Use of modelling and simulation for improving a business process

Ing. Tural Aliyev

Master's thesis

Use of modelling for improvement of a business process

Abstract:

The objective of this thesis is to model and analyze the existing operational business process of the Ukrainian wholesale company, to develop recommendations on its improvement and to assess the effectiveness of these recommendations. In the first chapter the overview of the business process management essentials is provided. In this chapter the definition, key features and classification of business process are considered, Business Process Management essentials, advantages and disadvantages are disclosed, and a Business process management life cycle is considered. The second chapter is devoted to theoretical analysis of core stages of business process management, namely: modeling, implementing, monitoring and improvement. The main emphasis is on business process modeling and improvement. The essence and purposes of business process modeling are explained in the part devoted to business process modeling, key elements of a business process to be necessarily depicted in its model are named, levels of business process models are described and the most widely used business process modeling notations are characterized. In the part concerned to business process improvement two different approaches are characterized: continuous and break-throw improvement. PDCA cycle is described, the essentials of Lean and Six Sigma systems, Business Process Benchmarking and Business Process Reengineering are disclosed. Third chapter represents a case of ARMAX LLC, a Ukrainian wholesale company, selling corrosion-proof flexible metal hose. The operational business process of this company and its sales and ordering subprocesses are modeled and analyzed. Their disadvantages leading to excessively long time of customer order fulfillment therefore to loss in sales are identified. The measures to eliminate these disadvantages are recommended, namely: to locate producing capacities in Ukraine, to divide the department of sales and procurement by two parts, to implement Electronic Data Interchange system and 1C Warehouse module, to implement barcode scanners at the warehouse, and to change the order of improved business processes. Economic effect of the recommended measures is evaluated. Under the basic scenario, the ARMAX LLC will earn 173 UAH thousands of the net profit annually as a result of the recommended improvements. Key Words:

Abstract:

The objective of this thesis is to model and analyze the existing operational business process of the Ukrainian wholesale company, to develop recommendations on its improvement and to assess the effectiveness of these recommendations. In the first chapter the overview of the business process management essentials is provided. In this chapter the definition, key features and classification of business process are considered, Business Process Management essentials, advantages and disadvantages are disclosed, and a Business process management life cycle is considered. The second chapter is devoted to theoretical analysis of core stages of business process management, namely: modeling, implementing, monitoring and improvement. The main emphasis is on business process modeling and improvement. The essence and purposes of business process modeling are explained in the part devoted to business process modeling, key elements of a business process to be necessarily depicted in its model are named, levels of business process models are described and the most widely used business process modeling notations are characterized. In the part concerned to business process improvement two different approaches are characterized: continuous and break-throw improvement. PDCA cycle is described, the essentials of Lean and Six Sigma systems, Business Process Benchmarking and Business Process Reengineering are disclosed. Third chapter represents a case of ARMAX LLC, a Ukrainian wholesale company, selling corrosion-proof flexible metal hose. The operational business process of this company and its sales and ordering subprocesses are modeled and analyzed. Their disadvantages leading to excessively long time of customer order fulfillment therefore to loss in sales are identified. The measures to eliminate these disadvantages are recommended, namely: to locate producing capacities in Ukraine, to divide the department of sales and procurement by two parts, to implement Electronic Data Interchange system and 1C Warehouse module, to implement barcode scanners at the warehouse, and to change the order of improved business processes. Economic effect of the recommended measures is evaluated. Under the basic scenario, the ARMAX LLC will earn 173 UAH thousands of the net profit annually as a result of the recommended improvements. Key Words:

Keywords

Business process, business process management, business process modeling, business process improvement.

Language used: English

Date on which the thesis was submitted / produced: 10. 5. 2016

Thesis defence

• Date of defence: 13. 6. 2016
• Supervisor: Ing. Ondřej Částek, Ph.D.
• Reader: Ing. Eva Švandová, Ph.D.

Masaryk University

Faculty of Economics and Administration

Master programme / field:
Economy and Management / Business Management (Eng.)