Reference no: EM131428653

Consider the equipment rental process described in Example 1.1 and the corresponding issues documented in Example 6.4

1. Apply the redesign heuristics in order to address the issues documented in Example 6.4.

2. Capture the resulting to-be model in BPMN.

3. Explain the impact of the changes you propose in terms of the performance dimensions of the Devil’s Quadrangle.

Example 1.1 -

BuildIT is a construction company specialized in public works (roads, bridges, pipelines, tunnels, railroads, etc.). Within BuildIT, it often happens that engineers working at a construction site (called site engineers) need a piece of equipment, such as a truck, an excavator, a bulldozer, a water pump, etc. BuildIT owns very little equipment and instead it rents most of its equipment from specialized suppliers.

The existing business process for renting equipment goes as follows. When site engineers need to rent a piece of equipment, they fill in a form called “Equipment Rental Request” and send this request by e-mail to one of the clerks at the company’s depot. The clerk at the depot receives the request and, after consulting the catalogs of the equipment suppliers, selects the most cost-effective equipment that complies with the request. Next, the clerk checks the availability of the selected equipment with the supplier via phone or e-mail. Sometimes the selected option is not available and the clerk has to select an alternative piece of equipment and check its availability with the corresponding supplier.

Once the clerk has found a suitable piece of equipment available for rental, the clerk adds the details of the selected equipment to the rental request. Every rental request has to be approved by a works engineer, who also works at the depot. In some cases, the works engineer rejects the equipment rental request. Some rejections lead to the cancellation of the request (no equipment is rented at all). Other rejections are resolved by replacing the selected equipment with another equipment—such as a cheaper piece of equipment or a more appropriate piece of equipment for the job. In the latter case, the clerk needs to perform another availability enquiry.

When a works engineer approves a rental request, the clerk sends a confirmation to the supplier. This confirmation includes a Purchase Order (PO) for renting the equipment. The PO is produced by BuildIT’s financial information system using information entered by the clerk. The clerk also records the engagement of the equipment in a spreadsheet that is maintained for the purpose of tracking all equipment rentals.

In the meantime, the site engineer may decide that the equipment is no longer needed. In this case, the engineer asks the clerk to cancel the request for renting the equipment.

In due time, the supplier delivers the rented equipment to the construction site. The site engineer then inspects the equipment. If everything is in order, the engineer accepts the engagement and the equipment is put into use. In some cases, the equipment is sent back because it does not comply with the requirements of the site engineer. In this case, the site engineer has to start the rental process all over again.

When the rental period expires, the supplier comes to pick up the equipment. Sometimes, the site engineer asks for an extension of the rental period by contacting the supplier via e-mail or phone 1–2 days before pick-up. The supplier may accept or reject this request. A few days after the equipment is picked up, the equipment’s supplier sends an invoice to the clerk by e-mail. At this point, the clerk asks the site engineer to confirm that the equipment was indeed rented for the period indicated in the invoice. The clerk also checks if the rental prices indicated in the invoice are in accordance with those in the PO. After these checks, the clerk forwards the invoice to the financial department and the finance department eventually pays the invoice.

Example 6.4

We consider again the equipment rental process described in Example 1.1 and the issues described above in Examples 6.2 and 6.3. The issue register given in Table 6.2 provides a more detailed analysis of these issues and their impact.

Question Issue or factor?

An issue register is likely to contain a mixture of issues that have a direct impact on business performance, and others that are essentially causal or contributing factors of other issues that then impact on business performance. In other words, the issue register contains both issues and factors. For example, in the issue register of the equipment rental process, one could find the following entries:

• Clerk misunderstood the site engineer’s requirements for an equipment.

Table 6.2 Issue register of equipment rental process

Issue 1: Equipment kept longer than needed

Priority: 1

Description: Site engineers keep the equipment longer than needed by means of deadline extensions

Assumptions: BuildIT rents 3000 pieces of equipment per year. In 10% of cases, site engineers keep the equipment two days longer than needed to avoid disruptions due to delays in equipment rentals. On average, rented equipment costs € 100 per day

Qualitative impact: Not applicable

Quantitative impact: 0.1 × 3000 × 2 × € 100 = € 60,000 in additional rental expenses per year

Issue 2: Rejected equipment

Priority: 2

Description: Site engineers sometimes reject the delivered equipment due to non-conformance to their specifications

Assumptions: BuildIT rents 3000 pieces of equipment per year. Each time an equipment is rejected due to a mistake on BuildIT’s side, BuildIT is billed the cost of one day of rental, that is € 100. 5% of them are rejected due to an internal mistake within BuildIT (as opposed to a supplier mistake)

Qualitative impact: These events disrupt the construction schedules and create frustration and internal conflicts

Quantitative impact: 3000 × 0.05 × € 100 = € 15,000 per year

Issue 3: Late payment fees

Priority: 3

Description: BuildIT pays late payment fees because invoices are not paid by the due date

Assumptions: BuildIT rents 3000 pieces of equipment per year. Each equipment is rented on average for 4 days at a rate of € 100 per day. Each rental leads to one invoice. About 10% of invoices are paid late. On average, the penalty for late payment is 2% of the amount of the invoice

Qualitative impact: Suppliers are annoyed and later unwilling to negotiate more favorable terms for equipment rental

Quantitative impact: 0.1 × 3000 × 4 × € 100 × 0.02 = € 2400 per year

• Clerk did not select the correct equipment from the supplier’s catalog due to inattention.

• Clerk indicated an incorrect delivery date in the PO and the supplier used this wrong date.

• Supplier did not deliver the exact equipment that had been ordered.

• Delivered equipment is faulty or is not ready-for-use.

• Supplier delivered the equipment to the wrong construction site or at the wrong time.

All of the above issues are possible causal or contributing factors of a top-level issue, namely “Equipment is rejected by the site engineer”. The fact that the site engineer rejects the equipment creates a direct impact for BuildIT, for example in terms of delays in the construction schedule. Meanwhile, the issues listed above have an indirect business impact, in the sense that they lead to the equipment being rejected and the needed equipment not being available on time, which in turn leads to delays in the construction schedule.