BPM Base

Chapter 1: Introduction to Process Management
Process Management: Creating Value Along the Supply Chain (1st edition) Wisner and Stanley
COPYRIGHT 2008 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Chapter Outline
Introduction
Processes and Process Management
Defined Process Management and Supply Chain Management The Eight Supply Chain Processes Inventory and Process Management Lean Thinking and Process Management Summary
2
Chapter Outline (cont.)

Quality and Process Management
Business Process Management
Formalizing Process Improvement Measuring Process Performance Trends in Process Management Summary
Learning Objectives
After completing this chapter, you should be able to: Define and discuss process management, using examples. Understand the business value of process management. Describe the eight processes linking organizations along the supply chain. Discuss the importance of process management in services.
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Learning Objectives (cont.)

After completing this chapter, you should be able to: Describe why quality management and JIT are important process management activities. Describe how processes are modeled and improved, and how firms measure process performance. Discuss the use of information technologies to integrate supply chain processes, and discuss other trends in process management.
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Introduction
Processes
What is a process? Can you provide examples?
Process management
Importance of process management, for both manufacturing and services Impact of effective process management on costs, profits and productivity How world-class businesses are managing their processes
Processes and Process Management Defined

Process improvement
Business value of process management / improvement Importance of process improvement: continuous process evaluation.
Business process management (BPM):
design, analysis, and improvement of business processes.

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Generic Process Elements
Internal & external suppliers
Inputs - labor - materials - training - equipment - time - capital - facilities - information
Transformation Sequenced steps of: - machine operations - physical/mental activities
Outputs Internal/External: - physical goods - services - decisions and information
Internal & external customers
Process Management Figure 1.1

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Process Management and Supply Chain Management

Shift in focus: internal silos external sharing and
coordination of key processes Traditional organization structures drive functional thinking-managers begin to see the world from a narrow, functional perspective. Process thinking aligning decisions with corporate strategy and coordinating activities across functions. Business process integration Vertical integration outsourcing Business process re-engineering (BPR) Supply chain management Collaborative process management
Eight Key Supply Chain Processes

Identified by the Global Supply Chain
Forum These processes link organizations across the supply chain Each process includes a set of functional activities, which should be integrated with other applicable functions Each process should be integrated with other applicable processes
10 COPYRIGHT 2008 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Eight Key Supply Chain Processes (cont.)

Customer Relationship Management: creating and
maintaining successful relationships with customers. Customer Service Management: designing, implementing and improving customer service activities. A perfect order Seven Rs rule: having the right product, in the right quantity, in the right condition, at the right place, at the right time, for the right customer, at the right cost. Demand Management: balancing customer demand with the firms capacity. Collaborative planning, forecasting, and replenishment (CPFR): a tool for reducing forecast error.

Order Fulfillment: delivery of products and services to
customers. Third-party transportation services Flow Management: making the product or service and managing inventories, customers, and information.

Supplier Relationship Management: selecting the
right supply partners and managing relationships. Product Development and Commercialization: designing and producing new products that customers want Concurrent engineering Returns Management: managing product returns effectively. Reverse supply chains A source for customer satisfaction and product improvement ideas
Inventory and Process Management

Inventory management : critical activity of
supply chain.
Having too much vs. too little inventory Bullwhip effect Independent demand
Dependent demand
Lean Thinking and Process Management

Just-In-Time (JIT)
Pull
system An important process management activity
Quality and Process Management

Total Quality Management (TQM)
TQM
processes An important process management activity
Business Process Management Formalizing Process Improvement

Structured approach to process assessment and organizational improvement. BPM tools: benchmarking, reengineering, six sigma Business process re-engineering (BPR) Difference between BPM and BPR
Measuring Business Performance

Continuously monitoring process performance is

important. Important points to consider when designing performance measurements: Link measures to the firms vision and goals Measure what customer care about Should monitor the quality, cost and timing of outputs along with the volume Effectiveness trumps efficiency More measurements are better

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Chapter 1: Introduction to Process Management

Processes and Process Management

Chapter Outline (cont.)

Business Process Management

Learning Objectives (cont.)

What is a process? Can you provide examples?

Processes and Process Management Defined

Business process management (BPM):

design, analysis, and improvement of business processes.

Generic Process Elements

Internal & external suppliers

Inputs - labor - materials - training - equipment - time - capital - facilities - information

Transformation Sequenced steps of: - machine operations - physical/mental activities

Outputs Internal/External: - physical goods - services - decisions and information

Internal & external customers

Process Management Figure 1.1

Process Management and Supply Chain Management

Eight Key Supply Chain Processes

Eight Key Supply Chain Processes (cont.)

Eight Key Supply Chain Processes (cont.)

Eight Key Supply Chain Processes (cont.)

Inventory and Process Management

Lean Thinking and Process Management

system An important process management activity

Quality and Process Management

processes An important process management activity

Business Process Management Formalizing Process Improvement

Measuring Business Performance

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