There are many technologies available to support supply chain management processes. In this article, we will focus on the 3 most recognized ones: Workflow and BPM suite (and the iBPMs evolution); Robotic Process Automation (RPA), Process Mining, and bringing everything together with the Digital Ops concept.
𝗕𝗣𝗠 - Business Process Management is about managing digitally the workflow of activities required to achieve a business objective. It is mostly aimed at helping people and systems to collaborate in a standard and efficient manner. This does not necessarily mean automation.
► 𝗦𝘂𝗽𝗽𝗹𝘆 𝗖𝗵𝗮𝗶𝗻 examples: S&OP and IBP decision-making process; or for a more operational example it can be about managing your daily warehouse cadences making sure all activities get done at the right time by the right people w/o administrative burden.
𝗥𝗣𝗔 - Robotic Process Automation is about automating part of the workflow. It is achieved by getting machines to imitate what a person would do. This is mostly around automating repetitive and mundane tasks. Well applied, this is liberating for some people.
► 𝗦𝘂𝗽𝗽𝗹𝘆 𝗖𝗵𝗮𝗶𝗻 𝗲𝘅𝗮𝗺𝗽𝗹𝗲𝘀: order or invoicing processing, avoiding staff to extract data manually from invoices received and loading it into the accounting systems. Any high volume tasks can be candidates here, even better if highly prone to human error.
𝗣𝗿𝗼𝗰𝗲𝘀𝘀 𝗠𝗶𝗻𝗶𝗻𝗴 is not a leading method like BPM & RPA (helping people do the right things at the right time) but rather a lagging one, meaning we look after the facts as to how the processes were executed by analyzing systems data to identify improvements opportunities.
► 𝗦𝘂𝗽𝗽𝗹𝘆 𝗖𝗵𝗮𝗶𝗻 𝗲𝘅𝗮𝗺𝗽𝗹𝗲𝘀: check how the forecast is built over time who interact with the forecast, how many times the forecast is amended, how far in advance or close to the actual, is the forecast cleaned after the fact... you can understand what happened, analyzing your forecast KPIs against these insights can be an excellent source of improvement your demand forecasting business process.
Business Process Management (BPM) is a process-oriented approach used to design, analyze and improve business processes. It assists in an organization's strategy and the execution of that strategy.
The purpose of BPM is for businesses to get control of their processes and continuously improve them. This method results in a more efficient organization that can produce products and services while also adapting to changing needs.
A business process can consist of hundreds or thousands of tasks, as well as the processes and approvals necessary to accomplish them.
The BPM discipline results in process changes that contribute to improved organizational performance in different functions, such as in a Supply Chain.
A competitive supply chain strategy and its operational execution are crucial in today's demanding business climate, which stresses flexibility, speed, quality, efficiency, effectiveness, and innovation.
The following are some practical examples where BPM can be applied in Supply Chain business processes:
► Order Management
► Vendor Management
► Invoice Management
It is worth noting that for BPM to be successful, a company needs to have well-defined ways of working, here lies a large part of the BPM implement success.
An organization might use a BPM toolkit to ensure adherence to the agreed internal way to handle an order from the moment it is received until the goods or services are delivered to customers.
The process would outline how orders should be entered into the organizations, which IT system should be used to record them, which procedures should be used to ensure order validity, steps to verify the purchaser's creditworthiness, and other subsequent tasks to get the product to the customer.
These BPM specifications resemble a computer program that specifies how the entire business should achieve the goal of "accepting and fulfilling an order."
Many organizations have tons of suppliers and vendors within their supply chain network. Each supplier and vendor provides a wealth of different materials, parts, products, and services.
By managing through BPM suites, vendor and supplier management can be made based on the capability, product specifications, within the time and at the best price without ever forgetting contractual deadlines.
Another helpful aspect is to provide a standard way to manage all vendors while multiple companies, functions, and individuals interact regularly.
The majority of actions related to invoice processing fall into one of the following categories:
► Reading invoices, maintaining spreadsheets, and/or entering data into systems (mundane and repetitive tasks).
► Managerial approvals, judgments requiring human decisions, and discussions (higher value activities).
