What is your Business Model?
Based on the anlysis of the data in your existing ERP system (Organizational Footprint) and the discussion of your future strategies we build segments of customer needs. To include an analysis of the last year’s sales is very important, see “The Long Tail“.
Goal: To group customer needs (service levels) that the needs of each segment can be fulfilled with one set of processes.
Distinguish between common needs and exceptions
Experience shows, that including rare events (e.g. special pricing, very large customers, special deals) in the design complicates the systems design and often make automation impossible. If these rare events are neglected, user acceptance can be endangered.
Based on the above analysis, the minimal set of necessary processes can be designed. Minimal means, that we fulfill all customer needs with dedicated processes. But we accept exceptions and we treat them as such and provide a few very flexible “exception processes”.
Economy of scale
The result are fewer process variants and therefore more transactions per process variant. This enables automation and less errors (we get the full revard of Economy of Scale).
Often, this frees capacity of users which can be used to increase customer satisfaction or to reduce cost.
Chosing the right process category
Dealing with materials, four basic process categories can be used: Make-to-Stock (MTS), Assemble-to-Order (ATO), Make-to-Order (MTO, and Engineer-to-Order (ETO). Each of these process categories have advantages and disatvantages. Or experience shows, that choosing the right process category for each customer segment is essential for a good process design.
The four steps above make sure your stocks and WIP is low for each desired customer service level. And process cost are low because of maximal usage of Economy of Scale effects.
These steps are neccessary to deal with complexity as descrebed here.