The process of streamlining and optimizing a business process consists of three mantras.
(EAS). The theory of EAS is to look for ways to eliminate transactions from a business process flow or, if you cannot eliminate them, use technology to automate as much of the process as possible. Finally, if you cannot eliminate or automate transactions, you should standardize them to ensure that your manual efforts require the least amount of work possible to complete the process.
As businesses grow, processes and procedures sometimes remain in place, even though they are no longer required. Case in point: reports. In most companies the amount of reports created far exceeds the number of reports looked at and acted upon. Many reports are created because they have always been created, even though the people originally requiring them are no longer around. Sometimes the need for a specific report has changed due to a change in processes. By looking at all the reports developed on a regular basis in your organization with a critical eye, you may identify a number of reports that are no longer relevant and can be eliminated, thus freeing up time for more important tasks.
Another are for potential elimination are approvals. In many cases approval levels grow as the company grows. Eventually companies end up with more then three levels of approval, and approval redundancy. Again, this is an opportunity for elimination and streamlining business processes for productivity gains.
If you are planning to implement an ERP system you may want to use the opportunity to review and eliminate all non-value generating activities in your company.
Now that you have eliminated non-value generating activities, identify which activities can be automated. Doing so not only improves throughput times of your operation, but also reduces errors due to manual entries, and the need for duplication of data. One example would be the automatic issue of a purchase order for raw materials whenever inventory falls below a certain, pre-defined reorder point. As you need such materials all the time for the production of your finished products, do you really need to manually raise a purchase order whenever your inventory is below a minimum level? A proper implemented ERP system can automate this process and free up time for more important activities.
Other areas for automation are cash-flow creation (by taking into account existing invoices, purchase orders and bank balances in your ERP system), or back-to-back orders in the case of bought-in items. Todays ERP systems have the ability to automate many of your business processes, which reduces processing time, minimizes data entry errors and improves productivity.
If you are planning on implementing an ERP solution, consider whether some of your business processes can be standardized and simplified. In many cases the need for a specific unique operating process is the result of continuous change of the organization and changing customer demands. Using standards may result in less flexibility towards customer needs, but this may be offset through significant productivity improvements and profitability gains. Standardization of processes can come in many forms: A company in Singapore specializing in gift hampers used to wrap such hampers individually in cellophane paper. As the business grew, they decided to introduce pre-fabricated cellophane wrappers that can easily fit over a hamper. The wrapping is now standardized, and this allowed the company to increase their production of hampers from 800 to 4000 hampers per day.