Keywords

1 Introduction

In science, process variants are defined as “A subset of executions of a business process that can be distinguished from others based on a given predicate” [1]. In other words: “A business process variant is a fundamental flow variant of a business process which uses the same input and delivers the same measurable outcome” [2]. In manufacturing companies, there are three main factors for the different executions and deviations from the ideally designed business process: deliberate business decisions, human factors, and contextual factors [1]. In terms of deliberate business decisions such as changes in the corporate strategy and the product portfolio, the process variant emerges due to plannable changes in the company [1]. Especially SMEs in a highly competitive business environment need to create diverse product variants in order to meet customer demands, which leads to a large amount of customer-specific production processes [3]. In terms of human factors, limited knowledge, time, or, resources as well as unintended mistakes can lead to process variants [1]. Another type of process variant emerges as a result of contextual factors from the corporate environment [1]. These variants can be further categorized as exception handling and ad-hoc problem solving [4, 5]. The former, exception handling, concerns the management of rare, large-scale disruptions, that have an impact on the company as a whole. Recent examples of such disruptions are COVID-19 pandemic and natural disasters. This work deals with the latter, ad-hoc problem solving: The type of process variants that arise due to unforeseeable, ad-hoc problems such as supply chain issues arising from market turbulences. Those problems force companies to find new solutions in the short term and primarily interrupts the production planning and control processes [6].

Managing large, globalized enterprises increases the need for Performance Management Systems (PMS) as unforeseen problems occur at production sites with greater speed and complexity [7]. A PMS is a system that generates performance information through strategic planning and performance measurement routines and that connects this information to decision venues [8]. Krause [9] conducted an empirical study on existing PMS approaches in practice. From the study, he derived requirements and developed a stakeholder benefit-oriented and business process-based method to successfully develop and implement PMS. However, in the method, deviations from the ideally designed processes are not considered. In fact, many organizations suffer from simultaneously managing a large number of process variants, resulting in high resource consumption [2]. To overcome this challenge, requirements for the development of a PMS with consideration of process variants for ad-hoc problem solving are being developed on a use case basis and are presented in this paper.

This research is conducted by TU Berlin students within the framework of a research project, which is funded by the German Federal Ministry of Education and Research (BMBF) and led by the Fraunhofer IPK. In Sect. 2, the use case is described in detail. Section 3 contains an overview of the challenges associated with process variants. These challenges were derived from the use case. Section 3 also gives an overview of the state of the art of PMS. Section 4 elaborates on the degree of how much the requirements by Krause [9] address the named challenges and proposes adjustments as well as an additional requirement. Section 5 provides a summary and outlook.

2 Use Case

The challenges associated with the performance management of process variants are analyzed based on a serious game, in which the non-linear production processes as well as the supply chain problems of a drilling machine manufacturer are simulated as a use case. A serious game is an experimental learning approach without exposure to risks and dangers, and have proven to provide researchers the chance to research complex, poorly organized problems and prepare stakeholders for practical decisions [10]. The products of the drilling machine manufacturer range from hand-held cordless drill drivers and universal rotary hammer drilling machines to jigsaws. To meet regional requirements and customer preferences in the use case scenario, each product is available in various product variants.

The target for this research is a driller production line operated by a pull-principle with the capability of sequentially producing seven product variants. All essential business processes such as sales, production, assembly as well as logistics are established. Contemporary challenges such as short-term order fluctuations are reflected. In the course of the serious game, a sudden supply chain issue occurs: Due to local regulations, a particular part of the drilling machine is banned from production after the discovery of hazardous chemical material linked to a health issue. Concerning this issue, three product variants can no longer be sold. To address the issue, the company has the following options shown in Table 1.

Table 1. Options in the serious game for solving a sudden supply chain issue.
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In order to compare the solution options and resulting process variants, it is not enough to directly compare the impact of one option to the other because the process performance is a result of a series of intertwined decisions that are made before and after the incident [11]. For example, the company would weigh up options A and B according to the make-or-buy strategy. If the same part is delivered by a new supplier, efforts are necessary to integrate the new supplier, but the manufacturing processes could remain unchanged. Option B requires high investments and considerable process changes but would also increase the robustness of the company. With options C and D, the company would risk not only the loss of revenue or penalty but also the loss of customers. With these variants, the company could be sacrificing its future profitability. However, if the demand for this product is declining already, it would be a viable risk. It becomes visible that the options need to be considered within the framework of business goals and the corporate environment of the company.

3 State of the Art

3.1 Challenges

The use case reveals several challenges for performance management of business process variants. Firstly, as explained in the previous section, it becomes visible that the performance of business process variants cannot be directly compared to each other and the ideally designed process due to differences in (C-1) goals, process sequences, and structure as well as framework conditions (e.g. different quote-to-cash process execution by different organizations) [1]. Furthermore, (C-2) some process variants may not have existed before, because they are deviations from the ideal process and have therefore not been considered in the PMS. This challenge is intensified if the (C-3) processes are strongly interrelated with each other and are hard to trace because they are not fully conducted with IT systems. In the use case, the supply chain issue occurs suddenly and option B, which is a complex process variant due to its interrelations with manufacturing processes, has not been considered before as the company was not planning on investing in new equipment.

As each decision opens up a new branch of options and possible process chains, the involved process roles and stakeholders involved are different depending on the option. Different stakeholders hold different views on process variants (C-4) that were generated for different purposes [2]. For developing a PMS for the use case at hand, for instance, the involvement of the legal team needs to be considered, especially when evaluating the performance of Option D. Therefore, the interest is required to be balanced between stakeholders because they embrace different objectives [7]. Lastly, as described in Sect. 1, one major reason for the occurrence of process variants is the need for companies to quickly adapt to changes in the corporate environment [12]. It is resource- and time-consuming (C-5) to monitor and control a large number of business process variants simultaneously [2]. Furthermore, for making an informed decision for one of the four process options, a quantitative prognosis for each of the options (C-6) is needed.

