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Anne Stuart’s BPM in Action

Dennis Byron

If Only Henry Ford Had BPM

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There's a story that one way Henry Ford held down costs was by specifying that all part suppliers to one of his Detroit factories ship their goods in boxes of a certain size with screw holes in specified locations. This was what it took to get business from Ford, no matter what the size of the parts the suppliers were making for Ford, so these small companies scratched their heads and shipped to spec. According to the story, at the plant workers put the received parts in inventory and immediately dismantled the boxes the parts came in and attached them to the doors of the original "woody" station wagons.

I have no idea if that is just an urban legend but it is why I tend to concentrate on how business process management (BPM) can enable supply chain management (SCM). Everyone seems to know intuitively how BPM works with CRM to help a business. (For example, over at IT Business Edge, Ann All wrote on July 22 Process Improvement Can Mend the Supply Chain.) The same is true for SCM even if SCM is more about esoteric things like transport and warehouse management, work distribution on the factory floor, just in time inventories (which Ford invented if the story is true), process-goods formularies, and how to schedule offshored manufacturing.

From an IT point of view that means export documentation, pick/pack lists, "timecards," material requirements plans (MRPs), etc. In the integrated company envisioned by Henry Ford at the beginning of the last century, one homogeneous system could automate those tasks and processes. ERP systems only date back half that far but they are still remnants of that earlier thinking. In today's manufacturing world where worldwide transport is managed by Fedex's IT, warehousing by another third party business process outsourcer, work distribution automated by one in-house packaged application and MRP by another, and inventory managed by a supplier application delivered software as a service (SaaS), ERP breaks down. BPM is a means of overcoming that breakdown and delivering on the promise of SCM from the late 1990s.

Beth Stackpole, at SearchManufacturingERP.com, explains the concept using examples from GE Fanuc and Apriso. Those are not two names that come immediately to mind when discussing BPM but she is right on in explaining how BPM can make a difference in manufacturing.

Ford's view of manufacturing lasted almost the entire 20th century so in building your information technology superstructure, use BPM as if the manufacturing-automation system you are building might last the entire 21st century.

-- Dennis Byron

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Dennis -

I agree- BPM is a good fit for supply chain processes. For example, there have been some very successful deployments around bid / RFP management with vendors, "reverse" logistics (returns/warranty claims), fulfillment... often augmenting systems that are harder to change (ahem, ERP), at a fraction of the cost. We've worked on a few of these projects and they tend to have a very good ROI ratio... but often have more internal resistance:
"Shouldn't we just change our ERP system?" says internal-objector1.
"Sure, how long will that take?" says Process-Improvement-Advocate1.
"We can put it on our next roadmap release."
"when is that?"
"Fall of 2011"...
*head scratching ensues*...
"well, we could deploy in 100 days on this BPM Suite..."
*head scratching ensues*

Scott

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Business process management and optimization -- philosophies, policies, practices, and punditry.

Anne Stuart

I am the editor of ebizQ.

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