Coors Brewing Company's Business Process Management: An Essay Analysis.

Part 1: Business Process Management strategy and structure

Business Process Management (BPM) is defined as an approach to make a company’s processes and operations more effective, efficient and adaptive to the dynamic environment. In the other hand, a business process refers to activities that ensure are performed together to fulfill given organizational goals. The purpose of BPM is to eliminate or reduce miscommunication and human errors from business operations. Through BPM, respective stakeholders understand and play their roles more effectively (Boutros & Purdie, 2013, p. 54). There are two types of BPM frameworks that are commonly used in the market. The horizontal BPM framework which focuses on developing and designing business processes that are focused on reuse and technology. On the other hand, the vertical BPM framework entails specific coordinated tasks which are captured in pre-built templates. These set of activities can be readily deployed and configured into the business operations. Either of the two frameworks is aimed at improving an organization’s operations towards achieving its strategic goals and objectives (Weske, 2012, p. 43).

Purpose

The purpose of this paper is to develop a report based analysis on the application of the Business Process Management (BPM) by the Coors Brewing Company (Coors). This report critically evaluates the Company’s BPM journey. The emphasis is on its strategy and structure, design, implementation and sustenance, evaluation and lessons learned from the BPM path.  The report is divided into two parts: Part 1 addresses the Coors’ Business Process Management strategy and structure. The second part focuses on the Business Process Management design as applied by the Coors.

The Coors Brewing Company was founded by Adolph Coors in 1873 with its first premises situated in Golden, Colorado. Today, the Coors has expanded into the global market with a significant market share in the U.S., the UK, among other areas. It is the third-largest brewer in the U.S., the second largest in the UK and the eighth largest globally. Likewise, it enjoys an extensive and effective distribution system in Europe, North America, Latin America, Asia, North America and the Caribbean. The Coors trades on the New York Stock Exchange market using the symbol RKY. Coors employs over 9000 people globally and produces approximately 33 million barrels of beer annually (Coors Brewing Co, 2005, p. 101).
In February 2005, The Company’s shareholders approved its merger with the Molson Inc. After the major, the company was to be named as the Molson Coors Brewing Co. The main goal of the major was to leverage synergies worth $175 million. Even though the Coors has continued to merge and acquire other firms to expand its market share besides the aggressive marketing campaign, the company saw a decline in the sales of its beer. To address these issues the management of the two companies (under the merger) agreed to use Business Process Management to identify the synergies and integrate the processes of the two companies together (Coors Brewing Co, 2005, p. 15).

Overview of Coors Brewing

1. Problems that led to BPM adoption 

Prior to the arrival of CEO Kiely, the Coors had not implemented the process-oriented system. The company relied on ad hoc to conduct its business. There were no means of storing important organizational information: When key employees left the company, they left with vital company information. To solve this problem and store its vital information, the company implemented the SAP system (Harrison, 2007, p. 91). However, the problem remained unresolved. Even with the SAP technology in place, human errors were still occurring. The company found out that it was difficult for the employees to adapt to the newly introduced technology. In particular, the technology could not change the employees’ behaviour.

The management identified BPM as the only solution to address the issues of human resources adaptability to technology-based operations. The HR department had the responsibility of implementing the BPM while Mara Swan, the Chief People Officer, was to focus on integrating the human component into BPM. The processes were commenced by forming a BPM team composed of experts and experienced personnel (Hanford, 2006, p. 87).

1. Organisationalvision and its alignment with the BPM vision 

First, human resources should be treated as the important component for the success of the BPM. It bridges the gap between the organization and the IT. Therefore, human resource is an asset that the company, the Coors embraced its contribution all through the initiation and implementation of BPM (Coors Brewing Co, 2005, p. 117).

The Company’s vision statement stated that:

 “To win long-term in the beer business, we must be an agile, high-performance company that is great at those things that are key to winning in beer.”

To achieve its vision, in line with the BPM and its human personnel, Coors must;

• Reduce its operational cost and invest more in growth to increase its income revenue and market share.
• Engage with the stakeholders in full implementation of BPM, involve them in decision making and inspire them to support the system because it would lead to both personal and organizational growth(Coors Brewing Co, 2005, p. 121).

The objectives of BPM is to make a company’s processes and operations more effective, efficient and adaptive to the dynamic environment. In accordance with Coors’ vision statement, BPM would help in;

• Developing a high performance and revolutionary business process structure,
• Align the Company’s programs, processes, operations and goals with the BPM,
• Integrate human knowledge possessed by respective stakeholders to increase innovation and competitive advantage.
• Achieve capability and clarity in the company’s processes and ensure meeting customers’ expectations, maintain the quality products, enhance the effectiveness of the distribution system to reach its distributors, retailers,and the end consumers (Hanford, 2006, p. 112).

