Do More With Less: Three Sure-Fire Strategies for Manufacturers – Dealing with the Administrative Framework

Every business today competes in two worlds: the physical world of resources and the virtual world of information. Executives must pay close attention to how their companies create value from both of these, as the means for accomplishment are different for each. It can go without saying that managers who understand how to master both physical resources and information resources will have a distinct advantage.

In Exploiting the Virtual Value Chain, Jeffrey F. Rayport and John J. Sviokla, talk about this extensively: “Creating value in any stage of a virtual value chain involves a sequence of five activities: gathering, organizing, selecting, synthesizing, and distributing information. Just as a company takes raw material and refines it into something useful…a manager today collects raw information and adds value through these steps.”

The infrastructure of an organization depends on how people and processes work together, and how information is shared between those individuals, processes, and departments—ultimately the entire enterprise. Recognizing that there is a process flow related to how tasks are completed and information is shared, and that each process is different, there are some core aspects to consider when defining the administrative framework.

People
The first aspect of the administrative framework addresses the people that are involved in the process. How easy is the process to manage? Is the information supplied by the previous person about the task-at-hand adequate enough to move the process forward? Is the output from the previous person in the process adequate enough to enable the next person to complete their task?

Process
The second aspect of the administrative framework relates to governance issues, which is where authority and risk are delegated. Process includes checks and balances, levels of automation, and business rules.

Information
Information completes this trilogy. Do people have to research additional information to complete their step in the process? Are they re-entering information? Do they have access to the most accurate or current version of the information?

All three of these components are critical: people, process, and information. For example, consider the complexity of executing a process where engineers, finance, purchasing, and legal all work together on a daily basis to solve business problems vital to the operation of the organization; each player with different information needs, procedures, and processes to follow. Situations like this occur when starting new projects, dealing with contracts, application for expenditure (AFE), or management of change in Occupational Health and Safety Administration (OHSA) regulated businesses. There is no question that companies are effective in solving these problems, but are they efficient?

People, process, and information are the conduit through which a business interacts, from one end of the value chain to the other. Apply too much control and operational demise occurs. Retain silos of information and you’ll isolate functional steps that force information replication, opening the door to data that is rife with mistakes.

Next time I’ll discuss the importance of a good enterprise content management system to tie it all together.