Article summary

Title of Article: Business process re-engineering: lessons from operations

management

Written by: Colin Armistead, Alan Harrison and Philip Rowlands

 Abstract
The purpose of the article is not to claim BPR as an operations management approach but to
examine the concepts and techniques of the field which might have application for BPR. Hence
the learning which has been gained from other improvement philosophies may be valuably
transferred to BPR programmes. The starting point for this examination is the following
description of BPR: An organization may be considered as a collection of processes
characterized as strategic, operational and enabling. BPR is an approach to achieving radical
improvements in performance by using resources in ways which maximize value added activities
and minimize activities which only add cost – either at the level of the individual process or at
the level of the whole organization. Operations management is concerned with the management
of processes, people, technology and other resources in the production of goods and services.
Any textbook on operations management includes chapters dealing with the main areas of the
design of products, the design of operations, planning and control of capacity, materials, quality
and resource productivity. The content included in these main areas may be essentially
descriptive and qualitative or may include a quantitative approach to solving operational
problems. There exists in the operations management domain two main areas which have
resonance with the concept and prescription of BPR. First, the use of the process paradigm and
second the concepts and techniques for designing, managing and improving operational
processes

Objective of the article

 To show The application of operations management experience to BPR
 To examine the concepts and techniques of operation management which might have
application for BPR

Introduction
The development of the concept and practice of business process re-engineering from the
“Management in the 1990s” research Programme at MIT, Hammer’s well-known initial article
on re-engineering in Harvard Business Review and Davenport’s book on process innovation, was
at first sight highly biased towards the exploitation of IT. However, it was clear that many of the
examples given of BPR had a very strong operations management and services management
content. Some authors on BPR do, of course, already acknowledge antecedents in manufacturing,
logistics and supply chain concepts. The purpose of this article is not to claim BPR as an
operations management approach but to examine the concepts and techniques of the field which
might have application for BPR. Hence the learning which has been gained from other
improvement philosophies may be valuably transferred to BPR programmes. Our starting point
for this examination is the following description of BPR: An organization may be considered as a
collection of processes characterized as strategic, operational and enabling. BPR is an approach
to achieving radical improvements in performance by using resources in ways which maximize
value added activities and minimize activities which only add cost – either at the level of the
individual process or at the level of the whole organization. Implicit in this definition of BPR is
the consideration of organizational structure. If an organization is viewed as a collection of
processes how do the processes impact on a functional view of the organization The debate about
the relative importance of processes over functions where processes cross traditional functional
boundaries is likely to be a feature of implementation of BPR

Methods of the study

 The study was based on secondary source of information
 It uses different articles and journals to show the role of operation management in BPR
(business process reengineering)
 The study was not focused on BPR but it focuses on operation management.

Key points
 The rules of BPR
As a prescription or framework for how to undertake BPR we have combined the principles of
re-engineering proposed by Hammer and the characteristics of a re-engineered process,
suggested by Hammer and Champy into a list of eight “rules” for the improvement of processes.
1. Organize around outcomes not tasks.
2. Have those who use the output of the process perform the process.
3. Treat geographically dispersed resources as though they were centralized creating hybrid
centralized/decentralized organizations.
4. Link activities in a natural order and perform them in parallel.
5. Perform work where it makes most sense, particularly, decision making, information
processing, checks and controls making them part of the process.
6. Capture information once and at the source, minimizing reconciliation.
7. Combine several jobs into one possibly creating a case manager or case team as a single
point of contact.
8. Create multiple versions of processes when appropriate.
 operations management
Operations management is concerned with the management of processes, people,
technology and other resources in the production of goods and services. Any textbook on
operations management includes chapters dealing with the main areas of the design of
products, the design of operations, planning and control of capacity, materials, quality
and resource productivity. The content included in these main areas may be essentially
descriptive and qualitative or may include a quantitative approach to solving operational
problems
 process
“Process” refers to the conversion of inputs (resources) into outputs (goods and services)

 Business processes
Operations should be viewed as one example of a business process. The key point is that
transformed resources originate from outside the boundaries of the organization, and that
outputs in the form of goods and services leave the boundaries of the organization. It is
this “end to end” property which should be used to distinguish business processes. They
start with inputs to the business boundary, and finish with outputs from the business
boundary. This view is consistent with the BPR message of “reinventing the corporation”,
and not simply streamlining parts of processes as in Davenport’s ideas.

Breaking down business processes

Managing business processes needs to take into account their aggregate nature. A
hierarchical structure is needed in the same was as project management needs a work
breakdown structure to allocate tasks (work packages) to project teams. (The analogy
with project management is further reinforced by the changes envisaged by BPR – from
functional departments to process teams.) This approach gives rise to a proposed
“business process breakdown structure”. Using the Alcoa work as illustration in Figure 3,
the names given to the levels in the hierarchy can be explained as follows:
● Process elements. These are the major elements into which a business process can
best be organized. For example, the customer service business process was allotted three
process elements. These were sales, order management and transportation.

