Protecting a Business Can Include Minimally Disruptive Ideas
Whether you have read about it in the news or experienced it directly, talks and impacts of an economic slowdown are becoming more and more pervasive. The word in the minds of many is “recession.” According to the National Bureau of Economic Research (NBER), a recession is characterized by a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.” Economic downturns in a recession can affect a business’s cash flows, supply chain, access to capital, employees and growth plans. Organizations may be anticipating how to prepare for the potential effects of a slowdown within the economy. Many business owners will consider more commonplace ideas like cutting back expenses, delaying capital expenditures or analyzing their human capital for potential staff reductions. However, there are more logical and minimally disruptive ways to keep your business less susceptible to the effects of economic disruptions.
Business Process Mapping
One easy and effective way to ensure your business is running lean and efficiently is through business process mapping (BPM). Process mapping uses symbols to visually communicate to your audience and encourage engagement within a process that is typically difficult to understand for business owners. As such, BPM details the steps within a particular process as it relates to a business, such as receiving or disbursing money, processing payroll or your financial close process. This mapping identifies who is involved, what is done and how it’s done. By identifying who is responsible for certain actions in a process, a business owner can better maximize a person’s time and skill set. They are also able to identify potential redundancies or inefficiencies in their processes. Addressing how a process functions allows you to determine whether a step is manually prepared or processed using an IT system.
The primary advantage of BPM is to improve a company’s effectiveness and efficiency when achieving a specific task or goal. BPM can help you gain more transparency around the decision-making steps and workflow, which reduces redundancy within your business processes.
Supply Chain Mapping
With challenges in recent years to supply chain disruption, supply chain mapping (SCM) is becoming another valuable tool. SCM documents a company’s supply chain, including the companies, suppliers and individuals involved in their critical supply network. This SCM is then used to identify opportunities to diversify or mitigate risk in sensitive parts of the supply chain.
SCM is important because it allows a business to react quickly to supply chain problems because it can more quickly identify the root cause and determine ways to remediate the issue. Through SCM you can also layer in costs, financing and terms with each supplier to gain better knowledge of your supply network as well as advantages over competitors. When adversity occurs in your business, being prepared with an SCM allows a business to stay agile and make effective decisions more quickly.
Mapping your supply chain can helps a business learn more about how its products are produced, where they are produced and by which parties. This allows for a company to build out a more effective risk management process as it relates to supply chain disruptions. When supply strains occur, businesses with a clear view of their supply chain weather the storm much more smoothly than trying to solve problems on an as-needed basis.
Value Stream Mapping
Developed as part of the Lean Six Sigma toolkit, value stream mapping (VSM) creates a visual representation of the necessary elements to develop and deliver a product or service. By creating a type of flowchart that shows all the people, processes, information and materials required, VSM provides an opportunity to analyze the process for areas that could use optimization by either adding value or removing areas that are wasteful, including inefficiencies, bottlenecks or other general pain points. VSM differs from other business processing tools in that it provides another layer of information by identifying cycle times and accuracy in the process. However, VSM can become a significant decision-making tool for higher management to make more strategic decisions for the business, especially when preparing for times of recession. Eliminating waste and inefficiencies when creating, developing and delivering a product or service can help cut costs and better utilize employees’ time while also supporting efforts to deliver better customer or client service.
Summary
Disruptions are inevitable in business, especially with the complexities of companies and their supply chains. The risk associated with those disruptions can be mitigated through business process mapping and supply chain mapping. Those mappings are an easy and effective way to keep an organization agile in challenging times, but to also keep them informed and aggressive when their business is moving strongly. At Windham Brannon, we have a skilled and knowledgeable team that can work directly with you to assist in your mapping and accomplish your overall objectives. For more information, contact your Windham Brannon advisor, or reach out to Dean Flores.
