Professional Documents
Culture Documents
Management
Best Practices in Optimizing
Cross-Functional Business
Processes
Networks
Process Improvement
Process
Owner
Process Metrics
Functional Silos
Best Practice
Cost Reduction
Common vs. Unique Processes
by Robert M. Curtice
February 2001
Fundamentals of Process
Management
Best Practices in Optimizing
Cross-Functional Business Processes
By Robert M. Curtice
Vice President, Arthur D. Little, Inc.
Customer
Inquiry
Prepare
Quote
Receive
Order
Check
Credit
Allocate
Inventory
Ship
Goods
Issue
Invoice
Collect
Receivable
Customer
Inquiry
Prepare Receive
Quote Order
Check Allocate
Credit Inventory
Ship Issue
Goods Invoice
Collect
Receivable
Materials
Sales Order Entry Management Accounting
Over the last decade, reengineering efforts have enabled many or-
ganizations to eliminate non-value-added work, to speed up proc-
esses, and to reduce the labor content needed to carry out
processes. The results are reflected in unprecedented productivity
gains for the economy as a whole.
Effort,
Management
Attention Process Improvement Project
Implementation
phase is too short
Time
No one is thinking about
the process during these
periods of time
1
See monograph, "Institutionalizing Process Improvement: The Role of the Process Owner,"
by Robert M. Curtice, Arthur D. Little .
Process Owners
Network
CUSTOMERS
SUPPLIERS
Develop
Products Sell & Provide
Market Procure Produce
& Deliver Technical
Products Materials Product
Processes Products Service
Manage Finances
Develop
Products Market Sell and Procure Produce Provide
PROCESSES and Products Deliver Materials Product Technica
Products l Service
Processes
Benchmark Position – + = – = +
Reduce Costs
Corporate
Improve Brand
Image
Capitalize on
Intellectual Property
STRATEGIC OBJECTIVES
Expand Markets
BU #1
Improve Quality
Cross-License
Products
Improve Customer
BU #2
Service
Reduce Costs of
Warranty
Major Moderate
Impact Impact
There are many benefits that stem from common processes, i.e., pro-
cesses that are carried out in a standardized manner wherever in the
enterprise they occur. Some of these benefits are captured in Figure
9.
Common Processes
This basic framework can be used for many types of analysis. In the
Process Commonality Map, each activity is color coded to signify the
level of commonality. In Figure 10 we show three levels:
• Locally unique—activity is carried out at a local
(business unit or geographic) level in a unique fashion
• Locally or regionally common—activity is carried out
locally or at a regional level, but according to a common
process
• Global—activity is carried out one place for the entire
enterprise
14
Define Offer & Service Level Develop Contract Guidelines
S & Policies
Strategic Determine Mkt/ Customer
Develop Contract Strategy
Segments & Strategies
Determine Advertising/
Promotion Strategy
Forecast Demand Conduct Market Research Establish Sales Territories, Contract Carriers & Negotiate
Assignments Rates
Optimize Short-Term Product Plan Marketing & Budgets Develop Sales Plan, Budget
P Mix Offered and Account Plan
Planning & Analyze Markets &
Analysis Manage Demand Competitors Forecast Sales
Figure 10: Process Commonality Map
Segment Customers
Monitor Forecast v. Report Product/ Report Contract Monitor Order Processing Track Shipment Monitor Account Status
Actual Demand Market Profitability Effectiveness Performance
Report Product Profitability Report Customer Profitability Report Sales Monitor Customer Service Monitor Carrier Performance Age Receivables
C
Controlling Monitor Advert/ Promo Report Sales Efficiency &
& Monitoring Effectiveness Effectiveness
Report Segmentation
Report Channel Effectiveness
Effectiveness
Develop & Maintain MSDS Create Marketing Maintain Customer Data Process Inquiries and Quotes Select Carrier & Build Prepare and Present Invoices
Communications Shipments
Distribute MSDS Maintain Market Information Manage Customer Capture Order Create Ship Documents Obtain Payment, Apply Cash
Relationship (CRM)
Control Products Manage Distribution Channels Prospecting Check Credit Process Freight Payments Process Collections
Provide Product Assistance Set Individual Product Prices Establish Customer Contracts Price Order Load, Pack, Fill Order
Maintain Product
O Management Data Send Samples & Literature Process Returns Consolidate Orders
Operational
Manage Price Exceptions Compute Tax Ship Product
Once the “to-be” map is created, it can be used along with the “as-is”
map to indicate how much change is required and where the most
change is needed. Evolving to the “to-be” vision may well take sev-
eral years and require considerable investment in common systems,
training, and change management.
1
From Process Improvement to Process Management—Shared Learnings
From Industry Leaders, Arthur D. Little, Inc.
2
Cross-Organizational Networks—Making Them Work, Arthur D. Little, Inc.,
1998.
3
Stanton, Steven, “How Process Enterprises Really Work,” Harvard Business
Review, November/December 1999.