When business processes are inefficiently designed, corporate loss in the form of non-value added waste can drown an organization. Identifying major performance gaps and validating the use of time and resources in a process must be approached from the top down. However, simply recognizing the need for change will not keep a business afloat.
Process improvement teams still encounter roadblocks that prevent stakeholders from making the best decisions: inaccurate/incomplete performance metrics, insufficient assurance from key stakeholders, time and resource restrictions, and limited understanding of the effects of recommended changes. Business Process Simulation is one of the many disciplined and scientifically driven methods BlueLine offers that addresses these issues while identifying and closing the gaps between current performance and your strategic goals.
Simulation modeling is a tool which, similar to the Lean Six Sigma methodology, has its base in manufacturing. Each of these methods has been adapted as tools for deriving new knowledge and a better understanding of business processes. Discrete Event Simulation is a common approach to simulation modeling. Unlike the system dynamics approach of supporting strategic thought in a specific market, DES has the potential of reusability throughout multiple levels of detail and can model these relationships between entities.
There are 3 major benefits of requesting Business Process Simulation in a process improvement initiative:
It helps you master your data
In the ideal process improvement project, trusted and complete data is available for every step and every resource in your process. However, we have found it unlikely and unreasonable for processes to have such mature data, especially those in need of continuous improvement. One of the first and most common momentum thwarting roadblocks for many of our clients is the lack of understanding for their data and its availability. Fortunately, as technology and computing have evolved to control many business operations, data is becoming more abundant. In some instances, understanding an overwhelming amount of data is a burden commonly put off by leadership due to its sheer magnitude and complexity. Since the driving force of a simulation model is trustworthy data, building said model requires an understanding of what data is, and should be available. BlueLine consultants thrive in this arena—they know where to look, not just to obtain data for building the model, but also to automate the manipulation, display, and reporting of Key Performance Indicators for continuous improvement.
It dynamically demonstrates the connections between siloed processes
For processes that operate across departments and organizations, process stakeholders may be masters of their silo of responsibility; but all too often these stakeholders have limited knowledge of what occurs outside of their scope. Fortunately, most simulation tools often require the visualization of the process under question by dynamically illustrating the same connections and the flow of entities based on your established data. The visual model is primarily used to: identify bottlenecks within the process, show which resources should be altered to alleviate said bottlenecks, and describe where process waste is happening. Additionally, the visualization will allow all process stakeholders to thoroughly understand how their domain interacts with the steps before and after. An immeasurable bonus to this benefit is the alleviation of tensions that often reside between the siloes of a far reaching process because of each stakeholder’s growth in understanding of the entire end-to-end process.
It allows you to “Pilot” the new processes using Simulated Designed Experiments
The ability to generate theoretical data is a key motivator for the use of simulation modeling. Once the “as-is” model is designed and validated BlueLine uses the model to drive decision making by providing a tool that allows the “as-is” processes to be analyzed and understood. And instead of trial and error or pilot programs, which can cost a troubling amount of time, effort, and money, a simulation model can be substituted. If the system is modeled adequately, the generated data should mimic the real-time system at the same parameter settings. The flexibility and ability to create and manipulate process functions, attributes, and variables gives you the ability to predict process performance along a number of measures such as lead-time, resource utilization, and cost.
Instead of potentially wasting money to test a newly designed process in as a Pilot, a well-designed model has the ability to conduct “what-if” analysis to statistically identify bottlenecks, cost drivers, and overall process performance. Business Process Simulation allows analysis of many potential new designs through its “what-if” capability with little extra effort. Variation is accounted for through the use of statistical distributions. Additionally, the customizable variables and functions, collected throughout the simulation, allow you to easily manage resources, set schedules, and optimize cost settings.
BlueLine Process Engineers have used simulation modeling in Banking, Insurance, Military Operations, Healthcare, and most prominently in Information Technology. IT has become a major vehicle on which business change relies. The following one example of how a team of BlueLine Consultants used Business Process Simulation to optimize the redesign of an IT process.
Addressing IT Vulnerability Management with Discrete Event Simulation
A team of two BlueLine Consultants managed one phase of a larger “Continuous Security” effort for a Fortune 500 pharmacy chain, “Rx”. Along with a small group of “Rx” employees and independent contractors, the project’s goal was to identify gaps in a scanning and remediation process. The major process of interest for simulating involved the identification and processing of IT vulnerabilities.
Using a Kaizen event, and through the utilization of process mapping, detailed data analysis, and brainstorming, a performance baseline was established. Given the narrow project timeline and resource constraints, discrete event simulation (DES) was used as the main avenue for analysis and process design. An initial model was constructed to simulate the current process capability and validate subject matter expert (SME) perspective. Following the Kaizen event, and follow up brainstorming efforts, the baseline model was adapted to allow for controlled experimental design of the potential solutions. The potential solutions were then screened using fit and reduction models to determine which would have the greatest positive effect on process efficiency.
Based on our analysis of the simulation results, the recommendation was to initially add two contractors, four total available, to provide a 35% reduction in processing time each scan. Eventually, the number of backlogged remediations would be reduced to a level where only three total contractor resources would be sufficient. Other improvements were suggested to make the process more efficient. The most significant potential improvement involved the elimination of web server vulnerabilities from the total scan record. Web server vulnerabilities accounted for 30% of the baseline volume of vulnerabilities. Additionally, with new tools available from upgraded scanning technology, the two week delay in receiving the scan was eliminated, as well as a significant reduction in the number of falsely reported vulnerabilities. Following the successful implementation of these technological changes to get control of the remediation process, it was also recommended that future efforts be made to standardize scanning practices. However, the process for weekly scanning would need to be designed and controlled based on developed process metrics and priorities.
Efficient execution is the goal of every process improvement project. The successful transformation of business operations requires leadership, organization, and strategically driven effort using business process simulation. To achieve sustained change, BlueLine Consultants obtain the right information to optimize and further implement process improvements. Please contact me at j.bryant@blueline-associates to get more information on how Discrete Event Simulation can give you greater assurance in designing a more efficient business process.