Business process improvement of the order-to-delivery cycle

Abstract

Grundfos is considered to be one of the world’s largest pump manufacturers. Poul Due Jensen founded Grundfos in 1945 in Denmark. It grew to become a global organisation. Grundfos South Africa (GZA) was established in 1992 and is responsible for sales in Africa. The organisation experienced massive growth over the last ten years. The current business processes are unable to support this growth which has led to inefficiency. Problems and issues arise in the day-to-day activities of the order-to-delivery cycle and this affects customer service negatively. This project addressed the inefficiencies, lack of standardised processes and recurring problems in the cycle and sets the baseline for process improvement and standardisation. An initial investigation phase was conducted to understand the order-to-delivery cycle, the Grundfos environment and to do research into the key concepts involved in process improvement. The theory of process maturity was used to determine realistic improvement goals for the project. Research included the principles of business process improvement (BPI) and business process reengineering (BPR). Both approaches include phases for process mapping, performance measurement, and implementation. In the literature study process mapping notations were analysed and the notation used for the project was selected, taking into account Grundfos standards and personnel maturity in interpreting process maps. Employees and managers were interviewed to develop a high-level understanding of the order-to-delivery cycle. From this a cause-and-effect analysis was conducted to identify all the factors that contribute to the problem. This analysis indicated that open group sessions were necessary to gather input from employees regarding the problems that they experience. Work sessions were held with stakeholders and role players to give them an opportunity to voice their concerns and to identify problems in those parts of the process that they are responsible for. These problem statements were collected, analysed and prioritised. The process related problem statements that were within the scope of the project were identified and provided a key input to the project. Documentation was developed for the order-to-delivery cycle including detailed hierarchical models of all the relevant processes. The level 1 process identification is based on Porter’s value chain activities. The level 2 process models define the order-to-delivery cycle and are grouped under the relevant level 1 processes to create a value chain perspective of GZA. The process models represent the best practices selected from the current activities performed by employees. The cause-effect and process problem analysis was used to develop process changes and improvements in areas where best practices were lacking. These were verified with management. The process models will provide employees with a guideline to ensure consistency in process execution and will serve as the baseline for future process standardisation, optimisation as well as information system initiatives. The models highlight the interaction between the processes required to achieve GZA’s purpose – providing goods to the customer in an effective, efficient and predictable manner. II Process performance measurement is important to determine whether processes are performing to expectation, to manage the processes and to identify opportunities for improvement. Measures were developed that will enable managers to monitor the performance of the new processes. Key performance indicators (KPIs) were developed to monitor the whole order-to-delivery cycle. The real improvement in the order-to-delivery cycle will be realised and achieved after the new processes have been implemented. An implementation strategy was developed to guide GZA through the implementation phase. The strategy also includes change management guidelines. In summary, GZA wants to improve customer service by improving the order-to-delivery cycle. The processes in the cycle were defined, documented and changed to eliminate known problems. The process models will provide the baseline for continuous improvement. The processes will be measured and reviewed regularly against the process measures and key performance indicators to trigger further management action. The project’s deliverables will contribute significantly to GZA’s understanding of their processes in general and the order-to-delivery cycle in particular. It can further be used as a template for similar projects.