ITSCM 776 Business Process Innovation and Management

PM Assignment 2

This is an individual assignment

Purchasing Process at Gris Matire University

The purchasing process at a Gris Matire University begins with the administrator in the ordering department collecting supply needs from different departments. Each department sends in a request for a purchase order (PO) to the administrator in a standard form. 

There are 2 types of POs. Type 1 PO is for stationeries. They arrive at a rate of 1 PO every hour, from 9 am 5 pm. Type 2 PO is for special order custom books such as bound books and chapters from textbooks. They arrive at a rate of 2 POs every 2 hours, from 9 am 5 pm.

As soon as a request for PO arrives, the administrator refers to vendor catalogs to select the supplies. This activity takes 10 min. She then completes a purchase requisition (PR) paper form, which takes 15 min on average, with a standard deviation of 1 min. (Note: This is the normal distribution. The time should be specified as N(15,1) ).

The PR form is sent through internal mail to the purchasing department. This takes 15 min on average, and can range anywhere from 10 min to 1 hour. (Note: This is the triangular distribution. The time should be specified as T(10, 15, 60) ).

The supervisor at purchasing department validates the fields in the PR form. This takes 15 minutes. Then, he asks the clerk to check whether the ordering department has sufficient funds. The clerk takes about 10 minutes to conduct this activity. If the department has sufficient funds, then the order is processed (80%), otherwise the order is rejected and sent back to the administrator.

For type 1 POs, the supervisor faxes the validated PR form directly to the vendor. This activity takes 5 minutes. For type 2 POs, the supervisor sends the validated PR form along with detailed specifications for special order by snail mail. This activity takes 20 minutes on average. (Note: Please refer to Module 4 Multimedia - Whitewater Gourmet PM - Part 4 to see how to model multiple arrivals and conditional routing.)

A clerk in the purchasing department sends a photocopy of the validated PR form to the ordering department, and enters the PR information on the computer, which takes 30 minutes.

The clerk gets paid $ 10 per hour. The supervisor and administrator get paid about $ 30 per hour.

Section 1 - Process Model (100 points total)

Draw the process using Process Model software using swimlanes for ordering department and purchasing department, and copy-paste here.

Simulate the process and obtain results for only one day. (Hint: Set run length to be 17 hours).

Section 2 Analysis Questions (50 points total)

Compare the simulation results for number of entities processed, bottlenecks, costs and idle times. (15 points)

Where do you see the problem in the process? (Hint: Is it resource capacity? Too much processing time?). Take a screenshot and copy-paste appropriate output to explain.

Do you think the results match up with your expectations, based on the arrival pattern of POs and the resource capacities? Explain why or why not.

The VP of purchasing has complained that the POs are taking too much time to process. He would like all the POs generated in a day till 4 pm, to be completed within the day. (25 points)

As a process analyst, you first decide to use six-sigma techniques to improve this process. But, given the costs, you cannot hire more resources. Cross-training is out of the question as well due to the expectation of segregation of duties.

Think about at least 2 other solutions to improve this process, and list them. (Hint: Can you do some activities in parallel? Can you remove some wasteful activities or reduce time for them?)

Simulate at least one such solution and take a screenshot of appropriate output from the results that shows improvement. (Note: You may not be able to achieve VPs demand with this one solution This is fine. You would however need to show improvement in the process)

The VP of purchasing has also asked you to think about redesigning the process using information technology. Justify to the VP your redesign ideas by illustrating the time and possibly cost savings from redesigning the process. (Note: simulation is optional). (10 points)