A business enterprise can achieve the pre-determined goals and objectives when its various functions like manufacturing, supply chain, marketing, HR, finance etc are successfully executed. And the successful execution of these functions depends on the efficiency, effectiveness and competitiveness of the processes involved in these functions.
Processes are, thus, crucial to the success of various functions of a business enterprise. When properly designed and implemented, processes can help a business achieve desired results in productivity, quality, consistency and competitiveness which eventually lead to higher profitability and growth. On the contrary, a poorly designed and implemented process will result in higher costs, higher time consumption, inefficient use of available skills and technologies etc. So, it becomes important that the faults in the processes are identified on time and remedial measures be taken. Faulty or poor processes can be easily identified with the help of the symptoms associated with it.
1.Deviations in the actual product and desired product
At each stage in the flow of work, certain inputs (tangible or intangible) are processed to get a desired output which becomes the input for the subsequent stage till the final product / service is created or delivered. A well defined process lays down the expected standards of input and output required at each stage. Without these defined standards, the input received and output created at each stage will not result in the creation of the features and characteristics required in the final product / service. This will be evident when there are deviations, of any form or degree, in the expected product and the actual product.
2.Duplication of work
A well defined process lays down the unique roles and responsibilities of each process owner which helps them in value addition to the inputs received and deliver the value added output. In the absence of clear cut definitions and demarcations of these responsibilities, a process owner may end up duplicating the work done at a previous stage. For example, if the responsibility of data entry of stock is not assigned to one particular retail staff and the work already done is mistakenly repeated, the store’s stock records will show inflated and inaccurate figures. This may lead to cancellations of orders taken in anticipation of presence of sufficient stock – a phenomenon often associated with poor processes.
3.Frequent violations of unity of command
Unity of command is a very important principle of management and plays a crucial role in the sustenance of the organization structure and design. Every process owner should have a functional authority. In a process where the authority-responsibility relationships are not clearly defined, there’ll always be room for uncertainty as to whom the process owners should take instructions from and for what. For example, in a large format retail store, an executive from the finance department cannot sanction a stock purchase bill received from an executive from the warehouse, without the go-ahead consent of the concerned heads of both the departments – Finance and Inventory / Warehouse. When activities like these are observed or take place in an organization, it is a reflection of a poor process in effect.
4.Undocumented processes
Processes should always be documented with the help of tools like SOPs. These written documents serve like a ready-reference for day-to-day activities in a business. With process documents, accountability and responsibility can be attached to the process owners. In the absence of processes in a written form, whenever there is doubt or confusion, process owners might resort to convenience over standard procedures. Lack of process documentation is the easiest way of telling that a company is experiencing a poor process management.
5.High and fluctuating TAT
TAT or Turnaround time is the time taken to complete a process cycle. A prudently designed process sets an acceptable time limit or a deadline for completion of each activity or operation in the process. Without a defined time-frame, a company will not be able to deliver its services on time or fulfill its commitments made to customers, suppliers, distributors and other third parties. Whenever there are reports of operational lags and delayed service delivery, it is most likely emanating from not having process time frame – another infamous symptom of poorly managed processes.
6.Risks of non-compliance
Processes are also helpful in maintaining regulatory norms. A business enterprise or a manufacturing unit needs to compulsorily follow several applicable rules and regulations at the workplace or factory. This includes maintenance of safety standards, quality control, office timings and holidays etc. By incorporating these rules in the respective functional processes, a company can keep a check on the compliances of these rules. By not incorporating the compliance requirements in its processes, a company risks itself of non-compliance to regulatory norms. The risks of non-compliance always remain high with poorly designed and hastily implemented processes.
7.Poor employee morale
Productive employees are sensitive to their work environment and organization culture. Processes play a significant role in maintaining high standards of work culture. Having projected targets / goals, defined parameters for performances and sense of contribution, boosts employee morale and keeps them committed to their functional goals. Absence of discipline, laid down rules and guidelines and non-adherence to standards can easily drain motivation and morale of employees and lower down their performances. Also, absence of well-defined processes may cause bias and unfairness in performance management, further aggravating the morale of productive employees.
Poorly managed processes have far-reaching consequences for a company. For a manufacturing unit, it may adversely affect the quality of the final product. For a service enterprise, it may hamper service delivery and customer satisfaction. Thus, it becomes essential that a company or a business enterprise work on its process management.
A crucial step in this direction is to check out for the presence of the symptoms associated with poorly managed processes. Process audits can be a powerful tool in the identification of faults in the processes.
To know more about “Symptoms of Poor Processes” get in touch with our Retail Experts on [email protected]
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Author Bio
Nikhil Agarwal
Chief Operations Officer
