business process blueprinting
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Demand Clarity Inc. 2005
Business ProcessBlueprinting
byMike DohertyJeff Harrop
231 Green Vista Drive Cambridge, Ontario, CANADA N1T 1Z1
Toll free: 877.877.9769 Phone: 519.623.4797 Fax: 519.623.0316
Web: www.demandclarity.com Email: info@demandclarity.com
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Most people wouldnt dare take on a building project without first having a set ofplans drawn up. The same logic should apply when changing businessprocesses, but its often tempting to dive right into installing software or changingprocedures without really knowing what the impact will be on the organization asa whole. If you cant make something work on paper, then youll have a tough
time trying to implement it. This paper will teach you how to blueprint yourbusiness processes to give your implementation the best chance of success.
Building a House
Pouring the foundation, laying bricks, framing, insulating, running wires andconduits, plumbing, wallboard, flooring, paint, fixtures the list goes on. Lots ofdifferent materials and a myriad of people working on different aspects of ahouse construction project at different times. An endeavour like this requires aplan.
Thats why your first step is to work with a designer or architect to create ablueprint. Youll start by getting your high level requirements jotted down. Forexample, you want a stone and stucco exterior, 3 bedrooms and 2 baths, asunroom that faces south, a large kitchen, etc.
Then the architect will draw a rough sketch that includes as many of your desiredelements as possible. With something more concrete, you suggest changes tothe design that better reflect what youre looking for. Based on this discussion,the architect will erase and redraw lines to better suit your needs. This processmay repeat again, but will become more refined at each step.
When you finally come to an agreement on the sketch, you can start filling in allthe details and drawing detailed blueprints. The blueprint will be to scale and willinclude specific locations for walls, windows, doorways, electrical outlets andplumbing that are based on the agreed-to sketch. Another round of discussionand refinement will occur until agreement is reached on the details.
You now have a final blueprint that is a paper representation of what your housewill be. You can use this blueprint to:
Buy property with the correct dimensions and features
Get a building permit Solicit bids from contractors Determine work schedules and material requirements
Make interior design decisions
While it may be a significant investment of up-front time and effort, its well worthit to have everything worked out on paper before you start pouring a foundationor buying wallboard. After all, if you cant make it work on paper, how can youpossibly build it?
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Its certainly much easier and more cost effective to erase and redraw lines thanit is to demolish a partially built house and start all over again!
Building a Business Process
Building a house is a well defined, step-by-step process, with the blueprint asyour guide for executing it. The blueprint tells you what people and materials areneeded (inputs) and the sequence of the work (process) in order to produce ahouse (output).
Fig. 1: The process of building a house
A business is nothing more than a series of processes, executed in sequence,that deliver a beneficial output to its customers. The outputs of businessprocesses can sometimes be less concrete than a house a demand forecast,an advertising campaign or a budget, for example but they are still createdusing inputs and a series of transformation steps. And just like constructionprojects, new business processes should be thoroughly worked out on paperbefore you do anything else (like install software or modify existing systems). Aswith building a house, not spending enough time on the design stage will makethe implementation much longer and costlier.
So how do you go about designing a business process on paper?
Its actually quite similar to creating blueprints for a house:
1. Start out by describing the high level activities in your business.2. Once a high level design is agreed upon, drill down to add details that are
consistent with the design.3. Continue drilling down to the specific activities and tasks that people in the
organization will perform, to ensure that day-in, day-out activities arecongruent with the high level design. At any stage there may be severaliterations before agreement
In uts Process Out ut
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When youre done, youll have a paper representation (or blueprint) of what yourbusiness will be, which you can then use to:
Make changes to existing policies and procedures Select new software and/or make changes to existing systems
Develop education and training materials
Design jobs and compensation schemes that support the process Develop measurements and key performance indicators (KPIs)
Business Process Blueprinting
To do a good job of business process blueprinting, we recommend that it bedone among a small team of people with diverse backgrounds and roles withinthe organization. This wont make the job particularly easy, but expediency is notthe goal you want to implement processes that have been well thought out fromdifferent perspectives.
While business process blueprinting can be used to document current businessprocesses, a word of caution is in order. If you get too wrapped up indocumenting the current state in a lot of detail, it can become very frustrating.Imagine what it would be like if someone built a house without detailed plans andyou were given the job of producing detailed blueprints after the fact!
We recommend a clean slate approach that allows people to explore howthings shouldwork with a clear mind. As for documenting the current state, wesuggest that you only do so at a high level, to point out redundancies that areaddressed by the future state design and to help management and others tounderstand the impacts of moving to the future state.
Business Process Blueprinting Guidelines
Before we get into the mechanics of business process blueprinting, we need toestablish some guidelines that will help to focus the activity and keep it on track:
Always start with the ultimate consumer of your business activity and workall the way back.
Think primarily in terms of what is being done and why. Put lessemphasis on how the activity is performed and whoperforms it. Keep thecompany specific jargon and acronyms to an absolute minimum.
Someone who has never worked for your company before should be ableto pick up the blueprint and understand it.
