Business process optimization
As a matter of principle, there are two different approaches to business process optimization:
- Continuous improvement
The continuous business process involves ongoing improvements to existing processes. This is also known as "Kaizen".
- Business process reengineering
In its original form, business process reengineering involves jettisoning all previous business processes and implementing completely new ones. This procedure was primarily developed for US companies and is not always practical in a real-life situation. Opponents of this approach argue that it is not viable to identify and examine the current state of business processes which are to be jettisoned as this impedes creativity and is additionally a waste of time and resources.
- Process smoothing
Among other things, practical process management means focusing on exceptions, standardizing them and eliminating them once and for all in the interests of greater process security. As a matter of principle, this entails smooth and harmonized processes as the simpler and more standardized processes are, the fewer exceptions there are, meaning that costs can be minimized, thus improving the scope for intervention and management.
Processes can be smoothed in any of the following ways:
- Geographic proximity (e.g. a plant engineering company should ensure that the design and purchasing departments are as physically close to each other as possible)
- Utilization of time potential to reduce turnaround times
- Removal of buffers (e.g. waiting times) between the individual process steps
- Elimination of interfaces as they prevent smooth processes
In practice, optimization processes can be supported efficiently by systematically utilizing enterprise resource planning software.