BPR
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12 Business Process Reengineering Total Quality Management “Do not merely automate. Obliterate” —Michael Hammer
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Transcript of BPR
12Business Process Reengineering
Total Quality Management
“Do not merely automate. Obliterate”
—Michael Hammer
Learning Objectives
After studying this chapter, you should be able to: Understand BPR and its development Identify principles and advantages of BPR Study the methodology of BPR and phases of implementation Explain re-engineering in the manufacturing and service
industry Understand re-engineering structure Study the limitations and issues surrounding BPR Understand the relationship between BPR and TQM
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Business Process Reengineering
“Re-engineering 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.”
- Hammer and Champy
Total Quality Management
WHEN SHOULD BPR IS USED?
The competition outperforms the company There conflicts in the re-engineer There is an extremely high frequency of meetings There is an excessive use of non-structured
communication (e-mail, memo) A more continuous approach of incremental
improvements is not possible
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Key concepts of BPR
Radical Dramatic Processes Customer
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The Traditional Approach
Traditional Approach
Process 1 Process 2 Process 3 Process 4
Customer
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BPR Approach
BPR Approach
Process 1 Process 2 Process 3 Process 4 Customer
Increased Customer Satisfaction
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The Three “R”s of Reengineering
Rethink Redesign Retools
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BPR- Evolution 1. Michael Hammer and James Champy (1993), the originator and leading
exponent of the concept of re-engineering, published a book on Re-engineering the Corporation.
2. Davenport (1993) notes six areas which influenced the emergence of BPR:
The Total Quality Approach Industrial Engineering The Systems Approach The Socio-technical Approach The diffusion of innovation Use of information Systems for competitive advantage
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Benefits of BPR Elimination of non-value adding activities and achievement of
cost saving in the longer run. Adaptation to change that enables growth of new business. Creation of product differentiation on the basis of “cycle time”. Achievement of satisfaction for employees as work becomes
more meaningful. Empowerment of employees results in swift decision making. Improvement of efficiency e.g. reduced time to market,
providing quicker response to customers Improvement in efficiency bringing about an increase in
effectiveness e.g. delivering higher quality
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Requirements of Reengineering Process
Clean Slate approach Critical Processes Process Analysis Cross functional teams Strong leadership Information Technology
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Rules of BPR Rule 1: Organize around outcomes, not tasks Rule 2: Have those who use the output of the process, perform
the process Rule 3: Merge information processing work with the real work
that produces the information Rule 4: Treat geographically dispersed resources as though
they work in a centralized manner Rule 5: Link parallel activities instead of integrating their
results Rule 6: Make the decision point. where the work is performed
and build control into the process Rule 7: Capture information once–at the source
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BPR Principles Several jobs are combined into one. Workers make the decisions. The steps in a process are performed in a natural order. Processes have multiple versions. Work is performed where it makes the most sense. Checks and controls are reduced. Reconciliation is minimized. A case manager is the single point of contact. Hybrid centralized/decentralized operations are prevalent.
Total Quality Management
Strategic Advantages of BPR
CriteriaBefore BPR After BPR
Work units Functional/department
Process teams
Role Controlling Empowering
Measurement Functional activities End results (covering the complete process)
Advancement criteria Performance Ability to learn/adapt
Value Protective Productive
Management Supervision Coaching, facilitating
Structure Hierarchical Flat, learner
Executives’ perception
Controller Leader
Focus Functional efficiency Value of entire process to customers
Improvement Slow and incremental Rapid, radical
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BPR Methodologies The Hammer and Champy Methodology
Davenport and Short’s Methodology
Process Analysis and Design Methodology (PADM)
Jacobson’s Object-oriented Methodology
Consolidated Methodology
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BPR- Consolidated Methodology
A consolidated methodology has been developed baed on the five methodologies given below:
Methodology 1#: Underdown (1997) Methodology 2 #: Harrison and Pratt (1993) Methodology 3#: Furey (1993) Methodology 4#: Mayer and Dewitte (1998) Methodology 5#: Manganelli and Klien
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Consolidated Methodology Activity 1: Prepare for re-engineering Activity 2: Map and Analyse As-Is Process Activity 3: Design To-Be Processes Activity 4: Implement Re-engineered Process Activity 5: Improve Process Continuously
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Implementation of BPR Develop the business vision and process objectives Identify the business processes to be re-designed Understand and measure the existing processes Identify information technology levers Design and build a prototype of new process
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Implementation of BPR in Projects
Phase 1: Begin Re-engineered change. Phase 2: Build Re-engineered structure Phase 3: Identify BPR opportunities. Phase 4: Understand the existing process. Phase 5: Re-engineer the process. Phase 6: Blueprint the new business system. Phase 7: Perform the transformation
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Reengineering in the service sector
Make the customer the starting point for change Design work processes in light of re-engineered goals Restructure to support front-line performance
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Reengineering in Manufacturing Sector
Agile Manufacturing Lean Manufacturing Just in Time Collaborative manufacturing Intelligent manufacturing Production planning and control (PPC) Product design and development
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RE-ENGINEERING STRUCTURE
BPR leader
Process owners
Re-engineering teams
Other employees involved in the re-engineered process
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BPR teams in Project Management Executive Sponsor Business Analyst Project Manager Developer Quality Assurance Analyst Trainer Application Architect
Database Analyst Infrastructure Analyst Information Architect Solution owner End user Subject Matter Expert Stakeholders
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Limitations of BPR Re-engineering too many processes at the initial stages Ignoring everything except process re-design Placing prior constraints on the definition of the
problem and the scope of the re-engineering effort Inadequate training of process owners and team
members Delay in showing results Non-availability of adequate resources Limited awareness amongst employees
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BPR and TQMBPR is closely related to TQM because it is one of the best tools to
achieve total quality and to improve a company’s performance significantly. Both TQM and BPR primarily focus on customers, both are process-oriented and both involve cross-functional activities. While TQM aims at process improvement, BPR aims at drastic changes to improve a process, if possible discarding the existing process and developing an entirely new, improved process.
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