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Business Process Reengineering A Process Based Management Tool (2017) by Serbian Journal of Management
Business Process Reengineering A Process Based Management Tool (2017) by Serbian Journal of Management
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Abstract
Purpose – Business systems are made up of processes. Processes are collection of activities of
businesses that results in an output. And when processes become old and inefficient and can’t deliver
results they must be redesigned or replaced. Business process reengineering is a tool for
transformation of business process and unconstrained reshaping of all business processes. This study
uses case and critical literature analysis (CLA) to investigate and focus on the development of
business process reengineering (BPR) application concept and its outcome to the industrial set-up
(service giving and manufacturing).
Approach/methodology – The goal is achieved by case and critical literature analysis (CLA). The
case validates its result and justifies its practicality. This study contributed in the context of BPR as
a process based management tool for selecting, managing and reengineering selected processes for
overall manufacturing or service quality improvement.
Findings – In this study, a series of manufacturing processes and a framework for the guidelines
of modeling has shown. Core processes of different industries has presented in effective manner.
These validates that business process reengineering is a process-based management tool that can
deliver both, either redesign or replace inefficient processes, as required, with a breakthrough result.
It can be applied to single, group or entire processes comprising the organization.
Practical implications – On the basis of presented case study & process modeling guidelines the
managers can use BPR to redesign their inefficient processes.
Originality/value – This approach suggests adopting BPR at any cost as a tool to improve all
business processes as well as overall productivity and performance by managing their whole process.
Case study motivates practitioners/managers towards reengineer and manages their business process.
Keywords: business process reengineering, BPR application, business process, process modeling,
process improvement/management, quality management.
* Corresponding author: bhaskar.gkp@gmail.com
doi: 10.5937/sjm13-13188
64 H.L. Bhaskar / SJM 13 (1) (2018) 63 - 87
1. iNTRodUCTioN redesigned at first and then, through
brainstorming, prototypes of the processes
Business process reengineering is not an are built. To make BPR more effective, it is
unknown word to the business world. It has necessary to manage and analyze the
become a most popular process management business system in perspective of all tasks
tool in business sector and attracted great and processes (Freedman, 2013).
attention from manufacturers, practitioners, In response to this competitive pressure,
and academicians (Goksoy et al., 2012). customer demands and ever-changing
Most companies are still searching for a regulatory conditions, many companies are
method to better manage radical change fundamentally rethinking the way they do
(Grover & Malhotra, 1997). Academicians business (Goksoy et al., 2012; Jamali et al.,
and researchers are studying the 2011; Rahali et al., 2008). The reality of the
phenomenon but very less articles have been current business environment, whether it is
published. Many basic questions remain service giving or manufacturing, is
unanswered. What does reengineering expressed by fierce competition,
involve? Are there methods for effectively globalization, liberalization and privatization
accomplishing BPR? Why is it so popular? Is (Ishvarsinh, 2014). The business
there logic behind reengineering? The environment has no mercy for inefficiency
organizations that do not change according and weakness (Afsarmanesh & Camarinha-
to environment will disappear from the Matos, 2004). Either you re-engineer your
markets (Nisar et al., 2014; Habib & Shah, business and shape up to the demands of the
2013). Habib and Shah (2013) concluded global situation or you go out of business.
that change is a continuous process which Regardless of the size or the type of
forces firms/or companies to adjust and business a company is involved in, there are
readjust their activities (process and services processes and operations that could be done
etc.) with every passing day. Goksoy, A., better than they are currently being done.
