Business Process Blueprinting

8/3/2019 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: [email protected]


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Business Process Blueprinting

Demand Clarity Inc. 2005 Page 1

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)


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


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


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


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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Selling&Administrative

Processes

RetailStoreProcesses

Consumer

Processes

1Acquire Product

3Plan Promotions

and Events

2

ManageAssortment


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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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 [email protected], or visit us on the web atwww.demandclarity.com.

Business Process Blueprinting

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