Business Process Reengineering vs Continuous Improvement
Transcript of Business Process Reengineering vs Continuous Improvement
Learning ObjectivesBUSINESS PROCESS
REENGINEERINGCONTINUOUS
IMPROVEMENT
Definition Definition
Benefits
Process Process
Example Example
DIFFERENCES BETWEEN BUSINESS REENGINEERING AND CONTINUOUS IMPROVEMENT
DIFFERENCES BETWEEN CONTINUOUS IMPROVEMENT AND KAIZEN COSTING
5 MAJOR STEPS :
Prepare a business process map
Establish goals
Reorganize work flow
Implementation
Evaluate
EXAMPLE –TACO BELLPROBLEMS
1) Lack of business vision
2)Reliance on obsolete mgt and operational practices-focus more on PROCESS > customer
3)Multiple level of mgt
4)Traditional approaches-assumed customers wanted without asking them
5)Invest more in kitchen area
REENGINEERED SOLUTION
1) Complete reorganize HR
2) Dramatic redesign of operational system
3) Replace area supervisors with market managers and reduce their number
4)Changed kitchen structure•Kitchen area 70% to 30%•Customer area 30% to 70%•Doubling the seating capacity
DEFINITION
• incremental (minor) improvements that is NOT drastic to improve products, services or processese.g reduce time of production process
PROCESS
PLANNINGIdentify current
process,
procedure or
workflow.
DO
Implement
solution
CHECK
monitor result
ACTStandardize on
new process
Services
• Faber House in Berlin, located at centre of the city
• Have branches all over the world, provide after-sale services
Processes
• Introduced segregation of duties-based on the genders
• Focus on giving motivation to workers-as they believe the workers are the heart of the company
DIFFERENCES BETWEEN BUSINESS REENGINEERING AND CONTINUOUS
IMPROVEMENT
BPR
VS
CPI
WHO LEADS?
TYPE OF PROCESS
SCOPE
COST
DIFFERENCES OF CONTINUOUS IMPROVEMENT & KAIZEN COSTING
Continuous Improvement Kaizen Costing
Desired consequences(result) A tool to achieve it
System derived from targeted goals Single activity, involve in the scope of continuous improvement
Goal is to improve better Eliminate root of cause of problem
Perfect cake Mixing ingredients
DICTIONARYKeyword: Fundamental
• Understanding the fundamental operations of business is the first step prior to reengineering. Business people must ask the most basic questions about their companies and how they operate: Why do we do what we do? and why do we do it the way we do? Asking these basic questions lead people to understand the fundamental operations and to think why the old rules and assumptions exist. Often, these rules and assumptions are inappropriate and obsolete.
Keyword: Radical
• 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.
Keyword: Dramatic
• Reengineering is not about making marginal improvements or modification but about achieving dramatic improvements in performance. There are three kinds of companies that undertake reengineering in general. First are companies that find themselves in deep trouble. They have no choice. Second are companies that foresee themselves in trouble because of changing economic environment. Third are companies that are in the peak conditions. They see reengineering as a chance to further their lead over their competitors.
Keyword: Processes
• Process is the most important concept in reengineering. In classic business structure, organisation are divided into departments, and process is separated into simplest tasks distributing across the departments. The preceding order-fulfilment example shows that the fragmented tasks - receiving the order form, picking the goods from the warehouses and so forth - are delayed by the artificial departmental boundaries. This type of task-based thinking needs to shift to process-based thinking in order to gain efficiency. The following example is taken from Hammer and Champy to illustrate the characteristics of reengineering - fundamental, radical, dramatic, and especially process.