THE BUSINESS PROCESS: A business process is a sequence of steps performed for a given purpose. Based on this generic definition, a business process considered within the framework of trade facilitation can be defined as: A chain of logically connected activities to move goods and related information across borders from buyer to seller and to provide related services. * A process has a definite starting point-the time, place, and point of input. * The input is transformed into output via a set of interdependent activities. These activities follow a logical flow; however, they may not add equal value to the process. The process ends with a defined output that is the resulting sum of all the activities performed on the input. Business processes are valuable organizational assets. They enable the creation and delivery of business values as defined by organizational goals. Business processes are often driven by information. A well-defined business process contains four components, as illustrated in Exhibit 1 Customer input Quantifiable external measures established and tracked to easure effectiveness, cost, and quality A Activity 1
Activity 2 Activity 3 B Output to customer C D Supplier input INTERDEPENDENT SET OUTPUT MEETS ALL CUSTOMER OF ACTIVITIES FOLLOW LOGICAL EXPECTATIONS. INDICATORS A, FLOW TO TRANSFORM B,C,D ARE USED TO CONSTANTLYINPUT INTO OUTPUT MONITOR PROCESS AS EXTERNAL PROCESS INDICATORS 1. Customer input 2. Supplier input 3. Interdependent set of activities 4. Process output Customer Input The primary customers are known by all people working within the process.
The process input is clearly defined and documented. Process input is mutually agreed upon by both the customer and the supplier. If the process is purchasing an item, then the item request is formalized to ensure the right requesting information is handed to the supplier each and every time. Supplier Input Business processes are often dependent upon input from other processes or suppliers of other products. A well-defined business process has well-defined supplier relationships. Supplier input should be monitored much like the output of the process is monitored.
Measures to indicate supplier timeliness, quality, and costs should be established and monitored. The output of the process is heavily dependent upon supplier input to the process. Therefore, it is important to establish mutually agreed upon customer and supplier expectations and to establish objective measures to indicate performance relative to those expectations. Supplier partnerships are a good way to establish mutually agreeable expectations. Suppliers should be selected based on several factors, such as cost, quality, timeliness, safety, and so on.
Cost should never be the sole factor in choosing a supplier. Once selected, the supplier and customer should enter into an agreement that establishes profit sharing based on specific, quantifiable performance indicators. Interdependent Set of Activities A well-defined business process consists of a set of logical, interdependent activities that transform customer input into customer output. These activities are clearly understood by all people working within the process. The process activities are documented in a procedure or formal work guideline.
The set of activities that transforms input to output also has one other important characteristic; it is the minimum set of activities needed to transform process input into process output. That is, a well-defined business process is an effective and efficient process. It is a streamlined process, consisting of only value-added activities. It is, above all, productive. Process Output Process output and customer expectations are known. Customer expectations are quantified and made part of the external process indicators. The process performance is judged by these indicators.
All processes can, and must, be measured with respect to quantifiable customer expectations. Although customer surveys are important, they are not as valuable as quantifiable external process indicators. Surveys primarily indicate attitude and behavior. Surveys rarely contain objective data with regard to process cost or quality. It is external quantifiable indicators that measure results. In the end, results are of paramount importance. The process performance relative to these indicators is published and known by workers within the process.
Target goals are set for each performance indicator and measured and monitored over a period of time. Process performance will trend either toward meeting the targets or toward not meeting the targets. The process owner must be aware of these trends and take action to correct adverse ones. A well-defined business process benefits a company in three dimensions: productivity, process, and people. Because the performance of a particular enterprise is the sum of the performance of its processes, well-defined business processes contribute to a well-managed company.
Productivity, process, and people are interdependent and synergistic. As people learn more about the process and become more proficient in the process, productivity will increase, further increasing the morale of the work force. Higher morale leads to motivated employees, which lead to higher productivity. THE STEPS NEEDED TO IMPROVE THE BUSINESS PROCESS: Six steps are needed to improve a business process: 1. Identify the process to be improved. 2. Choose, organize, and train the team. 3. Map the process. 4. Analyze and redesign the process. 5. Implement the process redesign. 6. Continually improve the process.