Key to agile business processes

Agility cannot be achieved by applying a method and with some reorganization. It is a crucial part of the company culture, along with customer orientation. Agility is primarily determined by:

• Understanding of leadership from the boss as moderator and enabler
• decentralised freedom of decision; mission competence responsibility (AKV)
• Self-organisation through changing roles depending on the task
• Collaborative and interdisciplinary work processes with a networked mix of competencies instead of functional and sequential "little gardens".
• clearly defined customer service levels and managed flexibility

The implementation has a profound effect on thinking and acting. As a prerequisite, the usually five business processes must also be adapted accordingly (see Fig. 1).

Definition of agility

A generally valid understanding of agility does not yet exist, despite several years of use of the term. Frequently associated contents are agility, impact, de-crustation, leaving behind the familiar as well as resilient processes (robust in a positive sense). For me, agility means managed flexibility in order to act optimally according to levels. Agility is not actionism or improvisation with unclear work processes, but acting with defined options for action. A risk in the introduction of agility is the separation from old, cherished habits and the decentralization of responsibility. Especially middle and senior management as well as patrons often find it difficult to let go. Agility cannot be prescribed - changing the corporate culture takes time.

Managed flexibility

Over the years, every company has accumulated many deferred solutions to problems as compromises as well as hidden reserves. On the one hand, this is a human need in order not to "look bad" in case of doubt, or on the other hand, it is a substitute process. Substitute processes often arise from partial and/or temporary problems. Examples are additional controls with and without signature; KPI evaluations without consequences; information to additional employees in order not to be the only one to blame. These expenses can be converted into defined flexibility. Hidden reserves, such as operational comfort as well as collateral, are disclosed and then deliberately used as flexibility. This flexibility gained from reserves is supplemented by other options, such as working time models, temporary employees, outsourcing, shifting general activities, prioritizing products or customers. In order to determine the flexibility options, the existing reserves as well as the other possibilities are collected, evaluated with regard to consequences, necessary lead time, costs, etc., and prioritized in order to apply them quickly and step by step as needed. Experiences from other companies, external impulses and support as well as a methodical repertoire help to disclose, let go and supplement.

Example product development

Major product innovations are always accompanied by changes in business models and processes. The example of product development is a good illustration of this challenge. A general trend is the dematerialization of physical products. This also results in a shift of revenues from physical products to accompanying services. These services are the new core of the product and can often be expanded by additional functions, even after the product has been purchased.

90 % of all industrial companies will offer products networked in the Internet of Things (IoT) according to 4.0 in the next five years. Hardly any organisational unit is exposed to such massive changes today as the development departments. Whereas development work used to be completed at the start of production, smart products are continuously improved and expanded through updates after they have been sold. The networking of hardware and software serves to expand products (smart products), is an important basis for added services (smart services) and thus part of market differentiation. The standards for assessing development work are quite different: in software development, market proximity is based on speed, and in hardware development, freedom from errors is based on fear of liability. This makes parallel product development with coordination of software and hardware with quite different cycles as well as working methods and cultures a great challenge. This must be met with agility in the mindset. Prerequisites for this are democratization of leadership, mixed teams, adapted project management etc.

Example order center

The usual planning and control of order fulfilment took place in a very functional way. This results in interfaces, responsibility transitions and long decision-making paths. The new approach is that a team of 6-8 employees takes over all these activities integrally. This includes production planning (PP), materials management (MW) including operational purchasing, production control (PS), control of internal and external logistics and, depending on the design of the interface to sales, parts of the internal sales service. In doing so, the entire responsibility and competence is consolidated in one place (cf. Fig. 2). The result is clear AKVs that are combined in a defined team. This reduces the coordination effort, decisions are made more agilely and fewer resources are required. Experience shows that after a short time, a powerful unit emerges from heterogeneous team members who learn from each other.

Processes under Industry 4.0

Work processes should be derived from the higher-level business processes. The core and auxiliary processes are to be developed taking into account the flexibility to be managed. Many building blocks already exist in the 4.0 transformation. Among other things, they help transparency, e.g. through integrated data collection and analysis. Or through a digital twin with supporting, artificial intelligence (AI) for timely selection of courses of action. Tools for data analysis exist and are becoming increasingly user-friendly. Artificial intelligence delivers initial results that are not yet always comprehensible. Nevertheless, the digital transformation is not progressing as quickly and integrally as announced. Social disruptions, such as the current Corona pandemic, are accelerating the implementation of 4.0.

Conclusion

Change needs direction and involves uncertainty. In Switzerland, we have a tendency to wait a long time, but then, when the pressure is on, we are quite good at mastering challenges. Successful companies need to be agile in preparing for risks and opportunities, possibly with outside help. Everyone has to live with any kind of change. The more the future deviates from the current situation, the less previous experience serves as orientation. If this also happens quickly, it becomes very challenging. Agility as part of the company culture is a must. It is important to consciously shape the future and establish managed flexibility. Process adjustments are forced by the environment; change is the norm today. The only question is, proactive, reactive or passive - and who decides: the BoD or the bank? It is up to you!