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Business Process Engineering
Organ
izatio
n Technology
Process
- 2 -© Minder Chen, 1993-2011
BPR & The Organization
- 3 -© Minder Chen, 1993-2011
What is BPR?
• Reengineering is the fundamental rethinking and redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed.
(Hammer & Champy, 1993)
- 4 -© Minder Chen, 1993-2011
BPR is Not?• Automation• Downsizing• Outsourcing
- 5 -© Minder Chen, 1993-2011
BPR Versus Process Simplification
Process Reengineering
Radical TransformationVision-Led
Change Attitudes & BehaviorsDirector-Led
Limited Number of Initiatives
Process Simplification
Incremental ChangeProcess-Led
Assume Attitudes & BehaviorsManagement-Led
Various Simultaneous Projects
(Source Coulson-Thomas, 1992)
- 6 -© Minder Chen, 1993-2011
BPR Versus Continuous Improvement
Process Reengineering
Radical TransformationPeople & Technology Focus
High InvestmentRebuild
Champion Driven
Continuous Improvement
Incremental ChangePeople Focus
Low InvestmentImprove ExistingWork Unit Driven
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What is a Process?• A specific ordering of work activities across
time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action.
(Davenport, 1993)
- 8 -© Minder Chen, 1993-2011
What is a 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
- 9 -© Minder Chen, 1993-2011
Why Reengineer?• Customers
– Demanding– Sophistication– Changing Needs
• Competition– Local– Global
- 10 -© Minder Chen, 1993-2011
Why Reengineer?• Change
– Technology– Customer Preferences
- 11 -© Minder Chen, 1993-2011
Why Organizations Don’t Reengineer?
• Complacency
• Political Resistance
• New Developments
• Fear of Unknown and Failure
- 12 -© Minder Chen, 1993-2011
Performance• BPR seeks improvements of
– Cost– Quality– Service– Speed
- 13 -© Minder Chen, 1993-2011
Origins• Scientific Management. FW Taylor (1856-1915). • Frederick Herzberg - Job Enrichment • Deming et al - Total Quality Management and
Kaizen • In Search of Excellence (Peters and Waterman) • Value-Added Analysis (Porter).
- 14 -© Minder Chen, 1993-2011
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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TransformationInputs Outputs
Feedback
Environment
Systems Perspective
- 16 -© Minder Chen, 1993-2011
Process Based• Added Value
– BPR Initiatives must add-value over and above the existing process
• Customer-Led – BPR Initiatives must meet the needs of the
customer
- 17 -© Minder Chen, 1993-2011
Radical Improvement• Sustainable
– Process improvements need to become firmly rooted within the organization
• Stepped Approach– Process improvements will not happen over night
they need to be gradually introduced– Also assists the acceptance by staff of the change
- 18 -© Minder Chen, 1993-2011
Integrated Change• Viable Solutions
– Process improvements must be viable and practical
• Balanced Improvements– Process improvements must be realistic
- 19 -© Minder Chen, 1993-2011
People-Centred• Business Understanding• Empowerment & Participation• Organizational Culture
- 20 -© Minder Chen, 1993-2011
Focus on End-Customers• Process improvements must relate to the needs
of the organization and be relevant to the end-customers to which they are designed to serve
- 21 -© Minder Chen, 1993-2011
BPR Symbols
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Business Process Flowchart Symbols
An Activity
A Document
A Decision
Data (input as outputs)
- 23 -© Minder Chen, 1993-2011
Business Process Flowchart Symbols
A Predefined Process
The Start of a Process
The End of a Process
Representing a Relation
Start
End
- 24 -© Minder Chen, 1993-2011
Business Process Flowchart Symbols
Continuation of the process at the same page at an equal symbol with the same number. Usedwhen a relation arrow crosses another relation arrow
Off-Page Connector - Process will continue on the next page
Integration Relation - A relation to another module is identified and described
- 25 -© Minder Chen, 1993-2011
Data Flowchart Symbols
An Activity
A Document
A Decision
Flat Data File (input as outputs)
- 26 -© Minder Chen, 1993-2011
Data Flowchart Symbols
Manual Data Item
A Database File
Representing a Relation
