Intended learning outcomes: Describe the interface between subprocesses according to the model “simple sequence”. Explain the interface between subprocesses according to the model “partner relationship with overlapping subprocesses for handing over the order”.
An alternative solution to the design of the business process in Figure 4.2.1.1 is a type of logistics that is shown in Figure 4.2.2.1 — a simple sequence of subprocesses.
Fig. 4.2.2.1 Interface between subprocesses: the “simple sequence” model.
This “simple sequence” model is common and effective, as long as order management does not change and remains in the hands of the same person. This person is the supplier responsible for all subprocesses; he or she manages the executing organizational units in a central fashion, one after the other. This is the model of push logistics.
With push logistics, you push the order based on a given schedule planned in advance in the direction of the added value, without need of customer influence or a definite customer order.
If decentralized control by the executing organizational units themselves is desired, the “simple sequence” model can hardly be utilized. First, there are no indications of how states between the subprocesses might be registered so that the next subprocess will be initiated. Between subprocesses, order management must be somehow shifted from one processing facility to the next. Responsibility then lies in the hands of the organizational unit that executes that next subprocess. Second, the external customer in our example must first deal with sales and later with design and manufacturing units. But how will the customer know when these transitions occur? Misunderstandings become inevitable. For these reasons, the “simple sequence” model — although “lean” — is bound to fail. Figure 4.2.2.2 shows that only careful designing of the transitions between subprocesses, that is, the interfaces, can make uninterrupted order fulfillment processing possible using push logistics.
Fig. 4.2.2.2 Interface between subprocesses: “partner relationship with overlapping subprocesses for handing over the order” model.
The practical example in Figure 4.2.2.2 is taken from a consulting firm. In the company’s past, vendors had made agreements with customers that the executing units could not fulfill. This, of course, had a negative effect on customer satisfaction. The company recognized that during contract negotiations, and at the conclusion of the agreement itself, at least one person should take part that will actually perform the services. This type of organization ensures that nothing will be sold that cannot be produced. Conversely, the executing unit commits itself at the right point in time in direct contact with the customer.
With push logistics, it is crucial that the two part processes overlap, that is, that the next part process begins parallel to the end of the preceding part process. This link is established by having people in the organizational unit handling the first part process conduct their last task in coordination with representatives of the organizational unit that will begin the second part process. This second group takes over process management — the responsibility as supplier with regard to quality, cost, delivery, and flexibility. At the same time, the party placing the order knows its “new” business partner, and order fulfillment can be coordinated.
In this model, the organizational units of subprocesses do not stand in a customer-supplier relationship, but rather stand in a partnership. The overlap of the subprocesses is the necessary slack. It is true that more persons than actually necessary perform certain subtasks. But it is this very redundancy that ensures a smooth takeover of the order by one organizational unit from the other. The two subprocesses become sewn together, and this is what makes for an overall effective business process.
It is not necessary to play off the two models in Figures 4.2.1.2 (“customer-supplier relationship with an internal order”) and 4.2.2.2 (“partner relationship with overlapping subprocesses for handing over the order”) against each other. Both the multiple process levels model with its pull logistics and the flat model with its push logistics have their justifications. For fast, uninterrupted pull-through of complex value-adding processes, enough slack, or non-value-adding activity, must anyway and always be built in at process transition points.
The more employees are capable of handling “longer” processes, the faster and cheaper the processes become. The reason is that there is less necessity for slack times and redundant work in order to join subprocesses in smooth transition. Of course, qualifying employees to do this and coordinating them in the group entails costs. From this, we can derive a guideline for the design of process organization. Division into short subprocesses may be necessary in order to achieve certain quality demands. As soon as several people show competency in the handling of a number of related subprocesses, it is correct — with a view to reducing transition points — to make a long process out of the short subprocesses and to organize these persons into a group (see also [Ulic11]).
Course section 4.2: Subsections and their intended learning outcomes
4.2 Push Logistics and Pull Logistics in the Design of Business Processes
Intended learning outcomes: Differentiate between pull logistics and push logistics. Describe the temporal synchronization between use and manufacturing with inventory control processes.
4.2.1 Pull Logistics
Intended learning outcomes: Produce an overview on the subprocesses of a business process in the enterprise, from order acquisition to fulfillment. Describe the interface between subprocesses according to the model “customer-supplier relationship with an internal order”.
4.2.2 Push Logistics
Intended learning outcomes: Describe the interface between subprocesses according to the model “simple sequence”. Explain the interface between subprocesses according to the model “partner relationship with overlapping subprocesses for handing over the order”.
4.2.3 The Temporal Synchronization between Use and Manufacturing with Inventory Control Processes
Intended learning outcomes: Differentiate between different inventory-control processes for temporal synchronization between use and manufacturing / procurement. Describe the example of pull logistics for order processing with end-product inventory replenishment after consumption.
