Business Process basics first...

We can find many good descriptions but basically it all turns down to these basics.

Definition of a Business Process(BP):
A BP or business method is a collection of interrelated tasks, which accomplish a particular goal.

Types of business processes:

1. Management processes, the processes that govern the operation of a system. Typical management processes include "Corporate Governance" and "Strategic Management".
2. Operational processes, processes that constitute the core business and create the primary value stream. Typical operational processes are Purchasing & Supply Chain Management, Manufacturing, Branding-Marketing-Sales.
3. Supporting processes, which support the core processes. Examples include Finance & Accounting, HR & Recruitment, IT-support.

A BP begins with a customer’s need and ends with a customer’s need fulfillment.

Process oriented organizations break down the barriers of structural departments and try to avoid functional silos.

A BP can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process.

The analysis of BP's typically includes the mapping of processes and sub-processes down to activity level.

BP's are designed to add value for the customer and should not include unnecessary activities.

BPR (Business Process Re engineering) is the reviewing of the current running BP's and sub-BP's and should contain changes to optimize the overall process.

The outcome of a well designed BP or BPR is:

• Increased effectiveness (more value for the customer)
• Increased efficiency (less costs for the company)
• Iincreased speed & flexibility (lower throughput time).

The Speed of Change (SOC) versus Throughput Time (TpT)

…a company and their products or services just exists to provide a decent ROI (profit) on the invested money from the owners/shareholders/investors (nothing more, nothing less)…
...not to give the employees a decent job...this last one is a lucky consequence, not a cause...

…a company’s organisation addaptation possibility or speed of change is always slower than the speed of change of the targeted market and their clients…

2 main reasons:

1. Any prediction or forecasts is mainly based on history or historical experiences
2. Many company have a much too long adaptation TpT because of their slow SOC

Thats why many organisations always are running behind the facts...
Especially big multinationals are too slow to start already reducing costs before the sales are going down...

Conclusion:

There is no other choice for a company as to focus on a lean business structures and processes in order to have the flexibility to change fast and in line with the markets and the clients to

1. add more value to the customer
2. reduce costs for the company
3. lower the throughput time

And as mentioned above, this can only be achieved by a well designed Business Process (BP) which is kept up-to-date to the market through a continuous re-engineering of that process (BPR).

To be continued …