Continuation
Off-Page Connector
- 27 -© Minder Chen, 1993-2011
Rules For Data Symbols
- 28 -© Minder Chen, 1993-2011
Rules For Data Symbols
Start
End
Generate Purchase
Order
OK? Yes
No
Symbol used to identify the start of a business process
Activities must be described as a verb
Decisions have only two possibilities (Yes & No)
Crossing lines are not allowed
If one side of the decision has no further processes defined this symbol has to be used
- 29 -© Minder Chen, 1993-2011
Rules For Data Symbols
PurchaseOrder
Posting of Bonus
I
A
Continuation symbol within the same number must be present twice on the same page
Name the document
Off- Page Connector is used to continue a process at the next page or to let the process to flow over at the previous to the next page. If more than one is needed use A, B, C, D …
Name the data
- 30 -© Minder Chen, 1993-2011
Rules For Data Symbols
Sub-ProcessDelivery
BC 4.04
Predefined Processes always have a relation to level and stream by a number in the line below a sub-process description A predefined process must be described in a different flowchart. To make the relation clear between the predefined process and the belonging flowchart a unique alpha numeric number should be assigned to this predefined process.
- 31 -© Minder Chen, 1993-2011
Version Management• For different versions of a business process or
data flow some mandatory information must be on the flowchart. – Name of the business process– Unique number of the business process– Revision number– Date of last change– Author– Page number with total pages
- 32 -© Minder Chen, 1993-2011
Implementing a BPR Strategy
- 33 -© Minder Chen, 1993-2011
Key Steps
Select The Process & Appoint Process Team
Understand The Current Process
Develop & Communicate Vision Of Improved Process
Identify Action Plan
Execute Plan
- 34 -© Minder Chen, 1993-2011
Select the Process & Appoint Process Team• Two Crucial Tasks
– Select The Process to be Reengineered
– Appoint the Process Team to Lead the Reengineering Initiative
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Select the Process• Review Business Strategy and Customer
Requirements
• Select Core Processes
• Understand Customer Needs
• Don’t Assume Anything
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Select the Process• Select Correct Path for Change
• Remember Assumptions can Hide Failures
• Competition and Choice to Go Elsewhere
• Ask - Questionnaires, Meetings, Focus Groups
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Appoint the Process Team• Appoint BPR Champion
• Identify Process Owners
• Establish Executive Improvement Team
• Provide Training to Executive Team
- 38 -© Minder Chen, 1993-2011
Core Skills Required• Capacity to view the organization as a whole
• Ability to focus on end-customers
• Ability to challenge fundamental assumptions
• Courage to deliver and venture into unknown areas
- 39 -© Minder Chen, 1993-2011
Core Skills Required• Ability to assume individual and collective
responsibility
• Employ ‘Bridge Builders’
- 40 -© Minder Chen, 1993-2011
Use of Consultants• Used to generate internal capacity• Appropriate when a implementation is needed
quickly• Ensure that adequate consultation is sought
from staff so that the initiative is organization-led and not consultant-driven
• Control should never be handed over to the consultant
- 41 -© Minder Chen, 1993-2011
Understand the Current Process• Develop a Process Overview• Clearly define the process
– Mission– Scope– Boundaries
• Set business and customer measurements
• Understand customers expectations from the process (staff including process team)
- 42 -© Minder Chen, 1993-2011
Understand the Current Process• Clearly Identify Improvement
Opportunities– Quality– Rework
• Document the Process– Cost– Time – Value Data
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Understand the Current Process• Carefully resolve any
inconsistencies– Existing -- New Process– Ideal -- Realistic Process
- 44 -© Minder Chen, 1993-2011
Develop & Communicate Vision of Improved Process
• Communicate with all employees so that they are aware of the vision of the future
• Always provide information on the progress of the BPR initiative - good and bad.