► Defining the process, creating business rules for approvals, processing accounting entries in the system, updating vendor information, and processing payments (higher value activities).
Invoice processing benefits from a system that orchestrate all three kinds of activity.
RPA is an acronym for Robotic Process Automation.
These are software that handles tedious, manual, and repetitive tasks that humans perform. Humans can be relieved from such mundane, and time-consuming tasks by letting them be taken over by software robots.
These software bots can understand, learn and then execute business processes based on standards and business rules set by supply chain managers.
An RPA software mimics human employees in many circumstances, these software bots can interact with any application or system in the same way as humans do, without being stopped due to tiredness at a much faster speed with greater reliability and accuracy.
Robotic Process Automation (RPA) software is seen to be a viable way for businesses to streamline their supply chain management procedures.
For example, retailers can deliver products to their customers faster and at a cheaper cost with better supply chain management. Let’s dive into some examples:
► Vendor Selection
► Purchase Order Management
► Inventory Management
RPA promises to transform the way vendors are chosen, which is now a completely manual process. A vendor selection process, at its most basic level, comprises various steps, such as:
► Preparing an RFQ;
► Communications and discussions with vendors;
► Analyzing vendor documents;
► Evaluating the vendor and cross-checking their credits;
► Onboarding the selected Vendor.
All of these tasks may be made more effective, productive, and automated with RPA in Supply Chain.
Especially in industries having a very large number of suppliers (and changing rapidly) such as retail.
While the first steps: defining the project, establishing a list of providers, and engaging in face-to-face discussions are unlikely to easily be replaced by RPA.
The rest are candidates for it and once it is implemented. Individuals will focus on managing exceptions and taking decisions.
Purchase Order Management:
Within the Purchasing domain of the Supply Chain, a typical buying and processing phase is divided into the following stages:
► Product Requirement;
► Purchase Order Placement;
► Product Delivery;
► Payment Processing.
Even today, some organizations rely on archaic manual paperwork to perform transactions that might easily be digitalized.
Order processing and payments can be automated such that data is directly absorbed into the company database, a software solution sends out order confirmation emails and SMS messages, and payment gateways process the desired amount according to the set rules and protocols.
By automating this back-office work, organizations can ensure that their staff focuses on other value-added tasks that demand more human intellect and attention.
Organizations should ensure that these processes are tightly integrated and that there are no flaws from order placement to delivery to payment processing to maximize efficiency and maintain a smooth supply chain.
Inventory management excellence is at the heart of a well-running supply chain.
Suppliers and manufacturers must constantly monitor their inventory levels to ensure that they have adequate items and replacement parts to meet demand.
RPA can help with inventory management by keeping track of stock levels, alerting managers when product stock levels are low, and automatically sending replenishment orders when they fall below a given threshold.
Furthermore, by analyzing past data and drawing out demand trends, an RPA system can assist in updating into the ERP and other planning systems the ideal inventory levels in the master data table.
Improved insights from Robotic Process Automation in Supply Chain can lead to better decision-making when it comes to inventory restocking, resulting in cost optimization and reduced spares at all times.
Employees can focus on other essential parts of the supply chain as they have more time available and are do not need to manage the tedious process of maintaining inventory levels records.
Process Mining is a technique to analyze and track processes.
It is an analytical discipline for discovering, monitoring, and improving workflows. In process mining, as the name indicates, organizations can mine data from their information systems deployed within their organizations to understand the performance of their processes.
This helps to identify the process bottlenecks and areas of improvement.
Process mining software can help organizations to analyze the log data from the information system deployed within the organization, and as a result, provides detailed and data-driven information about how the key processes within the Supply Chain are performing.
With many other applications within the Supply Chain, process mining can be used for:
► Analyzing the logistics data, which can be used to visualize the process KPIs such as OTIF management, and delivery performance.
► Optimizing inventory management by adjusting the planning parameters for inventory requirements.
► Purchase-to-pay process for creation, and correction of purchase orders.
Process mining helps to view the current state of the supply chain processes, increases the overall efficiencies of processes, identifies areas of improvement, and assesses the results of these improvements in a very visual manner by digesting system logs.
Co-founder & CEO, Metronome
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