Process View of Organization

Prepared by: A.LATHA IT-FACULTY INC –VIJAYAWADA,GUNTUR

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What is a process? Let’s take for instance a grocery shop where you stand in a queue The process begins with you stepping into line, and ends with you receiving your receipt and leaving the store. You are the customer (you have the money and you have come to buy food), and the store is the supplier. So process steps are the activities that you and the store personnel do to complete the transaction

What is a business process?

Business processes are simply a set of activities that transform a set of inputs into a set of outputs (goods or services) for another person or process using people and tools
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What is Business Process?
• A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organization's objectives. It has beginning and end points, interfaces and organizational units. The three aspects of Business process are  Objects: physical or informational  Entities: process occur between organizational entities. they could be inter organizational ,inter functional or inter-personal  Activities: process encompasses two types of activies :Managerial and Operational

• •

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Many companies began business process improvement with a continuous improvement model. This model attempts to understand and measure the current process, and make performance improvements accordingly.

You begin by documenting what you do today, Establish some way to measure the process based
on what your customers want Do the process, measure the results

Identify improvement opportunities based on the data you colle You then implement process improvements, and
measure the performance of the new process This loop repeats over and over again
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In the present scenario the continuous improvement model does not work out effectively because of emerging new technologies. As a result, companies have sought out methods for faster business process improvement. Now they have to beat the business by using the following questions so as to competitive the business world like:

what should the process look like? What do my customers want it to look like? What do other employees want it to look like? How do best-in-class companies do it? What might we be able to do with new technology

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Business Process Reengineering (BPR)

It begins with defining the scope and objectives of your reengineering project, then going through a learning process (with your customers, your employees, your competitors and non-competitors, and with new technology). Given this knowledge base, you can create a vision for the future and design new business processes. Given the definition of the "to be" state, you can then create a plan of action based on the gap between your current processes, technologies and structures, and where you want to go. It is then a matter of implementing your solution.
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Reengineering
• Totally reinventing and rebuilding the structure of a corporation. • Deciding to reengineer a company is a major decision that has fair amount of risk attached to it. • An existing process may be completely changed or eliminated in favor of a new structure. • Large savings in terms of money and time
Example: 1.Hp, XEROX,IBM Distribute and Print to Print and distribute 2. case

study of canon.doc
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table of cannon.doc

Why Reengineering?
• Customers  Demanding  Sophistication  Changing Needs Competition  Local  Global Change  Technology  Customer Preferences

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What does BPR do?
It REVIEW the past AND RELOOK into the present REPOSITION for the future. Everything is RE. This entire new approach is now known as Business Process Reengineering (BPR) REASSESSES – your business purpose REPOSITION -- for greater market penetration RECONFIGURE – for smoother workflow RESTRUCTURE – so that jobs match reality REVITALISE – for ongoing competitiveness

bpr case study.doc
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Salient Features of Reengineering
• • • Reengineering is improvement and it could be done with individual process and on the whole. Leads to performance improvements by maximizing value added content and minimizing production level costs. It involves in  rewriting organization’s procedures.  reviewing reward system and internal competitiveness.  installing new measures of performance. It expects a total change in Organization culture.

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Stages of Reengineering
• Realization
 Identify the needs and threats  Identify the sustaining level  Leadership at all level of functions  Collective effort to resolve problems quickly

• Essentials
 Identifying key essentials for customer satisfaction  To establish key product and service performance indicators

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• Rethink
 Reexamining the existing process

• Redesign
 Understanding the substance, make-up, behavior, configuration and elements of work process.  Through appraisal of the entire system.  Individually evaluated for performance  The redesign should follow the three principles:
• Requirements of customers and organization is met • Job Satisfaction • To Eliminate all waste and enhance the organization competitive position.

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Retool  Identifying Competitive systems  Evaluating the effectiveness through • Mean Time to Failure • Mean Time to Repair • Mean Time to Dismantle • O/P determined  Reviewing the new tools for its weakness and effectiveness. Reevaluation  To check whether Retool and Redesign have achieved the goals.  Reevaluating the entire process through the factors like quality, productivity, customer satisfaction, market share, variation levels, profitability index, job satisfaction indexes and cost reduction savings.  Ensuring Quality and Performance.
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Initiating Reengineering
• Reengineering a Large Business  P & G – Reengineered towards Specialist Org. • 1st: Reorganized into three separate businesses • 2nd : Expedited the reengineering process  Goal: To increase Shareholder value. Managing a Large Reengineering Initiative  Analysis and Design  Identifying Critical Factors  Implementation Phase P&G identified a dedicative team called streams – Where each stream works towards their objective.
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• Managing Change in a Reengineering Initiative.
 Eliminate human Resource issues  Looking for feedback  Involvement  Identifying financial results  Maintaining Speed

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Forms of Reengineering
• Three basic forms  Systems reengineering
• Hardware reengineering • Software reengineering. – CAD, CAM, CIM

 Infrastructure
• Includes people, processes, technology and resources.

