All people who work or have worked with the concepts of process improvement know the traditional techniques related to this area: reengineering, continuous improvement, quality tools, process management, etc.
However, in this context, new technologies provide a very important tool to be able to totally redefine business processes, giving a key twist to the concept of reengineering
The key to taking advantage of technology in process improvement is the treatment of information, since new technologies clearly help to redefine any process that is supported by information.
To make the concept clearer, let's work with an example. Take the case of the order management process at a wholesaler, which supplies itself from a manufacturer and in turn distributes to retailers.
In the typical process, the wholesaler is in charge of managing the orders from the retailers and asking the manufacturer when a certain condition occurs, usually the stock level, the order size or certain delivery times (or other parameters that vary in each particular case).
Thus, in the wholesaler's customer service department, orders are received - by phone or fax - from retailers. When, for example, the wholesaler's stock is less than a certain quantity, the wholesaler's purchasing department generates an order from the manufacturer.
After this order, the manufacturer introduces it into his planning, supplies himself, in turn placing orders with his suppliers and manufacturing it. When the product is manufactured, it is served to the wholesaler. When the wholesaler receives the order, they in turn distribute it to the retailers.
Obviously, this entire process is accompanied by their corresponding delivery notes, invoices, purchase orders, orders, etc. normally issued on paper and communicated by fax or telephone. It is also accompanied by costs inherent to communication between people.
This process has some very important inefficiencies:
1. Many simple "threads" are performed by people with corresponding costs, time, and inefficiencies. Elements such as the issuance of purchase orders, the receipt of an order, the introduction to planning, issuing and sending invoices and delivery notes, etc. they are not automated and therefore the cost is very high.
2. The wholesaler acts as an " information concealer " as the manufacturer and the retailer have biased and out of date information.
3. There is no real-time information on basic indicators about the process in a simple way.
4. Existence of errors in the process due to the large number of people who intervene in the management of the necessary information in it.
5. A very high process time due to the inefficiencies mentioned.
6. Incorrect stock management due to lack of information from all parties throughout the process.
The solution to this issue using New Technologies is the use of ERP information systems and tools for the management of the supply chain that help in the management of production, inventory management, supplier management, logistics, management of non-conformities., etc.
The "ideal" process would be for the manufacturer as well as the wholesaler and retailers to have ERPs and supply chain management tools that communicate with each other (presumably via the Internet) to automate all the "simple" tasks related to the process..
Thus, at the moment in which a retailer introduces a consumption by one of its customers, this information could automatically pass upstream to the entire chain (both to the wholesaler and to the manufacturer), the latter having more information for planning. This planning would be carried out by the manufacturer's ERP, communicating directly with the wholesale and retail systems to communicate delivery times and validating that they are within acceptable deadlines, thus having greater flexibility.
In addition, the management of a large amount of information is largely automated in the tasks inherent to the process (delivery notes, invoices, purchase orders, orders, etc.), greatly reducing both costs, time and errors.
Clearly this approach completely remodels all associated processes and threads, which provides great advantages:
1. Lower costs and process times (around 50% in administrative processes). In this way, the cost and time of the administrative processes is drastically reduced since it is largely automated avoiding a large part of the inefficiencies of the process. It clearly influences the processes of order management, production management,
2. Greater transparency and information on the process, which provides better planning and greater flexibility. This characteristic is essential in a changing environment such as the current one in which information is essential to adapt and respond quickly to demand.
Obviously, in this particular case, the impact of the internet on distribution should also be considered.
This example basically shows the opportunities of information management using ERPs and supply chain management solutions.
Similar benefits in other processes are found with customer relationship management tools, knowledge management, business intelligence, corporate portals, etc.
Obviously, and as mentioned at the beginning, a redefinition of processes as radical as the one mentioned cannot be achieved without technology, although it cannot be achieved without a clear vision of the processes and costs.
In conclusion, organizations that have a clear map of their processes should analyze the impact of New Technologies in each of them, and even more importantly among all of them, to improve their effectiveness and efficiency and, therefore, be closer to the Excellence in its operations.