● Process element activities. Process elements can in turn be broken down for ease of
management into recognizable activities. In the case of the sales process element, just
two activities were defined. These were management customer accounts and claims
processing.

● Activity tasks. Finally, activities can be broken down into tasks which are written up
as standard operating procedures for individual “process owners” to carry out.

Properties of process elements\

1.Value chain: Process elements comprise both value adding and non-value adding
activities.
2. Variability: All processes are variable. This means that the output of a process can
never be exactly repeated.
3. Measurement: All processes can be measured. Some of the most important measures
are customer related, which helps in the reorientation of process thinking to serving the
customer.
4.Networked: The business process breakdown structure proposed above shows how it
should be possible to develop a logical set of relationships between processes within the
organization.
5.Ownership: Processes benefit from ownership, whether this be through a process
champion (for higher level processes), or through process owners (for tasks).
6.Automation: tells us to “automate incrementally, when process variability cannot
otherwise be improved”.
The application of operations management experience to BPR
 Without necessarily developing in detail all aspects of each area of operations
management we have tried to abstract the key features which seem to us to have a bearing
on the development of a BPR Programme under the eight “rules” of BPR developed
earlier. The results are as follows: Organize around outcomes not tasks. The messages
from operations strategy in either a manufacturing or service domain is the importance of
establishing the operations task. The operations task defines what the operational
processes need to do well to meet customer requirements efficiently. Here the concept of
order winning, order qualifying and order losing criteria for features of a product service
offering is key to establishing the nature of the delivery process. Have those who use the
output of the process perform the process. The concept of internal customers as well as
external customer has been central for TQM. This concept brings with it the idea of
partnership between different entities along a chain of activities in any process or along a
supply chain. In practice the dangers of focusing only on the next step in the chain rather
than the customer at the end of the chain have been realized. A BPR approach offers some
resolution to the problem by challenging the idea that any departmental, and thus internal
customer, boundaries are legitimate. BPR make processes supreme.

W here operations management cannot help in BPR

First, if BPR is adopted it will lead organizations to adopt a process paradigm. While this
is useful from a systems point of view it does nothing to indicate to managers how they
should manage an organization in this form. It raises the question of what it means to
manage processes at different levels or managing operational, strategic and enabling
processes and the interaction between the different types.

Second, if the process paradigm is used, how can measurement and control systems be
realigned to support this mode of operation. It is our assertion, based on what companies
tells us, that the debate about how to construct an appropriate performance measurement
system has never been satisfactorily resolved. Indeed this question goes beyond the
operations management domain to include finance and accounting, human resources and
strategy.

Third, there would seem to be an emerging conflict in method between information

systems developers and operations staff. The explosion of computer tools to support BPR
demonstrates the demand which exists for sophisticated process mapping tools. Yet these
types of tools are difficult for non-technical specialists to use. A s detailed in our lessons
from previous philosophies emphasis on the use of these tools may prove damaging to
BPR initiatives. This dilemma, again, cannot be resolved in the domains of IS or
operations in isolation. As with MRP, only by working on all aspects of process, people
and technology can success be achieved.

Major findings of the study

 The study has founded where to apply management operation and where it can not apply
  It explains briefly The application of operations management experience to BPR

Strength of the article

 The graphical and diagrammatical use of the article is good
 The flow charts use to understand the idea of the article easily

Weakness of the article

 There was some mixing between the purpose of the article in some points for example on
the introduction part may be if a reader not read the next parts of the study it may confuse
what is the main aim of the study.

Conclusions
The operations management discipline can provide a number of valuable insights into pitfalls
likely to befall BPR programmes might be avoided. JIT, in our opinion, offers some prescription
on how to construct processes while TQM and simultaneous engineering offer more on how to
go about the change. Like these other philosophies BPR can only succeed with the commitment
of top management and a cross-disciplinary approach. Because many of BPR’s principles seem
to be a transfer of manufacturing principles to the office and service environment, it would be
worth more organizations considering the inclusion of skilled manufacturing people in their BPR
teams. Defining a “process” is no simplistic task. Like defining “quality”, there are many
interpretations and there has been much confusion. We need to tighten up on our understanding
of the term “process”, if only because it is at the center of BPR. The field of BPR is in the
developmental stage and there is a recognition that effective BPR exercises require an input from
all management disciplines. Success is more likely to be achieved if the concepts of each
discipline as they apply to BPR are well understood so that lessons gained in the course of
implementation of other improvement initiatives are not lost. The contribution from operations
management would seem to be potentially very valuable. In this article we have attempted to
provide the link between operations management and BPR to this end.