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2. Chapter : Production & Operations Management ✓ 1 2 3 4 5 6 7 8 9 10 11
The Role of Operations Management
Analyzing Operations
Inventory Management
Total Quality Management
Operations Strategy
Supply Chain Management ✓
Business Process Reengineering 8
Planning & Control 9
New Product/process development 10
Project Management 11
Issues For International Operations 12
Time Based Competition 13
Cost Elements

3. Lecture Outlines Process Thinking The Process View of Business
Measuring Process Flows
Flowchart Analysis
Materials-Flow Analysis
Information-Flow Analysis
Service Blue Printing
Business Process Reengineering (BPR)
BPR philosophy
Principles of BPR
The Success of BPR
BPR Mistakes

4. Process Thinking Definition of a “system” Whole > sum of parts
Application of systems thinking to businesses
“Can’t sell from an empty wagon.”
Defining system boundaries
Role of “cross functional” teams in systems analysis
Systems thinking requires cross-functional teams to include all affected functions.

5. Process View of Business

6. Measuring Process Flows
Little’s Law
Relates number of items in the system to arrival rate and length of time in the system.
Formula:
I = T x R
I = average number in the system
T = average throughput time
R = average flow rate into the process
Assumes system is in a ‘steady state’

7. Applications of Little’s Law
Manufacturing
Waiting lines
Invoice processing
Legal office transactions
Accounts receivable processing
Etc.

8. Flow-Process Chart Analysis
Purpose: to describe a process visually to find ways of improving the current process.
Find repetitive operations
Identify bottlenecks
Describe directions and distances of flows (people, material and information)
Reduce waste
Required for certifications such as ISO 9000.

9. Process Flow Analysis Might Change:
Raw materials
Product (output) design
Job design
Processing steps used
Management control information
Equipment or tools
Suppliers
i.e. Anything but customers may be changed!!

10. Steps in process flowchart analysis using the systems approach
Select a process to study
Form a team to analyze & improve the system
Decide on the objectives of the analysis
Define customers and suppliers
Flowchart the existing transformation process
Develop improved process design
Gain management approval of the improved design
Implement the new process design

11. Materials-Flow Analysis
One of first applications of process-flow analysis ideas
Emphasis on reducing total throughput time
Seek to reduce waste
Describes flow of materials in great detail

12. Symbols for Flow-Process Chart
Operation (a task or work activity)
Inspection (an inspection of the product for
quantity or quality)
Transportation (a movement of material from
one point to another)
Storage (an inventory or storage of materials
awaiting the next operation)
Delay (a delay in the sequence of operations)

14. Questions to Ask in FPA
What does the customer need?, operations are necessary? Can some operations be eliminated, combined, or simplified?….
Who is performing the job? Can the operation be redesigned to use less skill or less labor? Can operations be combined to enrich jobs? ….
Where is each operation conducted? Can layout be improved?
When is each operation performed? Is there excessive delay or storage? Are some operations creating bottlenecks? …..
How is the operation done? Can better methods, procedures, or equipment be used? ….

15. Information Flow Analysis
Purpose: to improve the efficiency and effectiveness of the process.
Types of information flow:
Information is the product of operation
Information is used for management control

16. Symbols for Information Processing Flow Chart
Origin of record (used to identify an operation that involves the addition
of significant data to a blank form
Subsequent writing (a step in which significant data is added to an existing
record)
Handling operations (any nonproductive step, such as sorting, stapling, or
folding)
Move (a step in which the record is transported from one person, department,
or work place to another
Inspection (used when the step involves examination of the quality or
clearness of a record cord)
Delay, file, and destroy (identifies a point or time at which the record is
inactive

17. Service Blue Printing Flow charting of a service operation
Shows the ‘cycle of service.’
Points on SBP are “moments of truth”
Ask the same questions as in PFA (what, who, where, when, and how)

18. Business Process Reengineering (BPR)
BPR defined (Hammer and Champy,1993)
BPR Philosophy
Principles of BPR
Success of BPR

19. BPR Defined
BPR is “the fundamental rethinking and radical redesign of business [or organizational] processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed.”

20. BPR Defined
This is in contrast to incremental change or continuous improvement of an existing process.
“If I were recreating this company today, given what I know and given current technology, what would it look like?”

21. BPR Philosophy
Does the reengineering consultant see the glass as half full or half empty?
Neither.
It’s the wrong size of glass!
Or, should it be a glass? …or a liquid?

22. Principles of BPR Organize around outcomes
Have the people who do the work, process their own information
Put the decision point where work is performed and build control into the process
Eliminate unnecessary steps in the process

23. The Success of BPR
According to Hammer & Champy, percent of the organizations attempting BPR do not achieve the results they expected. Why?
Because they make one or more of the 17 common mistakes:

24. BPR Mistakes Trying to fix a process instead of changing it
Not focusing on business processes
Focusing only on the process redesign
Neglecting people’s values & beliefs
Settling for minor results
Quitting too early
Constraining the scope of the problem & effort
Letting corporate culture & mgmt attitudes get in the way
Trying to reengineer from the bottom up

25. BPR Mistakes (cont.) Assigning a leader who doesn’t understand BPR
Skimping on the resources
Not making BPR a top corporate priority
Trying to do too much at once & dissipating resources.
Concentrating only on design & not implementation.
Trying to keep everyone happy.
Pulling back if people resist.
Dragging out the effort & taking too long.
Source: Hammer & Champy, Reengineering the Corporation, chapter 14.

26. THANK YOU!
Ahmed BELAFQUIH