Process management is a proven tool in modern business management, allowing better results in less time and therefore achieving competitiveness and excellence in the performance of organizations, being in fact the basis of ISO 9001: 2000 standards as well as well as the EFQM model of excellence. Following this line, this work aims to make an analysis and propose improvements in the key processes involved in the preparation of the Tender Document for the Exporting Import Company of the Ministry of the Food Industry, ALIMPEX, focusing on its key processes.
To fulfill this objective, the thesis was structured in an introduction, three chapters, conclusions, recommendations, bibliography and annexes. In the first chapter the main theoretical foundations of process management are exposed. In the second chapter, a general characterization of the ALIMPEX company is made, with emphasis on the Foreign Trade Division, its management and results. Likewise, the processes involved in each area were identified, going from the company to the area under study. Finally, in the third chapter, the process maps for each one, the process diagrams were made and the methodology was applied to develop the analysis and improvement of the key processes. To carry out this work, primary and secondary sources of information were used,consultations and exchanges with workers and managers of the organization and consultation of texts. The OTIDA technique and the VISSUAL PARADIGM software have been used.
The exporting import company of MINAL, ALIMPEX
Organization chart of the Alimpex company Source: Own elaboration.
This structure was created in order to support the import activity of the company, although the company is still in the process of reorganization with a view to achieving the maturity and experience necessary to ensure that the purchasing activity is duly supported by the other areas.
The business intelligence directorate, for example, was created to function as one of the pillars of the buyer. Its importance goes beyond being its rearguard in terms of information, references and databases, but rather constitutes its counterpart, something fundamental in this type of activity.
Likewise, the Logistics Division is essential as far as it is in charge of customs formalities, customer billing, processing the unloading of merchandise at the border, both air and naval.
The Foreign Trade Division.
The organizational chart of the ALIMPEX Foreign Trade Division is shown below. As can be seen in the following organization chart, this division is made up of 3 large purchasing groups, divided by types of products with very different characteristics, but intertwined with each other:
Organization chart of the COMEX Division in ALIMPEX. Source: self made.
Main sources of income in Alimpex.
Like any importer belonging to an OACE, the profit margins in the operations of its clients are minimal, in the case of ALIMPEX of just 2.5% for the freely convertible currency and 0.8% for the national currency.
As this company is very recently created, there is no statistical database that allows the results of its management to be graphed.
Main destinations in Alimpex.
ALIMPEX destinations are limited only to the payment of wages and expenses. In the case of investments, these are financed by the GEIA to which the importer is attached.
The process approach in ALIMPEX. Identification of the processes that comprise it.
Process management is a key factor for the optimal functioning of import management as it contributes to its improvement, since it constitutes the necessary basis for implementing management by competencies and conducting business diagnoses.
To undertake this activity, it is necessary to carry out a series of logical and coherent steps that allow establishing a diagnosis of the real situation in the area. To this end, the existing bibliography was consulted and the methodology "Analysis and improvement of the internal processes of the organization" was selected, which has been put into practice and verified in various Cuban entities.
This methodology will be taken as a reference, following the following steps:
- Identification of the key processes of the COMEX Division. Preparation of the process map of the COMEX Division. Preparation of the process flow diagrams. Analysis of the processes. Proposals for improvement. Proposal of indicators to measure the performance of the process improved.Confection tab
A plication of process management.
Once the processes involved in ALIMPEX, the import management and the preparation of the tender specifications have been identified, the process maps are drawn up.
Preparation of process maps.
The process map constitutes the most representative way of showing the identified processes and their interrelationships with each other and constitutes a graphic representation of all the processes that make up the organization. The process map must conform to the graphic representation of how the company or entity hopes to achieve the planned results. For its elaboration and to facilitate a better interpretation, it is necessary to previously think about the groups in which the identified processes can fit. The grouping of the processes within the map allows establishing analogies between processes while facilitating the interrelation and interpretation of the map as a whole.
The type of grouping can and should be established by the organization itself, although there is no specific rule.
The three process maps corresponding to the ALIMPEX Company, the import management and, lastly, the process of "drawing up the tender specifications" are represented below, as a process that is the object of analysis of this work.