 Business Process Reengineering
• A methodical, regimented progressive move towards critical examination, rethinking, redesign and implementation.

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Business Process Reengineering
• A Process of changing the method of a task with the use of current technology and meeting the demand of current environment. • BPR seeks improvements of
 Cost  Quality  Service  Speed

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Key Characteristics
• Systems Philosophy • Global Perspective on Business Processes • Radical Improvement • Integrated Change • People Centred • Focus on End-Customers • Process-Based

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FEATURES OF BPR

Process Orientation: it helps the employee know how they
work with flexible/networked process.

Project Goal:

project plans must include assignments, responsibilities, deliveries, and schedule.

Rule Breaking : Creative Use of Technology Combining Several Jobs into One Decentralization of Decision-making Authority Multiple Versions of processes Checks and controls are reduced A single point of contact for a customer

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THE EFFECTS OF BPR

Changes in the nature of jobs Changes in roles Changes in the preparation for the job Changes in the focus of performance measures and
compensation

Changes in the criteria for promotion Changes in the values Changes in the responsibilities of managers Changes in the vertical organizational structure Changes in the horizontal organizational structure

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Problems of Functional Division
• • Process Departmentalization  It refers to purchasing, manufacturing and sales. Purpose Departmentalization  It refers to the arrangement of work around product geographic locations or specific customers.  The structure which focuses on the organizational output rather than on the processes is also known as “Divisionalized Organization”.

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• BPR and Functional Division
 According to philosophy hierarchical and functional structure leads to inflexibility of organizations. It makes slow, blamed for low productivity, long cycle times and high costs.  Common database  Customer interaction  Productivity  Goal congruence  Externalized

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Division of Labour
• Organization is concerned with division of labour within departments also. • Work is divided into smaller units and encourages specialization and high skills within functional area in turn increases the output. • Reduce communication delays • Improve decision making

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BPR and Division of Labour
• • • • BPR ensures integrity among members through its span of data among departments. Task force team solves inter-departmental problems. Enables decision making at the lower levels of hierarchy. It prescribes self-managing teams comprising empowered members as the solution to the problem.

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Technology as Process Enabler
• • • • • • • Using technology to reduce cost and increase quality of any process It reduces labour cost Improves quality Reduce waste and Scraps Increase the efficiency Reduce set-up and lead time Improve communication, interaction and coordination

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Technology as Process Enabler
 Using technology to reduce cost and increase quality of any
process

 It reduces labour cost  Improves quality  Reduce waste and Scraps  Increase the efficiency  Reduce set-up and lead time  Improve communication, interaction and coordination

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Failures
• Misuse of technology • Non understanding of the technology • No inclination towards change • Fear among employees

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Automation
• • • • • • • • • It is a technology enabled process. It performs tasks by programmed commands. Enables process without human intervention. Controls, monitors and execute manufacturing activities. It follows the rules and procedures without any deviation. Optimize the process Improve the reliability of the results Predicts unsafe or abnormal operations in advance Results in increased productivity, efficiency and safety.

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Applications with Automation Technology

Flexible Manufacturing System  A Form of flexible automation in which several machine tools are linked to the material-handling system. Robotics  Based on two related technologies – Numerical control (NC) and tele-operators. Automated Guided Vehicles (AGVs)  AGVs are remote controlled vehicles that transfer materials from stores to the workstations. Automated storage and Retrieval systems (ASRS)  ASRS are computer controlled systems that automate storage and retrieval of inventory.
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Advantages of Automation
• Improvement in productivity • Efficient use of materials • Improvement in work environment for the workers • Reduced factory lead time.

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Disadvantages of Automation
• Negative feedback • High initial investment • Requires high level of maintenance • Less flexible • Requirement of technical manpower

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Mapping Existing process

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Mapping an Existing Process
• Identify the breaks • Find the amount of time required by the activity to perform • Cost incurred • Justify the reengineering

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Process Redesign

• An integral part of BPR. • An Examination and plan of workflows and processes both in and between organizations. • It is an analytical study to bring improvements in the performance and increase customer satisfaction. • Goal is to simplify processes and to make organization more efficient and effective.

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New Process Validation
• Done by allowing the user to simulate the execution of a process. • Using a process model validation tool
 helps the user to answer queries about the state of process as it proceeds.  Offers declarative language for process specification.  Can simulate even when part of a specification is available.

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