The two elements of the vision statement i.e. reducing the operational cost and increasing its revenue and market growth as well as inspiring and engaging its stakeholders to support the proposed changes are in line with the BPM objectives. The BPM will help in defining the roles and responsibilities of every stakeholder and define a success roadmap/ path for the organization.

Since the implementation of the BPM, Coors now clearly understand all its processes, the required personnel, the types of skills that should be possessed by the personnel. BPM also assist in identifying the new position required in the organization and the professions to fill them. Likewise, the HR also rely on the BPM to integrate the organizational performance system and the actual performance of the employees. The Company is on the right path of reducing the misuse of resources and organizational wastes that existed before the implementation of BPM (Hanford, 2006, p. 115).

1. Problems that led to BPM adoption

The BPM team has faced several challenges since the inception of BPM in 2003 to date. First, the team comprised of people from different professional backgrounds. The team was faced with miscommunication because members used and understood different terminologies and languages. Likewise, the Visio used by the team members was different. Therefore, it was difficult to effectively integrate information from different organizational units into one (Coors Brewing Co, 2005, p. 106).

Second, the clients’ expectation were not clear to the team. It was a challenge coming up with a BPM tool to solve a problem which had not been clearly defined. It would have been a handle for the Coors to measure the BPM’s success.

Third, other the organization was functioning effectively, there was no strategic thinking system implemented by the management. Leaders of organizational units were not aware of their roles in the organization. They could not understand how the proposed changes would impact the processes conducted within their respective units.

For the success of the BPM, the team hand to exhaustively address these three challenges. First, the team adopted a common methodology Besides standardising the terms for change work and executing the process. For instance, ARIS system for modeling was adopted. Second, the team came up with an engagement contract outlining the client’s needs. The contracts outline the expectations as well. Lastly, the team came up with framework model outlining the five major organizational processes. The framework also outlined the role of business unit leaders in the execution of the outlined processes and sub-processes (Damelio, 2011, p. 25).  

The Company chose the ARIS software, by IDS Scheer, to model and manage the business processes. The software was selected because it supports Coors’ approach to business modeling. ARIS is regarded to as a market leader among the existing business model tools in the market. The software was to be used in modeling business processes, information, data, products, organizations, knowledge, systems, information flows and business objectives (Smith & Fingar, 2006, p. 176).

Coors is currently using ARIS 6.2 which has the ability to;

• Allow companies to design their business processes in the online platform.
• Allow process analysis, reporting simulation of utilized resources, and cost calculations.
• Communicate the established process models through intranet and internet using its Web Publisher feature.

It is the responsibility of the BPM team to maintain the integrity of the processes as well as integrating the process using technology. The team has chosen the IT City planning which is supported by ARIS software to integrate the company’s BPM. Though IT City planning, all the business units within and organization can know what is being done in other units. The team has connected the business processes using the IT platform to ensure effective flow of information within the Company (Swanson, 2007, p. 88).

1. Organisational vision and its alignment with the BPM vision

To ensure the adaptability of stakeholders to the BPM and IT processes, people has been trained in workshops to understand the new business process model. The model uses a simple language that can be understood by all the stakeholders. Although some business units within the company are still project-based, the BPM team is collaborating with the employees to make them process-focussed (Freund & Rucker, 2012, p. 114).

Part 2: Business Process Management design

After developing the BPM tools and methodology, the next step was to come up with an Enterprise model for Coors. The team, by Boykins, focused on an enterprise model that would offer value to the company. They consulted model providers like SCOR, Deloitte Touche and SAP to obtain in-depth knowledge to develop the model framework (Sharp & McDermott , 2008, p. 97).

Later, the team developed the Coors Enterprise Process Structure model for the company. The model was segregated into five major business processes namely;

1. Manage Beer Business
2. Create Consumer Demand
3. Generate Revenue
4. Execute Supply Chain
5. Support Beer Business

After establishing the core processes within the model, the next step was to create sub-processes to support each of the processes. The team then came up with validation of each process with the company operations. The team sought the opinion of the Coors executives. Each executive member was to validate whether or not the processes reflected the activities that they were expected to execute. Some modifications were made in the original model and the five processes to match the expectations of the executive. Upon satisfaction with the enterprise model and the core processes, the team began to evolve the management with the processes that they would easily identify with (Jacka & Paulette, 2009, p. 111).

