PROCESS DESIGN

Case Study: The Action Response Applications Processing Unit

(ARAPU)
Operation Management

What is Process Design?

The activity of determining the

workflow, equipment needs, and
implementation requirements for a
particular process.
Process design typically uses a
number of tools including
flowcharting, process simulation
software, and scale models.

Process Design & Service/Product Design

are Interrelated

The Objectives of Process Design

Quality

Speed

Flexibility

Dependabil
ity

Cost

Process Types

Affected by volume & variety

It has different type from process that produced goods or services

Manufacturin
g

Service

Detailed Process Design: Process Mapping

Benefit: Describing
processes in terms of how
the activities in the process
relate to each other. ->
improve process

Process Mapping Symbol

Different Level of Process Mapping

Process Visibility

Littles
Law
Principle in
Manufacturing
Waiting time
Utilization
resources
Throughput
efficiency

of

The Effect of Variability

Case Study:
The Action Response Applications Processing Unit (ARAPU)

What is ARAPU?

Action Response is a London-based charity dedicated to providing fast

responses to critical situations throughout the world

Provide relatively short-term aid for small projects until they could
obtain funding from larger donors

Accessibility via the internet, by post & by phone

The charity receives requests for cash aid usually from an intermediary
charity and looks to process the request quickly and provide funds where
they are needed, when they are needed

Case Background
Target
Fast responses, only 20 days in processing the application.
Key Issues
1. There are complaints about the speed of their response.
2. Costs are beginning to spiral.
Goal
To assess and reconfigure the processes employed within Action Research to
improve responsiveness and efficiency.

What objectives should the ARAPU process be

trying to achieve?

to provide
short-term aid.
Therefore, unless
the process can
turn around
applications fast,
it is failing to
fulfil its primary
aim.

What is the main problem with the current

ARAPU process?
We need to know:

how
how
how
how

many claims each stage has to process

many people are available at each stage
long each person is available for processing
long on average each claim takes to process

Start

300
application
forms per
week

Application
form is
received
by 4 clerks

100 application forms

per week

Committee of
trustees
ratification
application
form

Ratification
application
form
Accepted
150 application

Store
application
form

Payment

Opening
and
checking
application
form

Application
form are in
line of
processing

Opening
and
checking
process

ApplicationApplication
form is
form is
received received
by coding by coding
staff
staff

Input
applicatio
n form by
5 coding
clerks

Rejected

Waiting for
committee
of trustees
meets on
Thursday

Accepted

7 assessors
assess
application
form

Scanning
applicatio
n form

Application form is
received by senior
applications
assessors
secretarys desk

Declined
150 application
Decline
application
form is
received
by officer

ARAPUs Process
Mapping

Officer
finalize
and write
suitable
letter

Payment

Document
is received
by dispatch
clerk

300 application
done per week
Dispatch
process

Finish

How much value-added work is being done at

each stage?
300 application per week and 100 application put aside by assessor per week.
Receipt stage
400 x 10 minutes per application = 4.000 minutes (66,67 hours)
Coding stage
400 x 20 minutes per application = 8.000 minutes (133,33 hours)
Assessment stage
10 minutes for 100 application
60 minutes for 300 application
(1/4 x 10) + (3/4 x 60) = 47,5 minutes
400 x 47.5 minutes = 19.000 minutes (316,67 hours)
316,67/35 = 9 assessors

How much value-added work is being done at

each stage?
Each Payments & Decline stage gets 150 applications per week (half of the 300 that emerge
from the assessors), so:
Payment stage
150 x 50 minutes = 7.500 minutes (125 hours)
Decline stage
150 x 30 minutes = 4.500 minutes (75 hours)
Dispatch stage
300 x 10 minutes = 3.000 minutes (50 hours)

Inefficiency in Process
The whole process output is 300 claims processed per week and from the case
there are around 2000 claims in process at any given time, Unit operates 35
hours week.
The cycle time of the whole process is = 35/300 = 0,12 hours
Throughput time = work in progress x cycle time
Throughput time = 2.000 x 0,12 = 240 hours = 34 days
More than
20 days
target

How could the ARAPU process be

improved?
Hired new
assessors,
balance the
process
More throughput

ARAPU
improvement
eliminate
applications that
need further
information

Educating
potential
applicants

The Improvement

Internet-based services

Simulation
THROUGHPUT
300 applications per week
cycle time is 35 / 300 = 0.12 hours
Throughput time = work in progress x cycle time
(20 days) 140 hours = WIP x 0,12
WIP = 1.166,67
WITHOUT RECYCLING
Educate applicant to eliminate incomplete application. So, it can minimize recycling
300 x 47.5 minutes = 14.250 minutes (237,5 hours)
316,67/35 = 7 assessors

CONCLUSION
Process design is important in every process stage for identifying the
efficiency and effectiveness in order to make improvement.
Based on Little Laws formula, there are some way to optimize process
design such as:
Waiting time
Utilization of resources
Throughput efficiency