Worst-Case Analysis of Process Flexibility Designs

Theoretical studies of process flexibility designs have mostly focused on expected sales. In this paper, we take a different approach by studying process flexibility designs from the worst-case point of view. To study the worst-case performances, we introduce the plant cover indices (PCIs), defined by bottlenecks in flexibility designs containing a fixed number of products. We prove that given a flexibility design, a general class of worst-case performance measures can be expressed as functions of the design’s PCIs and the given uncertainty set. This result has several major implications. First, it suggests a method to compare the worst-case performances of different flexibility designs without the need to know the specifics of the uncertainty sets. Second, we prove that under symmetric uncertainty sets and a large class of worst-case performance measures, the long chain, a celebrated sparse design, is superior to a large class of sparse flexibility designs, including any design that has a degree of two on each of its product nodes. Third, we show that under stochastic demand, the classical Jordan and Graves (JG) index can be expressed as a function of the PCIs. Furthermore, the PCIs motivate a modified JG index that is shown to be more effective in our numerical study. Finally, the PCIs lead to a heuristic for finding sparse flexibility designs that perform well under expected sales and have lower risk measures in our computational study.National Science Foundation (U.S.) (Grant CMMI-0758069)Masdar Institute of Science and TechnologyFord-MIT AllianceNatural Sciences and Engineering Research Council of Canada (Postgraduate Scholarship

An Optimization Model for Valuating Process Flexibility

Although flexible processes are deemed critical for many companies and constitute a key concern of business process management, there is a lack of approaches for valuating process flexibility from an economic perspective and for determining an appropriate level of process flexibility. Today, companies do not know how flexible their processes should be. While generally advocating balanced investments, scholars provide concrete recommendations for very specific settings only. What is missing is a more general guidance and a deeper investigation of the positive economic effects of flexible processes, which are hard-to-measure and beset with risks. Against this backdrop, we propose an optimization model that enables determining the optimal level of process flexibility in line with the principles of value-based business process management. We also report on the insights gained from applying the optimization model to the production processes of an international company from the semi-conductor industry

Compliant and flexible business processes with business rules.

When modeling business processes, we often implicitly think of internal business policies and external regulations. Yet to date, little attention is paid to avoid hard-coding policies and regulations directly in control-flow based process models. The standpoint of this analysis is the role of business rule modeling in achieving business process flexibility. In particular, it is argued that flexible business process models require business rules as a declarative formalism to capture the semantics of policy and regulation. Four kinds of business rules can be used as a starting point to generate less complex control-flow-based business process models. It is shown that these different kinds of business rules relate to different perspectives in the taxonomy of business process flexibility.

An empirical evaluation of the impact of process standardization on process performance and flexibility

This paper argues that business process standardization, as part of BPM activities, is an effective way to improve business process flexibility and performance. We develop and empirically evaluate a theoretical model of the differential impact of business process homogenization and optimization on business process flexibility and performance. The analysis based on data from 85 large firms shows a strong and highly significant influence of process standardization on business process flexibility and performance. This paper is among the first to propose a research model and empirical operationalization to analyze the twofold impact of process standardization on business process flexibility and performance. For practitioners the paper provides actionable recommendations on how to apply the findings to their management context

Addressing inter-organisational process flexibility using versions: The VP2M approach

Process flexibility has been investigated in depth in the context of intra-organisational processes, but it is still an open issue when processes cross the boundaries of companies. In this paper, we address the modelling of flexible inter-organisational processes using a version-based approach. Indeed, versions are known to be a powerful technique to deal with variability, evolution and adaptation of processes, which are the three main needs of process flexibility. More precisely, this paper presents VP2M (Version of Process Meta-Model), a meta-model supporting the modelling of versions of inter-organisational processes, addressing both static and dynamic aspects of VP2M. It also illustrates process version modelling within the Subsea Pipeline process example

Addressing inter-organisational process flexibility using versions: The VP2M approach

Process flexibility has been investigated in depth in the context of intra-organisational processes, but it is still an open issue when processes cross the boundaries of companies. In this paper, we address the modelling of flexible inter-organisational processes using a version-based approach. Indeed, versions are known to be a powerful technique to deal with variability, evolution and adaptation of processes, which are the three main needs of process flexibility. More precisely, this paper presents VP2M (Version of Process Meta-Model), a meta-model supporting the modelling of versions of inter-organisational processes, addressing both static and dynamic aspects of VP2M. It also illustrates process version modelling within the Subsea Pipeline process example

Analyzing process flexibility: A distribution-free approach with partial expectations

We develop a distribution-free model to evaluate the performance of process flexibility structures when only the mean and partial expectation of the demand are known. We characterize the worst-case demand distribution under general concave objective functions, and apply it to derive tight lower bounds for the performance of chaining structures under the balanced systems (systems with the same number of plants and products). We also derive a simple lower bound for chaining-like structures under unbalanced systems with different plant capacities. Keywords: Process flexibility; Distributionally-robust analysis; Chaining; Production system desig

The Business Value of Process Flexibility - An OptimizationModel and Its Application in the Service Sector

Promising to cope with increasing demand variety and uncertainty, flexibility in general and process flexibility in particular are becoming ever more desired corporate capabilities. During the last years, the business process management and the production/operations management communities have proposed numerous approaches that investigate how to valuate and determine an appropriate level of process flexibility. Most of these approaches are very restrictive regarding their application domain, neglect characteristics of the involved processes and outputs other than demand and capacity, and do not conduct a thorough economic analysis of process flexibility. Against this backdrop, the authors propose an optimization model that determines an appropriate level of process flexibility in line with the principles of valuebased business process management. The model includes demand uncertainty, variability, criticality, and similarity as process characteristics. The paper also reports on the insights gained from applying the optimization model to the coverage switching processes of an insurance broker pool compan

Process Flexibility and the Productivity of Selected Deposit Money Banks in Nigeria

Changes emerging from the environment offer both challenges and opportunities to business organisations and also keep organizations embedded in less predictable environments. Acknowledging the increasing need for flexibility in organizational processes, this study examined the influence of process flexibility on the productivity of selected deposit money banks in Nigeria. To achieve this objective, variables were operationalized and models were specified. The study adopted descriptive research design. Data were gathered from primary source using structured questionnaire, and analyzed using Principal Components Analysis and Multiple Regression Technique. Results of the analysis showed all the indicators of process flexibility adopted except adaptability to be statistically significant and that process flexibility has positive significant influence on organizational performance. Based on the findings, the study recommended that managers should create organizational forms that will help organizations to exploit their current capabilities and explore future possibilities by adopting processes that can be improved easily and at minimal cost to the organization, and adopt systems that will allow for easy change in business methods. Keywords: Business process, Environment, Flexibility, and Productivit