business process re-engineering bpr

BUSINESS PROCESS RE-ENGINEERING Prepared By:

Mona Gupta N

Nakulkumar Panchasara SIOM | Symbiosis Institute of Operations

Management, Nashik

SIOM | Symbiosis Institute of Operations Management, Nashik

What is a Business Process?

“A business process is a collection of activities which together produce something of value to a customer”

– e.g. Customer Order Entry


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


Also Known As…

• Process Re-engineering

• Business Re-organisation

• Business Process Redesigning

• Business Transformation

• Business Re-inventing

• Re- Engineering


Significance

• Concentrating on Fundamental rethinking and radical redesigning of business processes

• Main focus is on the CUSTOMERS

• Converting “Function Oriented” to “Process Oriented” organization

• Quick ‘Surgery’ rather than slow therapy i.e. revolutionary change not evolutionary

• IT is a key enabler


Role

• Challenges the existing business processes

• Clean slate approach

• Enhances an organization’s capability to adapt to business changes, frequently and quickly

• Where to compete and how to compete

• Brings radical change in level of performance


Prerequisites

• An understanding of end to end processes from customer’s perspective

• Clear understanding of 3 Es: Effectiveness, efficiency and economy

• Concentration on products and processes rather than functions and departments

• Understanding of current and emerging communication and IT technologies


Assumptions

• The organization will handle three major challenges 3C: Customer, competitors and change

• Elimination of all non-value adding activities from the customers’ perspective

• Taylor’s principle of “division of labour” and “functional specialisation” is no more valid

• Transformation processes are not business processes


Reasons for Re-engineering

Old Era New Era

Efficiency

Control

High Demand High Competition

Innovation

Speed

Service &Quality


What to reengineer?

BPR changes processes

not

functions, departments,

geographies or tasks SIOM | Symbiosis Institute of Operations

Management, Nashik

Activity Classification

• Value Adding Activities

Ex. Machining

• Non – Value Adding Activities

Ex. Material Handling, Supervising, Reviewing

• Waste

Ex. Machine Breakdown, Job rejection


Before & After BPR

Criteria Before After

Work Unit Functional/Departmental Process teams

Role Controlling Empowering

Measurement Functional Activities End Results

Value Protective Productive

Management Supervision Facilitating

Structure Hierarchical Leaner

Executive Controller Leader

Focus Functional Effciency Value to Customer

Improvement Slow and incremental Rapid and Radical SIOM | Symbiosis Institute of Operations

Management, Nashik

EXAMPLES


Implementing BPR (Business Process Reengineering)

Mahindra & Mahindra


Why BPR in M&M ??

• Manufacturing Inefficiencies

• Poor productivity

• Long production cycle

• Sub-optimal output.

• Unhealthy work culture

• Corruption was widespread

Visions

• Decision to focus on enhancing productivity and delivering world-class quality at the least possible cost.

• Ambition to become the largest tractor manufacturer in the world.


Roadblocks to BPR Implementation

• Fear of Downsizing

• Several jobs were combined into one.

• Management accepting the Union demands every time.

• Lenient approach of management towards running the plant.

• Inflexibility of the workers.

• Idle time available to workers due to unorganized processes


Analysis of Implementation

• Implementation started in mid 1990s

• Resistance from the unions

• Re-engineering the layout and method of working

• Cellular Manufacturing

– Multi-tasking through multi-machine manning

– Reduction in non-productive activities

• Implementation of TPM & Kaizen


Platform Concept

• Focus on customer requirement.

• Concurrent engineering: Formation of cross functional teams

• Formation of 3 full-time teams

– Horizon1: Improvements in existing products

– Horizon2: Up-gradation of existing products

– Horizon3: Development of new products


M&M After BPR

• Around a 100 officers produced 35 engines a day as compared to the 1200 employees producing 70 engines in the pre-BPR days.

• Igatpuri Plant: Employees declined by 400 but productivity went up by 125 engines per day

• Nasik Plant: 125% improvement in productivity

• Reduction in employee costs

– 1994: 12.4%

– 1996: 10.1%

• Value added per employee increased from 0.3 million to 0.46 million


Continued…… • Better inventory control

• Better sourcing

• Better order distribution across plants

• Online availability of data

• Transparent access to data

• Process transparency

• Integrated sales and supply chain


Benefits

• Empowers employees by cross functional skills

• Eliminates waste, unnecessary management overhead, and obsolete or inefficient processes

• Significant reductions in cost and cycle times

• enables revolutionary improvements in many business processes

• helps top organizations stay on top and low-achievers to become effective competitors


Limitations

• It may hurt the sentiments of managers and executives

• It does not clearly defines which process requires “rethinking” and which requires “reworking”

• Streamlining and rationalizing are better than redesigning in majority of the cases

• Worker union resistance

• Implementation cost is very high at the initial level

SIOM | Symbiosis Institute of Operations

Management, Nashik

business process re-engineering bpr

Education

lenient approach of

business changes

unions reengineering

bpr changes processes

valid transformation

concurrent engineering

functional effciency

collection of activities