Enhanced business processes yield savings of time and money for cooperatives.

• Author: Vojdani, Ali
• Position: Report

Leading companies across industries have demonstrated considerable success in applying a process-based approach--managing end-to-end business processes across departments--to improve corporate performance. Seeking to emulate these improvements in corporate performance, the Cooperative Research Network's (CRN) Distribution Operations Best Practices advisory group directed CRN to explore whether a model approach could be developed to assist cooperatives in improving their business processes.

It is most likely no surprise to most co-op managers that CRN's research found that many cooperatives focus on the traditional organizational view of managing work by departments, which often results in silos that stifle interdepartmental communication.

Consequently, end-to-end business processes--such as processing new service requests--can be inconsistent because of the lack of standards across applications, locations, functions, and divisions. Interviews with staff at several cooperatives revealed inconsistencies in procedures. A typical example involved the same service order being rekeyed into computer systems as it passed from department to department. To ensure accuracy and efficiency, new service orders should be entered into one computer system only one time by one employee. That information can then be shared through different software systems via integration provided through common protocols such as MultiSpeak. Entering the same project into a computer multiple times results in wasted time and money and increases the chances for error.

The research also revealed that few cooperatives have clearly defined performance measures for such processes and very few compare their performance systematically with best practices for continual improvement. Inefficient work practices that are not process driven have wide ranging impact on the operation of the organization:

* They limit the cooperative's ability to optimize precious resources, enhance value, and maximize performance of their work processes.

* Knowledge critical to the ability of the cooperative to serve its members may reside only with a few employees and can be lost permanently when they retire.

* Training of new employees on work processes can be unnecessarily time-consuming and difficult.

* Departments that depend on a business process in varying ways have no ready structure for communicating or negotiating needed changes with their counterparts across the cooperative.

* It can be exceedingly difficult to identify bottlenecks and process inefficiencies that waste staff time and member dollars.

Cooperatives can improve their performance by applying the business process improvement (BPI) techniques described in this article and expanded upon in the recent CRN project, 07-16 Businesses Process Improvement Toolkit.

What is Business Process Improvement?

Business process improvement, or BPI, is a systematic approach to help any organization improve its performance by organizing and executing one or more projects that focus on improving the ways in which work gets done. BPI is a mature discipline that has been applied in many industries--including the utility industry with proven results.

The core principles of successful BPI are often easily articulated, but difficult to implement. Successful application of BPI to an organization must involve the engaged leadership of management, beginning with the CEO, who is responsible for setting the direction and purpose for improving the business processes. Without the CEO's support, it can be difficult to tear down the department silos that cause many of the problems and inefficiencies.

In addition to management support, all members of the affected departments must understand processes from a systems perspective. That...