Business Process Analysis and Improvement
Business Process Analysis and Improvement
For this paper, the process that will be selected is the repair machine repair process. Numerous companies in Kuwait such as Golden Equipment Company offer services in the installation, maintenance, and repair of heavy engineering machinery. The main inputs within the system are defective machines and spare parts while the output from the process are the removed defective parts and the final repaired machine. The main stakeholders involved in the process are the different employees involved in the different stages within the repair process.
Currently, at the company the repair operations involve the arrival of defective machinery at the workshop. Employees then inspect the broken down machinery. Upon inspection, any defective parts are dismantled and the defect is diagnosed. This helps in identifying the root cause of the fault as well as a precautionary method of ensuring that the fault and its cause have been resolves. Once it is diagnosed, the right spare part is selected and the manager is notified about the part and the required replacement or the spare part that has to be purchased. It is important within the operation that the right part be identified in order to ensure that the right part is ordered. If the wrong part is ordered then the organization will be forced to take up extra time to return the wrong part, reorder the new part, and purchase the new product.
The purchase order is then handed over to the procurement and finance office. These departments are responsible for making purchases for spare parts. The owners of the company run these departments and they are responsible for making all decisions with regard to this department. In addition, it is clear that the CEO is involved in all activities of the company, ranging from procurement approval, personal management of the daily operations of the workshop to the handling of the company finance records. This is mainly because one of the company’s main goals is to maintain low operating cost factor.
Once a purchase has been approved, all funds are available and a supplier has been identified the spare parts are then ordered. In some cases, spare parts have to be imported and this means that the procurement process is slow since he is responsible for scrutinizing and approving all the purchases beforehand. The company then receives the spare parts, the machinery is reassembled, tested, and handing over the equipment back to the client. If at the last stage, the equipment is still defective it is rechecked for any issues and the entire process is repeated.
Phase 2: Identifying Analysis Tools
For this paper two analysis tools will be used in analyzing the repair business process discussed above are integrated Definition language (IDEF) and Value Stream Mapping (VSM). For the IDEF analysis tool an IDEF0 will be modeled. In process analysis and process modelling, an IDEF0 will be utilized to illustrate the logical sequence and arrangements of events within the repair process described in phase 1 above. The IDEF0 model will identify the inputs, outputs, controls and mechanisms present in the repair business process (Feldmann, 2008).
The VSM analysis tool will be used to provide information on all the activities involved in the repair process. The VSM will also provide information on the duration that it takes to complete each activity within the business process (Rother & Shook, 2009). This will be important when it comes to making recommendations on how the organization can improve its repair process by reducing the time needed for each stage. A VSM is also important as it allows one to model the current system as well as the future recommended system based on the recommendations (Dolcemascolo, 2006).
Phase 3: Process Analysis
Based on the process definition discussed above the IDEF0 and VSM diagram of the process were modelled, and are shown in figure 1 and 2 below. The IDEF0 below illustrates the logical sequence of events within the repair process. The IDEF0 model has also identified the inputs, outputs, controls and mechanisms present in the repair business process.
Figure 1: The IDEF0 for the machine repair process
Figure 2: Value stream map showing the current operation during the machine repair process
In some cases, the company acquires its spare parts by importing when the need arises. This is mainly because in Kuwait some of the parts for the machinery that the company requires for repairs are not readily available locally. This leads to the company being forced to outsource parts from countries such as China and Japan. Importing the parts means that the parts have to take up additional time in transit. The company imports and brings the spare parts required in servicing and repair of the machine and equipment when and as the need arises.
Lastly from the process map shown above it is clear that additional time is taken up in the inspection, arrival of parts, inventory and repair processes. This is mainly attributed to the few staff that assist in servicing, repair work, overhaul, and maintenance of the client’s equipment this leads to additional time being taken up. As stated earlier the company tries to operate at the lowest cost possible therefore, the number of employees available do not meet the customer demand.
Introduction of lean and agile operations:
The Golden Equipment Company can introduce leanness by purchasing multipurpose machines that can be used in repairs and thus reducing the amount of time required for repairs from 6 days to 1 day as shown in the figure 4. Agility can be used as a means through which the company can be able to adapt to changes in customer demand (Myerson, 2012). This can be achieved through the elimination of the various distribution levels in the supply chain and hence improves the decision rules at all stages of the supply chain. The company’s CEO should delegate some of his roles to managers in order to make the organization agile. This will reduce the amount of time for ordering and inventory of parts from 35 days to 10 days as shown in figure 3.
Categorization of suppliers:
The Golden Equipment Company needs to categorize its suppliers in order to reduce the amount of time required for ordering and receiving parts. Categorization of suppliers involves developing an effective list of suppliers that the company knows are reliable (Lambert, 2008). It is estimated that with an efficient list of suppliers the organization should be able to order and receive parts in about 10 days as opposed to the current 35 days as shown in figure 2 and 3. This reduction is because some of the suppliers will not be used because they may be considered slow in delivery parts.
Invest in a spare parts inventory system to improve efficiency of most common spare parts and outsourcing:
There are spare parts that are very common and in an effort to introduce agility in the organization. The company can order and store some of the most common spare parts in a warehouse. This means that for common repairs the company can easily find the spare in a day as opposed to the current 35 days.
Recommended operations and justification:
Based on the recommendations two value stream diagrams can be mapped for the organization. These are shown in figure 3 and figure 4. These diagrams have been discussed below.
Figure 3: The recommended operations at the Company
The supply chain shown above takes into account leanness, agility and the introduction of an inventory system for frequent spare parts such as hydraulic systems, tires, and common engine parts. Based on the recommendation, the organization should acquire an inventory of such items and store them in a warehouse. The stored parts will make it easier for the organization to carry out repairs since the spares will be readily available. This process is expected to take up about 5 days to complete. This implies that with some of the spares being locally available the organization will be able to cut the amount of time required to carry out a repair from 51 days to just 5 days. On the other hand, leanness and agility will help reduce the amount of time required for inspection and repair to just two days. As discussed earlier, this will be achieved if the company is willing to free up resources being wasted on non-core competences and mainly concentrating on repairing machinery.
Figure 4: The recommended operations at the company
The supply chain shown above takes into account categorization of suppliers and outsourcing. Based on the recommendation, the organization should categorize its suppliers and outsource some of its operations. By having an effective list of suppliers, the company will eliminate the bottlenecks and non-critical items that have been creating issues within its supply chain. This implies that the amount of time required to order and ship parts has been cut from 35 days to 10 days. This implies that the entire process will take up to 15 days to be completed.
Dolcemascolo, D. (2006). Improving the extended value stream: Lean for the entire supply chain. New York: Productivity Press.
Feldmann, C. G. (2008). The practical guide to business process reengineering using IDEFO. New York N.Y: Dorset House Pub.
Lambert, D. M. (2008). Supply chain management: Processes, partnerships, performance. Sarasota, Fla: Supply Chain Management Institute.
Myerson, P. (2012). Lean supply chain and logistics management. New York: McGraw Hill Professional.
Rother, M., & Shook, J. (2009). Learning to see: Value stream mapping to create value and eliminate muda. - Version 1.2. Brookline, Mass: The Learning Enterprise Institute.