When implementing new inventory management software, a business owner should always take the opportunity to evaluate processes with a view to increasing efficiencies and reducing costs. A good software vendor will not only spend time discussing their product, but also getting to know your business and current processes to identify potential areas of improvement. The efficiencies resulting from implementing new inventory management software will be minimized if processes are not reviewed and evaluated as part of this. In small businesses, where employees wear many different hats, processes are sometimes just habits formed over the years. Evaluating these processes and habits prior to and during the search phase will help to ensure that the system chosen provides the most benefit to your business.
Understanding Processes & Habits
For the most part, processes are agreed upon, collective ways of performing a task – something that has been discussed and analyzed in order to achieve a particular end goal and often in such a way that adds value. On the other hand, a habit is an action repeated regularly as part of a routine and is most likely performed in a subconscious or unintentional manner. To better understand the difference between the two, consider the question: are you performing tasks a certain way because that is the best way, or because that is the way it has always been done?
In a small business, an example of a process would be an employee manually counting inventory items in a warehouse, on a regular schedule, because there is no inventory management software in place to do this automatically. That same example could be considered more of a habit if Employee A always manually counts the inventory because that is how Employee B did it, and neither has ever given any thought as to why it is done this way. Many habits found within small businesses are a result of passed on “traditions” – a new employee is hired and trained on how to do a task without actually assessing whether or not that is the best way.
Whether it’s a process or a habit, asking why the task is performed in a certain way is important for identifying areas of improvement. In the example above, as a small business with little inventory, it may have initially been agreed upon that manually counting inventory was the best way to handle that process. However, a few years down the road, evaluating this process again may indicate that implementing inventory software is a better way to manage this process. When questioning habits, it is common for employees to become defensive; there may not be a good reason for performing a task a certain way and it was perhaps something they never truly thought about. Common excuses for not changing actions include; “Why would we change our current way of doing things if it’s working?”, “That’s the way we’ve always done it” and “I don’t want to disrupt the status quo” – none of these being valid reasons for continuing with habits that don’t add value to the business (and even potentially hurt it). Scrutinizing these answers forces people to challenge the underlying logic for doing something a certain way – and although it can be a frustrating process, it can also lead to huge efficiencies in the long run. If you have too much resistance from employees then it may be a people problem and not a process issue.
This is not to say that every action needs to be thoroughly examined, analyzed and changed. It is important with every action to be aware of why it is being performed in a certain way and if there is a better way. Making a software purchase decision around bad processes already in place will cause many issues down the road and reduce the positive benefits of implementing such a system. ERP software is supposed to drive processes and streamline actions to simplify and increase efficiencies. An ERP vendor that is interested in your processes can provide valuable insight from an outside prospective, effectively helping you to learn and benefit from the experiences of their other customers. In short, make sure you periodically evaluate your current business processes and be open to considering advice from others on how to improve them.