Business Process Reengineering

Business Process Reengineering
Ajay S Chaturvedi
M&Ms Problem
Non-strategic diversification. Manufacturing inefficiencies Poor productivity Long production cycle Sub-optimal output Highly under-productive workforce Militantly unionized Overcapacity on Headcount Unhealthy work culture Widespread corruption in various departments
Ajay S Chaturvedi
M&Ms Response Business Process Reengineering

M&M decided to follow a two-pronged strategy for implementing BPR
Reengineer the layout

> The company adopted cellular manufacturing layout > Resulting in multi-tasking through multi-machine manning & reducing nonproductive activity.
Focus on productivity enhancement

> Introduce a new organizational model, by grouping companies and focusing only on core business lines. > It was decided that in future, the group would confine its expansion to the identified thrust sectors. > Move from batch to modular processing > Implement Platform Concept > Integrated IT Solution through ERP Package > Other Initiatives such as Implementation of Total Productivity Management, Kaizen, Total Quality Management, Channel Management and lean manufacturing.
Ajay S Chaturvedi
BPR Origin & Definition

BPR first introduced in 1990 in a Harvard Business Review article by Michael Hammer:
Reengineering Work: Don't Automate, Obliterate.
Hammer/Champy
Reengineering the Corporation (1993), Provided this definition:

Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.
Ajay S Chaturvedi
BPR Features
Fundamental
Need to understand why an organization does what it does question all of the rules and assumptions that exist Radical redesign means disregarding all existing structures and procedures, and inventing completely new ways of accomplishing work. Reengineering is about business reinvention, begins with no assumptions and takes nothing for granted. Not looking for marginal or incremental improvements or modification Goal is dramatic improvements in performance.
Radical
Dramatic

Processes
Focus on the way the organization adds value through cross-functional business processes Move away from function view; task based thinking
Ajay S Chaturvedi
BPR Principals
Combine multiple tasks and assign a single point of contact for each process. EMPOWERMENT
An important feature of BPR is integrating activities and assigning business process responsibility to one individual a generalist.
Allow workers to make decisions. Avoid decision hierarchies that require workers to go through layers of management for decisions about the work they are doing. Perform process steps in their natural order. Rather than following a linear sequential set of tasks, perform process activities as needed, sometimes in parallel.
Ajay S Chaturvedi
BPR Principals (Cont)

Find it Fix it (FIFI) Have those who produce information process it. Centralize data one version of the truth. This allows companies to capture and store data only once, yet disperse as needed. Do it right the first time Capture information once and at the source.
Ajay S Chaturvedi
BPR Prerequisites
Strong and consistent top management sponsorship Addressing cultural transformation through effective change management Proven methodology including a vision process. Reengineering team composition Compelling business case for change Strategic alignment with company strategic direction Line ownership and accountability
Ajay S Chaturvedi
BPR Implementation
Business Understanding Project Planning
Business Process Identification Process Envisioning
Process Redesign Process Implementation
Ajay S Chaturvedi
BPR Risk
Advocates reports BPR failure rates of 50% to 70% Sutcliffe [1999] reviewed difficulties

Employee resistance to change Inadequate attention to employee concerns Inappropriate staffing Inadequate technologies Mismatch of strategies used and goals Lack of oversight Failure of leadership commitment
Ajay S Chaturvedi
More on BPR
Ajay S Chaturvedi
How do you figure out what processes to reengineer?

Whats broken the most? What process has the greatest impact on the customer? Which of the processes are most susceptible to successful redesign? (feasibility and scope)
Ajay S Chaturvedi
How do you know if its broken (or at least in major trouble?)

Extensive information exchange, data redundancy, and re-keying of data into multiple systems Excessive inventory, buffers, and other assets High ratio of checking and control to value adding Reworking and iteration
Ajay S Chaturvedi
Comparison: TQM vs. BPR

TQM
Description Concerned with improving work processes and methods in order to maximize the quality of goods and services. Planned, continuous Keep existing customers by meeting or exceeding their expectations concerning products and services. May also be driven by specific problems such as high costs or poor quality.
BPR
Particular approach concerned with rethinking current systems and processes. Planned, frame-braking To redefine existing work methods and processes to improve efficiency. Competitive pressures and intense need to cut costs
Type of Change
Aim
Key Driver
Ajay S Chaturvedi
Comparison: TQM vs. BPR

TQM
Change Agent Learning process External or internal Single or double loop
BPR
External consultant Double loop
Values objectivity, control, consistency and hierarchy Yes. Requires a shift to team based work because the work is process based rather than task based.
Nature of Culture change
Customer focused values
Change to team based work
Often requires a shift to team based work
Ajay S Chaturvedi
Ford Motor Company
Ajay S Chaturvedi
Ford (cont)
Ajay S Chaturvedi
Technology Enabled Reengineering Advantages

ERP provides the tool and structure to facilitate change Proven and based on best practices Forces change to happen ERP bounds the design Design is feasible and we know it works (its been proven in other companies) Cheaper than clean slate Designs likely can be implemented in a timely manner Less risky
Ajay S Chaturvedi

Business Process Reengineering

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Business Process Reengineering

Uploaded by

Copyright:

Available Formats

Business Process Reengineering