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

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

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

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

Process Flows Back & Forth between Departments Business Management Customer Needs Marketing EngineeringOperationsDistribution Finance Customer Satisfaction

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

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

Why Companies Reengineer? Top four motivations

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

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)

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

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

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

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

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

BUSINESS PROCESS REENGINEERING PURCHASE DEPT. VENDOR P.O. GOODS PAYMENT 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 RECEIPT DEPT. FORD MOTOR COMPANY - AFTER BPR ACCOUNTS PAYABLE DATABASE

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.

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 )

CRITICAL ASSESSMENT OF PROCESSES WORKSHOP - FLOWCHART Theoretical Inputs Ensure clear understanding of Processes Film on “Customer is Dwight” 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 Identify internal customer(s) of Sub-processes, value factors & Process performance Priorities processes in terms of process performance, process impact & value Annual Cost of Manpower to Company Calculate Processes/Sub-Processes manpower cost Select Flow Item Determine Macro Process Cycle Times Inventory Data in value days of R.M., W.I.P, F.G., Spares, etc. Select processes for Reengineering by Process Impact & Performance Analysis Key Process Issues Process Value Performance Process Labor Cost Process Cycle Time Process Material Cost Manpower Cost-Time Profile Material Cost-Time Profile 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