The Hammer Definition of BPR Radical redesign of business processes What BPR is What BPR is not Hammer, Michael, et al.,

REENGINEERING THE CORPORATION: A Manifesto for Business Revolution, New York: Harper Collins, Publishers Inc., 1993.

Other References on BPR

Champy, James, REENGINEERING MANAGEMENT, New York: Harper Business, 1995.

Hammer, Michael, et al., THE REENGINEERING REVOLUTION, New York: Harper Business, 1995.

Jacobson, REENGIENEERING WITH OBJECT TECHNOLOGY, 1995.

Taylor, David A., BUSINESS ENGINEERING WITH OBJECT TECHNOLOGY, wILEY, 1995.

Some Common Benefits of BPR

There is enterprise integration Departments are consolidated Several jobs are combined into one job

Workers are empowered There is both horizontal and vertical reorganization Handoffs are eliminated There are fewer rules and less coordination is required

Some Common Benefits of BPR, Cont’d

Number of steps in a process are reduced This is simplification Inspections, checks and controls are reduced or eliminated

The steps are performed in a more natural order

Some Common Benefits of BPR, Cont’d

Like Process Improvement, steps are reassessed Can it be eliminated Can it be taken off line Can it be performed in parallel Can it be combined Is it a bottleneck Can its mean be reduced Can its variance be reduced WHAT IS ITS COST???

Some Common Benefits of BPR, Cont’d

Processes differ by the type of job being processed Not just one process but many are employed depending on

the size of the job

Work is performed where it makes the most sense Wal-Mart moves the replenishment function to its suppliers

Some Common Benefits of BPR, Cont’d

Reconciliation is minimized A case manager provides a single point

of contact Hybrid centralized/decentralized

operations are prevalent IT enables decisions to operate

autonomously

Benefits of elimination of handoffs

No transits No waiting for another operator No waiting in queues No setups No supervision/coordination required

EXAMPLES:

Ford IBM Credit McKesson Pharmacueticals Kodak XEROX Motorola

How information technology provides important business

solutions

Managers must learn to think inductively Information can appear instantaneously

in as many different places as needed Generalists can do the work of experts

with expert systems {{LET’S EXAMINE THESE MORE

CLOSELY}}

Information can appear in as many places as needed

simultaneously

Shared databases make this possible

A generalist can do the work of an expert

Expert systems make this possible

Business can simultaneously reap the benefits of centralization and decentralization

Wide-area, data-communication networks make this possible

Decision-making is part of everyone’s job

Decision support tools (database access combined w/ modeling software)

Field personnel can send and receive information wherever

they are

They don’t need an office at headquarters any more

To receive and send mail, all they need is a notebook with cellular telephone technology modem

Contacts with potential buyers need no longer be personal

E-mail enables detailed interaction Southwestern Bell gets their C++

programmers out of India at $10-$15 per hour

Planning is instantaneous and continuous due to IT

Manufacturers gather data on product sales, raw materials price and

availability, labor supply and produces a master production schedule

This can now be done instantaneously by computer based on real-time data

Planning is instantaneous, Cont’d

Companies must make technology exploitation one of there core competencies if they are to succeed in a period of ongoing technological change

If you can buy it, its not new

Planning is instantaneous, Cont’d

Know what you’re going to do with technology before it becomes available

It is entirely possible to stay three years ahead of the market on technology

Who will re-engineer

Leader Process owner Re-engineering team Steering Committee Re-engineering czar

TASKS of the Re-engineering team

1) determine measures of performance 2) install measures of performance 3) delineate entire existing process in all

its gory detail 4) perform process value analysis and

activity-based costing 5) benchmark processes by comparison

with other processes

TASKS of the Re-engineering team, Cont’d

6) design re-invented process 7) simulate re-invented process 8) prepare report with recommendations 9) install re-invented process 10) measure improvements

Re-engineering Opportunities

Product development: concept to prototype

Sales: prospect to order Order fulfillment: order to payment Service: inquiry to resolution

Symptoms of a sick process Extensive information exchange, data

redundancy -- process fragmentation Inventory buffers and other assets --

slack to cope with uncertainty High levels of checking, inspection and

control -- fragmentation

Symptoms of a sick process, Cont’d

Lots of rework and iteration -- inadequate feedback

Complexity, exceptions and special cases -- accretion onto simplicity

Principles of good process design

Start with a vision Decide upon approach As few people as possible involved in

the final process Lots of involvement, empowerment and

ownership

Principles of good process design, Cont’d

Simplicity, simplicity, simplicity Make it fun, make it easy Focus on outcomes

Shortened cycle times Lower cost Higher quality Higher throughput

Simulate the prototype