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Business Process Management in a Manufacturing Environment – An Overview

Business Process Management (BPM) is a rapidly growing technology application idea with great potential for operational improvement and cost savings within manufacturing enterprises and their value chains. If you are like most companies the new Enterprise Resource Planning (ERP) system is firmly in place and the Customer Requirements Management (CRM), Product Lifecycle Management (PLM), and supply chain applications are on line. But, even with all the newest technology firmly in place, there are some operational capabilities missing.

  • 1.

    Major information system applications are still merely islands of information leaving obvious gaps that prevent full information exchange between participants.

  • 2.

    The promise of collaboration between entities (departments and/or companies) seems impossible due to wide systems disparity and the high cost of programming required to make the desired changes.

  • 3.

    Functional information interoperability as seen from the managerial perspective is still frustratingly lacking. Departments are still interacting by “throwing it over the wall”.

Solving these problems has long been the objective of many people but real help may be on the way if we start to look at operations in a somewhat different view and examine our processes.

What is a process? A process is a series of steps or tasks aimed at accomplishing a defined business objective. There are manufacturing processes, accounting processes, credit approval processes, material receiving processes, inspection processes, product design processes, and so on. A business can have hun- dreds of processes and most processes can be broken into smaller and lower-level processes and process components that include people and/or information system sources.

Ideally, processes within a company are related and all aimed, directly or indirectly, at serving customers most effectively. In many industries it is not the product that differentiates one company from another but the processes within the companies used to meet customer requirements. It is this process centric view that successful companies are using to meet modern competitive achievement objectives.

Revenue Manager

Controller

CFO

Internal Audit

Financial Rpt Mgr

Get Shipment Info

Audit Report

Rev Outstanding Tran

Get Contract

Post to Def Rev FL

Split

Get Credit Eval

Document and Verify

Exceptions

Review

Post to

Finalize

Rev GL

Audit Info

Notify Audit/ Disclosure Committee

End

Report One

Get VSOE

Validate

Report Two

Run Invoices

Processes have generally developed around commonly accepted business practices. In many companies these practices and consequent processes have never been questioned. Today, extensive operational improvements can be gained through simple observation of how existing processes work and seeking improvement alternatives. Examination of how work gets done has come about due to modern business systems such as ERP that are based on and require consistent business processes. Optimistically, what these systems have delivered are, in fact, best practices. Unfortunately, we all know even the best systems are silos of information with obvious voids that require people to do mundane tasks to make the business perform.

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