• Demonstrate assurance that the BPR initiative is both necessary and properly managed
- 45 -© Minder Chen, 1993-2011
Develop & Communicate Vision of Improved Process
• Promote individual development by indicating options that are available
• Indicate actions required and those responsible
• Tackle any actions that need resolution
• Direct communication to reinforce new patterns of desired behavior
- 46 -© Minder Chen, 1993-2011
Identify Action Plan• Develop an Improvement Plan
• Appoint Process Owners
• Simplify the Process to Reduce Process Time
• Remove any Bureaucracy that may hinder implementation
- 47 -© Minder Chen, 1993-2011
Identify Action Plan• Remove no-value-added activities
• Standardize Process and Automate Where Possible
• Up-grade Equipment
• Plan/schedule the changes
- 48 -© Minder Chen, 1993-2011
Identify Action Plan• Construct in-house metrics and targets
• Introduce and firmly establish a feedback system
• Audit, Audit, Audit
- 49 -© Minder Chen, 1993-2011
Execute Plan• Qualify/certify the process• Perform periodic qualification reviews• Define and eliminate process problems• Evaluate the change impact on the business
and on customers• Benchmark the process• Provide advanced team training
- 50 -© Minder Chen, 1993-2011
Information Technology & BPR
- 51 -© Minder Chen, 1993-2011
Benefits From IT• Assists the Implementation of Business
Processes– Enables Product & Service Innovations– Improve Operational Efficiency– Coordinate Vendors & Customers in the Process
Chain
- 52 -© Minder Chen, 1993-2011
Computer Aided BPR (CABPR)• Focus
– Business Processes– Process Redesign– Process Implementation
- 53 -© Minder Chen, 1993-2011
BPR Challenges
- 54 -© Minder Chen, 1993-2011
Common Problems• Process Simplification is Common - True BPR
is Not• Desire to Change Not Strong Enough• Start Point the Existing Process Not a Blank
Slate• Commitment to Existing Processes Too Strong
– REMEMBER - “If it ain’t broke …”• Quick Fix Approach
- 55 -© Minder Chen, 1993-2011
Common Problems with BPR• Process under review too big or too small• Reliance on existing process too strong• The Costs of the Change Seem Too Large• BPR Isolated Activity not Aligned to the
Business Objectives• Allocation of Resources• Poor Timing and Planning• Keeping the Team and Organization on Target
- 56 -© Minder Chen, 1993-2011
Summary• Reengineering is a fundamental rethinking and
redesign of business processes to achieve dramatic improvements
• BPR has emerged from key management traditions such as scientific management and systems thinking
• Rules and symbols play an integral part of all BPR initiatives
- 57 -© Minder Chen, 1993-2011
Summary• Don’t assume anything - remember BPR is
fundamental rethinking of business processes
- 58 -© Minder Chen, 1993-2011
BPR
•PART -2
- 59 -© Minder Chen, 1993-2011
Definition of Reengineering
The fundamental rethinking and radical redesign of core business processes to achieve dramatic improvements in critical performance measures such as quality, cost, and cycle time.
Source: Adapted from Hammer and Champy, Reengineering the Corporation, 1993
- 60 -© Minder Chen, 1993-2011
What Business Reengineering Is Not?
• Automating: Paving the cow paths. (Automate poor processes.)
• Downsizing: Doing less with less. Cut costs or reduce payrolls.
BPR involves innovation: Creating new products and services, as well as positive thinking are critical to the success of BPR.
- 61 -© Minder Chen, 1993-2011
A Cow Path?
- 62 -© Minder Chen, 1993-2011
Reengineering Is ...
• Obliterate what you have now and start from scratch.
• Transform every aspect of your organization.
Source: Michael Hammer, “Reengineering Work: Don’t Automate, Obliterate,” Harvard Business Review, July-August, 1990, pp. 104-112.
Extremist's View
- 63 -© Minder Chen, 1993-2011
Definition of Process• A process is simply a structured, measured set
of activities designed to produce a specific output for a particular customers or market.
