Techniques and Methods in Business Engineering

1. Presented by:
Ms Orlina C. Gorospe
Master in Management Engineering

2. ME 201 Strategic Management
Josefina B. Bitonio DPA
Engineering Enterprise
Professor

3. Techniques
• The manner and ability with which an artist, writer,
dancer, athlete, or the like employs the technical skills of
a particular art or field of endeavour.
• The body of specialized procedures and
methods used in any specific field, especially in an area
of applied science.
• Method of performance; way of accomplishing.
• Technical skill; ability to apply procedures or methods so
as to effect a desired result.
• Informal. method of projecting personal charm, appeal,
etc.: He has the greatest technique with customers.
dictionary.com

4. Method
A : a systematic procedure, technique, or
mode of inquiry employed by or proper to
a particular discipline or art (2) : a
systematic plan followed in presenting
material for instruction
• a particular form of procedure for accomplishing or approaching
something, esp. a systematic or established one. – Google
definition
• orderliness of thought or behavior; systematic
planning or action. – Google definition
a procedure or process for attaining
an object: as
B : a way, technique, or process of or for doing
something (2) : a body of skills or techniques
merriam-webster.com

5. According to Michael Porter (Porter, 2008), more than 80% of
organizations do not successfully execute their business
strategies. He Estimates that in over 70% Of these cases, the
reason was not the strategy itself, but ineffective execution. Poor
Strategy execution is the most significant management challenge
facing public and private organizations in the 21st century
according to Gartner (Lapkin & Young,2011).
There are many reason for the failures of organization to bring its
strategy to life. Escalating complexity and rapid change have
made the development execution of effective strategy
increasingly difficult (Kaplan & Norton, 2006).

6. Re-engineering

7. Business Process Reengineering (BPR)
BPR is known by many names, such as ‘core
process redesign’, ‘new industrial engineering’ or
‘working smarter’. All of them imply the same
concept which focuses on integrating both
business process redesign and deploying IT to
support the reengineering work.

8. • How business processes currently operate,
• How to redesign these processes to eliminate
the wasted or redundant effort and improve
efficiency, and
• How to implement the process changes in order
to gain competitiveness.
BPR involves discovering:

9. The Aim of BPR, according to Sherwood – Smith (1994)
“Seeking to devise new ways of organising tasks, organising
people and redesigning IT systems so that the processes support
the organisation to realise its goals”.
• Can be viewed as a response to change and it fits in the classical
school of strategy where organisations adjust themselves to new
forms in order to maximise their profits. [Galliers points out that the
four schools (approaches) to business strategy since the 1960s are classical,
processual, evolutionary and systemic.]
• Can help organisations out of crisis situations by becoming leaner,
better able to adapt to market conditions, innovative, efficient,
customer focused and profitable in a crisis situation”. (Hammer &
Champ -1993)
• Is concerned with customer-orientation. the outputs of business
processes should not only achieve the company’s objectives, but
also need to satisfy customers’ requirements.
BPR

10. Business Process
Is a collection of activities designed to produce a specific
output for a particular customer or market. It implies a strong
emphasis on how the work is done within an organisation, in
contrast to a product’s focus. A process is thus a specific
ordering of work activities across time and place, with a
beginning, an end, and clearly defined inputs and outputs: a
structure for action.
-- Tharanga Thilakasiri, Importance of Business Process
Reengineering

11. Business Process
• Has a goal
• Has specific Inputs
• Has a specific output
• Uses resources
• Has a number of activities that are performed in
some order
• Many affect more than one organisational unit.
Horizontal organisational impact
• Creates value of some kind for the customer. The
customer may be internal or external

12. Business Process Reengineering (BPR)
• Is a business management strategy, originally
pioneered in the early 1990s, focusing on the
analysis and design of workflows and processes
within an organization - (Wikipedia). Began as a
private sector technique to help organizations
fundamentally rethink how they do their work in
order to dramatically improve customer service,
cut operational costs, and become world-class
competitors. - Business Process Reengineering
Assessment Guide US General Accounting Office

