Why and When to avoid Holding Inventories
Every business organization that is engaged in manufacturing, trading or dealing with salable products holds inventories in one form another. Inventory is held in the form of raw materials or in the form of salable goods. Since every unit of inventoried item has an economic value and is itemized in the books of account of […]
Is the Indian Economy About to Return to the Decades of the Hindu Rate of Growth?
What is the Hindu Rate of Growth and is the Indian Economy returning to it? For a long time from Independence to the mid 1980s, the Indian Economy used to grow at 3-4% or at the most, 5% a year. Indeed, in the decades following Independence, economists were fond of saying that India is not […]
Importance of Project Management for Organizations
Project management is the art of managing the project and its deliverables with a view to produce finished products or service. There are many ways in which a project can be carried out and the way in which it is executed is project management. Project management includes: identifying requirements, establishing clear and achievable objectives, balancing […]
Is Globalization a Zero Sum Game or a Win-Win Situation?
When we discuss globalization, we often take into account the fact that both countries that are partners in trade benefit from the exchange. What this means is that a country A that specializes in a particular good or service can trade with country B that specializes in another good or service. In this way, both […]
Cash Management Module in ERP
Cash management module provides information relating to cash flow of the organization, by processing and analyzing all cash and bank transactions, arising out of payment of supplier’s invoices, receipt from sales invoices, stand alone payment and unallocated payment/receipts. Cash management module also allows analyzing financial transactions for a given period of time and provides information […]
Managing businesses in highly competitive environment and in global scenario is highly complicated. What has made the global giants like IBM, HP, Dell, CISCO, GE, DHL, Fedex and many more companies hugely successful is the fact that they have built their Organizations on standard business processes that are refined and fine tuned to each local country requirements.
Business process and Organizational design have provided them with the ability not only to control global operations but more importantly to provide the same superior quality and commitment as well as service to the customers all across the world. This is essentially the differentiating factor that makes a Dell or an IBM stand apart from the rest of the competition.
In order to offer complete control over the product and service to its customers, IBM used to manage the service support in house globally.
In recent times of course, IBM sold its Laptop and Desktop business to Lenovo and outsourced the entire service business to Geodis Logistics. However IBM has ensured that the business processes and controls are retained and interfaced with its functional units.
This outsourcing of the parts management, delivery and service has been possible only because the entire function is defined, managed and controlled via specific business processes. IBM has not only devised detailed business processes to manage its business operations, but spends an equal amount of time and focus on auditing the business processes to ensure the process is followed, the processes are valid and the business risks arising out of process failures are identified and managed.
Continuously the Organization evaluates its processes, removes redundancy and keeps strengthening the business processes in line with the changes in its business.
Understanding how the business processes and business functions are organized in such a set up validates the significance of the business process to the Organization. Though the departments are managed by functional managers, the functions related to a particular business report to the Business Unit head.
Thus the business unit has sales as well as service functions reporting into the head. The service unit involves the technical service engineers, the sales support staff, the parts distribution managers forming one unit to service the business unit. In addition, each of these functions would be managed by and reporting to each functional head such as Head of Service Delivery, Technical Solutions Head as well as Inventory and Logistics Manager etc.
The Organizational design includes horizontal work flow with vertical staffing structure. It is the Business Process and systems that ensure smooth and seamless overlapping, integration and optimization of the functions and aligning all groups on dual reporting system and ensuring that every function is focused on the end customer.
The service parts managers are functionally responsible for procurement, inventory and logistics of the service parts components. Overriding this functional expertise is the need for the Parts Managers to be in line with the local Customer needs, the local Country situation, the Customer criticality and field support requirements and plan his function accordingly.
When Customer fulfillment becomes the primary objective even for the inventory controller and the Parts service group, every single function in the Organization gears up to work together with the single aim of servicing the customer. When this happens at a Organizational and global level, the Organization naturally becomes a global leader.
Managing global markets, different countries, different types of customers, providing superior quality and service reliability to every single customer consistently and sourcing millions of parts from across the globe, managing multiple production bases, managing innovation and product quality besides managing thousands of employees and managing the changes both internally and externally to emerge as global leaders has been made possible due to the Organizational design and functioning depending upon on Business processes and systems to manage the business operations.
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