Ozsoy, B., & Vayvay, O. (2012) considers Improving and managing their business
BPR as a strategic tool for organizational process is a necessity for businesses to stay
change; and stated that firm needs to bring competitive in today’s marketplace. Over the
moderate change every year and undergo a last decade, companies have been forced to
major change almost every fifth year if they improve and manage their business
want to survive in present competitive processes because the customers have
environment. become more demanding for better products
The Business Process Reengineering and services (Hussein et al., 2013; Dutta,
(BPR) is a tool to make a business process 2007). And if they do not get what they want
efficient in time and cost (Hussein et al., from one supplier, they have many others to
2014; Essam & Mansar, 2012). It is the only choose from (hence the competitive issue for
one (consistent) tool (if applied properly and businesses). Traditionally many companies
carefully) will produce ground breaking began business process improvement with a
result was said by Weerakkody, V., Janssen, continuous improvement approach (Dogra et
M., & Dwivedi, Y. K., 2011; Goksoy et al., al., 2009). This approach attempts to
2012. Typical BPR highlights “process understand and measure the current process
innovation”. This identifies processes to be and make gradual improvement overtime.
H.L. Bhaskar / SJM 13 (1) (2018) 63 - 87 65
This method of improving business process considered. Then, how companies can
is effective to obtain gradual, incremental identify their business processes (that is,
improvement. However, over the last 10 process mapping) will be assessed. After
years several factors have accelerated the that, guidelines of process modeling & a
need for a rapid improvement to business method for selecting the process that should
processes (Pettinger, 2013; Bughin et al., be reengineered will be taken up. Then,
2013). understanding of the selected process,
Business Process Re-engineering (BPR) redesigning the selected process and
is the term used to express the process of implementation of the selected process will
optimizing organizational processes and be considered in a sequential order.
structures for best possible end result.
Process Re-engineering can be applied to the
whole organization (Goksoy et al., 2012), 2. BUSiNESS PRoCESS
part of the organization or to a single unit REENGiNEERiNG (BPR)
with in the organization. Business Process
Re-engineering has been practiced as a Business Process Re-engineering is one
formal discipline since the early 1920's of the rising and best growing management
(Goksoy et al., 2012). Then it was known as tools (Goksoy et al., 2012; Jamali et al.,
"Methods and Procedures Analysis," always 2011; Jain et al., 2010; Grover & Malhotra,
searching for new ways of restructuring 1997) that aim at optimizing organizational
workflow or improving business resources for most excellent end result
organizations. However, the main focus of (Rigby, 2013). It is the redesign of business
the paper will remain on discussing BPR as processes and the associated systems and
tool for processes change and its organizational structure to achieve a
management. dramatic improvement in business
Business process reengineering is a tool performance (Saleem, 2012; Goksoy et al.,
for process change and management. Thus, it 2012). The business reasons for making such
is important to develop a base regarding the changes could include poor financial
need for change and why firms should bring performance, external competition, and
change (Habib & Shah, 2013). Redesign erosion of market share, emerging market
business process is only one aspect of the opportunities, global competition, or some
process management. At least three kind of other pressing business issue (Radhakrishnan
process management can be identified: & Balasubramanian, 2008; Carr & Nanni,
management of outgoing business processes; 2009; Chauhan & Verma 2009). Business
management of improved business Process Re-engineering is not downsizing,
processes; management of reengineering restructuring, reorganization, automation,
business processes (both internal & external) new technology, etc (Stoica et al., 2004;
(Rahali et al., 2008). Bhatnagar, 2009; Nzewi, 2015). It is the
In this Paper, the following elements, examination and change of five major
which are considered the backbone of components of the business (Davenport, T.
business process reengineering, are dealt H., 1995; Mavetera, C. G., Huisman, M.,
with. First, overall assessment of the Mavetera, N., & Lubbe, S., 2015).
