13-10-2023
Business Process Re-engineering:
Concepts and Examples
Francis Castelino
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13-10-2023
“Any process is better than no process!
A good process is better than a bad process.
Even a good process can be made better!”
– Michael Hammer
"If you cannot describe what you are doing as a process,
you do not know what you are doing."
— W. Edwards Deming
Business Process Re-engineering (BPR)
• What is Re-engineering???????
NO It’s
“Starting
Patchworks!!!!
All
Over Again”
It’s the process of reinventing a company…….
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Defining Re-engineering
It is-
“The Fundamental rethinking and Radical redesign of
business Processes to achieve Dramatic improvements in
critical, contemporary measures of performance, such as
Cost, Quality, Service and Speed.”
Key Words
• Fundamental
o Begin with no Assumptions and no Givens
o Ignore what is and concentrate on what should be
o Why we do what we do?? Why we do it the way we do????
• Radical
o Getting to the root of the things
o Its about Business Reinvention and not about Business
Improvement/Enhancement/Modification
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Key Words
• Dramatic
o Its about Quantum Leaps and not about Marginal or Incremental
Improvements
o Should be undertaken when there is a need of a Heavy Blasting
• Processes
o Focus on processes and not on tasks/jobs/people/ structures
o The process is right only if it delivers the promised
Process Improvement
• Quick Hits (or Low Hanging Fruit)
o Low Risk
o Easily Achievable
o Immediate Results
• Incremental Improvements
o Closing Small Performance Gaps
o Delivers Small Degrees of Change
o Achieves Small but Meaningful Business Results
• Re-engineering
o Aims for Dramatic Business Results
o Organizational Change Characterized by Dramatic Process
Transformation
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Some Examples of Business
Process Re-engineering
Case of IBM Credit
Reinventing the process of credit issuance…
Original IBM Credit Re-engineered IBM Credit
Field sales person Field sales person
Call Logger
Credit Worthiness Checker
Deal Structurer
Business Practices Department
Pricer
Specialists
Dispatch Clerk
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Case of IBM Credit (contd.)
• What they achieved??
o 90% reduction in cycle time (7 days to 4 hours)
o Hundred-fold improvement in productivity
o A head- count reduction
• How they did that??
o They improved the process of Credit issuance and not the task
of credit checking……
o They shattered the assumption that they need specialists to
perform specialized tasks……
o They cleared all redundancies from the process
Ford Accounts Payable Process
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Case of Ford Motor (contd.)
• Mazda made them re-engineer the “Accounts payable”
department…..
o The department could not be re-engineered but what it does could be..!!!
o So they eventually reengineered the process of “Procurement”
• The ground Rule of
o “We pay when we receive Invoices”
was replaced by
o “We pay when we receive
the Goods”
• Benefits:
o Cost Reduction Benefits
o Increased Quality
o Staff Benefits
o Supplier Benefits
Ford Procurement Process
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13-10-2023
Ford Account Payable Process
Ford Motor Company Today
1. Ford Motor Company (FMC) Requistioner creates a requisition; 2. FMC Buyer prepares the Request for Quotation (RFQ) and generates an
electronic two way RFQ in the Everest Supplier Portal; 3. Supplier receives the RFQ and submits Quotation through the Everest Supplier Portal;
4. FMC Buyer receives the Quotation; 5. After all supplier quotations are reviewed, the Buyer selects the supplier that awarded the bid; 6. A
Purchase Order (PO), Tool order, Blanket order, etc is issued through the Everest Supplier Portal or EDI (Un/Edifact or eXtensible Markup
Language (XML)); 7. The Supplier receives Purchase Order (PO), Tool order, Blanket order, etc. through the Everest Supplier Portal or EDI (Un /
Edifact or eXtensible Markup Language (XML)); 8. The Supplier performs services and / or delivers materials Everest issues Material Release
(electronic) through the Everest Supplier Portal or EDI (Un / Edifact or eXtensible Markup Language (XML)); 9. Supplier submits Advance
Shipping Notices through the Everest Supplier Portal or EDI (Un / Edifact or eXtensible Markup Language (XML)); 10. After ASN has been
approved, an electronic receipt is triggered; 11. Ford post remittance advices via the Everest Supplier Portal or EDI (Un/Edifact or eXtensible
Markup Language (XML)); 12. Ford Motor Company issues EFT payment
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Case of Kodak
Original Product Re-engineered Product
Development Process Development Process
Sequential/ Design Groups
parallel
Body Designers Integrated
Product
design
Shutter Designers
Database
Film advance
mechanism designers
Tooling Engineers
Manufacturing Engineers
Case of Kodak (contd.)
• Re-engineering the product development process…..
• How they did it??
o By “Concurrent Engineering”
• What they achieved??
o Cut down the product development time from 70 weeks to 38 weeks
o Involvement of Tooling Engineers in the design, ensured easy and
inexpensive manufacturing
o 25% reduction in costs……
