Keys to Successful Process Automation
400,000 in additional working capital, $100,000 saved in labor costs, 60 hours reduced data processing per pay period, and 50% increase in market share. These are the kinds of results gained from successful process automation projects. CodePartners, the software development arm of Terrell & Terrell, describes the keys to successful process automation in this whitepaper.
Bottlenecks in existing systems increase costs and slow down progress. because a lot of bottlenecks occur where two distinct systems come together, common automation projects involve the integration of two or more systems so data can flow more freely. This integration could include anything from ERP to Web applications to handheld devices; the options are virtually limitless. Unless a person is involved with automation projects on a regular basis, evaluating or managing a project can be arduous, resulting in scope creep and failure. However, with clear objectives, a solid plan, and accountability, the outcome can be wildly successful and worthwhile.
Once the bottlenecks are identified, three major steps should precede any automation project: Sizing Up the Gain to determine if the project is worth the investment, Picking the Partner to perform the project based on merits, and Understanding the Process to ensure success.
A bottleneck can be anything that slows down, interrupts, confuses, or causes disproportionately high costs in the system. These commonly occur when a process goes from one system to another or when advances in technology offer new approaches that reveal weak spots in existing systems.
Some real examples of eliminating bottlenecks include:
- Integration between proprietary time keeping systems and a payroll system saved a home health services company 60 hours per pay period.
- Integration between handheld scanners and an inventory control system freed $400,000 in working capital for one manufacturing company.
- Integration between a proprietary logistics systems, order entry, and inventory control systems saved a distribution company from hiring 2 to 3 additional staff members.
- Integration between a proprietary job tracking system and inventory control saved a manufacturing company from hiring 1 additional staff member ($25,000/year) and increased their fill rate by 10% (equivalent to $1,000,000).
- Integration between point of sale systems and payroll saved a restaurant company 20-30 hours per month ($8,600/year).
- Automating inventory receipt from hand-held scanners at field locations to a centralized inventory control system saved a restaurant $100,000 per year by transferring the cost of collecting data from the higher paid corporate staff ($50,000/year) to lower cost restaurant staff ($25,000/year) for 16 locations.
- Building an integrated weigh ticketing system with truck scales and an ERP system enabling a glass recycler to streamline operations and absorb a competitor, increasing market share by approximately 50%. The same type of automation enabled a steel recycler to decrease theft in the steel yards, make accurate commitments to clients, and become compliant with state requirements.
- Integrating a Web store and supply chain management system with an ERP system allowed a parts supplier to keep a multimillion dollar contract with a client.
- A Web-based time and billing system inside a CRM application allowed a professional services firm to collect time daily from geographically disbursed employees and bill for time and expenses at will.