Business

Process
Reengineering
Presented By: Amit Singh
Rajesh Ranjan
Introduction
In todays ever changing world, the only thing that doesnt change is
change itself.
In a world increasingly driven by the three Cs: Customer, Competition and
Change.
companies are on the lookout for new solutions for their business
problems. Recently, some of the more successful business corporations in
the world seem to have hit upon an incredible solution: Business Process
Reengineering (BPR).
Some of the recent headlines in the popular press read, Wal-Mart reduces
restocking time from six weeks to thirty-six hours. Hewlett Packards
assembly time for server computers touches new low- four minutes.
The reason behind these success stories: Business Process Reengineering!
What is business process reengineering?
Reengineering 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.
BPR advocates that enterprises go back to the basics and reexamine their
very roots. It doesnt believe in small improvements. Rather it aims at total
reinvention.
BPR focuses on processes and not on tasks, jobs or people.
What to reengineer?
A business process is a series of steps designed to produce a product or a
service. It includes all the activities that deliver particular results for a given
Customer(external or internal).
Talking about the importance of processes just as companies have
organization charts, they should also have what are called process maps to
give a picture of how work flows through the company.
Reengineering is not reorganizing
Modifying how an organization is structured and redesigning an
organizations business processes are two different things.
An organizational structure should be designed so that it best supports
redesigned business processes.

Reengineering is not downsizing either

Downsizing focuses on the reduction of workforce to achieve short-term cost
savings.
Reengineering, on the other hand, focuses on rethinking from the ground up,
finding more efficient ways of working including eliminating work that is
unnecessary.
Why reengineer?
Historical reality for organization
High level of demand: organizations
are order takers
Management focus efficiency and
control of operation.
Modern reality for organization
Hyper competiveness
Globalization
Very demanding customers
Management and IT focus: Innovation,
responsiveness/speed, quality and
service.

BPR is required in two cases:

The organization has discovered some breakthrough methodology.
The organization has failed to keep up to date with the changing
technologies.
Advantage of Reengineering
Empowering employees
eliminating waste, unnecessary management overhead, and obsolete or
inefficient processes
producing often significant reductions in cost and cycle times
enabling revolutionary improvements in many business processes as
measured by quality and customer service
helping top organizations stay on top and low achievers to become
effective competitors
Why Organization Dont Reengineer?
Complacency feeling of uncritical satisfaction with reengineer
Political Resistance
New Development
Fear of Unknown and Failure

Common Problems with employees related to BPR

Desire to change not strong enough
Business Process Reengineering Process
BPR CASES
1. Ford: Account Payable
2. Mutual Benefit life: New life insurance policy Application
3. Capital Holding co: Customer Service Process
4. Taco Bell: Wide BPR
5. Others
Ford Account payable process
 Purchasing department order to vender for the product .
A purchases order copy send to account payable department .
Receiving unit (the where house )receiving document ,shipping slab would
also send to account payable department .
Vender also send invoice document to accountable department .
The three document match the payment are send to vender .
Trigger for Fords AP Reengineering
Mazda only uses 1/5 to do the same AP.
When goods arrive at the loading dock at Mazda:
Use bar-code reader is used to read delivery data.
Inventory data are updated.
Production schedules may be rescheduled if necessary
Send electronic payment to the supplier.
Ford Procurement Process
Ford Accounts Payable
Before:
More than 500 accounts payable clerks matched purchase order, receiving documents, and
invoices and then issued payment.
It was slow and cumbersome
Mismatches were common
After
Reengineer procurement instead of AP process.
The new process cuts head count in AP by 75%
Invoice are eliminated
Matching is computerized
Accuracy is improved.
New Life Insurance Policy Application Process at
Mutual Benefits Life Before Reengineering

30 steps, 5 department, 19 persons

Issuance application processing cycle time: 24 hours minimum; average 22 days
Staple yourself to the order: only17 minutes in actually processing the application
(Processing time/ cycle time)
New Process by Apply BPE
Instead of implementing each of the step by
computerizing.
In BPE process a case manager appointed.
The case manager would be assigned to incoming
cases.
When case are very difficult then case manager
help underwater, physician to determine the
premium
Application processing cycle time: 4 hours
minimum: 2 5 days average.
Application handling capacity double
Cut field office positions
Capital Holding Co Direct Response
Group
A direct marketer of insurance life, health, property, and casualty via television,
telephone, and direct mail.
In 1988, DRG president Norm Phelps and other senior executives decided that for our
company the days of ass marketing were over.
Need to strengthen DRGs relationships with existing customers and target our
marketing to those potential customers whose profiles matched specific company
strategies.
A new vision for DRG: the company needed to be exactly what people didnt expect it to
be an insurance company that cares about its customers and wants to give them the
best possible value for their premium dollar.
Capital Holding, Satisfying one by one
Caring, Listening, Satisfying One by one
Each of us is devoted to satisfying the financial concerns of every member of our
customer family by:
Deeply caring abut and understanding each members unique financial concerns.
Providing value thorough products and services that meet each members financial
concerns.
Responding with the clear information, personal attention and respect to which each
member is entitled.
Nurturing an enduring relationship that earns each members loyalty and recommendation.
New Business Model: A conceptual
Breakthrough
A High Level Service Process Model
Today
After Apply BPE
Customer Management Team (CMT):
A flavor of how DRG Service process will change.
Increase my A&H coverage
Give me information about my Life Policy beneficiaries.
Taco Bell
We were going backwards fast .. If something was simple, we made it complex. If it was
hard, we figured out a way to make it possible.
Customer buy for $1 are worth about 2 cents. 75 cents goes into marketing, advertising, and
overhead.
Reengineering from the customers point of view. Are customer willing to pay for these
value added activities?
Corporate Vision: We want to be number one in share of stomach.
Slashed kitchen: Kitchen: Seating capacity 70% : 30% 30% : 70%
Eliminate district manager. Restaurant managers are given profit and loss responsibility
Moving cooking of meat and bean outside.
Boost peak serving capacity at average restaurant from $400 an hour to $1,500 a hour.
$500 millions reginal company in 1982 to $3 billion national company in 1992.
Thank You