Express sub-processes as boxes and inputs/outputs as arrows. Make sureprocess boxes are labelled using a verb as the first word. Input/outputarrows should be nouns.
Any process or sub-process may have multiple inputs, but should onlyhave one output. This makes sense every time you follow a recipe forchocolate cake, you should end up with a chocolate cake as output.
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Starting with these initial guidelines (others will be introduced later), well walkthrough a sample business process blueprinting exercise for fulfilling consumerdemand in a typical retail business.
Developing a Level 1 Blueprint
The process box depicted in Fig. 2 below represents the most important butmost often overlooked process in the blueprinting exercise. It seems obvious,but if the consumer doesnt execute this process, then there is no retail business!
Fig. 2: The consumer process in the retail supply chain
The input received by the consumer is product displayed on the store shelf. Theaction they perform on the input is to Acquire Product and the output of thisprocess is the point of sale information that is recorded when the purchase ismade.
Now we can start tracing back from the consumer. Where did the output Producton Store Shelf come from? What process created it?
Think about the activities that occur just prior to when consumers take theproduct off the shelf. The retail store would need to have received the productand placed it on the shelf:
Point of SaleInformation
Acquire Product
Receive andPresent Product
Product onStore Shelf
Fig. 3: The process that gets product onto the store shelf
The output of the process Receive and Present Product is the input of theprocess Acquire Product. By continuing backwards in this manner, we may endup with a Level 1 process map that looks like this:
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Level 1: Fulfill Consumer Demand
Manufacturing
Processes
Dis
tribution
Processes
Selling&
Administrative
Processes
RetailStore
Processes
Consumer
Processes
Point of Sale
Information
OperationalSchedules
Consumer
Demand
Forecast
Store
Replenishment
Plan StoreReplenishment
Plan
DC
Replenishment
Plan
DC Replenishment
Plan
Production
Plan
Production
PlanRaw Materials
Event
Information
Finished
Goods
Product Available
For Delivery
Product Delivered
To Store
Product on
Store Shelf
12
Execute Physical
Operations
10Manufacture
Product
5
Determine StoreRequirements
7
Plan Physical
Operations
3
Plan Promotions
and Events
9
Acquire Raw
Materials
4
Forecast
Consumer
Demand
11
Prepare Shipment
1
Acquire Product
PRODUCT FLOW
13
Receive andPresent Product
INFORMATION FLOW
6
DetermineDistribution
Requirements
8Determine
Manufacturing
Requirements
2
Manage
Assortment
Assortment Changes
Fig. 4: Level 1 business process blueprint for the Fulfill Consumer Demand process
Youll notice that a few elements have been added to make the blueprint easierto understand:
Process boxes have been numbered. This will make it easier to follow drilldowns.
Coloured arrows have been used to differentiate between the flow ofinformation and the flow of product.
On the left hand side, a functional overlay has been added to categorizethe sub-processes you can see that some of the sub-processes (2, 3and 4) span across functions
Also, notice that the process flow is intuitive. If, in the course of doing thisexercise yourself, you find that you have an unmanageable number of boxes, orthat flow lines cross over each other, then you may have too much detail on the
page or your process may have redundancy. It may be necessary to combine afew activities into one box and push the details down a level.
Once the Level 1 process blueprint has been agreed upon by everyone involved,you would then and only then drill down to Level 2. You may choose to do aLevel 2 drill-down on every box or only on a select few processes that youreconsidering changing.
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Drilling Down
With the Level 1 blueprint finalized, we can begin to explode each of the boxesinto its own blueprint. Take, for example, the Forecast Consumer Demand sub-process from the Level 1 blueprint. From Fig. 5 below, you can see that there are
three sub-processes that provide input (green) and once sub-process thatreceives its output (blue):
Level 1: Fulfill Consumer Demand
Manufacturin
g
Processes
Distribution
Processes
Selling&
Administrative
Processes
Reta
ilStore
Processes
Consumer
Processes
Point of Sale
Information
Operational
Schedules
Consumer
DemandForecast
Store
ReplenishmentPlan Store
Replenishment
Plan
DC
Replenishment
Plan
DC ReplenishmentPlan
ProductionPlan
ProductionPlan
Raw Materials
EventInformation
FinishedGoods
Product Available
For Delivery
Product Delivered
To Store
Product onStore Shelf
12
Execute Physical
Operations
10
Manufacture
Product
5
Determine StoreRequirements
7
Plan Physical
Operations
3
Plan Promotions
and Events
9
Acquire Raw
Materials
4
Forecast
ConsumerDemand
11Prepare Shipment
1Acquire Product
PRODUCT FLOW
13
Receive andPresent Product
INFORMATION FLOW
6
Determine
Distribution
Requirements
8
DetermineManufacturing
Requirements
2
Manage
Assortment
Assortment Changes
Fig. 5: Identifying the inputs and outputs for the Forecast Consumer Demand sub-process
First, lets create a new blueprint template with the Inputs on the left and theOutputs on the right, as in Fig. 6 below.
