bpr - benchmarking, process analysis, incentives, motivation, quality & trends

BPR: BUSINESS PROCESS REENGINEERING

BENCHMARKING, PROCESS ANALYSIS, QUALITY, INCENTIVES, MOTIVATION, TECHNIQUES & TRENDS

- Rajesh Timane, PhD

PART-1

BPR: BENCHMARKING

WHAT IS BPR? – COMMON ANSWERS

Streamlining Improvement Efficiency “As Is” and “To Be” Better Faster More effective

DEFINITIONS

“Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as quality, service and price”

– (M. Hammer & J. Champy)

“Revolution not Evolution” – (catch phrase)

“Don’t Automate – Obliterate” – (M. Hammer)

FEATURES

Presents Vision and Aims for future service provision

Process Mapping and Analysis of existing processes, organisation and systems

Benchmarking throughout the process analysis work

Identifies opportunities for radical service improvement processes

Development and Implementation Plans On-going reviews ensuring targeted benefits

are achieved

BENCHMARKING

WHAT IS (PERFORMANCE) BENCHMARKING?

Industry practice: Business process approaches taken by companies within and across industries to address similar challenges

Benchmarking: The search for industry best practice that lead to superior performance (Robert Camp)

WHY DO BENCHMARKING?

To identify quantifiable measures of relative performance

To develop an understanding of what works well in other/related industries

Establish what is achievable from an improvement perspective

Understand how other companies have designed their processes

Determine what not to do, ie. learn from their mistakes

Find out where the process is (on a scale of 1–10)

TYPES

Internal: comparisons among similar operations within the same organisation - different site/countries.

External – Competitive: comparison to the ‘best in class’, ‘best in industry’, or direct competitors.

External – Functional: comparison of practices of companies with similar processes in the same function but in different industry sectors.

Generic process: comparison of similar processes, eg. order fulfillment, with those in organisations who are known to have innovative work processes.

SOURCES OF INFORMATION

Reports and studies by industry experts Site visits to companies Conference/symposiums Professional associations New employees from competitors Public research on companies Third party research firms

WHERE CAN IT BE USED?

Products Services Costs

Labour utilisation technology utilisation workflow time to do a job

Revenue/Profit/Profit margin Customers Suppliers

PART-2

BPR: PROCESS ANALYSIS

PROCESS

"a logical series of related transactions that converts input to results or output“

A chain of logical connected, repetitive activities that utilize the organization's resources in achieving specified and measurable results for internal or external customers.

PROCESS ANALYSIS

Process analysis is an approach that helps managers improve the performance of their business activities. It can be a milestone in continuous improvement.

The analysis approach consists of the following steps:

(1) definition of the scope and the objectives of the study,

(2) documentation of the status quo and definition of performance measures,

(3) assessment and performance evaluation, and (4) development of recommendations.

PROCESS ANALYSIS TOOLS

When you want to understand a work process or some part of a process, these tools can help:

Flowchart Failure Mode Effects Analysis (FMEA) Mistake-proofing

FLOWCHART

A picture of the separate steps of a process in sequential order, including materials or services entering or leaving the process (inputs and outputs), decisions that must be made, people who become involved, time involved at each step and/or process measurements.

Order-Filling Process

FAILURE MODE EFFECTS ANALYSIS

A step-by-step approach for identifying all possible failures in a design, a manufacturing or assembly process, or a product or service; studying the consequences, or effects, of those failures; and eliminating or reducing failures, starting with the highest-priority ones.

S – Severity Rating(1-10 - where 1 is insignificant and 10 is catastrophic), O - Occurrence Rating (1 to 10, where 1 is extremely unlikely and 10 is inevitable), D - Detection Rating (1 to 10, where 1 means the control is absolutely certain to detect the problem and 10 means the control is certain not to detect the problem (or no control exists), RPN - Risk Priority Number = S × O × D, CRIT – Criticality = S x O

FMEA A bank performed a process FMEA on their ATM system.

Figure 1 shows part of it—the function “dispense cash” and a few of the failure modes for that function. The optional “Classification” column was not used. Only the headings are shown for the rightmost (action) columns.

Notice that RPN and criticality prioritize causes differently. According to the RPN, “machine jams” and “heavy computer network traffic” are the first and second highest risks.

One high value for severity or occurrence times a detection rating of 10 generates a high RPN. Criticality does not include the detection rating, so it rates highest the only cause with medium to high values for both severity and occurrence: “out of cash.” The team should use their experience and judgment to determine appropriate priorities for action.

MISTAKE-PROOFING

The use of any automatic device or method that either makes it impossible for an error to occur or makes the error immediately obvious once it has occurred.

The mistake-proofing device is an electronic sensor on the entrance door. The sensor sends a signal to a vibrating pager on the maitre’s belt to ensure that the maitre d’ always knows when someone enters or leaves the restaurant. Other mistake-proofing methods replaced the process steps requiring the maitre d’ to leave the front door to seat customers.

PART-3

BPR: MANAGING QUALITY

MANAGING QUALITY

Establishing the Quality Policy

Setting up Quality Objectives

Creating Quality Management System (QMS)

Communicating with parties responsible for Product and Service Quality

Providing adequate Resources for the Operation of the QMS

Reviewing the Operation of the QMS.

QUALITY POLICY

The quality policy identifies the main goals of the QMS.

