Business Processes and Process Reengineering
Business processes are the coordinated activities that the company undertakes in the production of its goods or services. It involves accepting inputs, value addition and releasing outputs to the consumers. There comes a point where the organization realises that the processes in the company are not the best. Either the processes are not effective or efficient. Things could be carried in a better way to achieve higher results. The management will therefore get in touch with certain experts with the view of reengineering the processes of the company. Businesses that have reengineered their processes have observed a positive change in time management, profitability and return on investment.
In the past there has been a negative connotation when staffs hear that the management want to reengineer the business processes. There are companies in the past which have laid off most of the staff after they completed business reengineering projects. This is not the goal of the project. Business process engineering is closely related to lean manufacturing where the business processes are analysed to find out the value adding and non-value adding processes. The aim is to remove waste and bottlenecks in the value adding activities.
The non-value adding activities are eliminated so that the organization focuses on the value adding activities increasing efficiency. Business process engineering is carried out to assist the organization identify the best practice to adhere. The best practice in the organization is a way of doing things that is superior to all other processes (Oslon, 2003, p. 88).. While performing reengineering, the management should also engage in benchmarking. This is where the company’s processes are compared with the competitors in the industry to pick out the best practice as it will lead the company to have a competitive advantage over its peers.
Business Process Flow impact on Service Delivery
The business process flow can either have a positive or negative effect on the customers and the employees. While drawing a process chart, the management may identify certain bottlenecks in the processes. If the staff are not able to get the information and the resources that they need they are bound to get frustrated. Their morale will go down. Their work will be sub-standard. They will not be able to fully achieve their potential or capacity. Furthermore more labour hours will be spent on work that is not up to the required standard. The customers will not be satisfied with the products of the company. They will actually demand better from the company. There will be customer complaints and increased traffic in the returned goods section.
It is therefore important for the company to carry out process analysis in order to remove the bottlenecks in the processes. The employees will have high morale to do their work since they have all the tools and resources that they require. They have access to timely and accurate information at the point and time they need it. Their productivity will be higher. They will be more efficient and consume less hours in doing their work. This will give the company a competitive advantage in the industry. The level of customer service will be higher.
Satisfied customers will have high positive goodwill and loyalty towards the company. They will even purchase more products from the company. The senior management has to ensure that the processes in the organizations are great and do not make the company lose any business
Process Analysis
Process analysis is a tool that the management can use to pick out the bottlenecks in the processes. Once the bottlenecks are removed, the organization is able to perform in a superior way. Process analysis should be carried out to identify the problems and provide the appropriate solutions. The first step in process analysis is to draw the process flow in a diagram. The management can use flow charts which show the process flow sequentially and are very clear. Flowcharts are also useful in training and coordination of the different departments. It is also a tool that is used to inspire creative and innovative ideas from the staff on how the process can be improved (Fitzsimmons & Fitzsimmons, 2010, p. 41).
The hardest process in coming up with a flow chart is getting the consensus from all the department staff on how the process flow should actually look like on paper. The management should then analyse the cycle time. This is the time taken to complete each task in the flowchart. Bottlenecks should be identified as these are the factors that limit production. These could be the slow processes in the flow chart caused by either labour unavailability or lack of access to information. The capacity which is the achievable output per task should be recorded. The capacity is measured in a situation where the staffs are fully busy. Is the company able to achieve its capacity? In other words what is the capacity utilization?
The management also analyses the time it takes to complete a whole process? This is known as the throughput time which measures the duration of the critical path. The throughput
time should include the time spent in queues. However the rush hour time should also be assessed which is the time it takes to complete a process minus the queuing time. The direct and indirect labour time and costs can also be analysed. These objective measurements assist the management to improve service delivery.
The Impact of ERP and Technology on Business Processes
Enterprise resource planning are software systems that enable the sharing of management information across several departments across the organization. There is sharing of information among the finance, accounting, manufacturing, marketing, production and the customer relationship departments. Information technology is an important component of ERP as it enables the information to be shared through computer networks. Information is also stored in computer databases. ERP and information technology enables departments to have access to information quickly from other departments. The information helps the management make strategic decisions based on the latest, accurate and relevant information on the subject at hand.
ERP removes information bottlenecks enabling the different departments even use lesser time to finish their processes. Lack of adequate information systems causes the company to lose having a competitive advantage over the peer companies. ERP is also a tool used in process reengineering. The company has to get the superior information system that will serve the company best and give it a competitive advantage.
The concept of best practice is also incorporated in ERP systems. ERP has helped companies reduces the production cycles. In the manufacturing companies, there is increased accuracy of the demand of the raw materials. This improves inventory management as there is reduction in the raw materials stock held by the company.
References
Fitzsimmons, J. & Fitzsimmons, M. (2010). Service Management: Operations, Strategy, Information Technology. United States: McGraw Hill.
Oslon, D. (2003). Managerial Issues of Enterprise Resource Planning Systems. United States: McGraw Hill.
