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Leveraging BPM for a Flexible Supply Chain

In today's hyper-competitive world, sometimes the winner is simply the first one out the gate.

Bringing products to market faster than your competitor might mean the difference between an entrenched product and one that falls by the wayside. This might be easier to manage if not for the fact that globalization has given rise to a global supply chain full of unpredictable booms and busts that can adversely affect the ability for a business to provide goods and services.

What is needed in today's world is a flexible supply chain and tools that allow a business to nimbly and swiftly manage any changes with suppliers, contract manufacturers, and retailers. Business Process Management (BPM) streamlines a business's operations and allows the business architect to swiftly model and execute crucial processes in order to keep operations humming along, regardless of the fickleness of supply chains.

Moreover, business process improvement results in both lower costs and improved quality. BPM, applied at a deeper level, includes a means to analyze processes. These processes, such as interactions with third-party suppliers, can be diagrammed, analyzed, and improved before being implemented. BPM solutions often include a simulation capability, which allows a company to work out inefficiencies and problems and optimize an end-to-end process before executing it.

Failure to do this can potentially cost the company valuable time and money if a process does not work. BPM at its most complex level goes further yet. It integrates and applies information technology tools that actually participate in managing the process.

In executable BPM, the process can be graphically designed with the BPM software, and then actually executed or run as one might run a software application. Where there are people involved in the process, they may be presented with forms to fill in, along with information they might need to complete that step. Where the system is automated, the software can either perform the task, or can be linked to an information technology tool specifically designed for that purpose.

For example, the actual process in a company might look like this: A clerk in the front office manually enters orders into the computerized order/inventory system. That program is accessed in the warehouse by the employees responsible for pulling stock out of inventory, who also pack and ship it and finally manually enter into the system that the stock has been reduced and the order has been filled. The order-inventory program is part of the existing information technology behind this process.

Let's look at how this process might be managed with executable BPM. First, the process designer draws the process graphically as a flow diagram. Then, as the steps where employees act are identified (enter order into system, pull from stock, pack and ship order) the process designer creates the forms that the employee will complete (the order form, checklists).

The process can be designed to take the order data, automatically check inventory, calculate the weight and postage for the package, direct the packer to the location of the order, identify the correct size of shipping carton, access the customer's address information in the company's database to print a shipping label, ask the packer to acknowledge that the item was pulled, the carton was packed, the postage was charged, the order was shipped, etc., and record all details of the process that was implemented.

The whole BPM process is deployed in an environment where the people involved at each manual step in the process are able to interact with the process (for example, via an internal or external Website); and the automatic steps (and interfaces with existing information systems) are managed by the BPM software itself.

Things will continue getting more complicated as new supply chains emerge and businesses take advantage of more choices to bring down costs, increase their profit margins, and become leaner. BPM is a valuable tool for a business interested in managing these changes in the face of a constantly evolving and ever more competitive business environment.

6 comments on “Leveraging BPM for a Flexible Supply Chain

  1. Ashu001
    November 15, 2011

    Guys,

    It all depends really.Sometimes companies which make the least mistakes,Keep their customers happy and keep going about their business with the least fuss who are the most successful.

    Regards

    Ashish.

  2. Nemos
    November 15, 2011

    I think BPM is a powerful tool. How or where the readers can learn more about it ?It is really impressive that the BPM could react with the employees during the process.”it is not your skills that make you special, but your skills combined with the appropriate tools make you special”

  3. prabhakar_deosthali
    November 16, 2011

    One of the key advantages of BPM as I see it is that it makes the organization result oriented and not work oriented.  The basic organization of any manufacturing company is like a set of physical departments – Purchase, stores, production, quality Assurance, sales, despatch, service. Where as BPM looks at the functions to be acheived by the whole manufactruing set up to fulfill the client requirements. So a BPM  works like a general manager of a factory who ensures that all the departments work towards achieving a single goal , that of catering to customers orders.

    BPM not only helps a flexible supply chain but also breaks the boundries between the departments and make the whole organization work towards their final goal.

  4. mfbertozzi
    November 16, 2011

    Personally, I can report a vision similar to prabhakar, moving on results mindset could help business and corporation's performance. In addition, there is a couple of other trends/ topics for possible evaluation: how to measure bpm performance and main reasons for engaging a specialized partner for outsourcing bpm services related to a specific sector.

  5. Barbara Jorgensen
    November 17, 2011

    It seems to me BPM is one of those terms that pops up occasionally but is a very useful discipline. You really have to use it throughout all levels of a corporation to make it effective. Like TQM, BPM is only as good as its implementation. Good points made in this blog!

  6. Mr. Roques
    November 17, 2011

    I agree, I hadn't heard of BPM before but reading about in the article, it's something we refer to constantly and is probably the most important part of the supply chain analysis.

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