Companies today face various challenges in such a competitive business environment. Performance in the supply chain is considered to be one of the most critical issues in various industries. It has a vital impact on efficient supply chain management. Over recent decades, there are several frameworks and systems have been developed to meet this need (Balfaqih, Hasan & Nopiah, Zulkifli Mohd, 2016).
It is important to take a process perspective when analyzing the supply chain. Process mapping can be a very useful tool to start. From suppliers to consumers, managers should have a clear picture of how everything goes through so the modification can add value either the company or the product delivered to the customer. There are different levels and for each level, there are sub-levels that can be improved.
Based on the process mapping, there are several elements to be measured: quality, speed, dependability, flexibility, and cost. The polar diagram can be a method of illustrating multi-dimensional performance. Besides, managers can use Importance Performance matrix to identify problems and prioritize the solutions. As in the following matrix, for the issues located in the high importance and low-performance zone, urgent action needs to be taken.
However, there are always trade-offs, such as quality and cost that need to be considered at the moment of implementing any change. We have to improve the process to make the best balance.
Process redesign to improve performance
The process differs in various industries, but there are some common elements that influence the performance of the companies at the moment of evaluating what activity has the potential to be improved. One of the most susceptible elements to be improved is the layout of the production plan or the office due to its usual ease of implementation and its strong impact. For that, the manager needs to think about the safe operations, length of flow, staff respectful, clarity, accessibility, space utilization, flexibility and so on to maximize the advantages and minimize the adverse factors. For example, in manufacturing processes, there are mainly four types of layout based on different production activities. Usually, to be more efficient, the project process may use fixed-position layout; jobbing process may use functional layout; the batch process may use cell layout; the continuous process may use line layout.
Second, when designing the process, the most important factor is smooth flow. The designer has to consider the throughput rate, work-in-process, cycle time, and extra. Based on the process mapping, several recommendations are made to managers: simplify the process, focus on added value activities, identify delays in the process, reduce traveling distance, design-in quality controls.
One of the most used tools used to evaluate a process that wants to be redesign is process mapping. Geometrical forms are used to distinguish the different activities involved in the process; e.g. circles are used to describe operations (an activity made in the process), squares to describe inspections (a check of some sort), an arrow to describe transport (a movement of something), some sort of D to describe a delay (a wait, e.g. for materials) and a triangle to describe storage (deliberate storage, as opposed to a delay). (Formentini, 2017)
Once the full process is mapped, the next step is to measure the time involved in any operation, inspection, delay or storage in order to identify which activity cause a bottleneck due to the time or which activity can be deleted or automated to make the process even leaner. Finally, the distance of every transportation in the process need to be considered so the process can be aligned with the new layout of the production plan or the office. An example is shown next:
The result of process flow analysis is that processes can be simplified, let the company focus on added value activities, identify delays in the process, reduce traveling distances, review appropriateness of inspection points and design-in quality controls. (Formentini, 2017) Additionally, once the time and distance are obtained, a comparison between the difference of the actual process and the redesigned one can be made so a quantitative result can sustain the improvements.
Balfaqih, Hasan, & Nopiah, Zulkifli Mohd. (2016). Review of supply chain performance measurement systems
Formentini, M. (2017, October). Process Design & Analysis. Presented at the Operation Management, Nantes, Francia. https://audencia.blackboard.com/webapps/blackboard/
Course slides from Professor Marco Formentini
Mohammad Tavassoli, Reza Farzipoor Saen, Gholam Reza Faramarzi. (2015) Developing network data envelopment analysis model for supply chain performance measurement in the presence of zero data.
Written By: Luis Montoya and Xiu Zhao