13. Business Process Reengineering (BPR)
• The fundamental rethinking and radical redesign of
business processes to achieve dramatic
improvements in critical, contemporary measures of
performance, such as cost, quality, service and
speed. – Reengineering the Corporation: Manifesto
for Business Revolution by Hammer and Champy
(1993)

14. • The analysis and design of workflows and
processes within and between organisations --
SeachCIO.techtarget
• Involves the radical redesign of core business
processes to achieve dramatic improvements in
productivity, cycle times and quality. – BAIN &
COMPANY

15. The analysis and design of workflows and
processes within and between organisations.
Business activities should be viewed as more than
a collection of individual or even functional tasks;
they should be broken down into processes that
can be designed for maximum effectiveness, in
both manufacturing and service environment.
Thomas Davenport (1993) describes
“business process
redesign/reengineering” as:

16. Process
• A collection of activities that takes one or more kinds of input
and creates an output that is of value to the customer.
(Hammer and Champy – 1993 – p. 35)
• 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 – p.5)
• A process is structured change, i.e. there is a pattern of events
which an observer may recognise across different actual
examples (or occurrences) of the process, or which may be
made manifest, or implemented, in many different occurrences.
(Warboys et al. – 1999 – p. 32)

17. Business Process Reengineering
How it Started?

18. The purpose of re-engineering is to
make all your process the best-in-
class.

19. BPR can be viewed as a response to such change and
therefore fits in the classical school of strategy where
organisations adjust themselves to new forms in order
to maximise their profits. However it is commonly
agreed that BPR first came and attracted academic
and industrial attention in 1990 as a result of two
papers by Michael Hammer and Thomas Davenport. In
1993 they further published two key books which
brought widespread attention to the emerging field of
BPR.

20. Reengineering didn't start out as a code word for mindless
bloodshed. It wasn't supposed to be the last gasp of Industrial Age
management. I know because I was there from the beginning. I was
one of the "creators.“ The real creators of reengineering
weren't consultants or academics.
They were real people with real problems to fix. Inside
companies like Ford, Hewlett-Packard, and Mutual Benefit Life,
managers were experimenting with new uses of information
technology to link processes that cut across functional boundaries.
But they didn't call their work reengineering; they didn't have
elaborate "change models"; they certainly didn't see a movement in
the making. All that came later.
– Thomas Davenport A Fad that People Forget

21. “That managers use process reengineering methods to discover the
best processes for performing work, and that these processes be
reengineered to optimise productivity.”
“To conduct the undertaking toward its objectives by seeking to
derive optimum advantage from all available resources. (p. 8)”
Frederick Taylor suggested in the 1880’s
In the early 1900’s, Henri Fayol originated the concept of
reengineering:

22. Galliers (1998) observes that “BPR ... far from being a new
departure, is in fact a reversion to the classical school
[Galliers points out that the four schools (approaches) to
business strategy since the 1960s are classical, processual,
evolutionary and systemic.] of strategic thinking popularised
in the 1960s”.
That is, organisations make such radical changes
when they meet competitive pressures which
challenge their current processes.

23. MacIntosh and Francis (1997) point out some problems:
“information could not easily be transferred without repeated,
manual reprocessing and the layers of management served to
relay and communicate information across and through the
enterprise.”
As Hammer (1990) argued,
“in order to achieve significant benefits, it is not sufficient to
computerise the old ways, but a fundamental redesign of the
core business processes is necessary”.
Hammer and Champy concluded
“That previously divided tasks are now being re-unified into coherent
business processes. Thus one reason why BPR becomes popular is
that it provides a mechanism to make the changes better to fit the
competitive environment to which the enterprises must adapt
themselves in this new and post-industrial age.”

