Six Ways BPM Can Improve Supply Chain Management
Updated · Mar 15, 2012
As supply chains continue to expand and become more complex, organizations need better ways to manage their network of partners and providers. An increasingly popular way of gaining better visibility into the supply chain is by adding a business process management (BPM) solution to the mix.
How can adding a BPM system help improve supply chain management (SCM)? Enterprise Apps Today spoke with BPM experts at IBM and OpenText Business Process Solutions to find out. Herewith, six ways that BPM can help improve your supply chain management:
BPM can increase visibility across suppliers and partners. Imagine that Walmart gives you an order for 100,000 widgets – and it needs these widgets by a certain date, said Phil Gilbert, vice president of Business Process Management at IBM. Furthermore, he added, let’s say you have 200 suppliers in China, but only 20 of them supply widgets. If you had a BPM solution, you could enter the information and it would know which partners were certified to supply those widgets and would then request quotes from those suppliers.
Moreover, “the BPM system, because it understands process, it understands which of the 20 already have quotes in process,” said Gilbert, and can find three trading partners who can supply those widgets in the allotted time.
BPM can improve communication with your trading partners. With BPM, “you and your supply chain partners are all speaking around the same picture, literally,” explained Gilbert. That’s because with a BPM system you have an actual diagram of the process which you can share with your trading partners and discuss – “facilitating the ability to have deep and meaningful conversations [around the supply chain] and how to make it better.”
BPM can help with logistics. For many manufacturing companies and retailers, returns are a huge problem. With a BPM system, however, you can track each shipment from the time it was handed off to your third-party logistics provider. If the shipment was delivered on the first attempt, great. But if there is a problem, instead of the shipment being automatically scheduled for re-delivery the next day, the BPM system would now be notified – and would send a task to a call center agent’s desk, “so the call center person could contact the customer and try to save the shipment,” Gilbert explained.
Maybe the package was shipped to an incorrect address or the intended recipient was on vacation. Now instead of automatically trying to redeliver the shipment the next day, a call center representative knows to contact the customer to find out if, say, the address was incorrect or when someone will be there to accept delivery. And by keeping the package “in the field instead of coming back to the dock, [the company] saves hundreds of dollars per item,” Gilbert said.
BPM systems can scale – and be modified – to meet your supply chain challenges. Another advantage of having a business process management system in place is that it can grow along with your supply chain – and be modified to integrate with your trading partners’ systems. With BPM “once you’ve integrated all [your] various trading partners into your supply chain process, you can very easily change the process to accommodate unique nuances that each of your trading partners might have,” said Gilbert. “That ability to easily scale change and diversity among your various suppliers is a massive value proposition.”
BPM can help organizations streamline workflow and capture early payment discounts. By adding business process management to your supply chain, “you combine relevant content and intelligent workflow to create an effective decision-making environment that is fit-for-purpose,” stated Deb Miller, director of Market Development, OpenText Business Process Solutions, a business unit that leverages OpenText’s 2011 acquisitions of Metastorm and Global 360.
For example, by implementing a BPM solution, OpenText client Ciba Vision was able to scale its accounts payable processing – going from handling 4,000 invoices per month to more than 6,000 without adding staff. The company was also reduced cycle time from five days to less than 24 hours, allowing it to capture early payment discounts.
BPM can increase efficiencies and reduce costs. A BPM system, by streamlining workflow, can also help eliminate decision-making roadblocks by integrating departments and help businesses process invoices move faster. For example, “a global sporting goods manufacturer was able to [eliminate] paper from its processes – and integrated claims resolution and accounts receivable into its [workflow],” noted Miller. “This resulted in a seven-fold increase in productivity, improved customer service and management visibility into all work statuses.”
Jennifer Lonoff Schiff is a regular contributor to EnterpriseAppsToday.com and runs a marketing communications firm focused on helping organizations better interact with their customers and par