Business Process Reengineering.ppt

IE673 Session 8 - BPR Business Process Reengineering (BPR) Value Metrics Quality Service Cost Cycle Time The Crisis Often the efficiency of a company’s parts come at the expense of the whole Work that requires the cooperation and coordination of several different departments within a company is often a source of problems. Even when the work involved has major impact on the bottom line, companies have no one in charge. First Driving Force - Customers Demand products/services designed for their unique needs. Expect product configured to their needs, manufacturing plans, and convenient payment terms. Second Driving Force - Competition More different kinds Niche competitors Falling trade barriers Adequate is no longer good enough. Start-up companies Carry no excess baggage Do not play by the rules Technology changes the nature of competition Third Driving Force - Change Pervasive and persistent It is normality At an accelerating rate Ford Model T - an entire generation Computers - two years Executives think their companies have change sensing radars Quick Definition of BPR Means: “Starting Over” Does not mean: Tinkering with what already exists or making incremental changes Ask: “IF I were recreating the company today, given what I know and given current technology, what would it look like?” Additional Tools/Methods Benchmarking Process Simplification Concurrent Engineering Demand Flow Technology Activity Based Costing Eliminate Non-Value Added Activities * Value Metrics Value = Quality X Service Cost X Cycle Time Formal Definition of BPR Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as quality, cost, speed, and service. Four Key Words Fundamental Why we do what we do? Why we do it the way we do it? Radical Disregarding all existing structures and procedures Inventing completely new ways of accomplishing work. Four Key Wor