An As-l’s diagram is drawn to reflect the current processes. It then investigates and proposes solution by using a To-Be diagram which is streamlined and software-based. It also gives special considerations that need to be taken into account to deliver the solution successfully. Some of the limitations include the firm infrastructure may not support the implementation of the ERP systems financially, as well as the current higher computer literacy is required for uneducated staff.
The report also provides clear written advice and recommendations for an organizational change through the glasses of BPML, which include automate the process for order ligament to shorten lead time, transform the way ICC does business from paper-based to computer-based.
Table of Contents BPML and Strategy 3 Problem Analysis 4 Proposed Solution 7 Solution Considerations 9 Recommendations 10 BPML and Strategy According to the case study, the current business processes of Culled Creative Cooking Pity Ltd (ICC) is problematic as the business is experiencing declining sales and reducing profits.
This was partially due to an undeveloped solid marketing strategy.
But more importantly, the business owner Jack had not implemented any streamlined and computer based business processes yet till adhered to paper based manual methods. As a result, there is a rise in customer complaints about delays putting customer responsiveness in trouble. Therefore, Sac’s business processes should be redesigned and redressed to initiate an organizational change by enforcing a BPML approach.
Business Process Management (BPML) is a systematic process that enables an organization to achieve its strategic and specific goals by the improvement, management and control of key business processes (Stetson and Nails, 2008). It is also a management discipline focused on improving corporate performance that effects every aspect of a business (Harmon, 2005). By taking a BPML approach, it helps Jack’s business work more effectively and efficiently to realize its strategic goals and objectives, and increase chances for success in an ever-changing and competitive business environment (OK, 2009).
By optimizing Sac’s equipment and core operations, BPML also reduces human error and miscommunication while achieving three outcomes: clarify strategic direction, align resources and increases discipline in daily operations (Spiny, 2003). BPML and strategy can neither exist effectively without the other. It is argued that BPML facilitates treated execution, because it supports the chosen strategy and engage the whole organization in the execution of strategy (Spiny, 2005). On the other hand, it would be meaningless to initiate a BPML without the correct guidance of a strategy.
Therefore, BPML approach has to be linked to the overall strategy of the organization. The case study shows that Sac’s business strategy has focused on differentiating from potential competitors with an emphasis on quality and customer responsiveness. Its value propositions is product leadership focusing on innovative and breakthrough products because few products can match he Thermocouple’s looks and features (Treaty & Wireman, 1997). Therefore, a corresponding BPML should be initiated to align with these strategic goals.
Porter (1980) suggests that a value chain is a “comprehensive collection of all of the activities that are performed to design, produce, market, deliver and support a product line”. The activities are equivalent to business processes as a product moving along the value chain, value is added to it from process to process. Because many process problems occurred in the transition and communication from one department to the next, using BPML via value chain helps conceptualize ND manage process as a whole to overcome the interdepartmental problems (Rumble & Breach, 1990).
Moreover, it helps structure processes and activities to ensure each department functions effectively. For those processes not adding value or achieving strategic goals, they should be reconsidered or even eliminated. Problem Analysis The most urgent process problem or challenge lies in Jack’s question that “What happens when a customer places an order for a Thermopiles”. Because ICC”s business strategy focuses on innovation, product quality and customer responsiveness, losing customer responsiveness makes it harder to maintain its tragic stance and competitive advantage.
Hence, we think the most urgent problem ICC faces now is the waning customer responsiveness. It is primarily caused by a recent rise in customer complaints about delays in receiving orders. More specifically, the delay caused by long lead time is because a streamlined, automated and computer-based business process has not been developed. Even worse, ICC is still stuck at using a traditional paper-based manual methods to operate. As a consequence, customers are unhappy with a low customer- satisfaction rate, followed by dropped sales and reduced profits.
The situation ay be further deteriorated as sales of the Thermopiles replied upon word of-mouth due to a lack of solid marketing strategy. A problem is the difference between what exists now (As Is) and what we desire (To Be). Performance gap is the difference between measures of the As-l’s process and the To-Be process. At present, the customer responsiveness is declining, but ICC desires it to urgently rebound to the optimum level as before. Capabilities gap depicts the difference between how things are done now and how they could be done in the redesigned process.
In this case, sales order form can be computerized and stock heck can be automated. As a result, physical check is no longer needed so the lead time can be shorten substantially. The documentation and communication method is outdated. For example, sales form is still hand-written and stocktaking is conducted physically. Data redundancy is common as “post it” notes are commonly used to notate information. The production department sends out a duplicate copy while keeping a triplicate papers all over the place.
