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As we navigate the modern business world, optimising processes and operational efficiency is critical in determining an organisation's success. Even with careful planning and execution, process backlogs can occur, sparking delays, dwindling productivity, and lost opportunities. This blog aims to explore process backlogs, unveil areas of operational improvement, and underscore the critical role of Business Process Simulation (BPS) in pinpointing hotspots for optimisation.
Understanding the Nature of Process Backlogs
The term 'process backlog' usually signifies an accumulation of uncompleted tasks within a given process. Numerous factors, such as limited resources, procedural shortcomings, or sudden spikes in demand, can trigger this build-up. Backlogs can manifest in any department within an organisation, including customer service, production, procurement, or licensing. Regardless of their origin, backlogs invariably inhibit operational efficiency, reduce customer satisfaction, and stifle the growth of businesses.
Contrary to the expected view of backlogs as an obstruction, they are a treasure trove of hidden opportunities for enhancing your operations. The pile-up of tasks signals existing issues and offers organisations a unique chance to probe into the root causes of these bottlenecks, spotlight operational inefficiencies, and pivot towards more streamlined operations. A thorough backlog analysis can equip organisations with invaluable insights into their processes, pinpointing areas ripe for substantial improvement.
Optimising processes to mitigate backlogs can bring substantial benefits to an organisation:
Elevated Productivity: By eliminating backlogs, teams can focus on additional value added tasks, enhancing productivity levels and making more efficient use of time and resources, contributing to long-term growth.
Cost Reduction: Backlogs often entail additional costs like overtime payments or outsourcing. Organisations can cut these extra expenses and improve their financial health by streamlining processes and reducing backlogs.
Reduce Lead Times: By resolving bottlenecks and revamping operations, organisations can significantly enhance process efficiency, ensuring quicker throughput times and shorter lead times.
Improve Customer Satisfaction: By achieving reduced throughput times and shorter lead times, customer satisfaction is improved, as goods and services are received in good time.
Drive Revenue Generation: By improving productivity, reducing costs, and enhancing customer satisfaction, organisations can increase revenue through efficient operations, customer loyalty, and growth opportunities.
Harnessing Process Simulation to Discover Hidden Opportunities
Business Process Simulation is crucial for refining processes to bolster their efficiency, effectiveness, and overall productivity. When addressing increasing backlogs, BPS is instrumental in unearthing hidden potential and confronting the root causes of backlogs.
Through process modelling and simulation, businesses can identify and remove unnecessary steps contributing to backlogs. Detailed analysis equip organisations to detect bottlenecks, comprehend delays, and target the most suitable areas for optimisation. Organisations can further utilise BPS to experiment with different process structures and automation strategies, simulating scenarios and employing forward-looking decision-making to steer them on the path to peak performance.
Silico, the world’s leading Business Process Simulation tool, empowers users to replicate their existing process structures and enrich them with data derived from discovery activities like process mining. Process Simulation enables users to simulate various scenarios and process structures to identify the most optimal choices. These simulations can be swiftly translated into decision-making dashboards, answering complex and far-reaching questions in moments. This drives process efficiency and connects these to other strategic and commercial outcomes, such as revenue or ESG metrics.
In the following example, we have replicated a company's existing order workflow, which generates substantial backlogs.
We can use the dashboard feature to detect when and where backlogs will occur within our workflow. As we progress through our simulation timeline, we notice significant backlogs beginning to surface during the order reconciliation stage of our process. At first glance, it might seem logical to concentrate all our transformation efforts on enhancing the order reconciliation stage of the process.
However, acknowledging that our business is on the cusp of some substantial changes, we can incorporate varying scenarios to gain a clearer understanding of how additional alterations, such as reducing headcount or increasing order rate, will impact not only our backlogs but also other strategic outcomes that are of importance such as financial and ESG metrics. Silico provides further value by enabling us to connect processes to any commercial and strategics KPIs, expanding the value beyond process KPIs.
An upsurge in order volume and a reduction in headcount contribute to substantial backlogs. This shift redirects the primary source of backlog from the order reconciliation stage to the order review phase of our process.
Now that we have pinpointed where our future backlog issues may arise, we can direct our transformation efforts where backlogs will occur in the future. Silico allows us to experiment with our transformation and automation ideas, we can adjust process variables and configurations to mirror our transformation and automation ideas, enabling us to find the best process structures. This lets us ascertain which changes will have the desired influence on our backlogs.
By initially introducing a small transformation to our order review process, namely, eliminating waiting times from one of our order steps, we see a marginal reduction in our backlogs. However, this slight adjustment doesn't deliver the level of optimisation necessary for an efficient future process.
We can further refine our process by integrating automation into time-consuming tasks. This change allows us to evaluate the potential benefits it may bring to reducing our backlogs and in turn improving other critical outcomes such as revenue generation and profitability.
Automating manual tasks and reducing wait times effectively eradicates any significant backlogs within the order review stage of our process. We can now identify its knock-on effects on other stages of our process, as the order delivery and order
reconciliation stages both show slight increases in their backlogs. Using our optimisation feature we can also see how these change move orders from our order review stage.
As a result, we can focus on identifying which transformational or operational changes should be carried out next across the order delivery and order reconciliation stages to remove backlogs from our process completely.
Operational changes could involve increasing our teams FTE or outsourcing an activity to a third party.
Adopting process optimisation as a strategic priority and simulating your processes forms the bedrock for a more agile and resilient organisation
Leveraging Business Process Simulation tools such as Silico for process optimisation and backlog elimination is crucial for operational excellence and growth. The advantages of process optimisation, particularly when amplified by BPS tools like Silico, go beyond backlog elimination. They empower organisations to reach peak performance, adjust to changes and facilitate an environment of continuous improvement in their operations, achieving improved:
- Productivity
- Cost Reduction
- Lead Times
- Customer Satisfaction
- Revenue