Postech Strategic Management of Information Systems LAB BPR/ERP Postech Strategic Management of Information Systems LAB

Postech Strategic Management of Information Systems LAB What is BPR? “Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measure of performance, such as cost, quality, service, and speed” -Dr. Michael Hammer . 1990 Postech Strategic Management of Information Systems LAB

Fundamental Concept of BPR Process Fundamental Radical Dramatic Shift from function based thinking to process based thinking Fundamental rethinking of the way of conducting business Disregarding all existing structures and inventing complete new ways –not improvement or modification Making quantum leaps in performance rather than incremental improvement Postech Strategic Management of Information Systems LAB

Postech Strategic Management of Information Systems LAB Why BPR? Innovation Customer Driven Core Competence Globalization ! Change Competition Postech Strategic Management of Information Systems LAB

Postech Strategic Management of Information Systems LAB What is Process? Definition of Process A process is a cross-functional interrelated series of activities that convert business inputs into business outputs Supplier Customer Input Output Activity Process Postech Strategic Management of Information Systems LAB

Seven Principles of BPR Organize around outcomes, not task Have those who use the output of the process perform the process Subsume Information processing work into the real work that produces the Information Treat geographically dispersed resources as though they were centralized Link parallel activities instead of integrating their results Put the decision point where the work is performed, and build control into the process Capture all information at the source BPR Principles Postech Strategic Management of Information Systems LAB

Common steps when performing BPR 1. Selection of project 2. Analysis of initial capability 3. Selection of process and project scope 4. Work analysis 5. Redesign of alternative process 6. Cost/benefit analysis for each alternative process 7. Selection of alternative process 8. Implementation of process 9. Change of process information Postech Strategic Management of Information Systems LAB

Taylorism VS. BPR Taylorism BPR(Hammerism) Orientation Task, Function Process Tool Stopwatch IT Domain Production Management Entire organization Goal Mass production Customer satisfaction Age Industrial revolution Information revolution Postech Strategic Management of Information Systems LAB

Assumptions Questioned BPR VS. Other Programs Reengineering Rightsizing Restructuring TQM Automation Assumptions Questioned Fundamental Staffing Reporting Relationships Customer Wants and Needs Technology Applications Scope of change Radical Staffing, Job Responsibilities Organizations Bottom-up Systems Orientation Processes Functional Procedures Improvement Goals Dramatic Incremental Postech Strategic Management of Information Systems LAB

Information Technology What is ERP? Definition of ERP(Enterprise Resource Planning) A set of applications designed to bring business functions into balance and represents the next generation of business systems – by Gartner Group An accounting oriented information system for identifying and planning the enterprise wide resource –by APICS ERP Advanced Process BPR Information Technology Process Innovation Postech Strategic Management of Information Systems LAB

Development of ERP 1970’s 1980’s 1990’s 2000’s SCM ERP MRPII MRP (Material Requirement Planning) MRPII (Manufacturing Resource Planning) ERP (Enterprise Resource Planning) SCM (Supply Chain Management) 1970’s 1980’s 1990’s 2000’s Material Planning Minimum Inventory Closed Loop MRP Capacity Planning Cost Reduction Enterprise-wide Planning Management Innovation Inter-company Optimization Win-Win-Win Postech Strategic Management of Information Systems LAB

Functions of ERP ERP Product Development Process CAD/CAM PDM Finance/ Accounting Engineer- ing Sales/ Mktg Supplier Production Logistics Customer Product Development Process CAD/CAM PDM Drawing/Docu Mgmt EC Mgmt Configuration Control Release Control Order Fulfilment Process Manufacturing Process Management Process Employee MES Finite Scheduling Data Collection/POP Facility Management Quality Management FA Postech Strategic Management of Information Systems LAB

Structure of ERP System Supplier AR Planning AP GL Receiving Shipping Inventory Manufacturing Plants Distribution Centers Product Life cycle Engineering Purchasing Order Admin Finance Order Entry Shop Floor Control PDM E D I . W e b FA Customer Postech Strategic Management of Information Systems LAB

Characteristics of ERP BPR Tool BPR Infrastructure Data Integration Single View of Distributed Systems Communication Tool Configuration Function No Programming Supporting Multi-language BPR Enabler Integration Globalization Enterprise Real-time Integration Postech Strategic Management of Information Systems LAB