Ch-8 (Business Process Reengineering)

8/12/2019 Ch-8 (Business Process Reengineering)

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8-1 Excel BooksTotal Quality Management Text and Cases G Nagalingappa, Manjunath V S

Copyright © 2010, G Nagalingappa, Manjunath V S

Business Process ReengineeringCH-8

Chapter

8 Business Process

Reengineering






Cont….

Introduction

Some of the recent headlines in the popular press read:

"Walmart reduces restocking time from six weeks to thirty-six hours."

Hewlett Packard's assembly time for server computers touches new

low-four minutes.“

"Taco Bell's sales soar from $500 million to $3 billion" The reason

behind these success stories: Business Process Reengineering!






Establish

measures

Follow

process

Measure

performance

Identify and

implement

improvement

Document

the as is

process

Continuous Improvement Model






BPR is Continuous Improvement Model

• Improving business process is effective to

obtain gradual, incremental improvement.

• A competition exists in business driven by

customer, competition and change companies

look for new solution.

• Hence BPR guides for this problem.






Cont….

What is BPR?

"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."






Changes through BPR• Organizational structure

• Management system

• Employee responsibilities

• Performance measurement

• Incentive system

• Skill development

• Use of IT

• Process change

• Technology


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Scope of

improvement

Project

Learn

from

others

Create

new

process

Plan

transition Implement

Business Process Reengineering





Implementing BPR

Phase I: Preparing for change

Phase II: Planning for change

Phase III: Designing the change

Phase IV: Evaluating the change





Phase II: Planning for changeCreate a vision mission & guiding principles

I. Identify core competencies

II. Develop vision statement

III. Develop a mission statement

IV. Determine the guiding principles.

Develop a 3-5 year plan

I. Conduct a current business review

II. Determine the external environment factors.

III. Conduct an internal health reviewIV. Complete business as usual forecasts

V. Conduct a gap analyses

VI. Develop a 3-5 year strategic plan





Phase II: Planning for changeDevelop yearly operational or breakthrough plans

I. Develop operational objectives

II. Organize resources

III. Rank potential changes in order of priorityIV. Develop yearly operational plans & budgets

V. Apply & evaluate operational plans





Phase III: Designing the change

Identify the current business process

I. Determine the critical organizational process.

II. Measure the critical processes

III. Rate the process performance

IV. Identify opportunities & processes to be re-engineering.

Establish the scope of the process-mapping project

I. Identify the process stakeholders

II. Create the project’s mission & goals

III. Structure and select team membersIV. Develop a work plan






Phase III: Designing the changeMap & analyze the process

I. Depict the process in a flow chart

II. Depict the process in an integrated flow chart

III. Compete the process mapping worksheet

IV. Complete the process constraint analysis

V. Compete the cultural factors analysis.

Create the ideal process

I. Describe the ideal process on paper

II. Compare the current process to the ideal processIII. Assess the gaps






Phase III: Designing the changeTest the new ideal process

I. Develop the pilot objectives

II. Develop the pilot measures

III. Gain agreement & approval from stakeholders

IV. Conduct a pilot test of the new process

V. Assess the impact of pilot test.

Implement the new process

I. Develop the implementation action plan

II. Execute the plan






Phase IV: Evaluating the change

Review & evaluate measure

I. Has the steering committee evaluated the results?

II. Revise the three to four strategic plan, if necessary.

Repeat the yearly operational/breakthrough

planning cycle.






Reengineering Structure: HR, culture, believes, models

1. Accountability for results are not clearly communicated and measurable

resulting in subjective and biased performance appraisals.

2. Parts of the organization are significantly over- or under-staffed.

3. Organizational communications are inconsistent, fragmented, and

inefficient.

4. Technology and/or innovation are creating changes in workflow and

production processes.

5. Significant staffing increases or decreases are contemplated.

6.Personnel retention & turnover is significant or deteriorating

7.Morale is deteriorating

8.New skills & capabilities are needed to meet expected operational requirements.

C






Common Pitfalls of BPR

1. BPR cannot solve all the problems

2. BPR may face many difficulties in implementation

3. Stiff resistance may come from staff as it involves radical changes in

structure, processes, methods etc.

4. BPR relies heavily on IT and it may need heavy investment in software

and hardware.

CH 8






Change Management and BPR

BPR involves bringing in radical changes in organizational processes,

methods, structure, etc.

Change management processes:

1. Phase 1 – Preparing for change (Preparation, assessment and

strategy development)

2. Phase 2 – Managing change (Detailed planning and change

management implementation)

3. Phase 3 – Reinforcing change (Data gathering, corrective action and

recognition)

CH 8






TQM and BPR

• TQM and BPR are customer-oriented.

• Improving the customer satisfaction.

• TQM and BPR are process-oriented with team approach.

• TQM assumes that the existing practices or systems are principally right

and useful.• BPR assumes the existing system is useless and suggests starting it over.

• TQM emphasis on total involvement, including all the stakeholders.

• For BPR, the project can be controlled to a specified area only.

• TQM emphasis on the use of statistical process control. However, there is

no similar concern for BPR.

CH 8






Comparison between BPR vs. Kaizen

Reengineering KaizenWho leads? Usually consultants, top

management, and a cross-functional

Project Team

The people that actually do

the work (with strong

guidance in the early years

by top management)

Duration Is a "project" with a defined beginningand end Never ending. Every sub- process should be kaizened

repeatedly forever

Scope An entire Value Stream process Although kaizen usually

starts with a kaikaku that

addresses the entire Value

Stream process - mostkaizen events focus on one

specific sub-process

CH 8






Degree of change Changes can be

incremental or

radical - and usually

affect anentire integrated process

Changes can be

incremental or radical -

but usually only affect a

limited sub-processat a time

Speed Generally implemented in a

Big Bang changeover

Each kaizen event

generates

immediately noticeable and

measurable Changes

Acceptance High risk of things

reverting back to the way

they were soon after the

consultants leave

Since the people that

actually do the work are the

ones making the changes -

acceptance is very high

Technology Re-engineering projects are

often led by computerconsultants - who tend to

"fix“ most problems with

(you guessed it) computers

Most "lean" methods

minimize or eveneliminate reliance on

technology - with

a preference toward visual

methods and simplification

Ch-8 (Business Process Reengineering)

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