To achieve a better understanding of the process maps presented below, different colors were used in the key processes under analysis, taking as a starting point the "Import Management" (blue color) within the key processes of the Exporting import company of MINAL, ALIMPEX; then, within the Import Management, the process “Preparation of the tender specifications” (red color) was pointed out, from which its process map was opened to make it more accurate in the analysis.
ALIMPEX process map. Source: self made.
Once the ALIMPEX process map has been drawn up, the import management process map is presented below, where the main processes that comprise it are indicated and the key process object of this study is highlighted in red: tender specifications:
Process map of the "Import Management" process. Source: self made.
Finally, the most significant process map of this work is prepared and the one that will give rise to the subsequent analysis: The process map of the Preparation of the tender document. They are indicated as key processes "competition analysis" and "price analysis", both identified as the two most important processes within it.
Process map of the process "Preparation of the Tender Document". Source: self made.
Analysis and improvement of the two key processes involved in the preparation of the tender specifications.
To carry out the analysis, the first thing that was done was the preparation of the process diagrams, diagrams that help to represent all the interrelated activities more organized, in addition to facilitating the interpretation of the activities as a whole, including the entries and necessary outputs for the process.
After having drawn up the corresponding diagrams of the key processes of the Tender Document, the analysis was performed to detect errors that may affect the proper functioning of the two key processes under analysis.
In order to carry out this analysis and in order to identify continuous improvements in the area, a series of questions were taken into account, which were answered for each of the different sub-processes:
- Are all steps in the process organized in a logical sequence? Do all steps add value? Can some steps be removed in order to achieve quality? Should some steps be added in order to improve quality? Should some steps be ordered? Is there proportionality between each of the steps that make up the process? What skills, equipment and tools are required in each of the process steps? Should any of the processes be mechanized or automated? At what point should they be measured or controlled? quality? At what point in the process can the most frequent errors occur?
The exposed questions are part of the methodology elaborated by the author, who in his application obtained effective results that led to important improvements in the applied entities.
The process tabs.
Last and not least, the Process Cards were made , with the aim of simulating the sequence of their process steps and providing their basic information. It is the basic document of each process and its basic function is to collect in an organized way the fundamental elements that describe and identify the process for its analysis, redesign and continuous improvement. The process file gives a general description of the activities included in it and comprises three basic elements:
- The characteristics of the process (its title, its limits, its actors, its resources, its relationships with other processes, etc.). The dynamics of the process (related to its objectives and indicators). The representation of the process (its flow diagram).
Analysis and improvement of the key process "Analysis of concurrency"
The key process "concurrency analysis" is one of the most complicated processes within the tender specifications, since it encompasses a series of data to be taken into account where the support of the direction of commercial intelligence plays a very important role.
This process itself has many tasks that would be impossible to incorporate into the business process diagram below. In this sense, the diagram collects those tasks selected as the most significant within this process, with which it is intended to give a global idea of the current situation of this process.
Diagram of the key process "Analysis of concurrency". Source: self made.
Application of the methodology to the key process "Concurrency Analysis"
| METHODOLOGY QUESTIONS | ANSWERS |
| 1. Are all processes organized in a logical sequence? | YES |
| 2. Do all the steps add value? | NO |
| 3. Can some steps be removed in order to achieve quality? | YES |
| 4. Should some steps be added in order to improve quality? | NO |
| 5. Should some steps be reordered? | NO |
| 6. Is there proportionality between each of the steps that make up the process? | YES |
| 7. What skills, equipment, and tools are required in each of the process steps? | Acquaintances |
| 8. Should any of the processes be mechanized or automated? | YES |
| 9. At what point should quality be measured or controlled? | Bid analysis |
| 10. At what point in the process can the most frequent errors occur? | Selection of providers |
Proposals for improvements to the key process "Concurrency Analysis".
The methodology leads to important changes and improvements in the concurrency analysis process.
