Eliminating Waste with Business Process Management Tools

By Thomas R. Cutler and Mike Ligudzinski
Lean is all about doing things with less waste – that means both in time and resources. By adopting a Lean philosophy manufacturers review all business practices in an effort to reduce waste. This continuous review process must never stop; no matter how good the processes and practices, they can always be improved. These improvements may be due to new experiences, competition, technology, or simply that some one in the manufacturing organization has witnessed a better way.

Whether through an ISO certification process, Six Sigma quantifiable measurement, or a kaizen event, the design and documentation of practices and processes is often very tedious, time consuming and costly. The documentation is usually done using products such as Visio and Word. These documentation exercises are usually focused on recording how every manufacturing and business process should be executed.

BPM: managing the execution of documented processes

A true Business Process Management (BPM) tool must allow the design and publishing of the process; it must also provide the capacity for managing the execution of the processes.

One of the most challenging aspects of manufacturing management is the enforcement and adherence to defined processes. A Lean corporate initiative, characterized by significant process changes both in tasks and timing, mandates a strict conformance to the newly defined processes. It is absolutely paramount that a BPM system allows for complete control and monitoring of process execution and conformance.

Expanding beyond the plant floor: Lean manufacturing operations

The evolution of Lean initiatives was initially focused on the planning and control of the factory floor. ERP (Enterprise Resource Planning) systems have an accounting and warehousing component, however the main aim was to ensure that the machines and people on the shop floor were always manufacturing products.

Shop floor activity regarding actual production has been very well defined including materials, labor and machines. Specificity of manufacturing functionality even includes machine setup, cLeaning and pull-down. Defined are the operators, skill levels, supervisor span and time, shifts, and detailed maintenance times. Product work paths through the plant – the routings, have been detailed.

Since the 1980s and early 1990s, all of these ERP factors have enabled manufacturers to manage the resources required. The next step was to look and design ways of better manufacturing – first JIT (Just-in-time) then Lean manufacturing.

BPM tools allow the same definition of resources (along with the ability to plan those resources) for the non-shop-floor aspects of the organization. Business activities can now be defined and handled, by real time monitoring; processes are being carried out as designed. With quality BPM tools, built on Model Driven Architecture (MDA), we can make changes easily, quickly and without programming. BPM is the key catalyst for the delivery of JIT to the rest of the organization.

The role of ERP and BPM

Most ERP vendors have realized that the cost of creating, maintaining and implementing a manufacturing monolithic system is far too high – clients are also questioning the cost; it is time for a change.

Forward thinking ERP vendors have all announced plans to re-architect their ERP systems into smaller Object Oriented components within a Service Oriented Architecture (SOA). This new orientation should reduce the maintenance costs for the vendors and the implementation cost for the manufacturers. This redevelopment transition will take years and many ERP vendors will not survive the transition. Since the traditional ERP vendors will not survive, the transition to a long-term enterprise wide BPM integration philosophy is Darwinian.

Many ERP vendors are looking for ways to bring faster and greater return-on-investment (ROI) to manufacturing clients. ERP with implementations that are 1:1 against the license fee costs are rare; ERP products such as SAP are often four or more times the license fee.

Regardless of the ratio of implementation to license fees, most ERP vendors have found it difficult to design the new process, train the staff and ensure compliance to the new processes. This is where the BPM product can provide significant and immediate benefits.

Despite the vast functionality of ERP systems most vendors still have workarounds and customizations. With a BPM product sitting as the interface, implementations can be greatly simplified and customizations reduced.

Driving manufacturers to BPM

There are several reasons why manufacturers are turning to BPM tools. Here are a few examples.

Poor ERP results:

Manufacturers who have effectively implemented a highly capable ERP system and do not seem to be getting the returns they had expected are prime candidates for BPM.

Inconsistent ERP results:

Perhaps there are some returns but they do not seem to be moving down the Lean path consistently or quickly enough. In this case the actual ERP system is usually working correctly, however the execution of daily transactions is not effective. This condition is usually due to process procedures that are not being followed accurately or in a timely manner.

Task and timing accountability:

Senior manufacturing executives frequently ask how they can make sure that the staff performs tasks as defined in a timely manner. The hope is that technology will ensure that happens. Short of providing supervisors with baseball bats, enforcing conformance to process standards has been impossible. With BPM on top of the ERP system manufacturers can enforce conformance to the process step procedures – guaranteeing that they are executed in a timely manner.

Extending the Lean process to the entire manufacturing operation:

Manufacturers may consider a BPM implementation when their ERP implementation is highly successful. ERP has reduced waste and the organization is becoming a real Lean manufacturing company. These progressive manufacturers often look at the other parts of the business and realize that the ERP system is really only providing them control and monitoring of less than 30% of the total business activity processes.

These committed Lean manufacturers search how to drive the same level of Lean into other activities and business operations. The implementation of BPM provides an initial ability to ‘Lean-up’ processes (kaizen immediate results) but to continue the ‘Leaning’ processes (continued process improvement.)

The prognosis for Lean BPM

Unfortunately the common business process still encourages company departments to act autonomously; as company-wide process teams are built there will be a Lean, cohesive and consistent operation. BPM will enable that transformation; it will allow for the selection and orchestration of process-enabling tools to manage and process data for each process step. The large monolithic ERP, will in fact, become a hindrance to that process, however, that is the longer term prognoses.

To get rid of the waste, to become truly Lean, manufacturers need to use an existing high quality ERP system that is married to a very well featured BPM engine.

Thomas R. Cutler, President & CEO, TR Cutler, Inc., (www.trcutlerinc.com) Ft. Lauderdale, FL, is the founder of the Manufacturing Media Consortium, a group of seventeen hundred journalists writing about trends in manufacturing. He is the lead spokesperson for the ETO Institute and is the author of the Manufacturer’s Public Relations and Media Guide. He can be contacted at trcutler@trcutlerinc.com.

Mike Ligudzinski is the Vice President of Velocity Group Inc. (www.velocitygroupinc.com), Eden Prairie, MN, one of the leading manufacturing ERP vendors. Velocity Group introduced their BPM solution that integrates with the PRONTO Xi ERP system. Ligudzinski can be reached at michael@velocitygroupinc.com.