Process Management: Overcoming The “Buzzword”

Jakub Brada
March 11, 2020
English

If we take a closer look at stable companies who have overcome a variety of crises (financial, product quality, customer experience, etc.), we would likely find the key to success – process management. Regardless of the size or scop of a company, the application of processes and their management are as crucial to global industries as they are to small marketing agency that is just getting off the ground.

So what meaning does process management have? What does this discussion look like in practice? How have companies adapted to changes in markets or business approaches to become successful? There is no obvious answer to these questions. Every CEO can look at their business model and find ways to implement process management in order to be more effective.

Some companies have a problem with big employee fluctuation. In this case, the companies would need to have all the processes covered and updated so that the recruiting eats up less time and money.

Other companies aim for progressive growth. They want to meet their customers’ needs, widen the product portfolio, and enter new markets. But how can a company continue to grow in a stable way, without relying on the hiring of new employes? How do they maintain their standards of quality? Behind all this looms one fundamental aspect - how to handle processes with ease. Some companies focus on optimization that their products have the best market price/performance ratio. It's those companies that need to save money. Without the handled processes they are not able to determine where they’re losing money. They need to map and regularly audit in order to optimize their processes.

The big companies and corporations have a vision. They know where to go and what they need. From this vision come specific goals, which in turn inform what strategic activities are being implemented. Finally, all the individual activities help a company as a whole to realize the vision.

What about process management in small companies? Does it make sense for smaller business to also focus on this?

Of course, it does. There is no doubt that process management has its place amongst all business types. Even a successful self-employed person will probably have their process improved overy time and will need to rely on them through good and bad times. Also, the small company or the self-employed person should have their own vision and have a vague idea of where the company is heading, how it should operate, and what values it can bring to the customer in an ideal world. From this vision, they can take off and set goals that should be very specific, real and achievable in the intended in a designated window of time.

I personally recommend doing a business plan lean canvas. This method is very good for classifying thoughts, linking the vision with the aims, and being able to identify what you do, who do you do it for, and what value you’re creating. Devote your time to this, think critically, visualize what you want to accomplish, audit, and let it mature. Last but not least – make processes. Lean your vision on the cornerstone that will support you as you balance your cash flow. An important step is improving on your foundation so that the ambition of your company can keep up with the infrastructure. If you prefer a conservative approach to business, treat your processes as your partners. Every type of entrepreneur or company should have its own processes. All of this is provided by process management. It is not difficult to start or take it to the next level. It just needs to be perceived and worked with. Let's not make buzzword out of processes, let's take it as a necessary element of any successful business.

Example of business process and benefits for the company

Imagine a manufacturing company that changes or modifies its portfolio from time to time. This not only entails internal changes but also places increased demands on suppliers who have to test whether the purchased parts can be used for production. The ideal process is when the constructional department calculates and draws the required part first. Next, an internal team composed of all relevant employees (purchasing, quality, production, technology, etc.) will comment on this. The internally commented and modified part is then sent to the supplier for commenting on the complexity of production, the cost of the mold, or the estimated production and delivery time. After that, the production of the sample in the required quantity is ordered and the measurement is sent from the supplier to the customer before the component itself is specified. After the approval of the measurement, the part can be sent physically. The customer will incorporate it into the production, make a sample finished product, and if everything is in order, releases the unit for serial production. Only top class manufacturing companies have this process managed. Most companies do not (or do not want to) have enough space to undergo such a costly and time-consuming process. However, they often fail to realize that omitting even a single step can ultimately lead to far higher costs, stress on the workplace, and postponing deadlines for project completion. For example, suppose a company would not have measured and sent the required measurements beforehand, but the supplier would be entitled to send the sample parts directly. Due to primary production, it is expected that some errors will occur. However, the customer will only find this out at the initial inspection, or worse, on the assembly line. Moreover, if this part was sent by a supplier from the other side of the world (typically from Asia), we usually solve these problems with this "small" foul. The part apparently traveled several weeks by boat, so we have lost a lot of time. The other one can fly by plane and be there much sooner, but in the meantime, the "extra costs" are growing and growing. This also entails delays in deadlines and, consequently, delays in launching on the market. The economic outlooks will cease to be fulfilled and what's more, a team of people who didn't cause the problem lose their bonuses. The whole problem is then passed onto the supplier and by this time emotions are running high. This may eventually lead to a permanent deterioration in trade relations. 

Do you remember what was missing from the very beginning? The process had not been defined and a critical step had been forgotten.


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