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Strategies for Success: Process review will reduce errors, save money

Strategies for Success: Process review will reduce errors, save money

During Easter time, I sent my sister a bouquet of flowers. I was a house guest at that time and thought that a floral arrangement would be a great hostess gift. In fact, when I arrived, she commented that she had received not one, but two arrangements of flowers. Why did I send two?

That’s a great question. I had only ordered one bouquet and had planned on paying for only one bouquet. But yes, she did receive two different bouquets — from two different florists. Interestingly, the dollar amount for each was the same. However, the arrangements were much different. One arrangement was rich, lush and had a high “wow” factor. The other was, well, something just a little bit better than you might get from the supermarket — but at floral shop prices.

When I got back to Fort Worth, I called the florist we use and told her the situation. Her key words were, “No problem, we’ll take care of it.” Well, OK, I got that. However, as a consultant, I wanted to know how this happened. The woman at the floral shop did as well.

Here is what happened. The floral shop here in Fort Worth called a couple of different floral shops in the city where my sister lives. One shop “refused” the order. Why would you refuse an order? Well, in the floral business, if they have a big funeral, wedding or social event, the firm may not have enough flowers or staff to fill other ancillary orders and will sometimes “refuse” to take an order from an out of town call. I am told that the shop that refuses the order has to clear the order in the computer. In this case, that did not happen. Someone saw the order, processed it and delivered it, not recognizing that they were not supposed to deliver it.

Because one bouquet was so much different than the other, that may be why the order was initially refused: The shop did not have the flowers to make a nice arrangement.

As a management consultant, this matter generated all kinds of questions.

Once the order is refused, how is it deleted in the computer so that the shop did not manufacture the order?

Who was supposed to kill the order in the computer?

Who checked to be sure that the refused order in fact did not get processed?

Well, as you can see, this is a simple example of a broken process, which costs money, time and resources. In the management business, we would define this as a lack of systems and process integration— i.e. integrating the order refusal process and the manufacturing process in a seamless fashion so that the order would not be manufactured. After all, somebody did not get paid for this.

From the 20,000-foot viewpoint, it looks like this particular florist has a host of broken processes — order refusal, order fulfillment, accounting and bookkeeping are just a few that come to mind. There are many more, we just were not there to figure those out.

How do you check your processes when you have a service denial? That is what a refused order is, a service denial. Think about this for a second or two: If your processes are not fully integrated, then what happened above is bound to occur. When it does, not only have you lost profits, but in this case, the flower shop that sent the less robust arrangement would probably not be one that we would use again.

Work backwards through your processes and explore how you handle a service denial. Hopefully, you have your processes structured to ensure that communication and coordination occur at each step in the process. If not, now is the time to review the processes and ensure that communication occurs in each step. Additionally, reviewing how each process in your system is integrated reveals where, if anywhere, lost profit opportunities may exist. Process review should be an ongoing action in your business.



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