Typical responses to process variation are often unnecessarily complex, costly, and inconsistent. The seven steps outlined here will help organizations avoid those problems while effectively controlling variations.
Ivan Seselj (ivan.seselj@promapp.com)is the founderof Promapp Solutions (www.promapp.com), a provider of cloud-based business process management (bpm) software. Promapp was recently acquired by Nintex, a provider of intelligent process automation.
Companies are increasingly embracing business process management (BPM) as a way to make their supply chains more agile and efficient. After all, BPM involves taking a disciplined approach to identifying, standardizing, managing, and streamlining workflows and processes that span organizational boundaries. A BPM tool can, for example, provide a visual representation of the processes that run throughout the supply chain. This representation can significantly improve communication with all of the trading partners by helping to clarify roles and responsibilities, identify handover points, and reveal areas of inefficiency and waste. Standardized supply chain processes reduce wastage by identifying inefficiencies in both the products used and the processes that employ them. In industries like healthcare, where supplies are second only to staff costs in an organization, those savings can be significant.
While BPM provides many benefits, one challenge that many organizations continue to struggle with is managing and standardizing process variations. In fact, Steve Stanton—managing director of the consulting company FCB Partners and a pioneer of business process modeling—believes that the vast majority of the organizations he knows have failed at process standardization because managing variations is so difficult.
There are several common reasons for supply chain process variations. For example, a company may need to customize the customer's experience based on attributes such as profile, size, location, and behavior. Or it may need to slightly alter its receiving process to accommodate the unique nuances of each of its suppliers. For example, an organization which has multiple suppliers for the same raw material or product may apply a variation category (like "supplier") to their standard sourcing processes. This variation category will allow them to capture the nuances related to managing each individual supplier, while still governing the process variances from the company's standard process.
Another source of process variation is the fact that individual countries—and even some regions within countries—often have different tax or customs regulations and policies that require the company to customize certain processes such as shipping. In fact, globalization is making it increasingly difficult for many organizations to manage process variations. This is certainly the case for multinationals that have numerous locations and offer multiple core products or services. Even relatively small companies are now regularly selling into different countries and operating in multiple regulatory environments, increasing their process variation challenge.
If not managed effectively, developing and managing separate processes for different types of customers or suppliers or for different geographic regions can require a major investment in time and energy and lead to cost overruns. In addition, each new process variation can introduce process inconsistencies and additional complexity. To get the full benefits of business process management and process standardization without incurring significant extra cost or complexity, companies need to develop an effective way to manage process variations.
Ineffective responses to process variations
Typically, one finds three common responses to the problem of process variation along the supply chain. While they may offer some benefits, in general they are ineffective and can create additional problems for organizations that adopt them.
The first response is to create standardized processes at a high level only. This approach is most commonly found in companies just beginning to use business process management or smaller organizations. The problem with this approach is that it provides information at the 10,000-foot level—in other words, it provides basic information that is so summarized that it's of no use to anyone for day-to-day process guidance or as a platform from which to make future changes.
A second response is to create "mega-processes" that cover every conceivable variation. This approach is typically preferred by highly technical teams or large transformation projects and is characterized by detailed, technically correct process documents that apply approved process-notation standards. Unfortunately, teams often find the documented processes difficult to comprehend and engage with, so they ultimately ignore them. Additionally, because the process owners are reluctant to make any changes or implement improvements, process documentation quickly becomes out-of-date and of little use. The complex documentation can also stall agility and future opportunities for improvement.
The third fairly typical approach finds organizations at each point along the supply chain allowing owners to create their own, separate process variations. Commonly found among organizations that are further along the process management maturity curve, this approach is fraught with problems. Chief among them is the fact that separate, individual process variations that are owned, managed, and changed independently inevitably result in numerous administrative headaches. As these individualized variations drift further from the original standard, problems arise like incorrect stock orders and deliveries, product returns, and so forth. Without a strong link to the original standard they become less like variations and more like isolated, independent processes that are hard to track or manage.
