To consistently achieve revenue and profit growth in the competitive manufacturing environment of today, it takes more than incremental improvements and cost savings. Business process management (BPM) is being used by forward-thinking businesses to increase operational effectiveness in both core and support processes.
What adjustments have been made to enhance the performance of manufacturing firms?
Manufacturing firms have historically led the way in enhancing operational effectiveness using incremental improvement strategies like total quality management (TQM), Six Sigma, and Lean. The use of information systems, such as material requirements planning (MRP) and enterprise resource planning (ERP) systems, is widespread among manufacturing companies. However, to consistently meet revenue and profit targets in the competitive manufacturing environment of today, more than incremental improvements are required. Business process management (BPM) provides manufacturing participants with the means to optimize performance in supporting processes like hiring, preparing financial statements, and environment, health, and safety in addition to operational processes like production and supply chain.
Organizations in the industrial sector continue to face significant challenges with regard to supply chain management. While many businesses have attempted to boost supply chain effectiveness, this has occasionally led to higher levels of complexity. It was time for businesses in the manufacturing industry to reevaluate whether the savings in materials and labor outweighed the costs of coordination and supervision associated with supply chain management techniques. Many manufacturing firms thought that computer systems could offer solutions to issues with growth and profitability.
Business process management (BPM) is now being taken into account by forward-thinking businesses as a means of improving operational effectiveness.
Adding value through BPM
Lean and Six Sigma have historically been used most frequently by manufacturing companies to increase operational effectiveness. In fact, the manufacturing industry was the first to implement a Lean and Six Sigma combination to increase productivity. The issue is that information systems like ERP and MRP have frequently been overlooked when implementing this.
Manufacturing businesses must use "smart manufacturing" to keep their competitive edge. This requires CEOs and IT executives to acquire new skills. One of the core strengths of BPM, knowing how to gather the right information and use it to drive the business, is essential for success in manufacturing. BPM can help not only automate business processes, but also better manage documents and better measure performance.
How does BPM improve operational efficiency in manufacturing companies?
For businesses looking to make the switch to a process-based perspective, the American Productivity and Quality Council's framework for classifying processes can be a good place to start. A few instances of how BPM can be used as a tool to increase operational effectiveness include:
◆ Using document management to cut costs and boost teamwork.
◆ Making the warranty management process less complex.
◆ Enhanced regulatory compliance through automated processes.
◆ Automate crucial sales process transactions to improve visibility and control.
◆ Simplify the order to receipt process by automating paper-based transactions.
◆ Recruitment: from onboarding to demand.
◆ Financial statement preparation: from record to report.
◆ Financial management starts with risk and moves to risk reduction.
Do you work in the manufacturing or construction industry? Find out what you can gain by digitizing your company's processes. Make an appointment for a free, no-obligation consultation.