Global Logistics and Supply Chain Strategies - September 2008 - (Page 44)

Scheer. “Our core products help companies design, architect and publish business processes and continuously monitor the performance of the processes.” The Supply Chain Council has adopted the ARIS platform for the Supply Chain Operations Reference Model (SCOR) and associated reference models. Supply Chain Council members are able to access and use predefined supply chain processes, industry best practices and performance metrics in combination with the ARIS BPM tool. “We have been working with the Supply Chain Council for 10 years now,” says Johnson. “We think the SCOR model itself provides an excellent tool to help companies design their supply chain from the top down. It provides that independent notation that really helps companies during early design sessions when it is important to understand how the supply chain is configured and who all of the internal and external players are. They can start at a high level and drill down to whatever level of detail is necessary.” Process frameworks like SCOR can be useful as a starting point, “but then processes need to be tailored more specifically to an individual company’s operations,” says Iyer. “Dell and Hewlett-Packard, for example, are both computer companies, but for a long time they had very different business models. Processes around procurement, manufacturing, forecasting, and so on would have had to be structured completely differently.” i2 has a descriptive framework as part of its SCM 2.0 approach, he says. “We use this to see which of these many genetic strains a company belongs to, from the standpoint of process and organizational makeup. Then we bring in an analytics framework where we use the company’s own data and conversations with its own workers to make the model more company-specific. No two companies are alike and we find that a company may match up to its genetic strain in several respects but not all, which is as it should be.” APQC offers its Process Classification Framework to help companies get started. “Processes around the supply chain have been mapped to the SCOR model, so it is compatible with that,” says Varney. He notes that using the SCOR model helps from a benchmarking standpoint because it gives companies a common vernacular. “Even if they have customized the framework to suit their organization and are using different terms, they can still talk about what part of the framework a process maps to, which makes it easier to look across industries or even across business units within the same company,” he says. The important thing for a company to keep in mind when it approaches BPM is that “you don’t start with the tool,” says Varney. “You start by understanding your existing processes and how you function as a business. You need to get out there and talk to the people who are performing these tasks and find out if everyone does it the same way or if there are five different ways. Until you understand your processes and where you need to standardize and where variability is appropriate, trying to implement a tool is an exercise in futility, and a costly one at that.” Crow agrees. “The first things you have to look at are whether you have a clearly defined process and whether the requirements for that process are clearly articulated,” he says. “Without that, all the technology in the world will be of no help.” Forte, a supply chain consulting and integration firm based in Mason, Ohio, has done a lot of work helping companies optimize processes in warehouses, says Ian Hobkirk, director of supply chain consulting. “Warehousing is very process-centric and no two warehouses are the same,” he says. “They all have the same basic processes like receiving, putaway, picking and shipping, but there are little nuances to everybody’s business that makes each warehouse almost like a fingerprint.” As a result, companies often struggle with implementations of off-the-shelf warehouse management software, he says. “What we have done very successfully at Forte is to help companies re-engineer their processes prior to a software implementation or, in some cases, after an implementation as a way to help companies understand how to use the software more effectively.” Typically, in an engagement to optimize business processes, Forte observes and documents the processes that are used 90 percent of the time, Hobkirk says. “But more importantly, we spend a lot of time documenting all the exceptions,” he says. “That’s where a lot of companies fall down — they don’t document what happens the 5 percent to 10 percent of the time when a customer needs special handling or a shipment can’t be packed in the usual way or when anything falls outside usual parameters. It is critical to document all these exceptions as part of defining the current state.” Only when that is done, he says, can you begin to map processes for the future state that you want to achieve. Value Proposition When done well, BPM makes an organization more agile and responsive to change, says Iyer. “A lot of work gets done out of habit,” he says. “The business environment changes, but companies oftentimes are slow to adapt. If you have a process management discipline and a process measurement discipline, you can often detect those market shifts and start preparing for them well before you are in the middle of a crisis situation. It is all about being adaptable and able to change.” By enabling processes that span different departments or even different enterprises, BPM enables an end-to-end approach to management and helps break down the silos that often serve as barriers to agility, Varney says. “If I were to define BPM in terms of its most significant impact on business, I would say it is in removing the barriers to interactions between people and systems. If you don’t break down those silos, you are not doing BPM. Rather, you end up trying to fix little pieces of the business without seeing the impact of those changes somewhere else, so you are in danger of optimizing one element and suboptimizing something else.” Iyer agrees that using BPM helps companies look at the big picture. “I’m reminded of the story about the stone masons who were each asked by the archbishop to describe their jobs,” he says. “One said that he was removing a defect from a stone block and the other replied that he was building a cathedral.” To access this article online, visit The Digital Edition at www.SupplyChainBrain.com. Resource Links Aberdeen Group, www.aberdeen.com IDS Scheer, www.ids-scheer.com i2 Technologies, www.i2.com Metastorm, www.metastorm.com Intalio, www.intalio.com Software AG, www.softwareag.com APQC, www.apqc.org Blue Rhino, www.bluerhino.com Ahold, www.ahold.com Forte, www.forte.com 44 SEPTEMBER 2008 www.SupplyChainBrain.com http://www.SupplyChainBrain.com http://www.aberdeen.com http://www.ids-scheer.com http://www.i2.com http://www.metastorm.com http://www.intalio.com http://www.softwareag.com http://www.apqc.org http://www.bluerhino.com http://www.ahold.com http://www.forte.com http://www.SupplyChainBrain.com

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Global Logistics and Supply Chain Strategies - August 2008 Contents Editorial GL&SCS Exclusive Fast Forward Up Front Cover Story: Free The Enterprise: Busting Silos in the Supply Chain Business Process Management Merits New Look fromCorporate Strategists Ships and Ports Explore Many Ways to Go Green The Right Information Should Help Avoid Any Kind of Risk Industry Voices

Global Logistics and Supply Chain Strategies - September 2008

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