The company owns the five core processes. However, the BPM models and architecture are under management and control of the BPM team. It should be noted that the model can be subjected to changes to fit the business requirements. The process ownership was divided into five levels; from level “0” to level “4”.

The process Ownership Level “0” comprised of the five core processes. This level was not assigned to anyone in particular. The entire management was expected to work as a team and accomplish them. Each process had its sub-processes clearly defined as shown below;

• Managing Beer Business was supported by activities like; establishing business direction, managing environmental public policies, sustaining corporate entity, and developing enterprise technical strategies(Harvard Business School Press, 2010).
• Creating Consumer Demandwas supported by sub-process like; understanding consumers, developing brand plans, executing brand plans, and managing package/ product lifecycle.
• Generate Revenue was supported by sub-processes like; managing key accounts, managing wholesalers, performing order management, providing customer support, and managing sales performance(Peabody, 2006, p. 92).
• Execute Supply Chain was supported by sub-processes like; planning supply chain, sourcing materials,and services, manufacturing products, delivering products, and returning goods.
• Supporting beer business was supported by sub-processes like; leveraging human capital, managing corporate assets, enhancing IT excellence, ensuring legal adherence, ensuring financial excellence and managing support services(Panagacos, 2012, p. 64).

Levels “1” to “4” were more defined with the organizational structure. For instance, level 1 processes were owned by the Coors’ two vice presidents, level 2 by the directors, level 3 by the departmental managers and level 4 by the unit managers, supervisors, and the employees.  

The Coors’ Vision

Besides the BPM team, the other key players in the development and implementation of BPM at the Coors were;

• The Internal BPM constant who conducted training and workshops on process modeling, modelingstandards and methods.
• The business architect who was to ensure that the BPM modelingwas integral with the company’s business processes.
• The process owner.
• The subject matter experts who offer guidance during process modeling.
• ARIS process stewards are trained to oversee the success of the process after the disbandment of the project team.
• The ARIS administrator who has to ensure that the system is running and upgraded.
• The suppliers and customers who are to offer feedback on the performance of the processes as well as providing feedback on how to improve it(Damelio, 2011, p. 55).

The BPM modeling procedure describes process information and the relationship between the stakeholders. It entails;

• The What i.e. the purposes of the BPM which determine the activities and purpose of the processes.
• The When which standsfor the time frame to complete the process modeling, implementation, and control.
• The where which addresses the location to execute the process modeling.
• The Who focussing on the people responsible for executing the plan.
• The Which focussing on how to generate the information needed.
• And the how focussing on the relationship between different activities The How connects the What, the where, the which and the when(Weske, 2012, p. 109).

The main responsibility lies with the BPM team. The team works with matter experts to upgrade and handle changes in the process modeling. The team also brings together all the other key players to oversee quality standards of the entire modeling. The Coors model was stabilized in 2003. Currently, the team is working on the BPM control phase.

The Coors Brewing Company uses stair-step model to measure the maturity of its process modeling. The model was adopted from Paul Harmon’s BPTrends. The step are;

1. Initiating phase- It is an ad hoc process with a few explicitly defined steps. The success of this step depends on individual expertise.
2. The Replicate Phase- It entails the basic management processes of the project to establish the project cost and ensure that the BPM team work according to the schedule. As the business expands, the processes are conceptualisedand organised (Ould, 2005, p. 97).

• Defining phase- The management and development process is standardised, integrated and documented on the basis of the company methodology(Ould, 2005, p. 98).

1. Management phase- Focuses on a collection of detailed measures of the product and process quality. The process is quantitatively controlled and understood.
2. OptimisationPhase- Focuses on continuous improvement of the processes through collecting and analysing feedback from respective stakeholders as well as conducting a pilot test (Ould, 2005, p. 99).  

Conclusion

Ion attempt to solve the personnel related problems affecting its operations, the Coors Brewing Company (Coors) developed and implemented Business Process Management (BPM). BPM was purposely meant to eliminate or reduce miscommunication and human errors from the company’s business operations. Coors’ management wanted to reduce the operational cost and increase its revenue and market growth as well as inspire and engage its stakeholders in supporting the business operations. BPM, a technology-based technique, was chosen because its objectives were in line with those of the organization. The BPM helped in defining the roles and responsibilities of every stakeholder and define a success roadmap/ path for the organization. Today, all the business processes are well defined. Each category of stakeholders clearly understands their roles and responsibilities within the organization’s framework. Although BPM has not been fully incorporated, the company has witnessed immense operational changes within its business systems.

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