Business Processes are Like Old Laws:  They Never Go Away!

Laws are created to deal with a problem that exists today and may not exist years from now. Business processes are the same. They are created to deal with current needs. Over the years the legal system has accumulated a series of laws that may have been appropriate for their time but have never been abolished. Here are a few examples:

• Anyone driving at night through rural Pennsylvania is required to stop every mile and send up a rocket signal
• In Salem West Virginia it is illegal to eat candy 1 ½ hours before church
• In Hartford Connecticut, it is illegal to educate dogs? (Certainly don’t understand that one)
• It is illegal for women to parachute on Sundays in Florida
• A Gainesville, Ga, it is illegal to consume fried chicken any way other than by hand.
• In Barre Vermont, all residents are required to bathe on Saturday evening (Wow… glad it isn’t once a month)
• It is illegal to wear high heels in Carmel, CA. Heels greater than 2 inches high or with a base less than 1 inch across are not allowed without a permit.

It is obvious that these laws are bizarre, but they were enacted with good intention. The last one on high heels is a laugher, but was put on the books to limit the city’s liability for tripping and sprained ankles. Permits for higher heels are available free at city hall in case you were wondering. I wonder what percentage of women dressed up on a Saturday night abide by that one. Businesses are no different. As they are confronted with various operating issues, leaders put in policies and procedures to deal with those events, or employees put in shadow systems to deal with the shortcomings of existing business processes and business systems. This is especially true when old business processes aren’t removed in conjunction with implementing new systems. Some of the examples we have come across include:

• Multiple quality inspections of kits to make sure no one has taken a part from it
• Massive spreadsheets in purchasing to make sure the MRP system isn’t giving false purchase advice
• 2 over 1 sign-offs on expense reports
• Duplicate inventory kept separately so service doesn’t run out of parts
• Extra hardware in a package just in case the quantity in the package was short a part
• Monthly reports that are never read and acted on

Each one of these examples satisfied a need at one point or time in a business’s history and increased the overhead cost of that business. They also increased the time to get things done. But, if they are successful, they are forgotten about and more often than not, leaders view changing them as more effort than it is worth. Just like old laws, it is far easier to leave the processes in place than to change them. Changing business process requires work and cross functional agreement. Most people believe they have better things to do. What they don’t realize is that every business process requires resource, overhead and has very specific costs, sometimes as much as 10% of a company’s overhead. The most successful way to look at unneeded business processes and their costs to the business is through a Value Stream Map (VSM). A VSM provides a clear view of how various business processes are related to each other and assesses the need for that process. During the development of a VSM, a model is created which shows how much time, effort and cost is required for a specific process. When a VSM is done for an entire company, leadership is given a clear view of their core business processes and how they are working from the perspective of time, cost and necessity. VSM is not for the faint of heart, because it requires a lot of work and requires a commitment to change things up as a result of the findings (see a related VSM article here). You can find out more about how VSM can significantly reduce cost and streamline Business Process Consulting Services by calling +1 (626) 644-9746, requesting more information here, or emailing Group50 at info@group50.com. Subscribe below to Group50’s blog to stay on top of the latest trending topics:

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About the author:
Jim Gitney is the CEO of Group50^® Consulting and specializes in the development and implementation of manufacturing and supply chain strategies. Jim and the Group50 team are all former executives with well-known manufacturing and distribution companies who understand what it takes to put together and manage the implementation of a successful strategic plan. Group50 has designed a series of strategic assessments, workshops and strategic execution tools that eliminate the existence of Anti-Strategy. You can reach us at +1 (626) 644-9746 or send a note to info@group50.com.