Why end-to-end process – Volvo example

I can’t verify this example, but I have heard it used multiple times over the years and think it does a great job of making the point about end-to-end process.

At some point in the past, Volvo had apparently manufactured too many green cars.  They were sitting on the dealer lots and not selling.  The dealers decided to offer a special incentive around green painted cars.

It worked and the cars started selling rapidly.  The manufacturing group that was doing planning noticed a spike in sales of green cars and immediately changes the paint orders so that more green cars are produced and sent to the dealers.  Hopefully, you see the problem.

We have all had some instance like this occur.  The problem is that processes have not been historically connected across functions, business units or even companies.  Only an end-to-end process which links planning to inventory to distribution to sales would see the problem.  This is one of the values of BPM and one of the challenges.

Today, I can sub-optimize the whole to make my part better.  In the future, I have to do what’s best for the seo company and the entire process.