BUSINESS SYSTEMS

Successhl business a a systems engmeermg

Part 1 The systems approach to business processes

There has been a revolution in the way that companies in many market sectors do business. Despite the many apparently different explanations of the revolution, each supported by new terminology, certain principles kee recurring. These are

business systems engineering (BSE). It must be emphasised that it is no more, and no less, than achieving a high standard of ‘engineering the business process’ linking customer need to customer satisfaction by careful total process analysis, design and implementation to enable a win-win scenario. If the methodology of BSE is properly understood, the extension to new market sectors is greatly simplified. This first part concentrates on describing the systems approach and applying it to a range of business processes. Some typical industrial results obtained via application of the BSE methodology are included.

brought together in this two-part article into the methodo P ogy best known as

by Prof. Denis R. Towill, FEng

Introduction to the systems approach n the last few decades there has been a revolution in business performance I substantially driven by us, i.e. the final

customer in the supply chain. However, this revolution has not impacted on all market sectors simultaneously, nor has there been a concurrent take-up across all companies within a given market vector. This variation is duc to a combination of natural time lags, ignorance and bad systems engineering. As described in the book ‘The machine that changed the world’, one of the most prominent sectors in the development of such a customer-focused enterprise is the automotive industry. The electronics products, aerospace, insurance and banking sectors have also experienced the same revolution, the latter two activities being

ENGINEERING MANAGEMENT JOURNAL

particularly influenced via developments in IT and leading to direct telephone dealing with customers.

It may be argued that what is now needed is action to ensure that the revolution enables a uniformly high standard of performance across those sectors of UK industry which are already rcsponding to the opportunities on offer. But additionally there is an equally urgent need to explore the possibility of penetrating other market sectors far removed from the original mass production environment in which the present ‘lean enterprise’ culture originated. One obvious sector is the construction industry, since a Royal Academy of Engineering Report indicated that, although a few Companies haye made substantial progress, all too many are still lagging behind overseas

FEBRUARY 1997 55

BUSINESS SYSTEMS

Table 1 Basic steps in BPI as proposed by James Harrington (1991)

competitors in the implementation of new ideas.

So what are these concepts? Why and how do they work? And how are they best applied? It is the purpose of this two-part article to answer these questions by reviewing the revolution from the systems engineering viewpoint. This approach should evoke a natural and comfortable response amongst many industrial executives and consulting engineers since the ‘toolkit’ required contains many familiar elements.

As John Parnaby has argued, the ‘paradigm advanced here is that a n organisation which operates using a systems approach delivers better engineering throughout all its activities’. When the systems approach is used to ‘engineer’ business processes the focus is on the design and operation of the most effective means by which customer need is transformed into customer satisfaction. The resulting methodology has been defined by Gregory Watson as business systems engineering (BSE). It provides a structured way of simultaneously maximising both customer value and the performance of the individual business.

A system is an integrated combination of components and activities designed to follow a common purpose.‘’ A systems philosophy demands that an unco-ordinated approach is replaced by a framework in which the identities of the separate parts are subsumed by the identity of the total system. Systems engineering is an art: but it is based in part on control engineering principles and in part on industrial engineering principles. It involves applying engineering ideas and concepts to the ‘how’ of business as well as to the ‘what’ of the enterprise. Via the systems approach the individual elements and subsystems are designed and fitted together to achieve an overall system purpose in the most effective way, at the lowest cost and with minimum complexity.

Conventional thinking breaks wholes into parts and focuses attention on the parts. In contrast systems thinking considers the connections between the parts to be as important as the parts themselves. Hence the

right parts must be connected and in balance if the system is to produce the desired results. As Christopher Meyer has said: ‘Conventional thinking defines the problem as this or that’; systems thinking defines the problem as ‘this and that’.

As we shall see later, BSE conveniently integrates and subsumes many ideas which have been proposed (and very effectively used) to improve company competitiveness via the typical steps followed to streamline business processes listed in Table 1. It is, however, quite wrong and unnecessarily restrictive to think of BSE as being applicable only to large-scale mechanical artefacts, i.e. traditional manu- facturing industry. In the real world it has been found to be equally applicable to such apparently different market sectors as automotive, aerospace, electronic products, banking and insurance. Indeed, as the ultimate end customers, it may be argued that we are impacted in our daily lives by new style banking and insurance every bit as much as by the more spectacular greatly enhanced consumer choice in both electronic goods and in automobiles.