business process of companies will be
66 H.L. Bhaskar / SJM 13 (1) (2018) 63 - 87
Design
Product
Manufacturing
Purchase Processes
Materials
MOS
Receive
Wafer Fab Assembly Ship
Materials
FDMO
Process Validations
Figure 1. Business as a System (A Series of Processes)
68 H.L. Bhaskar / SJM 13 (1) (2018) 63 - 87
produce an output (physical product, 3.1.1. The four core business processes
information, a service) designed to be used
for specific purpose by the recipient for All work involves processes. Although,
whom the output is produced” (Pepitone, organizations have hundreds of business
2009). processes and thousands of sub-processes
Processes are likely to cross-functional (Kalman, 2002). There are usually between
boundary lines. And individuals may be five and eight core business processes in any
involved soundly in more than one process in industry group (Johansson, 1993); because
the performance of their day-to-day duties. most core processes are rarely owned and
Identifying and separating processes from monitored by any one single individual
tasks is an important requirement to process (Harrington, 1991; Kalman, 2002). But
change (Davenport, 2013). The key to author includes only four core business
identifying a process is observing that a processes. Almost all companies are built
process is not defined by the things people around four key core processes upon which
do but instead by the sequence of tasks the ultimate success of the company depends
performed to produce the output. The focus in providing quality product or service
is not on what people do; instead, the focus is leading to survival and growth. These four
on what happens to the material or work as it core processes are the following:
moves through the process. In other words, 1. The product or service development
every process consists of a series of steps process: Conception, design, and launch of
that somehow changes input-output process new products or services to customers.
(product or service) as it moves through the 2. The order-generation process: The
sequence of tasks or functions. process of attracting and securing customers
This approach facilitates a way to analyze and activities meant to interpret and track
processes in detail and it helps to expand the requests for products or services from the
understanding of processes to add an customers.
additional common characteristic: A process 3. The order-fulfillment process: Creation,
accepts input, supplies and then changes, preparation, and delivery of the order to the
adds to, or combines them to produce the customer.
desired output. Another characteristic 4. The customer-service process:
common to all processes that will be core in Activities designed to sustain customer
reengineering is that the individual steps and satisfaction after delivery of an order.
tasks in a process sequence are typically The four processes may look different
separated by waiting times, involve from industry to industry, and even from
movement of the output from place to place, company to company with in industry. In
and require transfer from one responsible fact, one can ask where these processes are in
person to another through out the sequence. some industries. But they are present in one
After process selection for innovation, a firm guise or another, and they are the processes
can begin to think about how it will create upon which a company focuses the most
quantum improvements in the process and attention. All other processes, such as
what change tools it will employ (Davenport, financial processes, human resources
2013). processes, and legal processes, exist to
support and measure the success of these
H.L. Bhaskar / SJM 13 (1) (2018) 63 - 87 71
four core processes (Kalman, 2002). Figure 2 needed. In general, at the third or fourth level
below describes how the core processes of simplification of the process family tree, a
relate to each other and how other processes level of process that is discrete enough to be
support them. Table 1 identifies more manageable for the purpose of process
specifically how the four key core processes analysis for reengineering the business
would appear in a number of diverse process is reached. At this level the processes
industries. are generally, but not always, producing
output for the internal customer
3.1.2. Level of processes (www.lexjansen.com/phuse/2012/pd/PD06.p
df).
Processes have by their very nature It is valuable to think of one long,
several levels. From a few steps producing a complex process as a series of shorter, more
minor output for the use of an internal specific processes that can be analyzed at the
customer as an input to another process up to same time as or sequentially over a longer
a long complex process of many steps period of time until the whole complex
producing a major product for the customer. process has been analyzed and reengineered.
In fact, an entire operation of the company Care in selecting the process segments
could be viewed as meeting the definition of makes this practical without having to redo
a process in an all-encompassing set of steps. work that is previously done on certain part
But that would represent a process too big of the process.
and complicated to analyze. Therefore, the
“family tree” of the company’s processes 3.1.3. Root cause for inefficiency
have to be broken down to a manageable
process scope for analysis (Harrington, Business processes are almost always in
1991). need of improvement (Berman, 2014).