-- Thomas Davenport• Characteristics:
– A specific sequencing of work activities across time and place
– A beginning and an end – Clearly defined inputs and outputs– Customer-focus– How the work is done– Process ownership – Measurable and meaningful performance
- 64 -© Minder Chen, 1993-2011
Processes Are Often Cross Functional Areas
M arke ting& S ales
P urchase P roduc tion D is tr ibu tion A ccounting
C E O
Supplier
Customer/MarketsNeeds
Value-addedProducts/Services toCustomers
"Manage the white space on the organization chart!"
"We cannot improve or measure the performance of a hierarchical structure. But, we can increase output quality and customer satisfaction, as well as reduce the cost and cycle time of a process to improve it."
- 65 -© Minder Chen, 1993-2011
BPR Examples
• Ford: Accounts Payable • Mutual Benefit Life: New Life Insurance Policy
Application• Capital Holding Co.: Customer Service Process• Taco Bell: Company-wide BPR• Others
- 66 -© Minder Chen, 1993-2011
Ford Accounts Payable Process*
Accounts Payable
Vendor
GoodsReceiving
Payment
Invoice
Receiving document
PurchasingPurchase order
Copy ofpurchase order
PO = Receiving Doc. = Invoice *Source: Adapted from Hammer and Champy, 1993
? ?
- 67 -© Minder Chen, 1993-2011
Trigger for Ford’s AP Reengineering
• Mazda only uses 1/5 personnel to do the same AP. (Ford: 500; Mazda: 5)
• When goods arrive at the loading dock at Mazda: – Use bar-code reader is used to read delivery data.– Inventory data are updated.– Production schedules may be rescheduled if
necessary.– Send electronic payment to the supplier.
- 68 -© Minder Chen, 1993-2011
Ford Procurement Process
AccountsPayable
Vendor
GoodsReceiving
Payment
Goods received
PurchasingPurchase order
Purchase order
Data base
- 69 -© Minder Chen, 1993-2011
Ford Accounts Payable
Before
After
• More than 500 accounts payable clerks matched purchase order, receiving documents, and invoices and then issued payment.
• It was slow and cumbersome.• Mismatches were common.
• Reengineer “procurement” instead of AP process.• The new process cuts head count in AP by 75%.• Invoices are eliminated. • Matching is computerized. • Accuracy is improved.
- 70 -© Minder Chen, 1993-2011
• 30 steps, 5 departments, 19 persons• Issuance application processing cycle time:
24 hours minimum; average 22 days• only 17 minutes in actually processing the application
Department AStep 1
Department AStep 2
Department EStep 19
. . . . Issuance Application
Issuance Policy
New Life Insurance Policy Application Process at Mutual Benefits Life Before Reengineering*
*Source: Adapted from Rethinking the Corporate Workplace: Case Manager at Mutual Benefit Life, Harvard Business School case 9-492-015, 1991.
Mutual Benefits Life Before Reengineering*
- 71 -© Minder Chen, 1993-2011
The New Life Insurance Policy Application Process Handled by Case Managers
Case Manager
UnderwriterPhysician
Mainframe
LAN Server
PC Workstation
• application processing cycle time: 4 hours minimum; 2-5 days average
• Application handling capacity double • Cut 100 field office positions
- 72 -© Minder Chen, 1993-2011
Capital Holding Co. - Direct Response Group*
• A direct marketer of insurance-life, health, property, and casualty-via television, telephone, and direct mail.
• In 1988, DRG president Norm Phelps and other senior executives decided that for our company, the days of mass marketing were over.
• Need to strengthen DRG's relationships with existing customers and target our marketing to those potential customers whose profiles matched specific company strategies.
• A new vision for DRG: The company needed to be exactly what most people didn't expect it to be an insurance company that cares about its customers and wants to give them the best possible value for their premium dollar. *Source: Adapted from Capital Holding Corporation-Reengineering the
Direct Response Group, Harvard Business School case 192-001, 1992.
