Business Process Reengineering For ASQ Members in UAE Sunil Thawani ASQ Country Councilor for UAE

1. Business Process Reengineering For ASQ Members in UAE Sunil Thawani ASQ Country Councilor for UAE Dec. 2001 EPPCO House, Dubai

2. Enterprise Model Regulatory Requirements Competition Suppliers Organizational Objectives and Goals Products Customers Services Products Strategies, Plans and Policies Services Public opinion Processes Organization Procedures Economic Conditions Environmental Concerns Tools and Technologies

3. Relationship Of Processes To The Business Operating Objectives and Strategies Processes Subprocess Procedures & Rules Tools and Technologies

4. Process Model Customer Supplier Work Activity (Value added over time) Input Output Tasks, People, Facilities Technology, Rules, Repeatable, Controllable

5. Process Flows Back & Forth between Departments Business Management Customer Needs Marketing Engineering Operations Distribution Finance Customer Satisfaction

6. Business Process Reengineering Processes Processes in traditional organization are • Orphans • Fragmented • Invisible • Unmanaged • Defy Organization Boundaries • Result Oriented They are at the very heart of every enterprise to create value for customers

7. Performance Improvement Approaches Strategic Business Direction Business Reengineering Products/Markets Scope in value chain Core Competencies Partners/Linkages Process Reengineering Processes People Organization IT Quantum Continuous Improvement Low--------------------Change Impact----------------------------High Process Improvement Tasks/Flows/Tools Techniques Measures Skills Quality Team Group Issues Remove Roadblocks Problems Processes Major Processes Entire Business Small-------------------------------Change Scope----------------------------Large

8. Why Companies Reengineer? Top four motivations

9. WHAT IS BUSINESS PROCESS REENGINEERING? • BPR means starting all over, from scratch i.e. “If I were recreating this company today given what I know & given current technology, what would it look like?”. • BPR is about rethinking how work is done. • Underlying principle is that design of work must be based not on hierarchical management and the specialization of labour but on end-to-end processes and the creation of value for the customer. M.H. & J.C

10. DEFINITIONS OF REENGINEERING • “ Reengineering is the fundamental rethinking & radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures performance , such as cost, Quality, Service, & Speed. “ Michael Hammer James Champy • “ Reengineering is the rapid and radical redesign of strategic, value-added business processes and systems, policies & organization structures that support them to optimize the work flows & productivity in an organization. “ The Reengineering Handbook (AMACOM 1994)

11. COMPONENTS OF PROCESS REENGINEERING Business Processes Business Processes Information and Technology People and Organization

12. INDUSTRIAL COMPANIES WHICH PROCESSES ARE BEING REENGINEERED ? PRODUCTION DISTRIBUTION/ LOGISTICS CUSTOMER ORDERS PROCUREMENT / MATERIAL MANAGEMENT FINANICAL MANAGEMENT MARKETING AND SALES HUMAN RESOURCES OTHER

13. SERVICE COMPANIES WHICH PROCESSES ARE BEING REENGINEERED ? FINANCIAL MANAGEMENT MARKETING AND SALES CUSTOMER ORDERS DISTRIBUTION/LOGISTICS PRODUCTION PROCUREMENT/MATERIALS MANAGEMENT OTHER HUMAN RESOURCES

14. Percentage of Companies Meeting Specific Objectives MIXED RESULTS STREAMLINING BUSINESS PROCESSES INCREASING PRODUCTIVITY CUTTING COSTS REDUCING HEAD COUNTS ELIMINATING LOW VALUE WORK INCREASING PROFITABILITY ELIMINATING FUNCTIONS MANAGING INVENTORY BETTER SPEEDING PRODUCTS/SERVICES TO MARKET GROWING MARKETS OFFERING NEW PRODUCTS/SERVICES OUTSOURCING FUNCTIONS CONSOLIDATING SALES LINES CONSOLIDATING PRODUCT LINES

15. BUSINESS PROCESS REENGINEERING FORD MOTOR COMPANY - BEFORE BPR PURCHASE DEPT. P.O. ACCOUNTS PAYBALE INVOICE VENDOR PAYMENT RECEIPT DEPT. G.R.N. • 500 HEAD COUNT • ACCOUNTS PAYABLE TO MATCH 14 ITEMS BETWEEN P.O., G.R.N. & INVOICE

16. BUSINESS PROCESS REENGINEERING FORD MOTOR COMPANY - AFTER BPR PURCHASE DEPT. P.O. RECEIPT DEPT. DATABASE GOODS VENDOR PAYMENT ACCOUNTS PAYABLE • AUTOMATIC MATCHING OF 3 ITEMS (PART NO.,UNIT OF MEASURE, SUPPLIER CODE) BETWEEN P.O. & G.R.N. • FASTER SIMPLER, MORE ACCURATE & EFFICIENT PROCESS • 75% REDUCTION IN HEAD COUNT • INVOICELESS PROCESSING

17. WHAT TO REENGINEER ? • Critical Assessment of Processes • Select processes for Reengineering • Criteria for selection of processes - Cycle Time, Cost, Process Value , Key Issue , Management Priorities, Customer , Supplier & Competitor Issues.

18. Selecting Critical Processes • Dysfunction : Process deepest in trouble (Fragmented , inefficient , etc. ) • Greatest impact on customer • Feasibility : Most susceptible to successful redesign ( High cost , wide scope )

19. Theoretical Inputs Ensure clear understanding of Processes Film on “Customer is Dwight” Select processes for Reengineering by Process Impact & Performance Analysis CRITICAL ASSESSMENT OF PROCESSES WORKSHOP - FLOWCHART Identify Macro to Processes, Sub-Processes, Allocate Manpower to Processes/Sub-Processes Define Sub-Processes Identify Issues to Process/Sub-Processes Select key issues by Dot Voting Priorities Issues in descending order & difficulty in implementation Key Process Issues Identify internal customer(s) of Sub-processes, value factors & Process performance Priorities processes in terms of process performance, process impact & value Process Value Performance Process Labor Cost Annual Cost of Manpower to Company Calculate Processes/Sub-Processes manpower cost Manpower Cost-Time Profile Select Flow Item Determine Macro Process Cycle Times Process Cycle Time Material Cost-Time Profile Inventory Data in value days of R.M., W.I.P, F.G., Spares, etc. Process Material Cost Customer Requirements Vendor Requirements Competition Issues Management Priorities Fix Dates, Venue for WesTIP, Scope the Selected Processes, Identify WesTip team Leaders & Members, Collect Sponsor Expectation