Seven steps for managing process variations
But supply chain organizations need not limit themselves to the ineffective responses to process variation outlined above. Instead, they should put in place a set ofunderlying capabilities and policies that can help them achieve the benefits of standardized processes across the entire supply chain. The seven steps recommended below will help organizations better manage controlled process variations:
Seven capabilities that help companies manage process variation
1. Organizations should agree on the core or standard process, which then forms a platform against which to consider local variations.
2. Local process variations should only be established from this standard process base. Any changes should be applied by variant experts and be highlighted and visible against the core process.
3. Any changes the global process owners make to the standard process should be submitted to the applicable local variant owners for their approval.
4. Business teams should compare and report on all the process variations that exist for each standard process.
5. There should be a global reporting capability so that process experts can see the list of processes that exist for each variant type.
6. When implementing processes, business teams should be allowed to select the variation they seek from a list or be automatically routed to the appropriate process variant for their location, product team, business unit, and so forth.
7. Organizations should calculate the difference in cost and time between variations and the standard process.
1. Organizations should agree on the core or standard process. This works well for high-level processes like procure-to-pay, idea-to-offering, order-to-cash, and plan-to-inventory. This is standardization at a value stream level and should ideally allow users to drill down into process specific details. For example, procure-to-pay may have multiple sub-processes that make up the end-to-end view, like create or maintain suppliers, prepare purchase order, receive goods and material, and process payment.
At the process detail level, it is possible to include factors such as participants and handoffs between participants, triggers, inputs, outputs, activities (process steps), tasks (transactional-level detail), supplemental documents, and answers to common questions that come up while performing the process. It is possible to measure process evolution and effectiveness by tracking items such as active time, wait time, cost, process specific key performance indicators (KPIs) or service level agreements (SLAs), supporting systems, automation/workflow integration, and opportunities for improvement. This standard core process will form a platform against which to consider local variations and will be owned by global process owners. They will be responsible for overseeing the process efficiency and effectiveness, regardless of the localized variations, with a corporate perspective rather than an individual departmental concern. A global process owner should know the process well enough to manage it and have the executive authority to make changes where efficiencies are identified. Although there may be—in fact, should be—input from different team members into what the standard process should look like, the global process owner ultimately makes the final call on what the core, or standard, process is. Once agreed on, all standard processes should be stored in a central repository where teams can easily access relevant, up-to-date processes when they need them.
2. Local process variations should only be established from this standard process. Any changes should be made by a local process expert who is responsible for that specific variant. This expert is the person who knows the local variation best. While they might not execute the process, they understand the steps and ramifications of each activity, and recognize what makes their context distinct. In order to manage process variants effectively, teams will need to use a BPM tool that can show the process variants against the core process, so it's easy to see where and how each process variant differs from the standard global process.
3. Any changes that the global process owners make to the standard process should be submitted to the applicable local variant owners for review. This ensures that any change to the general process is merged into the local variation or properly amended. This is important because the process change may need to be reflected in a different way in a specific country or for a specific product. For example, the activity might be completed by a different role in a certain country, or there may be local regulations that prevent the process change from being implemented as it has been in the standard global process.
4. There should be a global reporting capability so that process owners can see the list of processes that exist for each variant type. This facilitates awareness, review of, and, if necessary, rationalization of the number of process variations.
5. Business teams should regularly compare and report on all the process variations that exist for each standard process. They should, for example, be able to generate process variation time/cost savings reports to compare and contrast the performance of process variants against the standard. This report should include factors such as active time, wait time, cost, and any unique KPIs or SLAs. In order to control process variations, it's important to see and discuss process activities that have been added, removed, or changed when compared to the standard process on a regular basis.
