Changing tracks

More than ever, the average manufacturing executive is aware of the importance of business processes – and, what's more, of the need to align those processes with the business's strategic objectives. In short, terms such as 'procure-to-pay' and 'order-to-cash' are now reasonably commonplace, and have done much to crystallise manufacturers' thinking about the efficiency – or otherwise – of the business processes which underpin their organisation. But with this heightened understanding has come a danger. Simply put, says Phil Lewis, business consulting director at enterprise applications vendor Infor, manufacturers are designing and changing business processes without being in full possession of the facts. "Talk to manufacturers, and it's clear that there's a gap," he says. "They don't know what changes to make in order to achieve specific goals; they don't have a way of viewing and changing processes across enterprise applications; and they don't have a way of verifying the benefits that have arisen from the changes that they've made." Working in the dark At root, he explains, several factors underpin these failings. The bottom line? Too many business are working in the dark, unable to visualise, map and model their processes, and unclear as to how those processes contribute to strategic goals. To begin with, explains Lewis, while manufacturers' understanding of business processes generally is far more advanced than was the case a few years ago, confusion still arises over the appropriate level to view, design and change processes. "What's holding some businesses back is that they're taking a view which is far too tactical, and not strategic enough," he notes. "They're saying: 'How should we create a purchase order? Or a sales order?' This kind of approach is too low-level. What they should be saying is: 'What specifically do we want our purchasing process to optimise?' and 'What specifically do we want our order entry process to optimise?' Depending on the answers, the resulting process can be very different." As an example, he explains, a procurement process aimed at delivering speed of supply might be very different from one targeting lowest cost, or sourcing from local suppliers. Likewise, a sales order entry process for a build-to-order manufacturer will be very different from one created from a manufacturer selling from stock, or building repeat orders to a known design. "The whole point is that you have to think about the process within the business, and about the functions, people and job roles that are involved – and not focus simply on what happens on the screen, and where the data is routed to next," he emphasises. Which of course heralds a further difficulty: the workflow and critical path of a particular business process. Or, as Lewis puts it, making sure that people and functions operating within a process understand the context in which they are doing so. "It's all too easy to be clever and build stages into a process in order to deliver a particular objective – only to find that either it doesn't work, or that it slows the process down," he charges. "Time and again, we come across processes which have been designed with a particular goal in mind, but which don't achieve that goal, and are in fact a step backwards, not forwards." Process involvement Consider, for instance, a process that mandates the involvement of the finance function, or director-level input, for all sales orders taken below list price, or at a discount greater than a certain figure. Or, to choose another example, the involvement of manufacturing engineering, or manufacturing management, for all sales orders involving a departure from standard build, however minor. As a 'for your information' part of the workflow, there's no guarantee that any actual review will take place, or that busy people will do anything other than take a cursory look and move on, says Lewis. But enforce a 'sign off' for every instance, and instigate a mandatory approval stage, and there's a danger that the process will be delayed. And in any case, he notes, such issues highlight yet another issue with manufacturers' approach to business processes, especially at the 'tactical' rather than 'strategic' end of the spectrum. In short, a process or business workflow that is defined around a single enterprise application will invariably be weaker than one which can reflect the full depth of multiple applications. To pursue the sales order and manufacturing example a little further, argues Lewis, it's clear that what is needed in order to make a decision will not always be contained within the information present at the sales order entry stage. From a finance perspective, for instance, it might be appropriate to investigate product profitability and customer profitability, or understand the importance of the customer to the business. Likewise, to make a decision about a non-standard variant of a product, it might be necessary to look at inventory holdings, machine workloads and available capacity, or even product lifecycle management data. Wider view In other words, sums up Lewis, the need to view business processes from a cross-application process – and perhaps pull in data from outside the enterprise – shows how quickly a simple question around the design of a sales order process can quickly take on complex characteristics. "Properly undertaken, process design and change involves data, modelling, an understanding of organisation structure, and a modelling capability," he states. "Trying to do it without such insights can easily backfire: a supposed improvement could turn out to have unlooked-for consequences." So what's the answer? Infor, observes Lewis, in fact has several solutions on offer, depending on the complexity of the challenge. Firstly, he explains, Infor offers a 'value management' consulting capability. At a high level, the idea is to make sure that processes not only work – and work efficiently – but add value by contributing to strategic goals. "The value management team are there solely to help companies to map their strategies, and align their process and system to those strategies, in order to achieve their business goals," he explains. "It's all about synchronising the strategies of the business with the activities that are required to achieve their objectives." Secondly, Infor offers a business process management modelling tool, called Dynamic Enterprise Modeller. This performs two roles, says Lewis. On one level, as the name suggests, it models the business's processes, taking into account activities such as sales, manufacturing, and distribution, and then building in workflows within the enterprise, inter-company and intra-company interactions, and relationships with customers, vendors and other partners. Just as usefully, it is then capable of 'hard coding' the eventual refined and honed model into the business's enterprise software, making sure that the process that has been designed is the process that the enterprise will in fact follow. "It automatically configures the software to reflect the chosen process model: how it behaves, the workflows, security protocols, access controls and end-user navigation," says Lewis. "It's a tool for saying: 'Here's a way of working, hard-coded into your software'." Thirdly, and most recently, Infor's much-praised business process-centric ION platform contains a specific toolset – ION Workflow & Events – that not only helps manufacturers to design, streamline and optimise their business processes, but also to do so within a cross-application context. And to do so, what's more, whether those applications are from Infor or another vendor. Or, for that matter, on-premise, in the cloud, or mobile. "With a single tool, manufacturers can model, execute, monitor and fine-tune their business processes – right across the enterprise, and irrespective of platform or application source," sums up Lewis. "Continuous improvement, and the achievement of operational excellence, has never been more achievable."