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What processes add value for the customer?

Many companies are struggling to anticipate (un)announced changes in their environment. They are unable to oversee the impact of disturbances on processes and systems and to take preventive measures to reduce risks. Overview and insight in processes play an important role to identify time critical situations and take action.

Often companies have procedures and working instructions. Procedures focus on the coordination of activities across departments. They capture agreements about cooperation between people or services within a process. While work instructions describe the work of an individual or a Department. These documents are often drawn up as part of the quality management system.

Procedures and work instructions give companies little or no insight into the total chain of activities aimed at providing products or services to customers. Especially the integral coherence of critical processes is insufficient visible. By the lack of insight departments operate independently of one another and initiatives to improve the ‘value chain’ lead to sub optimization.

Getting a grip on business processes requires insight in the purpose of a process, the sequence of activities, the people and resources needed, the desired results and the coherence between processes.

But about what processes are we talking.

The last time I read more often that it is about the processes from ‘customer-to-customer'. That gets explained as processes that add value for the customer and for which the customer wants to pay. These are all the processes from the first to the last contact with the customer, from the customer's need to the delivery to the customer.

In this approach price, quality, service, delivery time and flexibility are paramount. They determine the entire customer value during the customer life cycle.

Customer value [1] = What do I get? + How do I get it? + How does it feel? MINUS How much does it cost? + How much should I do? + What do I feel?

Opposite this customer-oriented approach is the production-oriented approach – the ‘sand-to-customer’ processes with which we all have grown up a little bit. This approach is focused on delivering the right quality at the lowest cost.

As we see 75 percent of what companies do is focused on producing and supplying goods (products) or services. In improving processes, for the greater part, we need to focus on some of these processes.

Acquiring a better understanding of business processes is the start for getting more grip on customer-to-customer processes. That insight helps companies in identifying bottlenecks and defining improvement actions.

The customer focus of companies is not in question. It is about how business processes add even more value to the customer experience – the experience of the customer. This experience determines the satisfaction of the customer.

When we want to get a grip on customer-to-customer processes we will have to visualize the business processes that add value to the perception of customers. Only then are we able to start working on process improvement.

It is clear that mainly the sand-to-customer processes add value, the processes from expectation to experience. They are the primary processes that are directly related to the goals an organization pursues and thereby also inseparable from the goals of the client. The latter is not insignificant after all what do companies know of the needs of clients and are customers aware of all the possibilities.

The primary processes include all activities that contribute to the creation of the product or service for a customer. They are also called operational or horizontal processes.

Per type of business, the primary processes can differ but roughly they consist of:

● Sales

● Production

● Procurement

● Service

● Logistics

● Product development

The opinions may differ on this. So is procurement not by everyone seen as a primary process. Yet procurement contributes greatly to the result for the customer.

But what is the point of describing primary business processes in process models?

Let's take a look at any production company. We see several disciplines/departments involved in one or more business processes, the clouds represent the field of work of the departments. The brown lines symbolize primary processes such as procurement, sales, production, product development and logistics.

Business processes are composed of multiple connected work processes of departments or business functions. We see in this picture that business functions are connected to each other. [2]

With some knowledge of this type of organizations we can distinguish / imagine primary processes. It is perhaps hard to say but if companies do not have process models do they know what they are doing.

Looking again at the production company we see that something happened in one of the processes that is causing problems in certain departments and primary processes.

The well-oiled machine slowly hangs because the Marketing Department promised the delivery of a product under development to a customer. It is something that happens once in a while and disrupts the complete organization. Because it is an occasional unintended event there is nowhere described how the organization should deal with it.

It is most certain that during the modelling of processes the event would have been identified. Unanticipated events are one of the biggest annoyances of department managers and process owners.

When business processes are supported = managed by a modern Business Process Management system this disruption would have led in early stage to proper signals to process managers.

The current Business Process Management systems help companies with capturing business processes in process models (modelling), analyzing processes through simulation, improving processes, monitoring the performance of operational processes and identifying disturbances. But it is also possible to analyze the impact of disturbances on processes in advance and take measures to avoid problems.

When at a high level the coherence between the primary processes in a process model is captured we get a clear picture of the customer-to-customer process.



Van Kwaliteitsmanagement naar Klantwaardemanagement: een paradigmaverschuiving (Weblog Prof. dr. Ton Wentink)


Info Support, Whitepaper BPM en WFM: echte flexibiliteit in de processen

Tags: BPMN, ERP, Process Modeling