Business Process Reengineering won’t deliver breakthrough results without business process changes. To successfully implement a lean supply chain, you must be willing to commit to significant redesigns of existing business and production processes. Streamlining and improving business and production processes should be an essential part of management’s strategy for improving business performance.
Business Process Reengineering explains how to identify and analyze key processes, how to understand what needs to be fixed, how to know who should be involved, and
how a successful implementation should unfold. When properly planned and executed, a process
redesign effort will result in a lean supply chain, with predictable, high-velocity information and material flows. Breakthrough performance in the form of dramatically reduced cycle times and inventories, enhanced supply chain throughput, and significantly higher levels of customer service are the payoffs for the customer, the supplier, and your company.
Business Process Reengineering: Using the Tools Available
Over the past two decades, manufacturing companies have lagged behind other industries in adopting new technologies and tools. This is especially true for Business Process Reengineering. This is odd because so many of these new tools and technologies, especially in information technology, have tremendous power for storing, processing, and communicating massive amounts of the right information seamlessly and in real time. This is clearly technology that supply chains could take full advantage of. So why do manufacturers continue to tolerate highly fragmented, outmoded supply chain processes and systems?
The answer rarely has anything to do with money, budgets, and finance, although these may account for slow adoption in some cases. The good news and the bad news is that the power of information technology that can invigorate a business, can also put it off track. There are risks involved in adopting new technology, risks that many executives are reluctant to take.
The more dramatic the change - - - the greater the risk. And in the case of supply chain management strategy, the longer you put off making a decision, the more complex and inevitable the whole process becomes.
Management’s reluctance to adopt a new supply chain strategy often arises from the sheer size of the task. The most complex process in a manufacturing company is unquestionably the end to-end supply chain. Initiating big changes to such a critical and core process is daunting to say the least.
Often companies instead will undertake what I call “random acts of improvement” under the auspices of Six Sigma or kaizen events. They think they are making progress toward lean manufacturing and lean supply chain management because they have, for example, initiated improvements in several areas of the manufacturing process. These efforts, however real, are not only uncoordinated but also limited to an internal focus. What’s more, they are often carried out with the limited participation of top management.
The final reason that manufacturing is lagging well behind where they should be is that it is rare to find individual champions of even minor, let alone major, change. Many executives are very uncomfortable with change even though they recognize and accept change as being necessary; it is often hard to get started.
Business Process Reengineering: Understand the Whole Process
It takes a broader viewpoint, one where the CEO and staff have to be concerned about correcting problems such as poor delivery performance, long lead times, high costs, low market share, and increasing sales volume. A policy for localized improvements does not help a company that is after superior competitive performance in the marketplace. Any performance improvement methodology that intends to address the overall business must start with the customers’ wants and needs. For these reasons, as well as because the resistance to change is endemic to most company cultures, senior management from the corner office and across all functional areas must be unrelenting champions for significant business process improvement. I have seen it time and again with clients: without such a commitment from senior management, business process change is doomed from the start. You may see a lot of activity but achieve little in measurable results.