24. BPR is a radical change, rather than incremental change.
Hammer and Champy (1993) highlight this tenet as:
Re-engineering is ... about rejecting the conventional
wisdom and received assumptions of the past. ...
Reengineering is the search for new models of
organising work. Tradition counts for nothing. Re-
engineering is a new beginning. ... To succeed at
reengineering, you have to be a visionary, a motivator,
and a leg breaker.
BPR as Radical Change

25. Objectives of 5% or 10% improvement in all business
processes each year must give way to efforts to
achieve 50%, 100%, or even higher improvement
levels in a few key processes. ... [Radical change is]
the only means of obtaining the order-of-magnitude
improvements necessary in today’s global marketplace.
Existing approaches to meeting customer needs are so
functionally based that incremental change will never
yield the requisite interdependence – Thomas
Davenport (1993)

26. Possible [radical] changes to the
organisation are not limited to internal re-
orderings, ... Links can be forged with
other organisations even though they are
competitors. This leads to a view of the
organisation as a fluid mix of interests
rather than a fixed entity with an objective
existence.

27. It is recognised in the BPR literature that
advances in technology bring opportunities that
were difficult to imagine before the technology
had been created. There is a sense of innovatory
solutions looking for problems and the
exploitation of unexpected consequences that
cannot be predicted by a purely conceptual
approach. At its best, BPR can be seen as a mix
of conceptual thinking and practical experience
gained through creative experimentation and
faith.

28. How Business Process Reengineering
Works According to
Business Process Reengineering is a dramatic change
initiative that contains five major or steps. Managers
should:
• Refocus company values on customer needs
• Redesign core processes, often using
information technology to enable improvements
• Reorganize a business into cross-functional
teams with end-to-end responsibility for a
process
• Rethink basic organizational and people issues
• Improve business processes across the
organization

30. Also BPR and DSS have a common aim which is to improve
business processes via radical change. The most significant
difference between BPR and DSS is the scope of analysis: BPR
focuses on the whole organisation whereas DSS focuses on one
individual decision.
Business Process Reengineering (BPR), Decision Support
System (DSS) and Total Quality Management (TQM) have much
common with each other. They are all focusing on business
processes.
DSS is characterise as relevant to BPR as it was the first
information system (IS) movement to explicitly focus on the
fundamental redesign of business processes rather than on the
efficient application of a new computer technology. Arnott and
O’Donnell (1994).

31. BPR is different from TQM in that BPR
concentrates on major discrete changes
to business processes, whereas TQM
concentrates on minor continuous
improvement to business processes.
That is, the improvements in TQM are
smaller than the ones in BPR.

32. Management

33.  In this modern competitive business world, quality has
emerged as a key issue.
 Quality is a relative term, which is mostly associated
with the end-use of products or services
 With the advent of globalization, however, it is by no
means necessary that a product which is acceptable in
certain parts of the world would also be acceptable
elsewhere.
 Therefore quality is no longer treated as a
standardized term.
 It has rather become user segment specific.
Quality

34.  The most widely accepted definition of Quality is “it is
customer satisfaction”
 The International Organization of Standardization defines
it as, “the degree to which a set of inherent
characteristics fulfils requirements.”
 One of the most acclaimed management quality gurus of
the 20th century, Dr. Juran, states that quality is nothing
but “fitness for use.”
 Grade of service / product
 Reliability
 Safety
 Consistency
 Consumer’s perception
Definition of Quality

35. The four-level model of the evolution of quality
management
Level 1 Inspection
Level 2 Quality Control
Level 3 Quality Assurance
Level 4 Total Quality Management
Quality Management
The Evolution

36. Management centered on quality and based on the
participation of everybody which aims at the customer
satisfaction and at the improvement of the company's
personnel, of the company and of the society.
The ultimate step. A quality assurance plan is operational but
the management, the workers and the customers continuously
interact to review / improve this plan.
Total Quality Management

37. 1) Focus on the customers (fitness to use or
to latent requirements)
2) Continuous improvement (fitness to
standard and of cost)
3) Total participation
4) Societal Networking
The Highest Quality Level is made of
four (4) main elements:

38. 1)Focus on the customers
HP – They recommend each worker / employee / department
to raise the following questions:
1. Who are my customers?
2. What are their needs?
3. What is my product service?
4. What are my customers’ measures of expectations?
5. What is my process for meeting their needs?
6. Does my product or service meet these needs?
7. What actions are needed to improve my process?