- 73 -© Minder Chen, 1993-2011
Capital Holding Co.: Vision
Caring, Listening, Satisfying... one by one
Each of us is devoted to satisfying the financial concerns of every member of our customer family by:
• Deeply caring about and understanding each member’s unique financial concerns.
• Providing value through products and services that meet each member’s financial concerns.
• Responding with the clear information, personal attention and respect to which each member is entitled.
• Nurturing an enduring relationship that earns each member’s loyalty and recommendation.
- 74 -© Minder Chen, 1993-2011
New Business Model: A Conceptual Breakthrough
Target & Segmentof Aggregate Market
Use IndividualInformation
Use GroupInformation
Prospects
CustomersSell & Renew
Capture IndividualInformation
&
PersonalizedService
“I Think I Know.”
“I Know for Sure.”
Market Management
Customer Management
- 75 -© Minder Chen, 1993-2011
A High-Level Service Process Model Today
CSR Life A&H Micro- Data Letter- System Customer Corres. Policy film Entry shop
Change
What’s yourpolicy #’s?
Challis 3
Life 70 Micro-film Request
ActionRequest
Day 1
Micro-filmResponse Day 5
• Increase my A&H coverage• Give me information about my Life Policy beneficiaries
ActionRequest
Day 2
InputRequestedChange
Day 5
A&H change confirmation letter mailed to customer
SystemUpdate
Life Policy beneficiaries letter mailed to customer
Day 6
Day 6(Batch)
Day 8Customerreceivestwo separateresponses
- 76 -© Minder Chen, 1993-2011
Customer Management Team (CMT): A Flavor of How DRG Service Process Will Change
ImmediateResponse to
Customer
Day 1Answers
Day 3-4
Day 1-2
Day 1
Send writtenacknowledgment
• Increase my A&H coverage• Give me information about my
Life Policy beneficiaries
Customer
CMT: Teleservice Representative
System: Client-server architecture
Outbound Paper
- 77 -© Minder Chen, 1993-2011
Taco Bell*
• “We were going backwards - fast ... If something was simple, we made it complex. If it was hard, we figured out a way to make it impossible.” - Taco Bell CEO, John E. Martin
• Customer buy for $1 are worth about 25 cents. 75 cents goes into marketing, advertising, and overhead.
• Reengineering from the customer’s point of view. “Are customer willing to pay for these ‘value-added’ activities?”
*Source: Adapted from Hammer and Champy, 1993
- 78 -© Minder Chen, 1993-2011
Taco Bell
• Corporate Vision: “We want to be number one in share of stomach.”
• Slashed kitchen: Kitchens : Seating capacity
70% : 30% ð 30% : 70% • Eliminate district managers. Restaurant managers are
given profit-and-loss responsibility. • Moving cooking of meat and bean outside. • Boost peak serving capacity at average restaurant from
$400 an hour to $1,500 a hour. • $500 millions regional company in 1982 to $3 billion
national company in 1992.
- 79 -© Minder Chen, 1993-2011
Reengineering Example
Which line is shorter and faster?
Cash LaneNo more than 10 items
- 80 -© Minder Chen, 1993-2011
Reengineered Process
Key Concept: • One queue for multiple
service points• Multiple services
workstation
- 81 -© Minder Chen, 1993-2011
BPR Principles• Organize around outcomes, not tasks. • Have those who use the output of the process
perform the process. • Subsume information-processing work into the
real work that produces the information. • Treat geographically dispersed resources as
though they were centralized. • Link parallel activities instead of integrating
their results. • Put decision points where the work is
performed and build controls into the process. • Capture information once and at the source.
Source: Michael Hammer, “Reengineering Work: Don’t Automate, Obliterate,” Harvard Business Review, July-August, 1990, pp. 104-112.
