Blog Posts - BP Consulting (NZ)

What influences a process? – part 8

4/11/2012

13. What is the pay structure?
Are you are good, bad or average payer?

Besides impacting your cost performance, if you are a bad payer your cost may be low but your staff turnover is probably high unless there is some other advantage to people staying. But being a top payer is not necessary good.

14. What is the location?
Are you in a political / economically stable country with good infrastructure? Instability increases cost and reduces quality.

If you are in a low cost country you may focus on using labour rather than technology. That brings management / skills headaches and labour rate benefits do not last forever.

If you are in a small town your premises and labour costs are probably cheap compared to large cities. But getting good staff may be hard as there is a smaller labour pool. If you are in the centre of a large city your premises costs will be higher than the suburbs and you may have higher staff costs to attract people into the centre of town through rush hour traffic.

What influences a process? – part 7

3/25/2012

12. How many are there of the following?

· Stock purchasing / receipting locations
· Finance teams process crosses
· Locations process crosses
· Businesses process crosses
· Industry sectors process crosses
· Countries process crosses

The more of each of these factors your organisation has the harder the standardisation of the process becomes. It can be hard enough achieving consistency and responsiveness in one location for each of these factors. Add multiples and you can expect minor drops resulting from each factor in the areas of cost effectiveness, productivity, turnaround times, responsiveness to queries, etc.

If you have multiple for each of these factors accept they will have an impact. You may have to accept more process variations than you would like. You will need to get smart on how you communicate (Intranet, workflows, site visits, regular communications) as you need to keep people informed and develop relationships to get the process to work. You will need to monitor your process to maintain standardisation and will need a way of tracking queries to see where they originate from and how long they take to resolve. Especially as the further away a location is geographically the harder it is to justify the travel costs of sending administration staff out to those locations to resolve issues and develop relationships.

What influences a process? – part 6

2/26/2012

10. How many people are involved in the process versus those in the organisation?
If only 2-3 are involved in the process with 1000 in the organisation it will be hard to get people excited about improving the process, but it would be easy to improve. If 100 people were involved in the process it would be much easy to get managements attention, but the task of improving the process is made harder by the sheer numbers.

If the organisation is small people are probably multi-tasking and may not have the time or skill sets to perform the process properly and / or focus on improving it.

11. What is the organisation structure?
The organisation structure needs to fit the process.

A multi-layered hierarchy implies control but also less initiative and slower decisions making. Flat structures are more flexible but provide fewer promotion opportunities.

What influences a process? – part 5

2/12/2012

8. How many process variations are there?
The more variations you allow with the process the harder it will be to manage.

9. How many people are involved in the process?
People are generally the major cost for a process. The more people you have the greater the potential to save and the easier it is to justify technology investments. More people also mean’s better role coverage and perhaps specialisation.

But more time will be spent on staff management and it is harder to maintain standards. Also the more people involved in a process and the more people the process touches, the bigger the change management task for improving the process.

What influences a process? – part 4

12/8/2011

6. What % of the customers / vendors / stock / or whatever (relevant for process) are actually active?
The bigger the gap between what you have and what you actually use also impacts the cost and quality of the process. It will take longer to find what it is you actually want and wrong selections will be more common.

7. How many customers / vendors / stock / or whatever (relevant for process) produce 80+% of volume
The fewer of something you have making up the top 80% the easier the process will be to improve.

If you have 5000 customers it becomes daunting, but if you start with the top 100 you have an achievable target. Also it will get to the point where the marginal gain is not worth the effort. If some one trades with you only once or twice a year you may still want them as a customer but will want a simple, trouble free way of dealing with them.

What influences a process? – part 3

12/1/2011

4. What is the % of fields pre-populated in system?
This is about reducing keying errors, rework and duplication of effort. Modern systems pre-populate available data to avoid re-keying.

5. How many customers / vendors / stock / or whatever is there (relevant for process)?
The more of something you have the harder it is to manage. It requires more focus, resource and time. You will have more data to maintain and possibly more physical items to store and move about.

What influences a process? – part 2

11/24/2011

2. What is the % of corrections as a % of process driver?
Corrections mean rework. The higher the % the higher the cost of the process.

3. What is the average number of line items for each process driver?
If you need to cross match as part of the process (eg: invoice to purchase order to goods receipt; time sheet to personnel to pay rates; sales order to delivery note to invoice) then processing a 1-1-1 match is easier than a 30-17-22 match. If you are doing this sort of matching you will appreciate that there are never the same number of lines on the documents to be cross matched. A low number of lines to match will also make automation easier.

What influences a process? – part 1

11/13/2011

Unfortunately numerous factors influence the cost and quality performance of a process. The next 12 blogs look at some of these factors and their potential impact on a process:

What follows is not a comprehensive list. Some factors may not be applicable and there could be others not listed impacting the process. Hopefully the list gets you thinking about the types of things that may be impacting the process you want to review.

When you are reviewing your process you should step back and think about all of the things that could be impacting its performance. Use the list to start you off then add any additional factors that are appropriate for your process.

1. What is the per annum volume of the main process driver?
The economies of scale effect means the more volume you have the cheaper per item you should be able to process it. This does depend on your cost structure and how good your process is.

An organisation with high volume will probably show more interest in the process and be able to afford to invest more $$ and time in the process to improve it. If the volume is low it may be hard to get people’s attention on improving the process because it is not viewed as important.

High volume can also mean big problems and backlogs can develop quickly.

If you have low volume process it could be a part-time process where people have to remember what it is they are supposed to do so skill and knowledge retention could be an issue. It will also be hard to justify improvements that larger scale organisations can implement.

Key measures for assessing the quality of a process – part 6

11/3/2011

6. Is the process understood?
Are the job roles and processes clearly defined and documented. If not how can people be expected to follow them?

People will do what they think is best or easiest if there is no direction. They may do the right thing but often will not. If you do have documentation then it needs to be regularly reviewed and updated because things change. Annually is enough, 6 monthly if you are really keen and have the time. You need to review the documentation for process or system changes, new short cuts people have learned that others should know, new policies / regulations, etc.

Key measures for assessing the quality of a process – part 5

10/30/2011

5. Is the process measured?
The process needs to be measured in terms of volume drivers and performance indicators. If the process is measured it is more likely to be maximised for performance.

If you are not measuring the performance of the process then how can you expect it to perform well? The inference is that you have no idea what is actually happening. I

If you do measure performance just doing it once is not enough as you need something to compare it against.

Measuring performance on a regular basis is best. You could measure it on a weekly, monthly, quarterly, 6 monthly or annually basis. The regularity will depend on how easy it is to do and what the feedback loop is like (ie: if nothing much happens in a week then measuring monthly would suffice). You just want to do it on a regular basis so you can see the trends and compare the results.

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