The business world is always evolving. For instance, we can think about e-mails taking over the fax machine, or about online shopping (e-commerce) taking away sales from brick-and-mortar businesses. All these changes in the business environment affect companies in various ways. In this article, we will dive deeper into business processes. What exactly is it? Why is it important to understand them and review them from time to time?
A simple definition
In its 2015 update of the ISO 9000 norm, the international organization defines a process as a set of activities correlated, or interacting with each other, using inputs to produce a desire result. In other words, a business performs a set of activities, using various inputs (resources, data, etc.) to create an output. One can understand that for an activity to be considered efficient, said activity needs to be reaching the final desired output while requiring the least number of manual interactions to do so. Basically, do more with less. Otherwise, it is nothing less than a waste of resources, money and time.
“Basically, do more with less”
What brings companies to review their processes
There are several reasons why companies review their processes. The first type of reasons is from an internal perspective. On one hand, it can be due to the rapid growth of the company. Indeed, growing rapidly can force businesses to review their processes in order to standardize their working method, for numerous factors. For example, it is common for a company to face some challenges following a certain point in their growth. Due to his success, the company simply does not have the capacity necessary to fulfill the demand level. In this case, automating some processes may prove to be a must, if not essential. Some examples of processes include ordering, accounting, billing, etc. On the other hand, reviewing processes can be an exercise performed on a periodic basis by a business to identify and take care of less efficient processes. That way, we aim to increase the competitiveness of the company compared to the competition.
Also, there are other reasons, this time from an external perspective, that force businesses to review their processes. It can come from various sources. In the current situation, we can easily think about the Covid-19. Indeed, the pandemic forced many restaurants to review their operations. For example, online orders replaced the dining experience. Moreover, recently, the talent shortage is giving a hard time to companies. Again, to address this shortage of workers, some industries have had to revise and automate their processes in order to be able to meet demand, simply not having the required capacity in terms of staff to cope with this level of demand.
A simplified example to better understand the scope of review processing
To better understand the issue, let’s take the fictional case of Andrew, CEO of an outdoor store chain counting a dozen stores in the province of Quebec. Before the pandemic, in 2019, Andrew operated as follow to ensure that articles were available in its stores:
However, due to the lockdowns and the reluctance of his customers more at risk of catching the virus to set foot in his stores, André had to adapt and start selling his products online. Thus, since then, its process flow of goods in inventory is as follows:
Looking at the inventory management process, we can see that it changes completely. Indeed, before, the operational activities were focused on a centralized warehouse shipping products to stores based on their inventory level and needs. When an item was going to be out of stock, a request was sent to the centralized warehouse and a truck was responsible to deliver those items at the store needing them to replenish the shelves.
In the case of the e-commerce, there is only a distribution center responsible to keep the products in inventory as well as fulfill the client’s orders. Thus, the products are not delivered to the different stores, but directly at the client’s desired address. Observation: the last-mile delivery is completely changed. Instead of delivering at the different stores, we need to be able to provide a delivery service to all the area we are deserving. And we have not mentioned a word about reverse logistics…
Therefore, after review of the inventory and logistic processes, where a diagnosis of the current situation was done prior, we can offer some solutions. In this case, the implementation of a warehouse management system (WMS) and/or a transportation management system (TMS) could prove to be a good initiative, cost reduction wise. Indeed, these systems would reduce inventory losses and provide the best routes for last-mile delivery.
”These systems would reduce inventory losses and provide the best routes for last-mile delivery.”
Conseil 2.0, a great ally!
In short, business processes need to be reviewed and updated due to the changing environment of the business world. This can be due to internal or external factors, such as the rapid growth of a company or the labour shortage. Review processes can be complex, and it is better to be well accompanied by a team of expert to carry out a project of this kind. This is where all the know-how of Conseil 2.0 comes in handy. We have completed dozens of process review projects. For any additional information, feel free to get in touch with us!
