight major intersection points

Value Stream Mapping        

Visual representation showing all the material and information flows in a process Snapshot of the process – from time a customer places order until they receive it IT captures flow of info and materials in a process Part of a lean approach Allows us to visualize the flow of a process It can highlight waste in a process It is a tool that facilitates process improvement efforts – spots out redundancy Gembo: workplace

SIPOC Diagram 

Suppliers – inputs – process – Outputs – Customers

Critical Requirements  

CTQ: measurable feature that if nonconforming, will result in a failure of the product or service to meet the customer needs or requirements CTQ/CR Tree: indetify critical customer needs, quality drivers, performance requirements...