It was decided to eliminate searches for market references, behavior of stock products, references of previous purchases and other information that it is proposed that these data be provided by the Directorate of Commercial Intelligence from the preparation of the tender specifications. Likewise, it is proposed to eliminate the request for technical approval in those cases where it is not essential, for example when it comes to those products that have already been previously tested by the client and / or are the same from previous purchases. This, more than a suggestion, is included in article 24 of Resolution 190 of the MINCEX (See Annex No. 2). This is in contrast to the ALIMPEX PGI, which requires requesting technical approval in all cases, something that generates unnecessary waste of time in the buyer's management.
With the elimination of these activities, the buyer would have more time to delve into the analysis of the competition and the analysis of the specification in general. Likewise, commercial intelligence would become the buyer's counterpart in terms of prices, supplier selection, world market references, references of previous purchases, among others; at the same time that it would generate added value to purchasing management and, therefore, would contribute to the quality of imports.
To make the analysis clearer, different colors were used in the graphs to differentiate the current state of the concurrency analysis from that proposed.
In the figure that follows, the proposed improvement is represented by graph:
Diagram of the improved process "Analysis of concurrency". Source: self made.
Once the improvement proposal has been made, the key process “Analysis of concurrency” process is carried out:
| Process: Concurrency Analysis | Owner: Buyer | |||
| Mission: To ensure the measurement and evaluation of efficiency in commercial management. | Documentation: | |||
| Scope | Start: Receiving offers from suppliers
Includes: Business Intelligence information, technical approvals, exchange rates, price analysis, among others End: Result of the ALIMPEX hiring committee. |
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| Tickets: Offers received.
Suppliers: national or foreign suppliers |
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| Outputs: Reports, commercial invoices to the client
Clients: Entities attached to MINAL and third parties duly approved by MINCEX. |
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| Inspections: Review of records and status of purchases. | Records: Business records | |||
| Control variables:
Selection of providers Validation of offers |
Indicators: Those indicated above. | |||
Analysis and improvement of the key process "Price analysis"
To carry out this analysis, the first thing that was done was to make the diagram of this process and then carry out its analysis and then make the improvement proposals, representing them in a new business process diagram, with a view to making understanding easier..
It is important to note that only the most significant tasks were taken into account in the diagrams, since price analysis is a complex process that involves countless tasks and data to take into account. The diagram of the current state of this process is represented below:
Original text
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where: r = growth rate decrease. n = number of years of the historical series. Pf = Price of the last year of the historical price series. Pn = Price of the first year of the historical price series.
Diagram of the key process "Price analysis". Source: self made. Application of the methodology to the key process "Price analysis":
Proposals for improvements to the key process "Price analysis" The methodology leads to important changes and improvements in the "Price Analysis" sub-process. It was decided to eliminate from the flow the activities all those related to the search for market information, stock prices, last purchase and references to national production… as all these data should be provided by the Directorate of Business Intelligence, who is responsible for carrying out Market and price studies, monitoring the behavior of stock products and keeping purchasing statistics at the importing company. With these changes, the buyer would have more time to carry out their price analysis and achieve better results in the preparation of the tender document. Likewise, and very importantly, Business Intelligence served as the buyer's counterpart, since at present the buyer manages prices and is a judge and party to the analysis as there is no counterpart. It is also proposed that the member of commercial intelligence who participates in the Contracting Committee, has an active role as a counterpart to the buyer in terms of prices, as well as being a source of information and enrichment regarding questions that arise about the suppliers. As a consequence of the foregoing, by having more fidelity in the analyzes, the results of the tender specifications will have much more quality and, therefore, will bring better results to the company and the end customer. Another piece of information that appears in the tender specifications is the tariff heading for each product. It is proposed that this data be fed by the Logistics Division, which has specialists in this area. You are at great risk by having this task at the buyer, who might have general knowledge about it, but is not a trained gauge in this field. One way to solve this deficiency could be the incorporation of this data in the ALIMPEX integrating system from the logistics department. This is not improper if it is taken into account that the buyer supplies each new purchase with the data of each product. It would only be access from logistics and assign the corresponding tariff heading. The improved “Price Analysis” process is graphically represented below to facilitate understanding:
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