There is substantial evidence that adopting a ‘systems approach’ to core ‘business process’‘k design has been a major enabling strategy in each of the foregoing market sectors. Despite the superficial differences between market sectors, in many instances business processes have appeared remarkably similar when documented as a process flow chart. Of course the detailed re-engineering required to achieve, say, a 50% reduction in total cycle time (defined as elapsed time between customer need to need satisfied) may be quite different depending on the particular industry. This simply emphasises the need for BSE task forces to have both core discipline and multi-discipline team member- ship. So as we move from market sector to market sector, the principles of BSE remain the same, but the detailed analysis, redesign and implementation needed to support the change can vary considerably from one application to the next.

The drive towards business process orientation

The salient systems engineering features of the revolution which has taken place in

“A glossary of business systems engineering terms based on the Royal Academy Report is given in Appendix 1

56 ENGINEERING MANAGEMENT JOURNAL FEBRUARY 1997

manu convc Fig. 1 War prodL markt the CO

that il the ca by thc any A practi manu variet variet of str; the CO

Thc trend from organ organ more a con: mode But J a shc driver organ] becon featur, article

HO major sector better motivl to in3 progr: strateg restorc this pi equipr maint; taking extren GM E engine

In c proces manuf greatlj develo replen outstai profita

ENGIl

1950

:turing over the last few decades is ently summarised in matrix form in [t shows that since the Second World iere has been a transition from ion-driven functional organisation to a driven process organisation. As far as umer is concerned, one major benefit is ; now reasonably possible to purchase )f choice, rather than being constrained Ienry Ford dictate of being able to buy Idel T car as long as it is black. The I effect has been to move the :turers from a high-volume, low- to a high (total) volume, but high- xenario. A major factor in this change gy is set-up time reduction, leading to ept of the 'batch of one'. iatrix shows that, whereas the general Japan has been an orderly progression the production-driven functional tion to the market-driven process tion, the general Western trend is much cuitous and hence time consuming. As pence Japan moved into the process 1973, seven years ahead of the West.

anese businesses have also achieved er lead time in becoming market The consequence is that the process tion, market-driven scenario has a reality ten years ahead of the West, a ye shall return to again in Part 2 of this

1955

tver, Fig. 1 is the general trend: some Vestern businesses and some market lave responded to the challenge much Ian others. For example, in the auto- idustry GM decided in the early 1980s #t in a massive capital expenditure me. It obviously hoped that such a of 'automating people out' would

heir competitive edge. Unfortunately cy proved to be disastrous since the nt proved inflexible, difficult to , and was not cost effective. After this wrong turning, which was y expensive in both time and money, atedly emulated the Japanese system ing approach to redesign its business. trast Chrysler undertook the business .oute and implemented many Japanese turing systems principles, including speeding up the new product

nent process. The company thereby led its product range quickly, and with ing success as judged by both lity and market share. Chrysler is a

BUSINESS SYSTEMS

I

- - - - - - Japanese

Western

prime example of the many companies which have utilised new forms of flexible oreanisation

Fig. 1 Historical trajectories of the process orientation

and hence, via releasing people s"ki1ls and '''''Z~::~~i!'dustry engineering skills more creatively, have become [source: G. Merli in much more competitive. Essentially these Johansson et al., 19931 organisations are not only doing things right, but doing the right thing throughout their business processes. Typical results achieved from the application of the BSE approach to a UK aerospace actuation company are listed in Table 2. Note the specific reference to product 'ownership' being much improved. This is the typical result of moving away from a 'functional silo' mentality and organisation to a process organisation designed to satisfy customer need.

