Business Process Management and Methods
Business Process Management initiatives can help drive continuous process improvement through a factory. In addition, they can be used in conjunction with software platforms such as CRM, MRP, ERP.
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Optimum efficiency has always been the goal of manufacturing companies. Without it, a factory cannot remain competitive in its market as costly material, labor and opportunity are wasted. To uncover optimum efficiency, manufacturing companies work to revise and refine inefficient processes, develop new processes and to manage those processes continuously.
To accomplish this, companies may turn to Business Process Management methods to help them put the right processes in place. Business Process Management (BPM) is part of general operations management where managers utilize specified methods to discover, model, analyze, measure, improve, optimize and automate their business processes. This can be a single methodology or a combination of methodology and other tools such as software such as ERP and MRP programs as well as other formal programs such as TQM to achieve their goals.
Read more about Material Requirements Planning (MRP).
Levels of Business Process Management
BPM seeks to align manufacturing processes with business goals. The system seeks to improve existing processes and then maintain them through metrics that allow refinement and adjustment. It is rarely department or factory specific and is usually done at the enterprise level to capture optimum benefit.
A company-wide BPM initiative has three distinct levels:
- Process Assessment – Also referred to as “process mapping”, process assessment is the level where a manufacturer defines its core processes and focusses on documenting current processes as a benchmark.
- Process Improvement – As deployment teams begin to enact the elements of the BPM program, they will identify inefficiencies by digging into the deeper level of how these processes work and why. Once the full process has been intricately mapped, the team will develop and then implement process improvements. At this level, formal methodologies such as Lean or Six Sigma may be introduced.
- Process Automation/Optimization – After the process has been identified and mapped and after improvements have been applied, use of deep technology such as advanced monitoring and control systems or advanced analytics can help monitor and measure the system at a level faster than human intervention. This allows for further improvement and optimizes the system through automation.
By formalizing process improvement in Business Process Management, processes can be seen as having phases. Each deep dive takes a process from its natural and inefficient state to one of ever-increasing efficiency until it has been optimized. By formalizing the process, BPM provides a structure and a framework for analysis and action that can be used successfully for any project.
Two methods for managing the phases of the improvement process are known as DMEMO and DMAIC.
Phases of DMEMO are:
Design – Asks how a process is done and what steps need to be taken.
Model – Asks why a process is done a specific way and what can be done to improve it. It also seeks to eliminate unneeded steps and automate the process.
Execute – This is the action step where adjustments are made for improvement.
Monitor – This phase tracks the process to verify results are as desired.
Optimize – This phase asks what more can be done to improve the process. If additional improvements can be made, the phases can be repeated.
DMAIC is similar in scope and is most often used with Six Sigma methodology.
The phases of DMAIC are:
Define – In this phase, efficiency and process problems are defined in terms of the customer.
Measure – Here the current process is measured as is to provide a benchmark.
Analyze – In the analyzation phase, data taken from the process measurement phase is analyzed to identify cause and effect.
Improve – Like Execute in DMEMO< the Improve stage of DMAIC is the action stage where improvements are undertaken to change and optimize the process.
Control – The control stage in DMAIC is seen as the stage for identifying deviations from the new process and providing an adjustment or correction.
Benefits of Business Process Management
Unsystemized and inefficient business processes can cost manufacturers money as well as market share. In some cases, it can threaten a company’s existence. These inefficient processes impact many key areas of the factory and may have a ripple effect to departments outside of manufacturing such as purchasing, finance and maintenance. They can lead to a greater number of errors, incomplete or missing data and can even affect company culture and morale.
There are many benefits to a formal Business Process Management initiative in any company. These benefits include:
- Companies deploying BPM can gain control of inefficient and wasteful processes.
- BPM can also improve operational efficiency as all areas of the factory are managed under a single, systemized structure.
- BPM provides a measurable and ongoing discipline for continuous improvement.
- Communication improves as data is unsiloed for the benefit of a unified system which may include single software programs for managing previous fragmented and disparate subsystems.
- It allows more control over production and items produced as they can be tracked accurately through the production workflow.
- BPM can set the stage for digital transformation of a factory.
A Business Process Management initiative can take many forms. There are three common types of BPM that include:
- Integrated – This is the most automated type of BPM and includes processes that can be enacted with no human intervention between different software systems such as CRM, ERP, Planning and Purchasing Systems, etc.)
- Human – In many manufacturing environments, operator and technician interface with the elements of a BPM system are critical. A human-based BPM type may include ultra-friendly use interfaces, simple alerts and notifications, intuitive dropdowns and simple tracking mechanisms.
- Document Centered – Reserved for BPMs that require a chain of handling for authority such as contracts, safety requirements and compliance processes.
Most manufacturers will use these in combination but with a heavy reliance on human-based BPM.
BPM “Must Haves”
Business Process Management is a powerful way to formalize and systemize process improvement. Some of the best-known methodologies include Six Sigma, Lean, BP Trends and Hammer and Rummler-Brache. Each of these methodologies have been used successfully by a wide range of successful manufacturing companies over the last few decades.
However, each of these methodologies must have critical core elements such as:
- Defined Leadership – Who in an organization will manage the system and how are their roles defined.
- Process Improvement – Process improvement must be robust and standardized, and each phase must be defined and followed.
- Metrics – All methodologies must have reliable, real-time metrics that can be used to evaluate and make decisions.
- Synergy – The chosen methodology must align and have synergy with a manufacturer’s core business goals.
- Change Management – Continuous improvement methodologies and the software and technology tools that are usually used with them often result in a culture change. This requires effective change management within the organization. If this is not understood and planned for, the initiative may fail.
BPM initiatives can help drive continuous process improvement through a factory. In addition, they can be used in conjunction with software platforms such as CRM, MRP, ERP, and others to take that improvement to the next level. And in most cases, they can even be tied in through API to these systems to leverage powerful analytics and other data processing, machine learning and automated attributes as well.