In this lesson, you’re expected to learn about:
– business process reengineering
– business process improvement
– process management tools
Process management methods include business process reengineering (BPR), business process improvement (BPI), continuous process improvement (CPI), and business process redesign (BPD).
We’ll briefly look at each of these methods.
1) Business Process Reengineering
BPR identifies, analyzes, and redesigns an organization’s core business processes with the aim of achieving dramatic improvements in critical performance measures, such as cost, quality, service, and speed.
BPR recognizes that an organization’s business processes are usually fragmented into sub-processes and tasks that are carried out by several specialized functional areas within the organization. Often no one is responsible for the overall performance of the entire process.
Reengineering maintains that optimizing the performance of sub-processes can result in some benefits, but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outmoded.
For that reason, reengineering focuses on redesigning the process as a whole in order to achieve the greatest possible benefits to the organization and their customers.
This drive for realizing dramatic improvements by fundamentally rethinking how the organization’s work should be done distinguishes reengineering from business process improvement efforts that focus on functional or incremental improvement.
2) Business Process Improvement
BPI tends to be more of an incremental change that may affect only a single task or segment of the organization. The concept of fundamental or radical change is the basis of the major difference between BPR and BPI.
Quite often BPI initiatives limit their focus to a single existing organizational unit. This in itself breaks one of the tenets of BPR, which is that BPR must focus on redesigning a fundamental business process, not on existing departments or organizational units.
While BPR seeks to define what the processes should be, BPI focuses more on how to improve an existing process or service.
3) Continuous Process Improvement
CPI focuses on both incremental and dramatic improvements to provide better product and service quality but also on the need to be responsive and efficient in achieving a competitive advantage in the marketplace.
Two types of CPI are proactive and reactive tools.
Examples of reactive tools include check sheets, histograms, scatter diagrams, Pareto diagrams, flowcharts, cause-and-effect diagrams, and control charts.
Examples of proactive tools include the five principles of Kawakita Jiro (KJ): 360-degree view, steppingstone approach, unexpected situations, intuitive capability, and real cases and personal experiences.
4) Business Process Redesign
BPD focuses on both internal and external customers to increase sales, cut costs, increase profits, and improve service. It dictates what processes should be redesigned (changed) and in what sequence. Once a process is redesigned, it must be continually monitored, reassessed, changed, and improved in order to meet changing demands on the organization.
Process management tools include benchmarking and best practices, which involves selecting a demonstrated standard of products, services, costs, processes, or practices that represent the very best performance in an industry and following them
in an organization.
It is a standard of comparison between two or more organizations. Thereare many types of benchmarking, including internal, competitive, industry, best-in-class, process, and strategic.
Which Benchmarking Does What?
– Internal benchmarking looks downward and inward.
– Competitive benchmarking looks outward.
– Industry benchmarking looks for trends. It provides a short-run solution and a quick fix to a problem.
– Best-in-class benchmarking looks for the best all around. It provides a quantum jump in improvement.
– Process benchmarking is specific.
– Strategic benchmarking is broad with big impact.