El-Araby, an Egypt-based manufacturer and distributor of household appliances, was facing a crossroads in its supply...
chain. Over the years, the appliance maker had built up a sizeable network of partners to uphold its high standards for customer support.
But El-Araby had neither visibility into nor control over how its authorized service centers operated. The manufacturer lacked an efficient process for sharing warranty and replacement parts data.
Furthermore, the service centers, spread out across Egypt, had neither the IT expertise nor the budgets to pony up for the SAP software at the heart of El-Araby's enterprise backbone. Yet the $550 million manufacturer knew that if it were to continue on its trajectory for global growth, it had to find a way to increase its supply chain visibility, as well as to monitor and integrate this critical piece of its business.
So El-Araby turned to business process management (BPM) software tools from Lombardi Software. These BPM software tools are helping El-Araby create automated workflows and real-time data exchange with the 200 authorized service centers that comprise its supply chain. The project, which is scheduled to go live in July 2009, will track and control the repair process starting from when the customer calls in with a problem all the way through the closure of the trouble ticket.
By improving the communication between the service centers and the El-Araby back office, and by putting key performance indicators (KPIs) in place, the appliance manufacturer expects to gain efficiencies in everything from how it resolves repairs to how it tracks warranties and spare parts.
BPM software adds visibility to repair process
"Before Lombardi Software [BPM] was in place, all we could do for a customer was recommend them to the nearest service center and that was the end of it," said Omar Handy, vice president of business solutions for ValleySoft, the integrator working with El-Araby on the BPM project. "We had no clue what happened next until the monthly report came out afterwards."
Now, the Lombardi BPM software system handles all of the details of the repair process, even down to what technician is working on what appliance in what service center, adds Medhat El-Araby, director of the office equipment and computer sector at El-Araby.
More and more manufacturers view BPM tools as a way to gain visibility into increasingly complex supply chains. By leveraging standalone BPM tools or by taking advantage of built-in workflow and BPM functionality in supply chain management (SCM) software as well as extended ERP software suites, manufacturers can bolster productivity on the plant floor by getting real-time supplier updates for more efficient sourcing and tying order-to-promise capabilities to actual manufacturing constraints.
Using BPM to automate workflows across previously disconnected or loosely connected systems—not to mention, separate enterprises— while establishing key metrics and event triggers, can also help rein in transportation costs, lower billing and freight expenses, reduce inventory and foster more consistent on-time delivery.
"BPM is an emerging capability for companies which want strong governance to improve business processes and performance," says Simon Jacobson, a research analyst at AMR Research Inc. "They are using it to get visibility, as a way to drive accountability and auditability, to improve business processes and performance or simply as a way to automate."
BPM transforming the supply chain
BPM tools are transforming supply chains that require collaboration among an extended and diverse group of partners. Internal collaboration between different functional areas in a company usually relies on standardized systems and common business processes. Working with external partners, however, creates new challenges such as trying to sync up incompatible systems, not to mention creating fluid workflows that cross company, geographic and often cultural boundaries.
"BPM really comes into the picture [in the supply chain] when there are processes that span multiple organizations, when there are workflows not localized in a specific department or there are multiple departments within an organization," said Nari Viswanathan, vice president/principal analyst, Supply Chain for Aberdeen Group. "When you don't have a single application that solves all those problems, that's when it's suitable for BPM."
BPM reduces application complexity
That was the situation Jaguar Land Rover faced, not just with its external supply chain, but within the four walls of its own manufacturing and product development organization. The luxury car manufacturer has some 1,500 major applications driving the car development process, and BPM will play a major role in reducing some of that complexity by creating optimized and automated workflows and bringing data together seamlessly, according to Paul Davies, director of product development operations for Jaguar Land Rover.
"Previously, a whole spectrum of data sources were available, but not accessible," Davies said.. "We're using a BPM solution to semi-automate and bring some of that information together so an engineer knows where they're starting from."
While Jaguar Land Rover's initial focus is on using BPM software tools to create efficiencies in its internal operations, Davies said that expanding the effort to include its supply chain is a natural next step. By doing so, the company expects to improve collaboration and communication with suppliers. This in turn will lead to higher levels of transparency and visibility that can shorten cycle times on new vehicle development, which currently takes two to three years.
"We know there is wasted time in the cycle," Davies said. "By more effectively collaborating with suppliers, we foresee being able to deliver a new product to the marketplace two to three months faster than previous cycles. And being first to market is the best place to be."
About the author: Beth Stackpole is a freelance writer who has covered manufacturing techniques and manufacturing technology extensively.