A supply chain business process can be defined as a series of related structured activities, consisting of inputs, outputs and workflow that produce a product or service to meet specific needs of a customer or other process needs. Business process management (BPM) software is used to continuously improve or replicate variations of the process.
BPM implies specifically defining inputs, outputs and workflow, and with today's IT technology, can be automated to electronically manage, control or replicate a specific supply chain process across the organizational or inter-company landscapes that represent the extended supply chain.
Examples of processes that can be leveraged by BPM software tools include order-to-cash procurement process, an available-to-promise order management process or a manufacturing production process.
With the advent of next generation software-oriented architecture (SOA) applications, application software is represented by software component objects which can each be directed toward managing and controlling a process. In turn, BPM methodology can now be represented in an electronic format which can be associated with software code. A user can either electronically represent a process, or reference an existing process, and software code can be assigned to the process.
Building successful use of BPM software naturally requires a solid understanding of all of the elements or variables that comprise that business process. It implies defining a process in an end-to-end context, which can sometimes be difficult when supply chain processes extend beyond your organization or corporate systems. Examples would be involving external suppliers or trading partners, such as a third-party logistics provider. Yet maximum benefits can only be achieved if and when BPM is applied to the external aspects of supply chain business process.
It is therefore imperative that IT take a leadership or high influence role in the overall implementation of BPM. Supply chain functional teams can best represent the definition of processes, but IT has to be able to string the multi-application software components together to yield a successful BPM implementation.
An example may be on-boarding new suppliers. Purchasing, finance, product and accounts payable resources can define the process elements of getting a supplier registered, certified and operating as a qualified supplier. The IT team defines how the process is accessed by suppliers, how and what forms of information are to be entered, and how the process is integrated across existing supply chain support applications.
BPM software vendors, along with external systems integrators, are also an important resource to tap. Knowledge and best practices built from multiple implementations or similar process automation can be leveraged toward a successful implementation of BPM.
About the author: Bob Ferrari is the Managing Director of the Ferrari Consulting and Research Group LLC, a supply chain business process and technology consultant firm, and is the creator and Executive Editor of the Supply Chain Matters internet blog.
This was first published in December 2009