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Session 12-BPR

BPR was first introduced in a 1990 HBR article by Michael Hammer as the fundamental rethinking and radical redesign of core business processes to achieve dramatic improvements. It focuses on redesigning processes around customer needs rather than organizational structure. The case study analyzes M&M's business processes and recommends reengineering to focus on product units over functions, decentralize decision making, reduce cycle times, and adopt new technologies to improve manufacturing systems.

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Prakhar SIngh
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0% found this document useful (0 votes)
99 views36 pages

Session 12-BPR

BPR was first introduced in a 1990 HBR article by Michael Hammer as the fundamental rethinking and radical redesign of core business processes to achieve dramatic improvements. It focuses on redesigning processes around customer needs rather than organizational structure. The case study analyzes M&M's business processes and recommends reengineering to focus on product units over functions, decentralize decision making, reduce cycle times, and adopt new technologies to improve manufacturing systems.

Uploaded by

Prakhar SIngh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BPR first introduced in 1990 in a Harvard Business

Review article by Michael Hammer:

◦Reengineering Work.

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The fundamental rethinking and radical redesign of core business
processes to achieve dramatic improvements in critical performance
measures such as quality, cost, and cycle time.

Key Area IS PROCESS


 A specific sequencing of work activities across time and place
 A beginning and an end having clearly defined inputs and outputs
 Process ownership
 Measurable

Source: Adapted from Hammer and Champy, Reengineering the Corporation, 1993
check order, how much
accept / reject how much does it cost?
does it cost?
confirm order deliver
bill

acquire necessary
parts
can we
produce it?
customer wants
to order are parts
something when?
avalilable?

produce

Organisational units (departments) are formed by concentrating


specific tasks, e.g. production of goods, purchasing goods, sales.
3
CEO Customer/
Markets
Supplier
Needs

Marketing Purchase Production Distribution Accounting


& Sales
 Oriented to overall workflow of an order, project, etc.
 Single responsibility for the whole process
 Attempt to eliminate time-consuming coordination problems

 Precondition
 Processes in an enterprise must be known
 Processes in an enterprise must be analysed
 Processes in an enterprise must be documented

 Video-1

5
Purchasing
Vendor
Purchase order

Receiving Goods

Copy of
purchase
order

Receiving
Accounts document
Payable

Invoice

? ? Payment

PO = Receiving Doc. = Invoice *Source: Adapted from Hammer and Champy,


1993
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”
• The new process cuts head count in AP by 75%.
• Matching is computerized.
• Accuracy is improved.
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Broken Processes: Which processes are in the deepest
trouble?

Important Processes: Which processes have the


greatest impact on the company’s customers?

Feasible Processes: Which processes are at the


moment most susceptible to successful redesign?

Video - 2 21
BPR TOOL COMPANY DESCRIPTION
ActionWorks Action The product suite consists of a business process
TechnologiesAla builder, process engine, and front-end executive
meda, CA dashboard.
AllFusion CA, Islandia, NY Modeling tool that helps analyze, document, and
Process improve complex business processes. Provides
Modeler an integrated view of workflows to complete
tasks and activities.
BizFlow HandySoft, Delivers process management solutions in the
Vienna, VA areas of: collaboration, administration
application, and integration.
BPSimulator Technology The activity-based analysis software enables
Economics Inc, teams to track cycle times and costs of multiple
Rockville, MD business processes.

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 Flow chart technique (Flowcharter, Flowmark)
 Data Flow Diagrams (CASE Tool, 4Keeps)
 Role activity diagram (RADitor)
 Role interaction diagrams (RADitor)
 Gantt Chart (Project Scheduler7, Workflow BPR)
 IDEF (Design IDEF, IDEF Tools)
 UML (Magic Draw UML, Visual UML)
 Simulation (Metis, Arena)

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It is a graphical representation which uses symbols to represent such
things as operations, data, flow direction, and equipment, for the
definition, analysis, or solution of a problem.

24
 Data Flow Diagrams (DFDs) describe the processes showing how
these processes link together through data stores and how the
processes relate to the users and the outside world.

25
Context DFD Level 1 DFD

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1. Order Planning
2. Order Generation
3. Cost estimation and pricing
4. Order receipt and entry
5. Order selection and prioritization
6. Scheduling
7. Fulfillment
 Procurement
 Manufacturing
 Assembling
 Testing
 Shipping
 Installation
8. Billing
9. Returns and Claims
10. Post sales Services
Cost Time Quality Error rates
Cost per (negative
Cycle time
execution outcomes,
wrong info)

Waiting time /
Resource time spent in Missed
utilization non-value- promise
added tasks

Waste
Before Re-engineering After Re-engineering Business Impact

Ford Motor Independent databases An integrated database Fewer


Company Maintained by Supporting multiple inconsistencies;
Accounts purchasing, receiving, Functions (e.g., reduction in clerical
Payable And accounts payable Purchasing, receiving, overhead; better
accounts payable) responsiveness to
customers
Wal-Mart Wal-Mart ordered its Wal-Mart let its vendor, Better inventory
Inventory own stock of Proctor and Gamble, management; more
Management merchandise from replenish its inventory effective inventory
vendors; dealt with according to market replenishment
excess inventory or trends
insufficient inventory
Hewlett- Decentralized Central negotiation of Cost savings through
Packard’s purchasing led to a loss corporate volume the use of centrally
Purchasing of corporate-wide discounts and use of a negotiated discounts
Process discounts shared database of
negotiated prices 32
 CASE on M&M

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 M&M is an Indian multinational car manufacturing corporation headquartered
in Mumbai, Maharashtra, India.[3] It is one of the largest vehicle manufacturers
by production in India and the largest manufacturer of tractors in the world.[4]
 Mahindra & Mahindra was set up as a steel trading company in 1945
in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C.
Mahindra and Malik Ghulam Mohammed.[7]

 After India gained independence and Pakistan was formed, Mohammed


emigrated to Pakistan where he became that country's first finance minister.
The company changed its name to Mahindra & Mahindra in 1948.[8]
 It eventually saw a business opportunity in expanding into manufacturing and
selling larger MUVs, starting with the assembly under licence of
the Willys Jeep in India. Soon established as the Jeep manufacturers of India,
the company later commenced manufacturing light commercial
vehicles (LCVs) and agricultural tractors.
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 Requirement Analysis
 Role of Business Process Re-engineering
 Methodology of BPR: 5 Stage Model of AS-IS/TO-
BE Analysis
 Process Analysis
 Product Analysis
 IT Infrastructure
 Competitive Analysis
 Strategic Analysis

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 Process of Change leads to
 Focus on Product Units instead of Functional units
 Decentralization of Decision Making
 Reducing Cycle times
 Creation of sense of ownership among workers
 Technological adoption in manufacturing systems

 Key Learning
 Handling Project
 Change Management
 Strong and Robust Backbone i.e. IT Infrastructure

36

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