Business Process Re-engineering BPR
- 1. BUSINESS PROCESS RE-ENGINEERING Prepared By: Mona Gupta N Nakulkumar Panchasara SIOM | Symbiosis Institute of Operations Management, Nashik
- 2. SIOM | Symbiosis Institute of Operations Management, Nashik
- 3. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 4. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 5. Also Known As… • Process Re-engineering • Business Re-organisation • Business Process Redesigning • Business Transformation • Business Re-inventing • Re- Engineering SIOM | Symbiosis Institute of Operations Management, Nashik
- 6. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 7. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 8. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 9. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 10. Reasons for Re-engineering Old Era New Era Efficiency Control High Demand High Competition Innovation Speed Service &Quality SIOM | Symbiosis Institute of Operations Management, Nashik
- 11. What to reengineer? BPR changes processes not functions, departments, geographies or tasks SIOM | Symbiosis Institute of Operations Management, Nashik
- 12. Activity Classification • Value Adding Activities Ex. Machining • Non – Value Adding Activities Ex. Material Handling, Supervising, Reviewing • Waste Ex. Machine Breakdown, Job rejection SIOM | Symbiosis Institute of Operations Management, Nashik
- 13. SIOM | Symbiosis Institute of Operations Management, Nashik
- 14. 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
- 15. EXAMPLES SIOM | Symbiosis Institute of Operations Management, Nashik
- 16. SIOM | Symbiosis Institute of Operations Management, Nashik
- 17. SIOM | Symbiosis Institute of Operations Management, Nashik
- 18. Implementing BPR (Business Process Reengineering) Mahindra & Mahindra SIOM | Symbiosis Institute of Operations Management, Nashik
- 19. 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. SIOM | Symbiosis Institute of Operations Management, Nashik
- 20. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 21. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 22. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 23. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 24. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 25. SIOM | Symbiosis Institute of Operations Management, Nashik
- 26. 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 SIOM | Symbiosis Institute of Operations Management, Nashik
- 27. 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
- 28. SIOM | Symbiosis Institute of Operations Management, Nashik