Benchmarking Benchmarking requires identifying those

leading-edge companies or activities within companies that represent best market-sector practices. The search starts with establishing with whom the work process/business process competes and progressively relaxes constraints to broaden the range of potential companies. The goal is to ensure comparability without overlooking other market sectors where business process breakthroughs may occur and

Table 2 Typical results quoted by John Parnaby (1995) following the successful application of a BSE programme within an aerospace actuator company

~ ~~

benchmark improvement

manufacturing costs down 30% material movements down 90% lead time down 75% inventories down 75% work in progress down 75%

Droduct 'ownershils' much imlsroved adherence to schedule Up 30%

CERING MANAGEMENT JOURNAL FEBRUARY 1997 57

BUSINESS SYSTEMS

cost matrix for an electronics company (based on data from Hope and Hope, 1995)

I I I business control systems I I /

I I I

fM428 fM4.90 fM296 fM1.19 fM13.33

business process cash flows

cash contribution (function to process) ratio of NVA/VA costs in business process

are readily transferable. Benchmarking is a term coined by Robert Camp of Rank Xerox for a procedure which has been in vogue since the early 1980s. It helps considerably in understanding the role of benchmarking to regard the methodology as being the equivalent of sensor technology in ‘hard systems’. Certainly all the usual sensor problems of ‘noise’, ‘bias’ and ‘delay’ can be inbuilt into the benchmarking of business systems by the unwary!

In Fig. 2 a Hewlett-Packard company is shown partitioned into six business processes (business-product strategy; product genera- tion; new product introduction; order fulfilment; sales development; and control). Fig. 2 also breaks down costs as a matrix attributable to the support processes of: manufacturing; research/development; market- ing; and administration. Furthermore each business process has an estimated percentage

cost of non-value-added activities occurring within the process, thus providing initial internal benchmark targets for BSE to better. Note that Fig. 2 is not a unique breakdown of the company finances into business processes. For example, the Lucas Group concentrates on two business processes: product introduction process (PIP) and product delivery process (PDP). The other processes in Fig. 2 are then classified as (essential) support processes.

Benchmarking requires continuous (or at least frequent) measurement of process perfor- mance. It should be conducted within a feedback loop so that improvements in performance become highly visible. Three sources of data should be considered. They involve internal benchmarking (comparison of similar processes within the firm), competitive benchmarking (comparison against direct competitors), and finally functional bench- marking (comparison between the same

58 ENGINEERING MANAGEMENT JOURNAL FEBRUARY 1997

functi sector scope typifir housir Bean differt marki model were , (i.e. ar ideas activit

In L

vital tc few c; indica useful ProPo expres

PI =

These focus 1

key in prolife were d in mir proact the le; regard reduce impro

The eqn. 1 of imI anothe an ir impori classifi be mt

the orc nature metric For e: establi winnei price imposc

Businr It c;

busine

ENGIT

custon

s as carried out in other market The latter is thought to offer the most )r uncovering innovative practice, as by Xerox benchmarking its ware- and materials handling against L. L. c., a mail order house in a totally

market sector. Following a bench- visit, productivity gains obtained from sing Xerox warehousing operations IO%. Of these improvements, 3-5% ind half) were directly attributable to nanating from these benchmarking

ng BSE as a competitive strategy, it is tenchmark business processes via just a fully focused metrics which are true -s of process performance. A very et of process measures are those 1 by Cooper and Lybrands which they s a performance index:

quality] x [customer service level] [total costs] x [lead time] --} (1)

nsultants argue that companies need to and monitor a small number of such

cators, rather than on the traditional tion of computer printouts. The latter eloped with a rather different purpose i.e. reactive accounting rather than

: leadership. As we shall see in Part 2 time component in eqn. 1 may be as a powerful business driver, i.e.

total cycle time and bottom line nents will assuredly follow. rength of the performance index of LS partly that it exposes the myth iving one metric at the expense of with the business then being seen as ritable zero-sum game. Equally itly, the individual metrics may be into 'market qualifiers' (which must in order to be shortlisted by the

e), and 'market winners' (which cause to be won) (Hill, 1993). It is also in the . competition that this year's winning lay well become next year's qualifier. nple, the market leader may have Ed exceptional quality as the market me year, then dramatically drops the

the competitors reach the newly quality threshold.

systems engineering iot be emphasised too strongly that systems engineering is engineering.

