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BUSINESS PROCESS REENGINEERING

DEFINITION

- Business process re-engineering (BPR) is


the fundamental rethinking and radical
redesign of business processes in order to
achieve dramatic improvement in critical
areas of performance such as cost, quality
and delivery. (Hammer & Champy, 1993)

REASONS
- To satisfy their customers, employees and other
stakeholders.
- To be competitive.
- To cure systematic process and behavioral
problems.
- To enhance their capability to expand to other
industries.
- To accommodate an era of change.
- To be different and/or to produce different result.
- To survive and be successful in the long term.

FOUR MAJOR STEPS


Prepare a business process map

Establish goals

Reorganize work flow

Implementation

EXAMPLES OF BPR
- Taco Bell

REENGINEERIN
G PROCESS

K-MINUS

TACO

ADVANTAGES OF BPR
It helps to reorganize business functions, identify the
core activities and processes as well as inefficient or
obsolete ones.
It helps them to focus on overall corporate objectives
and promotes greater staff involvement.
It reduces the new product development and process
activity times and can condense the response of the
customer as well.
It can lead to `quantum leap improvements and
developments in business results if planned and
implemented carefully.
It can improve the current industry position, an
inefficient and reorganize business processes and can
make them the industrial leader.

DISADVANTAGES OF BPR
It is more suited to products and services that
involve logical sequences in production.
It may be less suitable for highly variable
processes.
It may require a high level of investment in IT and
requires good teamwork and a high degree of
planning and implementation expertise.
It can be seen as a real threat to jobs.
Success is not automatically guaranteed.

Continuous Performance Improvement


(Kaizen)

What is CPI ?
Also called as continual improvement
An ongoing improvements of services as well as
product with ease
Long-term vision that need courage and creativity
to achieve
Add value to organization by developing staff
Improves business operation continuously
With the right process can produce good result

Reason for CPI


Business operations are changing and getting
more complicated
To meet customer demands and goals more
effectively
To gain competitive advantages

4 Step Process of CPI


Plan -

Identify
current
process,
procedure or
workflow.

Act

Do -

Standardize on
new process

Implement
solution

Check -

monitor result

Other Method of CPI


TQM
- Management approach that strive to provide
customers with product & services in order to
satisfy their needs
Six Sigma
- Set of techniques and tools for process
improvement
Lean Management
- Approach usually use in manufacturing or services
5S
- Apply 5S to improve quality and productivity at
workplace

Advantages
Work flow Highly supports for the improvement
of work flow in organization
Problem solving technique Solve problems
associated with the process
Reduced root causes Design to overcome all the
problems and great remedy for any situation
Improved streamline streamlined processes
require less time, efforts as money requirement
Reduced cost CPI does not need to use high
capital in the process

Disadvantages
The need to bring about an immense change of
mind set and style of functioning
Kaizen can increase burden on lower level
management as they only spend time on the front
line while facilitating the implementation of the
approach and may also spend lots of time to
complete routine administrator tasks (Brunet,
2000)

Example of CPI (Kaizen)

Kaizen in Toyota
After world war II, Taiichi Ohno was charged with
setting up machine shops for Toyota. He studied
and analyzed Ford production systems that
include various productive measures and
discrepancies in the system.
Based on the analysis, he outlined several
production strategies for Toyota. These production
strategies that later became benchmarks for
production practices across the world.
Toyota thus became one of the first companies in
the world to adopt practices such as Kaizen.
Analysts however feel that Kaizen kept TPS, JIT,
Kanban and other practices working smoothly as
an interlinked strategic operational plan.

Differences
BPR

CPI

People that lead

Consultant, top
management and
cross-functional
project team

Operation manager,
supervisors and
employee

Type of process
used

Cross organizational
boundaries and
demand to use more
complex and mixed
technologies

Well-defined bounds
and used relatively
low technologies

Degree of
modifications in
performance

May receive radical or


incremental that may
affect the whole
streams of the
process

May receive a radical


or incremental but
usually only affects
certain part in the
whole process of
production

Cost incurred for


each process

May need high capital May need low capital


to cover up the cost
to cover up the cost