When analyzing processes for improvement opportunities, staying focused on the big picture – the goals of the organization, stakeholder, and the core processes – is absolutely essential. A company that loses sight of the big picture may improve the wrong processes and find itself in trouble.
To accomplish its goal of speedy delivery, a company that specializes in parcel delivery is divided into four functional areas, or business units.
Pickup
Delivery trucks pick up packages from homes and businesses and deliver them to local warehouses.
Centralization
Parcels are sorted at the local warehouses and sent by truck and airplane to central distribution points all over the world.
Dispersion
Packages are again sorted at the central distribution points and distributed to local distribution points.
Delivery
From local distribution centers, parcels are trucked to their final destinations.
Each functional area has its own vice president and internal infrastructure. The company encourages business units to make their own decisions and set their own team goals.
In time, the business units become insular and operate almost like separate companies.
The manager in charge of dispersion determines that he can reduce overseas delivery times by 40% by replacing the fleet of planes with faster, larger airplanes. He makes the change and sits back, awaiting adulation from his peers.
Unfortunately, the overseas distribution centers cannot respond quickly enough to the change, and they soon accumulate a sizable backlog. The company’s much-advertised and much-coveted delivery time of “three days to anywhere in the world” increases by as much as several weeks on some routes.
The competition quickly moves in and takes over some key delivery routes.
This cautionary tale underscores what can happen when people lose sight of the big picture. The company’s goal of speedy delivery was undermined when one stakeholder improved his process to the detriment of others.
A modern organization can be an extremely complex organism. However, when the organization is broken down into core processes, the picture is often simplified.
For example, a multinational manufacturing company employs 11,000 people in three countries, but it is able to distill its operations into four core processes:
Product Development
Product development is essential for creating new products. Subprocesses include product creation and R&D. It also supports production by supplying design specifications and clarification.
Product Creation
Product creation creates the products the company sells. Subprocesses include procurement, manufacturing, inventory, and quality assurance.
Marketing
Marketing is essential for branding and for identifying and acquiring customers.
Sales and Service
The sales and service process is a direct link with external customers. Its focus is on providing customers with what they need and making sure they are happy.
Core processes interact with each other and with support processes to create value. After identifying core processes, it’s important for you to plot and analyze their interactions with a process map. The map also enables you to show how processes are performed across functional lines, or business units.
External Suppliers
External suppliers provide raw materials for the product creation processes.
Product Creation
Workers in the product creation processes in the Operations functional area receive raw materials from suppliers, exchange information about customer wants and needs with marketing staff, and exchange information about product features and functions with product development personnel.
Marketing
Marketing is a key portal. It’s how information on customer wants and needs enters the organization, and how information about the organization’s products and services reaches the customer. Marketing information is an input to all other core processes, and marketing personnel receive output directly from all other core processes.
Sales and Service
Sales and service is a key portal for the direct exchange of information with customers. Sales and service personnel interact with marketing staff and with product development personnel.
Product Development
Product development personnel interact with workers in all of the other core processes. Information is exchanged about products, services, features, and functions with personnel in product creation, marketing, and sales and service.
External Customers
External customers communicate directly with sales and service personnel.
Support Processes
The support processes interact directly with all of the core processes.
Functional Areas
Functional areas, sometimes called business units, are groups of processes that work together to accomplish specific functions. The three functional areas on this map are Operations, Marketing, and Sales and Service.