BUSINESS SYSTEMS

\ new technologies '\

flow of materials, \ information, cash

and caDacities \ i I

\ I \

\

\ customer need 1

through to I

BUSINESS SYSTEMS

ENGINEERING

customer 'O0~er satisfaction \ I

I

BSE requires all the established engineering skills of analysis, innovation, synthesis and implementation which are the hallmark of the engineering profession. However, the emphasis is on the way the business achieves its goals simultaneously with maximising value to the customer. As a discipline BSE enables a company to regard the operation of a business in a focused way in which objectives are met by design and not chance. In other words we focus as much on the value delivery process as we do on the product or project being delivered.

BSE might be thought of as a set of manage- ment tools which good companies have used for some years. Indeed, Gregory Watson has traced the origins of some aspects of BSE back to the late 19th century and certainly the principles are well documented for at least three decades. Nevertheless, as John Parnaby has argued, it is best regarded as an integrated discipline already being practised (rather than just existing as a collection of management jargon) by many eminent industry-based engineers successfully implementing major change in Western companies. Unfortunately, because of the history of BSE, there is still the great danger that potential users who would benefit considerably f r o m implementing BSE are misled into thinking that because some elements look familiar the disciplme is being used b y their company already. Alternatively, they think that the whole of BSE has already been tried and discarded as being inappropriate for their company, whereas it manifestly has not.

Fig. 3 Three dimensions along which traditional engineering of the 1950s has expanded to produce business engineering in the 1990s

.ERING MANAGEMENT JOURNAL FEBRUARY 1997 59

BUSINESS SYSTEMS

Table 3 Classification of the three strands of business systems engineering as a function of applicability, timing and human resource input

of new business existing business existing business cation processes processes

timing periodic step continuous during the life of the business process

changes during the life of the

process business process

engine multi-discipline pari of normal respon task force with duties of the

finite life process team

re-engineering (BPR) and business process improvement (BPI). The classification shown in Table 3 may be helpful in understanding the common elements and differences between them. Of the three branches, BPR has received by far the most publicity in the media, both positive and negative. When asked for a quick definition, Michael Hammer and James Champy said:

BSE is an integrated approach, but one of its several origins is industrial engineering (IE); one source even describes it as ‘the new industrial engineering’. So, to emphasise the ‘modernisation’ consider the relationship between BSE and IE shown in Fig. 3. Now IE has a long history of breaking down tasks in order to provide work which is largely standardised and repetitive. Unfortunately, perhaps because historically too much emphasis was placed on setting and resetting time standards at the expense of properly updating work processes in the light of advancing production technology, advancing control systems engineering and enhanced workforce skills it has somewhat fallen into disrepute. Furthermore, since industrial engineering requires process flow analysis to be undertaken, isn’t BSE just a simple update of IE?

The answer is that in part it is, but the differences between IE and BSE highlighted in Fig. 3 are highly significant along all three dimensions. Firstly, BSE is ‘wider’ in context, i.e. is concerned with the flow of materials, information, cash and capacity; in contrast IE tends to concentrate on manual/clerical operations. Secondly, BSE is ‘deeper’ in context, and encompasses a much wider range of technologies, especially IT. Finally, BSE is ‘longer’ and extends across functional boundaries to ensure that the systems approach enables the total business process to be optimised. IE, on the other hand, originated as an on-call support resource for tackling problems in specific production processes at the behest of the process manager. So, to summarise, a background knowledge of the principles of IE is a necessary, but not sufficient, requirement for implementing BSE.

Three strands of business systems engineering

BSE has three established strands of business process engineering (BPE), business process ,

‘It means starting over again, it doesn’t mean tinkering with what already exists or making incremental changes that leave basic structures intact ... It does mean abandoning long- established procedures and looking afresh at the work required to create a company’s product or service and deliver value to the customer. It means asking this question: If I were re-creating this company today, given what I know and given current technology, what would it look like?’

The step change implied with BPR necessitates the setting up of an empowered multi- disciplinary task force. In contrast BPI is undertaken by ‘empowered’ (and highly motivated) process teams as part of their normal duties. Ideally both BPR and BPI are operating concurrently and successfully as shown in output form in Fig. 4. This enhanced and sustained performance improvement contrasts with the results obtained from a management ‘stop-go’ policy. Here the latest ‘buzzword’ has become a short-term manoeuvre resulting in temporary performance improvement (no doubt due to the well known Hawthorn effect), followed, because of a lack of determined and effective follow-through, by long-term regression. Note that by combining BPR and BPI, as also shown in Fig. 4, it is possible to arrive at an all-embracing and helpful definition of TQM as inferred by Gregory Watson. Thus the clear inference of this approach is that TQM is the result of the summation and integration of continuous performance improvement from empowered process teams and periodic process redesign and implementation by empowered task forces.

