Think Business Process Improvement Before Tools
By: Scott Jessup
As a strategic planning methodology, business process improvement (BPI) enables manufacturers to streamline operational processes, improve access to information across departments, and eliminate waste in all its forms. Done correctly, BPI also improves decision-making as well as the management and utilization of assets and resources. It does all of this by identifying the business operations and employee skills that can be improved to make procedures smoother and workflows more efficient, driving business growth and profitability.
ERP systems, despite their technology and automation, provide no intrinsic benefit without the guidance and input of business processes. In fact, ERP implementation is, in reality, business process improvement tool. Determining and defining the right business processes helps a company quantify what it wants to do and how it will go about doing it. It's critical to know what you want to do and how to do it before installing the tools you think will implement the as-yet-undefined task or process. Establishing the necessary business processes is a three-step process that involves:
1. Dissecting and understanding the current state of business processes
2. Removing all the non-value-added processes
3. Implementing the technology tools to automate the key, core processes remaining
Business processes exist to create consistency and control over a specific set of actions designed to produce a clearly defined outcome. Understanding that and developing the processes to accomplish the defined outcome is essential before introducing tools to try to automate everything.
Fostering a culture of change
Discrete manufacturing requires a number of tasks and processes that are interrelated and sequential - one task's output becomes another task's input. These complex relationships make business process improvement a daunting task that most individuals are loathe to undertake unless there is an overwhelming or compelling reason to change. So instead of focusing on improving business processes, some companies will instead construct patches or add tools that treat the symptoms but don't address the underlying illness -- poorly-designed or obsolete business processes.
Business process improvement is technology-independent and should not be driven by IT. In fact, a true business process isn't even back office- or front office-dependent, it's organizational-dependent. For example, an over-arching business process such as opportunity-to-cash touches virtually every department and function, from sales and finance to production and operations. Representatives from each department can be instrumental in helping determine "this is how we excel as a business," "these are our processes to make us efficient and profitable," and "how do we make all this work?" Only at this point can IT weigh in with recommendations on technology tools and solutions to make it all happen within the system.
What's needed is a culture of change. A desire within the organization to get rid of the non-value-added processes that don't add to the bottom line but instead act as a drain on time, money, and resources. This requires a multi-functional, cross-enterprise approach that will help eliminate enterprise-wide waste and free up resources for focused, value-added activities that contribute directly to business growth and profitability.
Utilizing this more strategic, cross-enterprise business process improvement strategy forces an organization to think beyond just production processes, which is where companies typically focus. After all, when thinking about process improvement, many managers look to production models because that's how products get manufactured. However, focusing on a larger, enterprise-wide BPI effort that includes balancing and optimizing workers and resources across the entire organization can yield significant business process improvements that provide substantially more value than just adding or adjusting a machine or production task.
Adjusting business processes across the enterprise - not just in production - produces results that can streamline operations, minimize waste, boost production, and improve quality to increase sales and maximize profitability. And that's the ultimate goal of business process improvement.