3.2 Existing PMS Approaches and Requirements Development

PMS can be classified into three categories: traditional, framework-based, and technology-based approaches [9]. This work focuses on analyzing framework-based PMS because the framework-based PMS enables companies to derive an individual PMS according to their business strategy [9]. Balanced Scorecard (BSC), Performance Pyramid, and Performance Prism are the three main framework-based approaches for performance management [13].

Krause [9] developed requirements for PMS by deriving them from an empirical study on the success of existing PMS approaches and assigned the requirements to four clusters: The general PMS concept, the knowledge base and procedure model for developing a PMS, and the software support for PMS implementation. In his work, the feedback and feedforward principle of business processes in the sense of a closed loop is considered. Furthermore, in contrast to previous approaches, Krause takes a process-oriented perspective in a way that the PMS covers the entire value chain process. However, as mentioned in Sect. 1, unforeseen process variants are not considered in his work. The stakeholder benefit-oriented and business process-based method was developed based on the assumption that all processes run according to plan.

4 Requirements for PMS with Consideration of Process Variants

4.1 Development Approach

The overall steps for requirements development are summarized in Fig. 1. Firstly, the research group conducted the serious game, identified the relevant challenges and conducted a literature review to analyze existing requirements. Based on the work of Krause [9], the gap between the challenges (Sect. 3.1) and existing requirements by Krause (Sect. 3.2) was analyzed. The results of the analysis are summarized and elaborated in Sect. 4.2. Next, based on the use case, the gap in requirements was derived from this analysis, and additional requirements as well as adjustments to existing requirements were proposed. Thereby, the adjusted requirements list was specified with consideration of process variants. In Sect. 4.3, an excerpt of the specified requirements is elaborated based on the use case.

Fig. 1.
figure 1

Steps for requirements development

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4.2 Relation of Existing Requirements and the Challenges

The degree of how much existing requirements by Krause [9] addresses the named challenges is summarized in Table 2. The gap analysis is explained below the table using the first cluster as an example.

Table 2. Gap analysis between existing requirements by KRAUSE [9] and the challenges associated with the performance management of process variants.
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The first cluster consists of three requirements. According to Krause, a PMS needs to take a holistic approach in the way that it must include four components (A1–1): critical success factors, business processes, performance improvement projects, and performance indicators. Hence, the need to consider the differences in goals and framework conditions of process variants (C-1) is partially covered by this requirement. If a PMS is developed for the use case under this requirement, the PMS would take the critical success factors ‘implementation time’ and ‘implementation cost’ into account when comparing the performance of, for example, Option A and Option B.

The second requirement defines that the PMS needs to be integrated into the organization-specific management systems (e.g. existing risk management system) (A1–2). This enables the performance management of interrelated processes (C-3) which are conducted by different roles with different stakeholders (C-4). In use case scenario, Option C is risky in terms of losing customers.

By the integration of new aspects including new technologies and instruments, as proposed by the third requirement (A1–3), new process variants can also be included (C-2). However, the requirements in the cluster ‘overall concept’ (A1–1, A1–2, A1–3) do not address the issue of high resource consumption of process monitoring (C-5) and the need for predictive prognosis (C-6).

In summary, the challenges (C-1), (C-2), (C-3), (C-4) and (C-5) are largely addressed by the requirements developed by Krause. However, the predictive prognosis challenge (C-6) is only partially covered by requirement (A3–2), which points out that the as-is and to-be model should be studied, but lacks the instructions of conducting predictive prognosis.

4.3 Excerpt of Specified Requirements

Next, based on the gap analysis, the set of generic requirements by Krause [9] were specified for the performance management of process variants. The specification was done by adjusting the generic requirements and by adding new requirements in order to create a set of requirements that fully address the named challenges. In this paper, the specification is demonstrated with one example (‘Benefit potential’ (A4–7)) of a newly proposed requirement, which is shown in Table 3 and explained in the following.

Table 3. Evaluation of the newly proposed requirement
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The gap analysis revealed that challenge (C-6) is not covered by the existing set of requirements. Therefore, one new requirement, which addresses the need for predictive prognosis had to be integrated into the set. In the use case, for example, Option A not only increases the cost of production but also brings no direct benefit to the future of the organization. On the other hand, Option B can enhance organizational resilience to mitigate future disruptions but comes with much higher investments at present. Hence, predictions of not only the estimated profit but also intangible benefits to the organization have to be made in order to make an informed decision for one of the process variants. For instance, return of investment and technology capabilities for each option should be evaluated respectively. Additionally, the benefit potential needs to be clarified, based on the value chain of the organization. By fulfilling this requirement, the relevant interests of different (C-4) stakeholders can be considered as well.

5 Summary and Outlook

The challenges associated with process variants were analyzed based on a serious game as the use case. An overview of previous research on process-oriented development of PMS is given. Building on the work of Krause, the requirements for the development of a PMS were further developed in order to overcome the named challenges. The specification and evaluation of the requirements is demonstrated with one requirement in this paper. It was newly added to the set of requirements in order to address the challenge concerning the need for predictive prognoses.

Further steps of the research at hand is the development of a PMS for the use case based on the specified requirements. Afterwards, the PMS will be implemented in the serious game. The last step is the validation of the implemented PMS and of the underlying specified requirements. Finally, the serious game provides a training environment for researchers and for managers in the industry for ad-hoc problem solving.