The system you use to handle an invoice and cut a check to pay it is a business process, as is the way information and documents move through various hands in your operations. Tracking freight, dispatching drivers and trucks, flowing materials through a supply chain, and even measuring performance can all be considered business processes. In fact, the term can be used to describe every aspect of how your fleet conducts business.
As the foundation of a company's efficiency and profitability, it's a complex topic. The best business schools build entire advanced degrees around the concept of evaluating and improving business processes, and an industry has grown to lead companies through business process “reengineering” projects.
But it's also a highly individual issue, involving ways of doing things that have simply evolved as a company grows. And that means any evaluation of your fleet's business processes and development of strategies to improve those processes will require your insight and direction.
No matter where you turn for outside expertise or what information technologies you choose to streamline your processes, the path to any improvement will start and stop with you.
Of course, you can simply keep on doing things the way you've always done them if you're willing to accept the risk that you're operating at less than optimum efficiency.
“And if you've grown at all, that's a big risk,” says Brian Deming, president and COO of Tribridge Consulting, a provider of process consulting services for a variety of industries, including trucking. “People don't think about business processes as they evolve over time. At most, they take a bandage approach and change a process on a reactive basis without ever addressing the real problem. A fresh look at how you conduct daily business can turn up some incredible inefficiencies simply because no one has ever asked if there's a better way to do it.”
The first step to evaluating your fleet's processes is to resist throwing technology at the problem without first making the effort to understand them and how they work or don't work. “If there are problems with your business processes, software is not a panacea,” says Tom Weisz, president & CEO of TMW Systems. “The worst thing you can do is automate your problems. They won't go away; they'll just get faster.”
In fact, selecting new software or significantly upgrading current systems without a careful preliminary examination of your business processes is likely to lead to wasted time and money, as well as unnecessary system complexity, suggests Deming.
Instead, start by looking for red flags like damaged materials or unprofitable loads. “If you have good performance metrics already in place, look for areas that are not performing well,” says Deming. “For example, maybe your profitability isn't measuring up to expectations.”
Once symptoms are identified, “start asking questions and drilling back to where the process starts,” says Deming. “Follow the process backwards until you see where it breaks down. Spend the time to find out how things are done and why they're done that way.”
If you're thorough, you may also pick up other problems. “As we drill back from one problem, we often find there are interrelated issues as we get closer to the root of the problem,” says Deming. “For example, there may be a profitability problem caused by too many damage claims. When you look at the issue you find that the claims are coming from cross dock processes that cause too much handling of freight, so now you understand that solving your profitability problem actually involves rethinking your material handling process.”
Another approach to an initial examination of your business processes is “to follow the money,” says Steve Ruffner, chief marketing officer for McLeod Software. “Look at how you create the ability to generate sales and to pay for goods or services rendered. How are those requests generated and how are they handled?”
As easy as both approaches sound, in practice “it can be hard to self-diagnose your processes,” says Ruffner. “In general, people see the job they have to do every day, not what they're actually trying to accomplish by doing that job.”
“All too often, the various individuals involved in a process just don't know the objective of that process,” says Weisz. “For example, one person is given the goal of reducing overall miles and another is told to increase revenue per mile. So one positions equipment all over to get better rates and the other takes any rate offered to reduce miles.”
Weisz also finds that different levels of an organization have different views on process problems or even how a process works. “For example, we often find that senior management doesn't actually know what it takes to get out a bill,” he says.
“That's where a fresh set of eyes is valuable,” says consultant Deming. “You may not see the problem because you've always done it that way or you're too removed from it, but we can ask the simple questions that lead to the big “ah ha” answers.”
With the essential processes and their objectives identified, “then your software vendor can begin to design improved processes around those needs,” Ruffner says. “Sometimes that means addressing a specific problem by tweaking existing systems, and sometimes it means completely changing the way a fleet handles information.
“That's why it's important to find someone who isn't biased towards one solution,” he adds.
Any business process reengineering should also include a method for measuring and assessing performance of that process.
“Most people want to do a good job,” says Weisz. “A good business process not only tells someone what their job is, but at the end of the day lets them know if they did or didn't do a good job. Even a mediocre process that's well understood will give better results than a good one that no one sees or understands. In the end, it's the visibility of the process [to everyone involved] and the ability to measure it that are important.”
Whether your business processes need some fine-tuning or a complete overhaul, an objective outsider can help find the right solutions. “But don't fall into the trap of expecting a consultant to hand you a turnkey solution,” advises Deming. “You have to be involved every step of the way. You're the one that knows your business, so you have to set the priorities to get the results you need.
REWARDS OUTWEIGH EFFORT
“You also have to involve the folks who will be doing the job every day,” Deming adds. “Consultants can bring you best practices from other industries, but you and your people need to drive the details.”
Although the effort required by everyone in the fleet is substantial, so are potential rewards. “Fleets are becoming more savvy about the importance of business processes and their relationship to the health of the fleet,” says Weisz.
“Pressures on profitability are constant in this business, and both large and small fleets need to look to process improvement to improve both costs and services,” Weisz adds. “Survival today isn't just about carrying freight; it's also about handling information, whether it's electronically or on paper, quickly and efficiently.”