39. 1. Identify the work you do.
2. Identify whom you do it for.
3. What do you need to do your work? From
whom?
4. Map the process.
5. Mistake-proof the process and eliminate
delays.
6. Establish quality and cycle time(flow time)
measurements and improve goals.
Motorola

40. 2) Continuous Improvement
“The Seven Quality Control (7QC) steps:
1. Select the theme
2. Collect and analyse data
3. Analyse causes
4. Plant and implementation solution
5. Evaluate effects
6. Standardize the Solution
7. Reflect on process and the next problem

41. 3) Total Participation
What workers want?
 Goals which are clear, challenging and
reachable
 Means to reach the goal
 Responsibility for the outcome
 Information about the corporate goals
 Participation in decisions
 Salary
 Job security
 Interesting work
 Self-development
If a company want a continuous improvement system most
of these features must be granted…

42. 4) Societal Networking
The TQM mentality also assumes that your company positively
interacts with the "society" in which it operates.
 National promotional organization
 Training
 Knowledge dissemination
 Societal promotional activities
 National standard certification
 Development of new methods

43. International Standard
Organization (ISO) – 9000
Approach:
1)Develop an internal quality
assurance plan
2)Certify it by an official
organization

44. Principles of ISO - 9000
1.Say what you do
2.Do what you say
3.Record it, check it and correct
it if needed

45. ISO – 9000 Structure
The ISO 9000 norm series (9000 – 9004)
Guidelines for use : 9000 and 9004
The ISO 9000 norm is more a user guide which explains the difference
between the norms and which gives advises on how to implement them.
The ISO 9004 gives additional hints on the implementation of a quality
system.

46. ISO – 9000 Structure
Quality Systems : 9001, 9002 and 9003
The three other norms are well-defined
standards. They specify the framework for the
implementation of the quality systems. They
differ by the breadth of the activities which are
performed in you company.

47. 9003:Model for Quality Assurance in
Final Inspection Test (Production)
This is the basic certification which first
aimed at guaranteeing that the final
products meet the final specifications.
This should be the norm aimed at by
companies only involved in the
manufacturing of well-defined standard
products.

48. 9002:Model for Quality Assurance in Production, Installation and
Servicing
This is the norm aimed by companies with pre or post manufacturing
functions.
It is the broadest norm. It does not mean it is more
difficult but that the norm applies to a company with
the broadest spectrum of functions. As shown by the
above drawing, it should be aimed at by companies
with a real design function.
9001:Model for Quality Assurance in Design, Production,
Installation and Servicing

49. • Inspection, Measuring, and Test Equipment
• Inspection and Test Status
• Control of Non conforming Product
• Corrective Action
• Handling, Storage, Packaging and Delivery
• Quality Records
• Internal Quality Audits
• Training
• Servicing
• Statistical Techniques

50. Getting the ISO 900x Certificate
(Obtaining a Certification is a Project)
Depending on the size of your group, you will do the job alone or you
will build a whole team with a project leader.
• Define a team / a project leader
• Define a plan
• Team setup
• Team formation
• Personal (in)formation
• Selection / formation of internal auditors
• Evaluation of the current state
One more application of PDCA
Information / formation / implication of all
• Definition of needs
• Description of the needed procedures

51. Getting the ISO 900x Certificate
(Obtaining a Certification is a Project)
• Implementation
• Internal audit (as early as possible)
• Corrective actions
• Final quality manual (as late as possible)
• Certification audit
• Manage the post-certification

52. Post – Certification
Once the certification has been obtained, three directions should be
pursued. You should systematically re-assess your efforts; try to
evolve from this certification towards a real TQM spirit and also
reconsider the complete process by which you deliver products or
services. These three directions are discussed below.
• Re-allocate the efforts/Continuous improvement loop Internal audit
(as early as possible)
• Enlarge the scope : ISO9000 TQM
• Process Re-engineering

53. We are all born
ignorant, but one must
work hard to remain
stupid.
Benjamin Franklin

55. “In this day and age it’s
not about the experience
you have but your ability
to learn and
your ability to apply
what you learn that
makes you most
valuable”(Gil Yehuda and Rick Fleischman)