case study: business is like a printed circuit board, but with information not electrons

Our client, a major electronic equipment manufacturer, needed help with the selection and implementation of a new Enterprise Resource Planning (ERP) system.  But in embarking on this project, they felt that to get the maximum benefit from any new system that they would need to review their core business processes. So they asked us to get involved because of our ability to support them through the entire project including strategy, process design, system selection, contract negotiation and implementation.

The best approach when reviewing the processes at the heart of any business is to take each process completely apart and see how best it might be redesigned. Our strategy to achieve this in this instance was to set up a series of intense workshops, lasting 3–4 days each. For each workshop we first agreed a clear scope, agenda and precise timings; in our experience it is vital to drive these workshops against clear deadlines, otherwise there is the danger that they become talking shops with little or nothing concrete achieved. We then agreed with senior management who the participants should be to get the best result, and this often included senior Board members. This ensured senior management commitment both to the project and the redesigned processes.

Once the workshops started, our role was to facilitate them, making sure that timescales were strictly adhered to, that the work was done thoroughly and, where necessary, challenging the team members to ensure that we got radical and practical solutions. The normal pattern to these workshops was as follows:

1. Confirm that all participants completely understood the objectives and agenda:
   It was vital that everyone understood what they were trying to achieve, such as reduced lead times, reduced costs, improved customer service etc. Any misunderstanding at this stage could have completely undermined the success of the workshop.
   
2. Map the old process:
   This needed to be done in detail, including the core process and any significant variants and error loops. What was very important was to map the actual process used, not what people thought was used or what was in the procedure manual. We normally use simple tools like brown paper rolls and post-it notes to capture the process, which can be electronically documented later.
   
3. Analyse the process:
   In this stage we measured the performance, including elapsed time at each step, costs (usually manpower), error rates at each step and issues or problems with the process that the team members were aware of. This gave the team a good idea of where to focus attention for improvement.
4. Brainstorm new ideas for the new process:
   This was a free-wheeling discussion. By this time the team had a very clear picture of how the old process worked (or not) and where the problems lay. This included re-organisation of the process, better controls, new technology, and in many cases the complete removal of process steps or stages where they did not add value. No idea was dismissed.
5. Draw up a new process incorporating the new design ideas:
   This is where the practicality test was then applied to ensure that the new process could work in the real world. The new process was documented and where necessary, other people from around the business were brought in to check that the process would work and deliver the benefits anticipated.
6. The final stage was to draw up an implementation plan:
   Along the way the team identified a number of ‘quick-wins’ that could be implemented immediately with little or no cost. These were assigned to team members to be introduced straight away. The implementation of the remainder of the new process was also planned. While some elements could be implemented over a matter of days or weeks, others would take longer, particularly if they relied on new equipment or computer systems.

Once all of this had been documented, the task was not over. A key element to our approach was the stabilisation of the process whereby the team reviewed the implementation and operation of the new process over the next few months to ensure that the objectives were being achieved and further improvements applied. In our view this is one of the key ‘secrets’ to success in process design work.

The result of all of this was that the re-designed processes delivered substantial benefits in terms of reduced cost, elapsed time and inproved customer service. They also laid the foundations for ERP system specification and selection which we subsequently helped our client through.

Process design does not always deliver its promises. The key factors in ensuring that it does include:

• strongly facilitated and intensive workshops that deliver results quickly
• a focus on rapid results (quick-wins)
• strong follow-up actions that stabilise the process and drive the benefits out

This client is just one of many companies where we have applied our tried-and-tested approach to process design. Every business is different, but the need to have a clear grasp of what is happening ‘under the bonnet’ is a constant, since the alternative (‘muddling through’) is a recipe for inefficiency, wasted resources and, ultimately, reduced profitability. A well-defined set of business processes can save your enterprise much needed resources: manpower, time and/or cost — often all three.

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