Strengthening your supply chain one link at a time.
The familiar phrase “chicken-or-egg” describes a scenario where it is unclear which of two events should be considered the cause and which should be considered the effect. Seemingly each action depends on the other finishing first. This theme is highly debated in Supply Chain circles when evaluating enterprise system implementations: Should a company reassess current business processes before selecting and implementing a new system? Should a company select a new system and then adjust current business processes to align with the system’s features and capabilities?
The assumptions made on both sides of the debate are valid. If you prefer the process-first approach, a question you may ask is “How do I purchase a new solution without knowing how best to run my business?” If you would rather take the system-first approach, you may insist “the technology was designed with best practices in mind”. Each assumption can be correct, but will lead to disconnects and headaches for leadership. The process-first approach may require customized workflows where automation or scaling can only be achieved through tailored design and development. The system-first approach may require subscribing to non-value adding modules, redundant processes, and a restricted operational framework that may not align with the current processes of your team or department.
All things considered, how should supply chain leaders address the conundrum of improving existing processes and/or investing in new technology to drive efficiency and productivity? The resolution to this “chicken-and-egg” dilemma is striking a balance and doing both in parallel. Putting all your ‘eggs’ in one basket and doing all of one approach prior to the other, either process-first or system-first, may lead to ruin. The following paragraphs explain the benefits of doing a bit of process and system review at the same time.
What is the Problem You Want to Solve?
To improve current business processes and select the right system solution, companies must thoroughly understand their unique business case and define the processes that need to be improved. To achieve this, a small team of stakeholders and subject matter experts should conduct a high-level assessment and “process framing” exercise. Process Framing defines process boundaries, process owners and actors, key metrics and KPIs, the business case for action, and the overarching vision for the new, improved process. This framing activity should then drive the key business requirements for a new system that are traceable back to the business process. Defining processes and system requirements at the same time provides potential vendors with a clear picture of what your company needs, and they will tailor their system demonstration to what’s most relevant to your business rather than provide an off-the-shelf overview of system capabilities and features.
Stakeholders Drive Acceptance Criteria
Once the current processes and problem statements are defined, key stakeholders should provide the design of an optimal process and define what success looks like. These stakeholders have a dual responsibility as a process owner who manages and monitors the process, and also as an internal customer who directly benefits from the improved process. They should be involved with the documentation, construction of workflows, and capturing improvement opportunities at each process step. Answering questions such as:
1) What does the optimal process look like?
2) Describe the desired output?
3) Who must be involve in executing the process?
will provide a deeper understanding of how and what systems can deliver the ideal outcome. It also helps identify they key participants of the process, skills required, and whether a personal development or systemic/solution gap needs to be addressed.
Implement CPI Before, During, and Post Implementation
Once stakeholders have defined and documented success, they should have confidence in the “how and what type” of new system best fits the business. From this point forward, continuous process improvement (CPI) should be pursued before, during, and after any system implementation – working process and system in parallel. Before the system implementation, low hanging fruit activities such as data cleansing, developing policies and procedures that enforce best practices, and refreshers on key processes are immediate, value-adding improvements that can be implemented without a new system. During implementation, process improvements may need to be implemented as part of the new system launch as certain capabilities and features can only be realized in production – these in-flight improvements are essential to implementation success and long-term adoption. Post implementation, hind-sight/metric reviews, customer surveys, and stakeholder interviews may outline future process improvement opportunities that can be pursued strategically after the system has become mature and stable in production. This post-launch pursuit speaks to your company’s willingness to listen to the voice of the system’s users and customers, and also speaks to their commitment to evolve in efforts to be more efficient and productive.
In summary, process and system implementations should operate in tandem. Through this close relationship, companies save time and money, mitigate risks, and increase implementation success as well as process excellence. This dual approach helps define requirements and avoid purchasing a solution that does not fit your organizations needs.
—Amanda Montgomery, St. Onge Company