6. When implementing a new process, business teams should be allowed to select the appropriate process variation for them from a list. Or, if they have a default location, product team, business unit, or so forth, they should be automatically routed to the relevant process variant. When implementing a new process, business teams want to see information that is relevant to them, their roles, and their location. Enabling teams to quickly find relevant process information is critical in order to drive engagement and process adherence.
7. Organizations should calculate the difference in cost and time between variations and the standard process. This allows organizations to make informed decisions about whether to keep, challenge, or eliminate process variations based on time and cost impact. For instance, if one location has greater logistics costs through distance or local tariffs, the variation needs to reflect this but where the difference is due to outdated plant or machinery creating delays, the variation could be eliminated with strategic capital investment in the plant. It's also important to recognize that in some cases, time and cost won't be the only considerations. For example, certain key customers may warrant a special shipping option that is more expensive than the standard shipping practice.
These seven capabilities and policies allow the entire organization to understand the extent of the process variations they are managing, to control and report on them, and to challenge them. This clarity and control will help teams along the supply chain be more agile, more flexible, and better able to customize (or eliminate) activities as they see fit.
Business software vendor Cleo has acquired DataTrans Solutions, a cloud-based procurement automation and EDI solutions provider, saying the move enhances Cleo’s supply chain orchestration with new procurement automation capabilities.
According to Chicago-based Cleo, the acquisition comes as companies increasingly look to digitalize their procurement processes, instead of relying on inefficient and expensive manual approaches.
By buying Texas-based DataTrans, Cleo said it will gain an expanded ability to help businesses streamline procurement, optimize working capital, and strengthen supplier relationships. Specifically, by integrating DTS’s procurement automation capabilities, Cleo will be able to provide businesses with solutions including: a supplier EDI & testing portal; web EDI & PDF digitization; and supplier scorecarding & performance tracking.
“Cleo’s vision is to deliver true supply chain orchestration by bridging the gap between planning and execution,” Cleo President and CEO Mahesh Rajasekharan said in a release. “With DTS’s technology embedded into CIC, we’re empowering procurement teams to reduce costs, improve efficiency, and minimize supply chain risks—all through automation.”
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Even as a last-minute deal today appeared to delay the tariff on Mexico, that deal is set to last only one month, and tariffs on the other two countries are still set to go into effect at midnight tonight.
Once new U.S. tariffs go into effect, those other countries are widely expected to respond with retaliatory tariffs of their own on U.S. exports, that would reduce demand for U.S. and manufacturing goods. In the context of that unpredictable business landscape, many U.S. business groups have been pressuring the White House to pull back from the new policy.
Here is a sampling of the reaction to the tariff plan by the U.S. business community:
American Association of Port Authorities (AAPA)
“Tariffs are taxes,” AAPA President and CEO Cary Davis said in a release. “Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses, and increase costs for hard-working citizens. Instead, we call on the Administration and Congress to thoughtfully pursue alternatives to achieving these policy goals and exempt items critical to national security from tariffs, including port equipment.”
Retail Industry Leaders Association (RILA)
“We understand the president is working toward an agreement. The leaders of all four nations should come together and work to reach a deal before Feb. 4 because enacting broad-based tariffs will be disruptive to the U.S. economy,” Michael Hanson, RILA’s Senior Executive Vice President of Public Affairs, said in a release. “The American people are counting on President Trump to grow the U.S. economy and lower inflation, and broad-based tariffs will put that at risk.”
National Association of Manufacturers (NAM)
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge,” NAM President and CEO Jay Timmons said in a release. “However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
American Apparel & Footwear Association (AAFA)
“Widespread tariff actions on Mexico, Canada, and China announced this evening will inject massive costs into our inflation-weary economy while exposing us to a damaging tit-for-tat tariff war that will harm key export markets that U.S. farmers and manufacturers need,” Steve Lamar, AAFA’s president and CEO, said in a release. “We should be forging deeper collaboration with our free trade agreement partners, not taking actions that call into question the very foundation of that partnership."
