Helge Hess's picture

Broken global procurement and distribution processes  require operational excellence and business continuity management

In addition to the massive challenges facing our healthcare system, there is a risk of broken procurement and distribution processes: Many borders are now only passable to a limited extend and carriers must drastically reduce their capacities. Logistics companies are informing their customers that for certain regions regular transit time obligations are suspended and that deadlines and transit times cannot be guaranteed. Car manufacturers are ceasing production.

Operational Excellence in crisis time
Cross-continental supply chains also threaten to break down. For example, trains from central China to Germany (e.g. baby seats, car and machine parts are transported from the province of Shaanxi in China to Europe, which are then redistributed from Mannheim) have already broken down several times or arrived without cargo. Especially the logistics of companies in the chemical, vehicle construction, textile and electronics are under threat, as their value-added chain is spread over many partner companies. In the case of products (such as mobile phones) that consist of many individual parts, the mere absence of a few components is enough to bring production to a standstill.

To sum it up: when companies are operating in a state of emergency, they are affected in three sensitive areas:

  • Health and availability of employees
  • Decline in demand
  • Interruption of logistics chains in procurement and distribution

Companies are currently taking operational measures to keep their key operations and processes running and to cope with various scenarios. Important operational measures to maintain core processes are in particular:

  • Rescheduling of procurement and distribution logistics routes
  • Process adjustments to ensure the supply of warehouses, branches and factories
  • Close exchange with suppliers or search for alternative suppliers
  • Adjustment of capacity planning for short-time work 

All these show that operational excellence is particularly necessary when faced with challenges beyond the scope of day-to-day business: procurement and distribution processes must be managed so efficiently that a rapid response can be made to short notice events. Companies that have invested in the documentation, analysis and monitoring of their business processes over the past few years benefit now from a clear advantage! They can use their tools to quickly identify and coordinate relevant measures.

What is a Business Continuity Management System (BCMS) and what is the purpose?

The aim is to minimize damage and to take the best possible precautions in the event of serious disruptions. Let’s have a detailed look:

  • Such a system includes plans for resuming regular operations as quickly as possible after an interruption.
  • An understanding of the core processes with the resulting products and services (and all aspects such as responsibilities, information technology, partners, etc.) is a mandatory prerequisite for defining emergency plans.
  • ISO 22301 is the internationally recognized standard for BCM systems and requires that such a management system is located at the top management level and that regular reviews are ensured.
  • Under the heading "Understanding the organization", the role of business impact and risk analysis is highlighted. Furthermore, process monitoring plays a dominant role, since after the implementation of a BCMS, measures for periodic monitoring and evaluation must be implemented.
  • The monitoring of procurement and distribution processes is an application scenario of Process Mining systems, which are used to not only see delays in processes, but to identify causes and propose counter measures.

In addition, companies give high priority to protecting their employees and customers through specific guidelines on travel and infection prevention. Here, too, the comprehensive approach of an Enterprise Management System (EMS) powered by ARIS is evident: a so-called 'Read & Understood' capability ensures that guidelines are distributed quickly and enables control that they have been received and understood by each individual employee.

Learn more on Enterprise Management Systems here.

Tags: ARIS 10 Enterprise Management System Process Mining