- 82 -© Minder Chen, 1993-2011
- 83 -© Minder Chen, 1993-2011
A BPR FrameworkOrganization
– Job skills– Structures– Reward– Values
Technology– Enabling technologies– IS architectures– Methods and tools – IS organizations
Process– Core business processes– Value-added– Customer-focus– Innovation
- 84 -© Minder Chen, 1993-2011
Business Process Reengineering Life Cycle Define corporate visions and business goals
Identify business processes to be reengineered
Analyze and measure an existing process
Identify enabling IT & generate alternative process redesigns
Evaluate and select a process redesign
Implement the reengineered process
Continuous improvement of the process
Visioning
Identifying
Analyzing
Redesigning
Evaluating
Implementing
Improving
Manage change and stakeholder interests
BPR-LC ©
Enterprise-wide engineering
Process-specific engineering
- 85 -© Minder Chen, 1993-2011
TI Semiconductor Business Process Map
Manufacturing Capability Development
StrategyDevelopment
ProductDevelopment
CustomerDesign &Support
OrderFulfillment
Concept
Development
Manufacturing
MarketCustomers
Customer Communication
Source: Adapted from Hammer and Champy, 1993, p. 119.
- 86 -© Minder Chen, 1993-2011
Using Value Chain to Identify High-Level Processes
AddedValue
Corporate Infrastructure
InboundLogistic Operation Outbound
LogisticServiceSales
andMarketing
PrimaryActivity
SupportingActivity
Human Resource Management
Procurement
Technology Deployment
- 87 -© Minder Chen, 1993-2011
Criteria for Selecting Processes
• Broken • Bottleneck • Cross-functional or cross-organizational units• Core processes that have high impacts • Front-line and customer serving - the moment
of the truth• Value-adding• New processes and services • Feasible
- 88 -© Minder Chen, 1993-2011
Process Data
• Basic Overall process data: – Customers and customer requirements– Suppliers and suppliers qualifications– Breakthrough goals– Performance characteristics: Cost, cycle time,
reliability, and defect rate. – Systems constraints: Budgetary, business, legal,
social, environmental, and safety issues and constraints.
• Measure critical process metrics – Cycle time– Cost– Input quality – Output quality– Frequency and distribution of inputs
- 89 -© Minder Chen, 1993-2011
Phase 4: Redesigning
Identify enabling IT & generate alternative process redesigns
Information Technology
BusinessReengineering
How can IT support business processes?
How can business processes be transformed using IT?
Source: Thomas H. Davenport and James E. Short, “The New Industrial Engineering: Information technology and Business Process Redesign,” Sloan Management Review, Summer 1990, pp. 11-26.
Technology-drivenBusiness-pulled
- 90 -© Minder Chen, 1993-2011
Evaluation Criteria• Costs
– Design and implementing the business process– Hire and train employee– Develop supporting IS – Purchase of other equipment and facilities
• Benefits– Customer requirements– Breakthrough goals– Performance criteria– Constraints
• Risk– Technology availability and maturity– Time required for design and implementation – Learning curve– Cost and schedule overrun
- 91 -© Minder Chen, 1993-2011
Enabling IT to Consider• Client/server technology• Groupware and collaboration technologies• Mobile computing (wireless LAN, pen-based computing,
GPS, iPhone)• Data capturing technology (scanner/barcode reader/RFID)• Telephony: Integration of computer and telephone systems;
VoIP; Unified communications• Web services and Service-Oriented Architecture (SOA)• Imaging technology, work flow management systems,
Business Process Management (BPM)• Decision support systems, Data warehouse, Business
intelligence, Data mining, Digital dashboard• ERP, CRM, SCM• Electronic Data Interchange (EDI), Electronic Commerce,
WWW, and Internet• Web 2.0 ….
- 92 -© Minder Chen, 1993-2011
IT Enabling EffectsDimensions & Type Examples IT Enabling Effects
Order from a supplier
Develop a new product
Approve a bank loan
Manufacture a product
Prepare a proposal
Fill a customer order
Develop a budget
Lower transaction costsEliminate intermediaries
Work across geographyGreater concurrency
Integrate role and task
Increase outcome flexibilityControl process
Routinize complex decision
Reduce time and costsIncrease output quality
Improve analysisIncrease participationAdapted from: Davenport, T. H. and Short, J. E., "The New Industrial Engineering: Information Technology and Business Process
Redesign," Sloan Management Review, Summer 1990, p. 17.