Healthcare Distribution Alliance (HDA)
“We are concerned that placing tariffs on generic drug products produced outside the U.S. will put additional pressure on an industry that is already experiencing financial distress. Distributors and generic manufacturers and cannot absorb the rising costs of broad tariffs. It is worth noting that distributors operate on low profit margins — 0.3 percent. As a result, the U.S. will likely see new and worsened shortages of important medications and the costs will be passed down to payers and patients, including those in the Medicare and Medicaid programs,” the group said in a statement.
National Retail Federation (NRF)
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America,” NRF Executive Vice President of Government Relations David French said in a release. “But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.”
In a statement, DCA airport officials said they would open the facility again today for flights after planes were grounded for more than 12 hours. “Reagan National airport will resume flight operations at 11:00am. All airport roads and terminals are open. Some flights have been delayed or cancelled, so passengers are encouraged to check with their airline for specific flight information,” the facility said in a social media post.
An investigation into the cause of the crash is now underway, being led by the National Transportation Safety Board (NTSB) and assisted by the Federal Aviation Administration (FAA). Neither agency had released additional information yet today.
First responders say nearly 70 people may have died in the crash, including all 60 passengers and four crew on the American Airlines flight and three soldiers in the military helicopter after both aircraft appeared to explode upon impact and fall into the Potomac River.
Editor's note:This article was revised on February 3.
GE Vernova today said it plans to invest nearly $600 million in its U.S. factories and facilities over the next two years to support its energy businesses, which make equipment for generating electricity through gas power, grid, nuclear, and onshore wind.
The company was created just nine months ago as a spin-off from its parent corporation, General Electric, with a mission to meet surging global electricity demands. That move created a company with some 18,000 workers across 50 states in the U.S., with 18 U.S. manufacturing facilities and its global headquarters located in Massachusetts. GE Vernova’s technology helps produce approximately 25% of the world’s energy and is currently deployed in more than 140 countries.
The new investments – expected to create approximately 1,500 new U.S. jobs – will help drive U.S. energy affordability, national security, and competitiveness, and enable the American manufacturing footprint needed to support expanding global exports, the company said. They follow more than $167 million in funding in 2024 across a range of GE Vernova sites, helping create more than 1,120 jobs. And following a forecast that worldwide energy needs are on pace to double, GE Vernova is also planning a $9 billion cumulative global capex and R&D investment plan through 2028.
The new investments include:
almost $300 million in support of its Gas Power business and build-out of capacity to make heavy duty gas turbines, for facilities in Greenville, SC, Schenectady, NY, Parsippany, NJ, and Bangor, ME.
nearly $20 million to expand capacity at its Grid Solutions facilities in Charleroi, PA, which manufactures switchgear, and Clearwater, FL, which produces capacitors and instrument transformers.
more than $50 million to enhance safety, quality and productivity at its Wilmington, NC-based GE Hitachi nuclear business and to launch its next generation nuclear fuel design.
nearly $100 million in its manufacturing facilities at U.S. onshore wind factories in Pensacola, FL, Schenectady, NY and Grand Forks, ND, and its remanufacturing facilities in Amarillo, TX.
more than $10 million in its Pittsburgh, PA facility to expand capabilities across its Electrification segment, adding U.S. manufacturing capacity to support the U.S. grid, and demand for solar and energy storage
almost $100 million for its energy innovation research hub, the Advanced Research Center in Niskayuna, NY, to strengthen the center’s electrification and carbon efforts, enable continued recruitment of top-tier talent, and push forward innovative technologies, including $15 million for Generative Artificial Intelligence (AI) work.
“These investments represent our serious commitment and responsibility as the leading energy manufacturer in the United States to help meet America’s and the world’s accelerating energy demand,” Scott Strazik, CEO of GE Vernova, said in a release. “These strategic investments and the jobs they create aim to both help our customers meet the doubling of demand and accelerate American innovation and technology development to boost the country’s energy security and global competitiveness.”