A detailed analysis of the literature shows that the difference between BPR and BPI is at first sight relatively small, despite the persuasive arguments put forward by BPR advocates. For example, the fundamental ideas which are the basis of BPI as listed in Table 1 are also a substantial subset of BPR. However, the order in which these are addressed is different and

60 ENGINEERING MANAGEMENT JOURNAL FEBRUARY 1997

-

BPR

m

2 Q

IT

temporary improvement

following management

initiative performance

\ , due to lack of regression

follow through A time

NOT STOP-GO

continuous improvement

I time

BPI +

re-engineering

time

BPR

temporary improvement plus periodic

re-engineering 0

E b t a

I time

= TQM

1 undoubtedly put more emphasis on picture’. The consequence can be

d in terms of the implications for Live stance and risk management due ore global nature of BPR. There is also esting viewpoint put forward by some vocates that in Western companies 1st precede BPI in order to establish a xiented culture. Not surprisingly this it is challenged by the work of James ton (of Table 1 fame), who successfully nted BPI procedures at IBM during a lod well before the expression BPR was

ve said little so far concerning business engineering (BPE). The reason is

here are relatively few opportunities to

set up entirely new business processes. In contrast the opportunities for BPR and BPI are widespread and likely to remain so. Indeed it is difficult to see how industry can enhance international competitiveness without encom- passing the process approach. However, in practical terms the BPR and BPE method- ologies are essentially similar as the earlier quote from Hammer and Champy makes clear. So there should be few difficulties in using BPE in the truly ‘green-field’ situation which occasionally presents itself.

Work processes Process analysis is the methodology for

documentation, management and optimisation of both business processes and work processes.

3ERING MANAGEMENT JOURNAL FEBRUARY 1997

BUSINESS SYSTEMS

Fig. 4 How Gregory Watson (1994) interprets TQM as the integration of BPI plus BPR

61

BUSINESS SYSTEMS

Fig. 5 Getting hold of the data-the relative importance of sources used in process modelling an electronics products supply chain

Each business process relating customer need to satisfying customer requirement will consist of a number (sometimes very many) of work processes. Hence the difference between the two is largely one of inclusion. Business processes are performed by combinations of work processes, and work processes are performed by individuals acting as a team.

Process analysis is very well described by Christopher Meyer and must answer the following questions:

0 From whom is the process input received? e What is the final deliverable from this

0 What is needed before the process can start? 0 How do we know when the process is

finished? How long does it take to complete the process? To whom is the process output delivered?

process?

Mapping is an indispensable tool in docu- menting and understanding the process prior to analysis and redesign. What is needed is a graphical representation in a format suitable for further investigation, debate and redesign. Several standard and cognate formats exist, for example flow diagrams, business activity maps, input/output diagrams and IDEF diagrams. But process mapping can only be achieved by fully understanding the behaviour of the process, inputs and outputs, operating

constraints, control mechanisms etc. How can this be obtained without excessive cost, and in particular how can we avoid a state of paralysis by excessive data analysis, since our credibility will depend on having a working and agreed process map available early on during a BSE programme?

The answer is to ensure we use all available data sources in a considered and structured way. This includes ‘weighing’ the evidence obtained from the four major data categories which we have grouped together in Fig. 5. The four categories are via people contact; documentation sources; numerical techniques; and investigative methods. The extent to which these data sources were utilised in the construction of a process map for a complex global electronics supply chain is also shown in Fig. 5 . It is an important skill on the part of the process modeller to seek out and sift these sources to obtain a reliable map of the process dnd which fully documents ‘handovers’ within the process and between the process and its suppliers and customers.