Organization Entity• Interorganizational
• Interfunctional
• Interpersonal
Objects• Physical
• Informational
Activities• Operational
• Managerial
- 93 -© Minder Chen, 1993-2011
End-to-End Processes
Customer
Manufacturing Inventory Mgmt.
Shipping
Marketing/Sales
Account Receivable
- 94 -© Minder Chen, 1993-2011
Order Management Cycle1. Order Planning2. Order Generation3. Cost estimation and pricing4. Order receipt and entry5. Order selection and prioritization6. Scheduling7. Fulfillment
– Procurement– Manufacturing– Assembling– Testing– Shipping– Installation
8. Billing9. Returns and Claims10. Postsales Services
- 95 -© Minder Chen, 1993-2011
Empowered Customer-Focus Processes
Values and Quality delivered to
Customers timely
Empowered Font-line worker
Customer-facing Process
Manager as Coach
Teamwork
- 96 -© Minder Chen, 1993-2011
Think from the Customer Back
The Customer
Management
Organization
Functions/Processes
Activities/Tasks
DefineOutcomes
RedesignOutputs
DetermineActivities
DefineJob Responsibilities
DevelopOrganization Structure
* Adapted from The Price Waterhouse Change Integration Team, Better Change, Irwin, 1995, p. 163.
- 97 -© Minder Chen, 1993-2011
The Business Context of Business Networking
Company Customer Customer's Customer
Suppliers/ Partner
N C N C N C N C
N: Needs and Perceived NeedsC: Capabilities
Source: Adapted from Charles M. Savage, "The Dawn of the Knowledge Era," OR/MS Today, pp. 18-23.
Virtual Enterprising
Competitor
Share: • Costs• Skills• Market access• Technology
- 98 -© Minder Chen, 1993-2011
Standard Flowchart Symbols
Activity
Movement/Transportation
Decision Point
Paper document
Delay
Storage
Connector
Begin/End
Annotation
Direction of process flow
Transmission
- 99 -© Minder Chen, 1993-2011
Functional Flowchart (Process Mapping)
CustomerService
CreditChecking Inventory Shipping
Begin EnterOrder Check
Credit
Yes
Order Processing Update
Inventory
Ship orderEnd
PROCESS
·
CYCLE
·1 2 1 1 1
2 0.1 43 0.2 14 ... ......
ACTIVITY
Wait forshipping
No
Customer
- 100 -© Minder Chen, 1993-2011
Process order
Allocate inventory
Ship order Billing
Receivepayment
Actual flow of information (i.e., data flow) Logical flow of operational data (i.e., workflow)Flow of physical objects
Money flow
Legend:
Warehouse
Customer
OLTPDatabase
Workflows, Data Flows, and Physical Flows
Account Receivable
- 101 -© Minder Chen, 1993-2011
Islands of Automation & Fragmented Processes
Order processing
Inventory management
Shipping & distribution
Accounts Receivable
IBM/MVSDB2
UNIXInformix
Windows/NTSQL Server
NetwareOracle
- 102 -© Minder Chen, 1993-2011
Flow of Problem Tracing vs. Data Flow
Order processing
Inventory management
Shipping & distribution
Accounts Receivable
Flow of Problem
Tracing
Data Flow
- 103 -© Minder Chen, 1993-2011
Front-End Integration
Order processing
Inventory management
Shipping & distribution
Accounts Receivable
Process Owner Front-line Worker
Front-end integration: A single-system view of the process and the customer
- 104 -© Minder Chen, 1993-2011
The Reengineering Diamond
Business Processes
& Functions
Management & Measurement
Systems
Jobs , Skills, & Organizational
Structures
Values andBeliefs
Enlighten
Entail Demand
Foster
Culture
Customers&
Info. Tech.
Competitors
Markets
Customers &Suppliers