Learn something new every day
More Info... by email
A business process is a sequential number of events that companies go through to complete a task or activity. Business process optimization consists of designing, modeling, executing, and monitoring each process. Each of these individual steps adds to the overall optimization of a company’s production or ancillary activities. The end result should be using fewer resources to produce the same output, achieve higher employee productivity, and create or improve a higher overall value for the company.
Business process optimization starts with the design of a process. Owners and managers must have a goal in mind for each business activity. Allowing these activities to go on without review for long periods of time can result in employees simply going through the motions to complete business processes. Companies must set goals, create operating standards, and identify bottlenecks to improve overall workflow. Removing these bottlenecks in the design of a business process can also eliminate surprises later when implementing the process.
Modeling is a type of “what-if” analysis. Owners and managers must think of ways to improve working conditions and improve the productivity levels or employees and machines. Common types of “what-if” analysis include reducing the amount of resources needed to create a product and cutting overhead cost from facilities. If these conditions lead to the same or better quality of product, then the analysis is true; if the output is worse, the analysis is false. Models can be operational or financial, depending on the type of activity being measured for business process optimization.
The execution of an activity is also essential in business process optimization. Companies must first ensure they have the necessary skilled labor to complete tasks and activities. For example, optimizing a business process may result in a higher need for individuals with a technical background. Manufacturers may require fabricators with a specific background in welding techniques to improve equipment manufacturing. The manufacturer may also need to develop a series of steps in the production process to improve the equipment manufacturing process, which in turn results in improved workflow.
Monitoring is an ongoing management activity that supervises the business process optimization process. Owners and managers must ensure the optimization works well in the company and continues to add value. Companies can use financial ratios, standard industry benchmarks, comparison reports to previous historical output or other types of data to ensure business processes continue to add value to the company and improve the overall working conditions in the company.