The first step is to move to the level of the According to the experiences of Adair &
four core processes and the supporting Murray (1994) and other practitioners
processes. However, this level too is all (process managers, engineers, BPR teams,
encompassing and complex to be analyzed to quality managers), improvement in the order
readily. Therefore, further simplification is of 75 percent and above is normal when
General
Model Quality
Figure 3. Framework for the Guidelines of Modeling (GoM), (Becker et al., 2000)
3.3. Process mapping link together. The process map is particularly
useful for analyzing very complex flows –
Once processes are clearly defined and those with many routes or feeder branches.
their present state and the evolutionary These are particularly difficult flows to
transition that brought them to the state describe in words, but the process map
where they are known, the next step will be makes the relationships very clear.
to find all the processes of the business and Understanding these relationships and the
map them. Just as companies have complexity of the process is useful in setting
organizational charts, they can have process starting and stopping points for the
maps that give a picture of how work flows reengineering effort and ensuring that the
through the company. A process map also scope of the effort is both complete and
creates a vocabulary to help people discuss manageable by the implementation team in
reengineering (Hammer & Champy, 1993). the specified time. The development of the
A process map can be developed at process map also gives the opportunity to
several process levels begin collecting some data about the process
(http://sixsigmastudyguide.com/process- (Hunt, 1996; Laguna & Marklund, 2013),
mapping/). Usually, the first approach in such as:
process mapping is a high level mapping but - Cycle Time: - The time necessary for
each of the high level processes can be one unit to pass through the process
detonated into smaller or detail process - Area of significant build up of pile of
maps. The concentration at this stage is to work
provide an understandable graphical - Major defect producing steps
description of a process that would be - And other relevant data useful for
difficult to understand or describe in a reengineering.
narrative form. The end product is a diagram
that shows how the major steps in a process
H.L. Bhaskar / SJM 13 (1) (2018) 63 - 87 75
3.3.1. Constructing the detail process to 20 percent value-added steps. This
map suggests that 80 percent or more of the steps
in most processes could be eliminated with
Developing the detailed process map is out adverse impact on the value offered to
like attaching oneself to a piece of work as it the customer. This is a great opportunity for
begins the process and going through the improvement. The concept of value added
process with it. The map documents what 65 and non-value added steps provide a very
actually happens to the work going through valuable tool for initial analysis of the
the process, not what the process design or process: the value added flow analysis.
instructions or routing sheets say is to Using this analysis one can:
happen. When completed, the detailed - Identify and measure significant
process map tells everything that piece of redesign opportunities.
work has gone through. A detailed process - Establish a baseline of performance
map or a detailed process flow analysis can against which to measure improvement.
be organized in either flow chart or as a list - Determine which tools are most
of steps. Both methods can be used. The useful in redesigning the process.
major advantage of the detail process map is - The value added flow analysis begins
in its ability to bring to the surface the two with construction of a detailed process map
types of steps that are opposite in nature; the at the 66 lowest levels. This is a detailed
value added steps and the non-value added examination of the process with some unique
steps (Nielsen et al., 2000). Adair & Murray characteristics:
define the two steps as follows: - It documents the flow of work, not
- A value-added step is one that (1) the things people do.
physically changes the work passing through - It follows one unit of work as it
the process or the work output produced to passes through the process. The unit may be
make it more valuable to the customer, (2) is one item, one batch, a particular service, or
a step requested by the customer that he/she some other increment, but it is always the
is willing to pay for, or (3) is legally required smallest unit possible to follow separately.
mandate. - It documents every step: - moves,
- A non value-added step is one (1) for waits, delays, operations.
which the customer is not willing to pay, and - It identifies what really happens to
(2) that does not change the work output in a the typical unit of work, not what is supposed
way that makes more valuable to the to happen according to documentation or
customer. what the supervisor may believe to be the
Most value-added steps in manufacturing process.
processes are fairly easy to identify. They - It is developed with and by the
physically change the product as it moves employees who actually do the work on the
through the process. The distinction might process, not from engineering
not be that clear in service providing documentation or supervisory process
processes. description.
According to the experiences of Adair &
Murray, omitting those processes that offer
no value at all, the typical process has only 5
76 H.L. Bhaskar / SJM 13 (1) (2018) 63 - 87