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Business Process Reengineering

Business Process Reengineering. (BPR). Value Metrics. Quality Service Cost Cycle Time. Value Metrics. Quality X Service. Value. =. Cost X Cycle Time. The Crisis. Often the efficiency of a company’s parts come at the expense of the whole

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Business Process Reengineering

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  1. Business Process Reengineering (BPR) Session 8 - BPR

  2. Value Metrics • Quality • Service • Cost • Cycle Time Session 8 - BPR

  3. Value Metrics Quality X Service Value = Cost X Cycle Time Session 8 - BPR

  4. 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. Session 8 - BPR

  5. First Driving Force - Customers • Demand products/services designed for their unique needs. • Expect product configured to their needs, manufacturing plans, and convenient payment terms. Session 8 - BPR

  6. 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 Session 8 - BPR

  7. 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 Session 8 - BPR

  8. 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?” Session 8 - BPR

  9. 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. Session 8 - BPR

  10. 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. Session 8 - BPR

  11. Four Key Words (cont’d) Dramatic Not for marginal or incremental improvements Only when need exists for “heavy blasting” Processes Most business people are not “process-oriented” They are focused on tasks, on jobs, on people, on structures. Session 8 - BPR

  12. What BPR Is Not It is not another name for downsizing or some other business fix of the month. Downsizing or restructuring only means doing less with less. Reengineering means doing more with less. Session 8 - BPR

  13. Total Productivity Maintenance Y= yield (%) t(u) = Up-time (%) t(s) = Set-up time t(rt) = Theoretical run time t(ra) = Actual run time M(eff) (%) = t(rt) /{t(rt) + t(s)} Factory Overall Efficiency (FOE): FOE = Y x t(u) x M(eff) Session 8 - BPR

  14. Example Y = 90 %, t(u) = 80 %, t(rt) = 5.0 hours t(ra) = 7.3 hours, t(s) = 5.0 hours M(eff) = 5.0/{7.3 + 1.5} = 5.0/8.8 = 0.568 FOE = 0.90 x 0.80 x 0.568 = 0.409 Session 8 - BPR

  15. The 7 New Quality Tools General Planning Affinity Diagram Interrelationship Diagraph Intermediate Planning Tree Diagram Matrix Diagram Matrix Data Analysis Detailed Planning Process Decision Program Chart Arrow Diagram Session 8 - BPR

  16. Affinity Diagram Gathers large amounts of data and organizes it into groupings based on the natural relationship between each item. Session 8 - BPR

  17. Interrelationship Diagraph Session 8 - BPR

  18. Tree Diagram Systematically maps out the full range of tasks/methods needed to achieve goal. Session 8 - BPR

  19. Matrix Diagram Displays the relationship between necessary tasks and people or other tasks, often to show responsibility for tasks. Session 8 - BPR

  20. Data Matrix Analysis Temp Humidity Session 8 - BPR

  21. Process Decision Program Chart (PDPC) Maps out every conceivable event and contingency that can occur when moving from a problem statement to possible solutions. Problem Statement Solution x Things that can go wrong Countermeasures Solved Session 8 - BPR

  22. Additional Tools/Methods • Benchmarking • Process Simplification • Concurrent Engineering • Demand Flow Technology • Activity Based Costing • Eliminate Non-Value Added Activities Session 8 - BPR

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