3. What is a Business Process?
“A business process is a collection of
activities which together produce
something of value to a customer”
– e.g. Customer Order Entry
SIOM | Symbiosis Institute of Operations
Management, Nashik
4. Re-engineering is…
• - 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
SIOM | Symbiosis Institute of Operations
Management, Nashik
5. Also Known As…
• Process Re-engineering
• Business Re-organisation
• Business Process Redesigning
• Business Transformation
• Business Re-inventing
• Re- Engineering
SIOM | Symbiosis Institute of Operations
Management, Nashik
6. Significance
• Concentrating on Fundamental rethinking and radical
redesigning of business processes
• Main focus is on the CUSTOMERS
• Converting “Function Oriented” to “Process
Oriented” organization
• Quick ‘Surgery’ rather than slow therapy i.e.
revolutionary change not evolutionary
• IT is a key enabler
SIOM | Symbiosis Institute of Operations
Management, Nashik
7. Role
• Challenges the existing business processes
• Clean slate approach
• Enhances an organization’s capability to adapt to
business changes, frequently and quickly
• Where to compete and how to compete
• Brings radical change in level of performance
SIOM | Symbiosis Institute of Operations
Management, Nashik
8. Prerequisites
• An understanding of end to end processes from
customer’s perspective
• Clear understanding of 3 Es: Effectiveness, efficiency
and economy
• Concentration on products and processes rather than
functions and departments
• Understanding of current and emerging
communication and IT technologies
SIOM | Symbiosis Institute of Operations
Management, Nashik
9. Assumptions
• The organization will handle three major challenges
3C: Customer, competitors and change
• Elimination of all non-value adding activities from the
customers’ perspective
• Taylor’s principle of “division of labour” and
“functional specialisation” is no more valid
• Transformation processes are not business processes
SIOM | Symbiosis Institute of Operations
Management, Nashik
10. Reasons for Re-engineering
Old Era New Era
Efficiency
Control
High Demand High Competition
Innovation
Speed
Service &Quality
SIOM | Symbiosis Institute of Operations
Management, Nashik
11. What to reengineer?
BPR changes processes
not
functions, departments,
geographies or tasks
SIOM | Symbiosis Institute of Operations
Management, Nashik
12. Activity Classification
• Value Adding Activities
Ex. Machining
• Non – Value Adding Activities
Ex. Material Handling, Supervising, Reviewing
• Waste
Ex. Machine Breakdown, Job rejection
SIOM | Symbiosis Institute of Operations
Management, Nashik
14. Before & After BPR
Criteria Before After
Work Unit Functional/Departmental Process teams
Role Controlling Empowering
Measurement Functional Activities End Results
Value Protective Productive
Management Supervision Facilitating
Structure Hierarchical Leaner
Executive Controller Leader
Focus Functional Effciency Value to Customer
Improvement Slow and incremental Rapid and Radical
SIOM | Symbiosis Institute of Operations
Management, Nashik
18. Implementing BPR (Business Process
Reengineering)
Mahindra & Mahindra
SIOM | Symbiosis Institute of Operations
Management, Nashik
19. Why BPR in M&M ??
• Manufacturing Inefficiencies
• Poor productivity
• Long production cycle
• Sub-optimal output.
• Unhealthy work culture
• Corruption was widespread
Visions
• Decision to focus on enhancing productivity and delivering
world-class quality at the least possible cost.
• Ambition to become the largest tractor manufacturer in the
world.
SIOM | Symbiosis Institute of Operations
Management, Nashik
20. Roadblocks to BPR Implementation
• Fear of Downsizing
• Several jobs were combined into one.
• Management accepting the Union demands every time.
• Lenient approach of management towards running the plant.
• Inflexibility of the workers.
• Idle time available to workers due to unorganized processes
SIOM | Symbiosis Institute of Operations
Management, Nashik
21. Analysis of Implementation
• Implementation started in mid 1990s
• Resistance from the unions
• Re-engineering the layout and method of working
• Cellular Manufacturing
– Multi-tasking through multi-machine manning
– Reduction in non-productive activities
• Implementation of TPM & Kaizen
SIOM | Symbiosis Institute of Operations
Management, Nashik
22. Platform Concept
• Focus on customer requirement.
• Concurrent engineering: Formation of cross functional teams
• Formation of 3 full-time teams
– Horizon1: Improvements in existing products
– Horizon2: Up-gradation of existing products
– Horizon3: Development of new products
SIOM | Symbiosis Institute of Operations
Management, Nashik
23. M&M After BPR
• Around a 100 officers produced 35 engines a day as compared to
the 1200 employees producing 70 engines in the pre-BPR days.
• Igatpuri Plant: Employees declined by 400 but productivity went up
by 125 engines per day
• Nasik Plant: 125% improvement in productivity
• Reduction in employee costs
– 1994: 12.4%
– 1996: 10.1%
• Value added per employee increased from 0.3 million to 0.46
million
SIOM | Symbiosis Institute of Operations
Management, Nashik
24. Continued……
• Better inventory control
• Better sourcing
• Better order distribution across plants
• Online availability of data
• Transparent access to data
• Process transparency
• Integrated sales and supply chain
SIOM | Symbiosis Institute of Operations
Management, Nashik
26. Benefits
• Empowers employees by cross functional skills
• Eliminates waste, unnecessary management
overhead, and obsolete or inefficient processes
• Significant reductions in cost and cycle times
• enables revolutionary improvements in many
business processes
• helps top organizations stay on top and low-
achievers to become effective competitors
SIOM | Symbiosis Institute of Operations
Management, Nashik
27. Limitations
• It may hurt the sentiments of managers and
executives
• It does not clearly defines which process requires
“rethinking” and which requires “reworking”
• Streamlining and rationalizing are better than
redesigning in majority of the cases
• Worker union resistance
• Implementation cost is very high at the initial level
SIOM | Symbiosis Institute of Operations
Management, Nashik
