As discussed in my last blog, I will walk readers through APQC’s methodology for process improvement over the next several months in this series of blogs I like to call Demystifying Process Improvements. Our step-by-step approach is based both on our best practice research as well as hands-on experience helping large companies’ accelerate their process efforts.
The Fun Begins
Your manager just called you in to her office to tell you that you’ve finally convinced her: It takes too long for the organization to buy goods and services. There’s got to be a better way. And you’ve been tapped to fix it. Congratulations! But now what?
Our experience is that by the time management is willing to admit that a process is broken, it’s probably been broken for a while and there’s probably not a single version of that broken process. Every business unit, facility, or top manager probably executes the broken process in different ways. To truly fix the process, you have to fix every variant across the enterprise.
And finding where similarities and differences exist is not easy because each business unit uses different words to describe what they do. You could spend the next year trying to reconcile every variant of procure-to-pay. But there’s a faster way.
APQC’s Process Classification FrameworkSM (PCF)
For the last 20 years, APQC has managed and updated a listing of all the tasks and activities conducted inside organizations. It’s just a big numbered list. And for process improvement, it’s the key to standardization. Here’s why it’s so valuable:
- It normalizes the wording of every process step. So, even if different business units describe their actions in different ways, there’s a “standard” phrasing they can now adopt.
- The listing is mutually exclusive and collectively exhaustive, which simply means that everything appears once—but only once. Duplication is the enemy.
- It’s organized in logical groupings, and then decomposed into finer and finer detail. In other words, if you can identify the big steps in a process, you can use the pre-identified steps as a starting place to identify what each business unit does in that process.
So How Do I Use It?
While every library could organize and store their books in their own way, they don’t. The PCF is a Dewey Decimal system for process steps, a skeletal organizational structure.
To find a book in any library, the first question to ask is if the book is fiction or non-fiction. To find a process in the PCF, you need to ask yourself whether the process step is an operational or support task:
- The first five sections are focused around “operating processes”, the stuff you’re in business to do (develop a widget strategy, develop widgets, market and sell widgets, deliver the widgets, and manage your relationship with the buyers of widgets)
- Sections 6 through 12 are the back-office support functions (developing employees, managing IT, etc.)
Let’s take an operating processes “Procure to Pay” for our example, you’ll find most of the process steps within section 4: “Deliver Products and Services”.To find the most relevant sub-steps, ask yourself what happens within each of the following big steps:
- Strategic sourcing
- Contracting
- Purchasing operations
- Receiving
- Payment options
Simply copy/paste the relevant rows into a new sheet, creating a long list of process steps. Share that list with the first business unit, asking if they do all of these and if there’s anything else they do within Procure-to-Pay that’s not on this list.
You can then bring this list to the second business unit to compare and contrast, identifying where they do the same tasks and what steps might be unique. Continue building the list of steps by sharing the list with each business unit.
Process Steps* |
Which Business Unit (BU) Use This Process Step |
||
|
BU 1 |
BU 2 |
BU 3 |
4.2.1 Develop sourcing strategies (10277) |
Yes |
Yes |
Yes |
4.2.1.1 Develop procurement plan (10281) |
Yes |
No |
No |
4.2.1.2 Clarify purchasing requirements (10282) |
Yes |
Yes |
No |
4.2.2 Select suppliers and develop/maintain contracts (10278) |
No |
Yes |
Yes |
4.2.2.1 Select suppliers (10288) |
Yes |
No |
Yes |
4.2.2.2 Certify and validate suppliers (10289) |
Yes |
No |
Yes |
For your first review meeting with your manager, an exhaustive list of what happens will show you’re off to a great start. At this point, don’t worry about how the steps are ordered or the relationship, who does what, or who owns the process. We’ll get to the “who” and “how” in future blogs.
Jess Scheer is a process consultant at APQC and can be contacted at [email protected].
To better understand and address process framework challenges APQC is conducting a survey on putting its Process Classification Framework SM (PCF) in action. Please take a few minutes to share your insights by completing a 10 minute survey on how your organization is using the PCF, your adoption and implementation practices, and the challenges you face using it.