Manufacturing the way we see it Business Process Management in Manufacturing: From Process to Value New Capgemini research shows how organizations can move to the next level of BPM maturity BPM can help As manufacturing companies emerge Taking a Close-Up Look at BPM manufacturing companies from the economic slowdown, in Manufacturing address global competitive they are looking for topline growth To better understand the current opportunities while still maintaining state of BPM in the manufacturing challenges and economic control over costs. But years of industry, as well as the benefits pressures, enabling them globalization and expansion − some and implementation opportunities, to reduce costs and organic, but much of it through Capgemini conducted research improve the value they mergers and acquisitions − have looking at the BPM practices of create as well as their resulted in complexity in the value leading manufacturing companies. speed-to-market. chain, redundancy in systems and Among the key findings: processes, and a lack of transparency and flexibility in processes. Improving Manufacturing companies are performance can be a challenge in this investing in BPM(T) to further environment. optimize their complex business processes, as well as to manage Business Process Management (BPM) processes that are not yet is a powerful approach to deal with automated. these issues. BPM aims to improve and The application areas for BPM in optimize the business processes of an manufacturing are centered around organization, supported by Business Innovation & Lifecycle Management Process Management Technology (ILM; shorter time to market), (BPMT). BPM can help companies Customer Relationship Management address global competitive challenges (CRM; leveraging multi-channel and economic pressures, enabling client interaction) and Supply Chain them to reduce costs and improve Management (SCM; managing the value they create as well as their volatility in the supply chain). In speed-to-market. addition, support functions like administration and finance can be Though manufacturing organizations made more efficient and compliant. have been putting BPM initiatives in Three types of BPM implementation place for some time, only now has levels are observed within the the underlying technology reached manufacturing sector: individual a threshold point where it can truly process transformation, agility deliver new potential – by improving layers on top of legacy applications cost efficiency, speed-to-market and and end-to-end transformation. acceleration of innovation. BPM(T) implementation at most of the companies studied is at a nascent stage and predominantly deployed at a process level as opposed to an enterprise-wide transformation. 2 the way we see it Identifying the Benefits of BPM BPM Implementation Landscape The research identified a number in the Manufacturing Sector of benefits achieved from the Although manufacturing companies implementation of BPM among the have started to realize early benefits manufacturing companies studied: from BPM implemented in a landscape that ranges from operational process A global diversified technology and levels to strategic enterprise level, the industrial manufacturer automated companies still have a long way to its paper-based processes within the go to extract the full potential from procurement division using BPM to BPM transformations. The evolving shorten the SCM cycle for approvals landscape broadly comprises three and receipt of goods. types of process transformation A leading automotive manufacturer opportunities leveraging BPM in deployed BPM to increase efficiency manufacturing companies: and decrease costs with respect to document management in its I. Individual Process marketing function. Transformation: Transformation that focus on improving discreet A global industrial equipment processes/functions within company leveraged workflow one or two components of the automation and visibility through manufacturing value chain BPM for greater operational control over its sales process. II. Agility Layer Across Legacy Applications: Transformations One of the largest global automotive that focus on integration of cross- companies resolved complexities in functional systems like PLM that its warranty management process connect several key components by implementing BPM, thereby of the value chain improving quality and costs in its customer support services. III. End-to-End Transformation: Transformations that focus on A global industrial equipment creating a “BPM transformed” manufacturer’s machinery organization with integration of construction division leveraged all the components of the value BPM’s process modeling, risk chain management and visibility tools to achieve SOX compliance. An aerospace and defense manufacturer overcame the cross- border integration challenge in its design process by implementing a BPM-PLM (Product Lifecycle Management) integration suite. Through effective implementation of BPM across the value chain, an aerospace and defense company benefited from strong governance and quality control within one of its divisions. BPM in Manufacturing 3 Three Types of BPM Implementations: Type I, Type II and Type III E2E BPM I BPM-PLM I I IMPLEMENTATION Engineering E Design BPM-ERP P Y T BPM-SCM Innovation & Product Lifecycle Management Inventory Control BPM-CRM I I Management E P Y Marketing T Campaigns Supply Chain Management I Sales Order Warranty HR & Finance E Management P Y T Marketing & Sales Customer Support Services Other Support Processes Note: E2E = End-to-end (enterprise-wide) Source: Capgemini Among the companies studied, most In the case of engineering design, have implemented Type I projects most of the companies studied are (functional level) with few focusing using BPM to link to external R&D on Type II (cross-functional level) or sources, collaborate on research and Type III (enterprise level). However, troubleshoot design problems. The opportunities clearly exist for BPM implementations here are being companies to move to Type II BPM supported by technology changes such implementations with the potential for as collaborative platforms, social BPM additional benefits and to Type III for and process orchestration engines full benefits. across a Service-Oriented Architecture landscape. Type I: Individual Process Transformation In the area of marketing campaigns, At the lowest level, companies are BPM is being used to orchestrate adopting BPM in certain processes campaigns, which enables companies within their core functions. This to scale up the marketing operations approach offers improvements in and thus create efficient repeatable individual processes, which can processes. Leveraging cloud-based be across the board. Warranty technology, these campaigns allow management, for example, can manufacturing companies to connect encompass several areas, including more directly with potential customers marketing campaigns and engineering and multiple partners, resulting in design. BPM can enable companies to higher campaign success rates. cross these silos more effectively by providing better visibility, agility and, most notably, governance control of their processes. 4 the way we see it Type II: Agility Layer Across Type III: End-to-End Legacy Applications Transformation One step up is about having a layer of At the highest level some BPM capabilities across a functional manufacturing companies are area, such as CRM, SCM or PLM. launching initiatives to reorganize Architecturally this acts as an agility themselves to become “process- layer across the existing IT system focused” organizations. These landscape. companies have determined that a need exists for best-in-class With this approach, BPM can extend architecture, IT systems and a PLM functionalities by embedding governance control mechanism that flexibility, agility and visibility in spans the entire enterprise covering all Product Lifecycle Management stakeholders – from the board down systems. BPM can also extend SCM – for all of the different end-to-end benefits by embedding governance processes. They are looking at how to and real-time monitoring of the entire redesign the process model from the supply chain in collaboration with the top down and fitting applications to partner ecosystem. Additionally, BPM that landscape. However, in terms of can enhance CRM through effective both implementing this transformation interaction of the process owners and and supporting it with technology, legacy applications across the these companies still have a long way value chain. to go. BPM in Manufacturing 5 Implementing BPM for We focus on five key areas to reduce Research Methodology Manufacturing: How Capgemini costs and make manufacturing Capgemini’s BPM in Manufacturing Can Help organizations more innovative and study involved research into the Regardless of the current state of agile. To go from process to value, all evolution and use of BPM within a manufacturing company’s BPM these areas need to work in harmony. the manufacturing sector. The implementations, Capgemini can BPM practices of more than 20 help identify and implement the 1. Value and Performance leading global manufacturing right BPM level for an organization. Management to define goals and companies were mapped against Our end-to-end Business Process evaluate and steer progress functional areas such as R&D Management approach treats processes 2. Accelerated Business Analysis and engineering, procurement, as assets that directly contribute to