Process management and the supply chain

- It's all about the process. Every aspect of business, and especially the management of supply chains, requires you to understand the key processes involved. By clearly defining these key processes, you can better understand how your company works and how it manages your supply chain. Simply put, a supply chain is what connects you to your customers and to your suppliers. Adding in a transportation company, a very simple supply chain looks like this. Now what about processes? Well, a simple definition of a process is any activity that creates an output. And unfortunately, in most cases, a process also has a cost. So we can depict a very simple process like this. Businesses always want to improve their processes. That's what a continuous improvement work culture is all about. We want to reduce costs. I'm sure you've heard that from your boss more than once. We want to increase output. Even better, we went to increase output and reduce costs at the same time. In today's demanding business environment, that's become almost a necessity. The first step to improve a business process is defining the process itself. We do this with a process map or a process flow diagram. Processes have a distinct starting point and a distinct ending point. And in between, there are tasks, and activities, and decisions to be made. To properly define a process, you must determine what is and what is not included in the process itself, and then draw a picture of it, like this. I can't emphasize this part enough. It's important that you first draw a picture. From here, you can begin to analyze, understand and improve your business process, and your supply chain performance. I've included handouts that show these diagrams and some examples of process maps. You'll find them in the Exercise Files section of this course. For a description of how to create a process map with the appropriate symbols, take a look at this video from my Lean Foundations course. And for a really good source of information about best practices and business process improvement, visit BPtrends.com. The BP stands for Business Process. The website information is free, and they encourage everyone to share and distribute their knowledge all in the name of improving the way we do business. Now certainly, your company's processes are much more complex than the examples I've provided here. And I assure you, your supply chain processes are even more detailed. But with this basic foundation, you can now begin to understand your supply chain.