Business Process Reengineering - A simple approach

Everyone always hears about Business Process Reengineering, but what does it mean? In a nutshell, it is the process of reengineering your business so that it can be more effective in processing transactions with the right amount of resources.

Sound simple? Unfortunately too many businesses have been bogged down in these reengineering projects that often all they have to show for it at the end is a lot of effort, much money spent, and little quality improvement. This does not have to be the case.

In the following example, we will cover a simple business process that everyone should familiar with, renewing your driver's license. I have yet to meet anyone who doesn't feel that they spend too much time in line, and that there has to be a better way.

This business process is a generic example, and not based upon any particular DMV. We are simulating how many renewal applications can the DMV handle on a daily basis.

There are 6 steps involved each with varying process times and 6 departments.

We initially start out with 6 workers, one in each department. And we simulate an inter-arrival time of customers looking to renew their drivers license to be 1 every 30 seconds.

When we run the simulation, we will see that only 59.86 or roughly 60 renewals are processed per hour in the entire day. In order to improve customer service the business objective is to at least double the amount of transactions to be processed.

So how do we achieve this? Do we add resources at every department, how do we know when we are hitting diminishing returns?

The best way is to simulate the process and see what the model tells you. After running a simulation we see that the department utilization is as follows:

Time-Weighted Average Resource Utilization
No Workers Added

Department	Sim #1
Application Review	24.94
Cashier	49.88
Eye Exam	66.51
Issuance	49.88
Photography	33.26
Violation Review	99.77

We see that the Violation Review Department is running utilized at 99.77%. We see this as an opportunity to add an additional worker and rerun the simulation.

This time the simulation tells us that we are now doing about 89.64 renewal applications per hour and that the bottleneck has moved out of the violation review department, and into the Eye Exam department.

Time-Weighted Average Resource Utilization
After 1 Worker Added to Violation Review Department

Department	Sim #1	Sim #2
Application Review	24.94	37.35
Cashier	49.88	74.70
Eye Exam	66.51	99.60
Issuance	49.88	74.70
Photography	33.26	49.80
Violation Review	99.77	74.70

Now if we add another resource in the Eye Exam department and run the simulation we see we now are processing 119.32 applications per hour achieving our business objective goal of doubling our applications processed per hour and only adding 2 more workers.

Time-Weighted Average Resource Utilization
After 1 Worker Added to Eye Exam Department

Department	Sim #1	Sim #2	Sim #3
Application Review	24.94	37.35	49.72
Cashier	49.88	74.70	99.43
Eye Exam	66.51	99.60	66.29
Issuance	49.88	74.70	99.43
Photography	33.26	49.80	66.29
Violation Review	99.77	74.70	99.43

So can we do better? If you look at the following Report on Renewal Applications you can see the diminshing returns we get as we add more resources.

Therefore to get more process improvement we need to look at the process times for each function and see if we can optimize those, just adding bodies is not going to improve the process. To see an overview of the entire process, click on the following link: DMV Process Overview

As you can see from this quick example, business process reengineering can be a powerful tool to help you optimize your business process.

If you would like to explore how you could gain efficiencies through modeling your business processes, please contact Hawaii Business Consulting for a free assessment at (808) 224-0470.