There are problems with logical completeness. For instance, logistics department receives sales order then forwards shipping note to accounting without knowing what it does. Exceptions and special cases are common as well that normally a photocopy of shipping note is kept in binder. But when photocopier is broken, “post it’ note is used on the order in the folder. In addition, output problem can be found that accounting department only looks at customer name to send an invoice to its address by choosing whichever address appear first on the order.
There is also a problem with timeliness of input. For example, if stock runs out, production organizes a purchase request and send to purchasing to get necessary materials which takes a few days to get the purchase request organized and sent. Worse still, the purchasing department uses surface mail which takes about six weeks before receiving dispatch confirmations and invoices from suppliers. Lastly, processes span several departments and there is blaming as shown by tension between production, purchasing and accounting.
Proposed Solution Business process architecture (BAA) is defined as the “body of knowledge” about how the various business processes work together to create value (Harmon, 2014). It is arranged as a hierarchical decomposition of the processes that constitute the value chain. Developing a BAA facilitates effective organizational alignment. BAA renders an accessible view of the ways in which processes can be aligned to achieve strategic goals. Conversely, it offers a clear view of the alignment of organizational resources and processes. Furthermore, BAA provides the means that Jack can use to establish a corporate software infrastructure.
Lastly, BAA provides a basis for proportioning process change initiatives. A streamlined, software-based To-Be diagram is the new process to improve the existing process. According to Harmon (2014), when software is introduced into business process, many specific activities that were formerly undertaken by individuals are now replaced on a continuous basis by the software system. For example, when there is an interaction between customer and the company now, the software application and information records the transactions directly into the customer database.
It also shows when information is input to the software process and when information is given to workers by the software application. Moreover, it focus on inputs and outputs to software processes and neglect the internal workings. A well-sorted ERP system boosts business performance by integrating internal and external resources together with a single comprehensive solution. A smart ERR system would help jack in planning business, inventory management, material purchasing, order processing, and human resources that almost every aspect of business.
In contrast with traditional point solution, ERP system offers a better control on information organization, by collecting and storing various data in one information system, makes it relatively easy to access. Overall, developing an ERP system provides an ultimate business solution to reduce the operational cost, increase business efficiency and eventually improve company’s profitability. Solution Considerations ICC undoubtedly would gain benefits from the BPML architecture and through the implementation of ERP.
Most issues as regards to the delay in processing, redundant data filing and storage, and ambiguity in roles and communications across departments can be greatly improved. That being said, there are still some issues related to the implementation of the ERR systems need to be considered. Firstly, the implementation of ERP helps manage the data and automates the functional processes. However, the infrastructure used in the ICC may cause problems in the process of implementation. For example, ICC owns only 15 computers with moderate configurations and minimal access to the Internet (e. G. Just 10 PC’s having access to the Internet). Thus, the lack of infrastructure would affect the effect of the implementation of ERP. Secondly, the major problem that ICC will confront is the computer literacy. Having a size of approximately 55 employees, only 8 people have sufficient computer literacy and can freely operate computers. Hence ICC would need to provide training courses for its employees to learn the basics of using computers and operating systems. Furthermore, it might experience a higher turnover of employees if the majority are not willing to jump out their comfort zone to learn new skills.
Thirdly, ICC will be in danger of facing financial difficulties if it has to spend too much for the investment on the PER systems. The implementation of the ERP project such as SAP for entire enterprise is very costly and so ICC has to maintain a budget on the implementation. The company may even face the problems from internal politics. Staff and perhaps unions as stakeholders of the company may not positively react to this drastic change in functional processes of the company. Finally, once the ERP system is implemented, it is not the final product that would operate optimally for ICC.
The system has to be maintained and constantly updated for an effective and efficient functionality. The company will require to recruit new staff and expand the IT department for maintenance and service of the ERP. Recommendations A succinct list of recommendations: Implement Automation: Transform from paper-based to computer-based. Sack redundant production team employees. Developing a set of new training programs for employees to gain adequate IT knowledge, learn new ERP system ND the basic knowledge of operating computer.
Establishing a customer- oriented business strategy to fulfill customers’ desired needs and wants, to better prepare for future business rivals. Improving product quality and monitoring potential defects, while measuring quality improvement against cost. Hosting regular company meetings for employees to increase motivations and incentives, exchange information, find out problems and provide solutions. Implement internal IT department for maintaining and looking over the implemented ERP. Change in HRS policies, which will keep the employees focused and productive at ark.
Having good co-ordination with in the employees will definitely result in improved productivity. Considering the above recommendations with the ERP implementation will definitely help ICC achieve their business goals. Seek advice from professional third-party business consultants in terms of a solid marketing strategy, or set up a new marketing departments from the present sales department, which will help achieve increased sales for the product with a department solely focusing on marketing.
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