Business Process Reengineering-PPT[2]

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									Business Process Reengineering


    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
     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
     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

    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?”

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 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.

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.

 12    Session 8 - BPR                                           IE673
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)
     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

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

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

Interrelationship Diagraph

Tree Diagram
     Systematically maps out the full range of tasks/methods
     needed to achieve goal.

Matrix Diagram
     Displays the relationship between necessary tasks and people
     or other tasks, often to show responsibility for tasks.

Data Matrix Analysis



Process Decision Program Chart
     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



     Additional Tools/Methods
      Benchmarking
      Process Simplification
      Concurrent Engineering
      Demand Flow Technology
      Activity Based Costing
      Eliminate Non-Value Added Activities

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