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4 Forecast Consumer Demand
Selling&Administrative
Processes
RetailStoreProcesses
Consumer
Processes
1Acquire Product
3Plan Promotions
and Events
2
ManageAssortment
Point of SaleInformation
Assortment
Changes
5
Determine Store
Requirements
Consumer
Demand
Forecast
INPUTS OUTPUTSPROCESS
EventInformation
Fig. 6: Sub-process drill down template for the Forecast Consumer Demand sub-process
Now we need to connect the dots. Using boxes and arrows again, welldocument the steps that are required to transform the 3 inputs (Point of Sale
Information, Assortment Changes, and Event Information) into the final output(Consumer Demand Forecast). This ensures that lower level drill downs willalways link up with the higher level processes that spawn them.
We end up with a peek into whats happening inside the Forecast ConsumerDemand sub-process. The flow should be smooth and sequential from left toright as in Fig. 7 below:
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4 Forecast Consumer Demand
Selling&Administrative
Processes
RetailStoreProcesses
Consumer
Processes
1Acquire Product
3Plan Promotions
and Events
2
ManageAssortment
Point of SaleInformation
AssortmentChanges
EventInformation
5
Determine Store
Requirements
Consumer
Demand
Forecast
INPUTS OUTPUTSPROCESS
4.1
Archive ConsumerDemand History
4.2
Filter Events from
Consumer
Demand History
ConsumerDemand
History
4.3
Calculate BaselineForecast
Filtered Consumer
Demand History
4.4
DeterminePromotional Lift
Forecast
EventInformation
4.5
Calculate
Consumer
Demand Forecast
Baseline Forecast
Promotional Lift
Forecast
Fig. 7: A Level 2 drill down of the Forecast Consumer Demand sub-process
Note that there are 5 more granular sub-processes within the ForecastConsumer Demand process. Also, the numbering convention is inherited from
the higher level to ensure consistency throughout the blueprinting exercise.
You can continue to drill down in this fashion as much as you want, so long asthe additional detail is useful. As before, dont proceed down to the next leveluntil everyone is in agreement on the current level.
Once youre down to Level 3 or 4, it may not be necessary to continue usingboxes and arrows. You may instead want to just use a sequential list todocument the details. For example, the drill down for the Archive ConsumerDemand History sub-process might look like this:
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4.1 Archive Consumer Demand History
4.1.1. Extract date-stamped POS and inventory history from data warehouse
4.1.2. Smooth POS demand across historical stockout periods4.1.3. Determine which items entered the assortment less than a year ago4.1.4. Retrieve superseded items and scaling factors for items with less than a
years worth of POS history4.1.5. Copy scaled history from superseded items to new items4.1.6. Delete history for superseded items
Fig. 8: A Level 3 drill down of the Archive Consumer Demand History sub-process
Supporting Documentation
One of the advantages to having business process blueprints is that you canmake future process changes and see what the impacts will be early on in theproject. For example, if you want to delete an activity for efficiencys sake, youllbe able to see what other processes will also need to be changed toaccommodate it. This can be very useful for change management purposesdown the road.
For this reason, its a good idea to have some background information abouteach sub-process, including:
What the purpose of the sub-process is Which other sub-processes provide the input
What input is supplied by these sub-processes Why the input is needed by the sub-process
For example, accompanying our Level 2 process blueprint would be the followingtable:
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4 Forecast Consumer Demand
Process PurposeTo predict, by item, the time-phased demands of consumers that willneed to be satisfied by each retail store
Process Inputs
Supplier Process Input Supplied Why Supplied
1 Acquire Product Point of Sale InformationTo provide the historical demanddata that will be used to generatea mathematical forecast model offuture consumer demand activity.
2 Manage Assortment Assortment Changes
To provide information about
product introductions anddiscontinuations.
3 Plan Promotions and Events Event Information
To provide information aboutpast events so that we knowwhich historical demand needsto be filtered from the baselineforecast calculation.
To provide information aboutfuture events so that we canfigure out how much additionaldemand needs to be added tothe baseline forecast.
Summary
Implementing a new business process is much like building a house. The timespent working out the details on paper before construction activities begin is wellworth it.
Business process blueprinting is most effective when its done as a collaborative
team effort. This can sometimes make the process more time consuming, but itsthe best way to make sure youve captured everything. To keep things on track,get broad agreement on the high level design first, then go after the details.
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Remember these key process blueprinting guidelines:
Always start with the consumer and work backward. A process blueprint is about what is done and why, not how its done and
whodoes it.
When describing a process, use a verb as the first word.
A process can have many inputs, but only one output.
When your blueprint is complete, the flow of the process should be easy tofollow. If you have a large number of boxes or flow lines that cross, look for waysto combine some activities and relegate the details to the next level down.
Always get agreement on the level youre working on before drilling down to thenext.
Always provide supporting documentation that defines the purpose and inputs ofeach sub-process, so that, down the road, people will know what you were
thinking.
About Demand Clarity: Demand Clarity Inc. is a focused consulting firm whose mandate is to
simplify supply chain planning. For more information on this topic or others, please phone us tollfree at 1-877-877-9769, send an email to info@demandclarity.com, or visit us on the web atwww.demandclarity.com.
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