Session 1- Intro to Business Process
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Transcript of Session 1- Intro to Business Process
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7/31/2019 Session 1- Intro to Business Process
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Session 1
Introduction to Business Process
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Session 1
Important Perspectives of BusinessBusiness Functions and its linksWhat is a business process?Business Process features
Three basic logics of a business processBusiness Process Supply Chain CaseSome examples of Core Business ProcessesDominos example
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The EnterpriseProcess
Perspective
FunctionPerspective
DataPerspective
Perspectives of a Business
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Business Functions & its links
Production Planning Demand managementMaster planning
Capacity planning
MRP
Order- Creation- Release- Confirmation
Shop floor controlCapacity levelingProcess planning
Quality Management Lot inspectionProcess charting
Warehouse management
Materials Management Direct requisitionPurchasingInventory managementGoods receiptMaterial valuation
Invoice verification
Preventive Maintenance Planned repairEmergency
Sales and Distribution
Customer orderprocessing
Shipping,billing, transport
Sales planningProfit planningForecasts
Project system
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What is a BUSINESS PROCESS?A business process is a collection of related structural activitiesthat produce a specific outcome for a particular customer.
It is a recipe for achieving a commercial result.Each business process has inputs, method and outputs.The inputs are a pre-requisite that must be in place before the
method can be put into practice.When the method is applied to the inputs, then certain outputs
will be created.
A business process can be part of a larger, encompassing processand can include other business processes that have to be includedin its method.
A business process can be thought of as a cookbook for running abusiness; "Answer the phone", "place an order", "produce aninvoice" might all be examples of a Business Process.
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A Business Process Features
A business process:
Driven by an eventHas a goalHas specific inputsHas specific outputsUses resourcesHas a number of activities that are performed in some order
May affect more than one organizational unit. Horizontalorganizational impactCreates value of some kind for the customer. The customermay be internal or external.
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EventProcess
Business processOutput
Information Resource Goal
A Business Process Model
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Logics of a Business Process
A business process is an aggregation of operationsperformed by people and software systemscontaining the information used in the process,along with the applicable business rules.Business process has to deal with information flowlogic, control flow logic and transaction logic.
determines input & outputinformation requirements for
each activity
determines the sequence of activities
determines values of output.
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Example : Paragon Leather Products Pvt. Ltd.
Paragon Leather Products P Ltd., receives a sales order for supply of
1,000 pairs of shoes (in different sizes) from a customer. This salesorder process may involve execution of transactions such asGeneration of Order document, Generation of Shipping document andGeneration Billing document in an ERP system.In practice, three different performers from Sales Office, Warehouse
and Accounts department may perform three transactions respectively,which comprises of
- Generation of Order document by sales office executive- Generation of Shipping document by warehouse executive- Generation of Billing document by accounts executive
This process requires enforcement of credit control by sales executivei.e., if the sales order exceeds the credit limit, a special approval isrequired from the sales manager before warehouse executive cangenerate shipping document.
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Example : Paragon Leather Products Pvt. Ltd.
The sales manager in order to take the decision needs the information
on order details, credit limit and credit history before he or she couldtake the decision.The sales office executive has to compute order value based onproducts ordered, no. of units ordered, sales price, discounts, duties &taxes applicable.The sales office executive also has to provide the delivery date basedon the availability of stock, production schedule and dispatch schedule.In the above activities, control flow logic determines the activityafter Generation of Order document, which could be eitherGeneration of Dispatch document or Approval from Sales Managerdepending upon credit control.
Information logic determines what information is to be provided(input) to and obtained (output) from the sales manager .Transaction logic determines the value of sales order and deliverydate or the decision by the sales manager.
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Business Process A Supply Chain Case
Suppliers
Intra-companyFabrication
Assembly
Distributors
CommercialBuyersConsumers
Retailers
Features:
Independent systemsto manage theinteraction betweenplayers in the supplychain
Great operationalflexibility
Problems inforecasting,transparency, accuracy,
speed
Conventional Supply Chain
Information
Material
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Business Process A Supply Chain Case
Features:
Integratedinformation
System optimizationpossible
Problems inflexible much moreformal infrastructureneeded to support the
systems
IT Enabled SupplyChain
Suppliers
Intra-company Fabrication
Assembly
Distributors
Commercial Buyers
Consumers
Retailers
ERP System
Web-order Processor
Information
Material
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Procurement Process(Procure-to-Pay)
PurchaseRequisition
Paymentto Vendor
NotifyVendor
Vendor Shipment
InvoiceReceipt Goods
Receipt
PurchaseOrder
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Purchase, Sales & Cash Process
SalesInquiries
Sales
FinishedGoods
Raw
Materials
Manufacturing
ResourcesPlanning
Labour
Customer
Profit Center
VendorAccountsPayable
AccountsReceivable
Cash
Cash Information Materials
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Pizza Development Process at Dominos
PIZZA CUTTING(15 SECONDS)
DOUGH MAKING
(1 MINUTE )TOPPING & BAKING IN
OVEN(6 MINUTES)
PIZZA PACKING( 1.5 MINUTES)
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Flow Logics in Dominos ExampleControl flow logic: 1. Customer calls outlet2. Customer details fed in system3. Order is taken over the phone4. The delivery process of 30 minutes starts here.
5. Bill is printed a copy of which is sent to the kitchen.6. Pizza is made and delivered to the customer
Information flow logic: 1. Customer details customer name, ph no. address is input to
customer master file2. Copy of bill generated acts as input to the cook for
processing order3. Order for raw material procurement is sent every alternate
day.
4. Payment details acts as input to the outlet
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Flow Logics in Dominos Example
Transaction flow logic:
1. Decisions about special offers and discounts.2. For area greater than 5 Kms customer is redirected to the
nearest outlet or a timeline is given.3. Sales reports sent on monthly basis to the headquarters at
Mumbai4. Depending upon number of orders decisions are taken to
either increase decrease or promote the available SDBs. 5. Performance of SDBs is evaluated and incentives are
provided