Although the investigative i.e. ‘legwork‘ sources of Fig. 5 are time consuming and expensive to pursue, they are often the only way to fully understand (and thereby re- engineer) the process. Managers are often surprised at just how complex their processes have become, and how poorly documented they now are. Consequently, it is our normal practice not to accept the validity of a process

62 ENGINEERING MANAGEMENT JOURNAL FEBRUARY 1997

map evidei ‘walk the ac order insigh This i

‘one f

and

‘one I

so

FLO’ I N MOL

For e: assem level ‘ the ti this a to un and h the ac withii the ex defect and rt view I

Conc Int

syster applic the tc that t BSE, referr (BPI) (BPR proce on tl engin natelj expec some total integr

We indus ‘tradii BSE i

ENGl

BUSINESS SYSTEMS

iless there is independent supporting e either from sampling or alternatively g the process’. The latter is typified by on known as ‘stapling yourself to an and can result in the most amazing into the real cause of poor performance. 2ecause:

t is worth a dozen opinions’

xess flow chart contains a dozen facts’

CHARTING IS A MAJOR STEP ELIABLE BUSINESS PROCESS 1LLING

mple, a detailed study of an electronics y process showed that at the shop floor a1 work’ accounted for as low as 30% of e available. The traumatic shortfall in embly process was largely attributable :cognised complexity due to machine nan errors and rework occurring within la1 process. Unfortunately these actions :he work processes are not identified in ting documentation. This assumed zero on the part of both products and people, resented a false and extremely idealistic the assembly process.

isions to part 1 LS first part we have introduced business ; engineering and shown that this is the ion of ‘good engineering principles’ to 11 business. In particular we have seen ‘re are some three constituent parts to vo of which have become commonly i to as business process improvement and business process re-engineering Both of these refer to existing business es. Business process engineering (BPE) ’ other hand is the proper initial ring of the business process. Unfortu- .his happens all too rarely, and is often d to occur by osmosis. Also there is irtue in the perspective which defines iuality management (TQM) as the ion of BPI and BPR. lave also seen that BSE(or the ‘new’ ial engineering) has its origins in mal’ industrial engineering. However, ‘wider’ since it is involved with much

. . .

more than material flow. It is also ‘deeper’ since it embraces a much wider range of technologies. Most importantly of all, it i s ‘longer’ since it embraces all activities from customer need right through to customer satisfaction. Some impressive results of the application of BSE in UK industry have also been highlighted.

In Part 2 we shall see via some industrial examples how one particular theme within BSE (‘time compression paradigm’) offers tremendous leverage for improving business performance. Part 2 also emphasises the important role of simulation tools within BSE, and concludes with the practical steps to be taken to ensure that BSE actually delivers improved performance instead of being regarded as a ‘seven-day wonder’.

Acknowledgments This particular synthesis of ideas took place

while the author was a member of the Royal Academy of Engineering Construction Sector Steering Group. He gratefully acknowledges the stimulating environment created by the Steering Group and the support of the EPSRC Innovative Manufacturing Initiative.

Bibliography and Further Reading, Part 1 BALLE, M.: The business process re-engineering action kit’ (Kogan Page, London, 1995) BERRY, D., NAIM, M. M., and TOWILL, D. R.: ‘Business process re-engineering an electronics products supply chain’. IEE Proc. Sci., Meas., Technol., Special Issue on Manufactunng Engineer- ing, Sept. 1995,142, (5), pp.395-403 CAMP, R. C.: ‘Learning from the best leads to superior performance’, Jnl. of Bustness Straregy, May/June 1992, pp.3-6 EVANS, G. N.,TOWILL,D. R., and NAIM, M. M.: ‘Business process re-engineering the supply chain’, Int. Jl. of Prod. Management and Control, 1995,6,

FULLER, J. B., O’CONOR, J., and RAWLIN- SON, R.: ‘Tailored logistics: the next advantage’, Harvard Business Review, May-June 1993,

GEORGE, B. V. (Chair): ‘A statement on the construction industry’, Royal Academy of Engineering, London, January 1996 HAMMER, M., and CHAMPY, J.: ‘Re-engineering the corporation’ (Harper-Collins, New York, 1993) HARRINGTON, H. J.: ‘Business process improvement’ (McGraw-Hill, 1991) HOPE, T., and HOPE, J.: ‘Transforming the bottom line’ (Nicholas Brealey Publishing Co., London, 1995)

BURY, A. J,. and WHEELER 111, W. A.: ‘Business

(3), pp.227-237

pp.87-98

JOHANSSON, H. J., McHUGH, P., PENDLE-

[EERING MANAGEMENT JOURNAL FEBRUARY 1997 63

BUSINESS SYSTEMS

64

process re-engineering (John Wiley & Sons Ltd., Chichester, 1993) MEYER, C.: ‘Fast cycle time: how to align purpose, strategy and structure for speed’ (Free Press, New York, 1993) PARNABY, J.: ‘Systems engineering for better engineering’, Engineering Management Journal, Dec. 1995, 5, (6), pp.256-266 WATSON, G. H.: ‘Business systems engineering’ (John Wiley & Sons Inc., New York, 1994) WOMACK, J., JONES, D. T., and ROOS, D.: ‘The machine that changed the world’ (Rawson Associates, New York, 1990)

APPENDIX 1 Glossary of terms useful in

business systems engineering BENCHMARKING The continuous process of measuring products, services and practices against companies renowned as industry leaders. It is essential to benchmark business processes against ‘best in class’ irrespective of the market sector in which the leader operates.

BUSINESS PROCESS A linked and natural group of skills and compe- tencies which start from a set of customer requirements and delivers a total product or service. It is a key concept in achieving internationally competitive performance.

BUSINESS PROCESS IMPROVEMENT (BPI) The means by which an organisation can achieve coiitinuous change in performance as measured by cost, delivery time, service and quality. It may be argued that BPR is a ‘big picture’ version of BPI with the latter driven by empowered work process teams and the former driven by empowered multi- disciplinary task forces.

BUSINESS PROCESS RE-ENGINEERING (BPR) The means by which an organisation can achieve radical change in performance as measured by cost, delivery time, service and quality via the application of the systems approach which focuses on a business as a set of customer-related core business processes rather than as a set of organisational functions.

BUSINESS SYSTEMS ENGINEERING BSE is a systems approach to designing new business processes and redesigning existing business processes. It provides a structured way of maximising both customer value and the performance of the individual business hence exemplifying a ‘win-win’ scenario.

EMPOWERMENT A means of managing a process whereby the

personnel working on the process are also charged with continuously improving its performance. It is an essential part of any learning Organisation.

LEARNING ORGANISATION The learning organisation is an environment where people continually improve their capacity to create new ways of thinking and doing things. It uses its ability to learn faster than its competitors in sustaining competitive advantage. A learning organisation seeks to understand and enhance the thinking processes that lie behind decision making throughout the business. This is coupled with a determination to regard every completed task as an opportunity to identify and expand those elements which constitute ‘best practice’.

PARTNERSHIP A generic term which is used to describe various ways in which businesses within the supply chain work together as part of an extended organisation or family with the objective of greatly improving the competitive advantage of the whole chain.

PROCESS Any activity or group of activities that takes an input, adds value to it and provides an output to an internal or external customer. Processes use an organisation’s resources to provide definitive results on behalf of the business.

SUPPLY CHAIN A system whose constituent parts include material suppliers, design agencies, production facilities, distribution services, commissioning teams and customers linked together via the feedforward flow of materials and products and the feedback flow of information.

SYSTEMS APPROACH A system is the grouping together of parts that operate for a common purpose. In the systems approach the focus is on the behaviour of the total enterprise and the design, operation and interfacing of the constituent parts so as to achieve best total competitive performance.

TOTAL CYCLE TIME (TCT) A major philosophy adopted in many BPR programmes which focuscs on the total time required by the existing business process to satisfy a customer need from the initial inquiry. Because cycle times are easy to predict and measure they are powerful metrics in planning and achieving change-especially as TCT reduction is found experientially to directly improve bottom-line performance. Consequently TCT is alternatively known as time-based management (TBM).

0 IEE: 1997 Prof. Towill is University of Wales Lucas Research Professor, Logistics Systems Dynamics Group, University of Wales Cardiff, PO Box 924, Cardiff CF1 3TS, UK. He is an IEE Fellow.

ENGINEERING MANAGEMENT JOURNAL FEBRUARY 1997