THE QUALITY POLICY MUST BE:

Appropriate to the organization’s purpose,

Include a commitment to meet customer, legal and regulatory requirements,

Create a background for establishing quality objectives,

Communicated throughout the organization,

Reviewed for ongoing suitability to the needs of the organization and its customers

QUALITY OBJECTIVES

Establish Measurable Quality Objectives that support the quality policy and communicate them throughout the organization.

MANAGERIAL RESPONSIBILITIES

Effective work depends on a clear understanding of each persons responsibility and authority.

Therefore responsibility and authority must be defined and communicated.


Top management must appoint a manager to have ongoing operational responsibility for the QMS.

This person is referred to as the Management Representative.

THE DUTIES OF THE MANAGEMENT REPRESENTATIVE INCLUDE:

Ensuring that processes needed for the QMS are established, implemented, and maintained,

Reporting on the performance of the QMS and any improvements needed,

Promoting awareness of customer requirements throughout the organization


Top management is required to regularly review certain aspects of the QMS to make sure that the goals are being achieved and to look for ways to improve the QMS.

The review must cover suitability, adequacy, and effectiveness of the QMS.

The review also includes assessing opportunities for improvement and needed changes to the QMS, quality policy, and quality objectives.

Records of these review must be kept.

REVIEW INPUT

These meetings must address the following areas: Internal audit results, Customer feedback, How well processes have been working, How well products have been meeting requirements, Status of previously identified problems, Items identified for follow-up in previous management reviews, Planned process or product changes that could affect quality, Recommendations for improvement generated through the

operation of the QMS

REVIEW OUTPUT

These reviews result in decisions and actions related to:

Improving the QMS

Improving the Product

The need for additional resources, including Human Resources.

MANAGING FOR QUALITY

HOSHIN The hoshin process is, first of all, a

systematic planning methodology for defining long-range key entity objectives.

These are breakthrough objectives that typically extend two to five years with little change.

Second, the hoshin process does not lose sight of the day-to-day "business fundamental" measures required to run the business successfully.

This two-pronged approach provides an extended period of time for the organization to focus its breakthrough effort while continuously improving key business processes day to day

PART-4

BPR: INCENTIVES & MOTIVATION

BPR & Motivati

on

Willingness to

Change

Management Support

for the Change

Leader as Motivatio

nTeam based Effort

Clear & Measurable Goals

Business Process vs. Business Function

Adopting Technology for Change

BPR & MOTIVATION

BPR and Incentive

s

Sales Incentiv

es

Performance Linked Incentive Schemes

Points Program

Employee Incentive Programs

Consumer Incentive Programs

Dealer Incentiv

es

INCENTIVE SCHEME

Change management is a structured approach to shifting/transitioning individuals, teams, and organizations from a current state to a desired future state.

Kotler defines change management as the utilization of basic structures and tools to control any organizational change effort.

CHANGE MANAGEMENT

It makes use of performance metrics, such as financial results, operational efficiency, leadership commitment, training needs, counselling, communication effectiveness, monitor and implementation & the perceived need for change to design appropriate

strategies, in order to avoid change failures or solve troubled change projects.

CHANGE MANAGEMENT

Fullan (1993) lists eight "basic lessons" that can be learned about the process of change and improvement:

Lesson One: You Can't Mandate What Matters (The more complex the change, the less you can force it.)

Lesson Two: Change is a Journey, not a Blueprint (Change is non-linear, loaded with uncertainty and excitement and sometimes perverse.)

Lesson Three: Problems are Our Friends (Problems are inevitable and you can't learn without them.)

Lesson Four: Vision and Strategic Planning Come Later (Premature visions and planning blind)

Lesson Five: Individualism and Collectivism Must Have Equal Power (There are no one-sided solutions to isolation and group think.)

Lesson Six: Neither Centralization Nor Decentralization Works (Both top-down and bottom-up strategies are necessary.)

Lesson Seven: Connection with the Wider Environment is Critical for Success (The best organizations learn externally as well as internally.)

Lesson Eight: Every Person is a Change Agent (Change is too important to leave to the experts, personal mind set and mastery is the ultimate protection.)

Change management is a structured approach to shifting/transitioning individuals, teams, and organizations from a current state to a desired future state.

Kotler defines change management as the utilization of basic structures and tools to control any organizational change effort.

DYNAMICS OF CHANGE

It makes use of performance metrics, such as financial results, operational efficiency, leadership commitment, training needs, counselling, communication effectiveness, monitor and implementation & the perceived need for change to design

appropriate strategies, in order to avoid change failures or solve troubled change projects.

DYNAMICS OF CHANGE

CHANGING ATTITUDES AND BEHAVIOURS

Theories

Social Cognitive Theory

Theory of Planned Behaviour

Trans-theoretical Model

SOCIAL COGNITIVE THEORY

THEORY OF PLANNED BEHAVIOUR

TRANS-THEORETICAL MODEL

PART-5

BPR: TRENDS & TECHNIQUES

FMS – FLEXIBLE MANUFACTURING SYSTEMS

Definition

A flexible manufacturing system is a group of numerically-controlled machine tools, interconnected by a central control system. The various machining cells are interconnected, via loading and unloading stations, by an automated transport system.

It is an automated production system that produces one or more families of parts in a flexible manner

FMS

Objectives

to approach the efficiencies and economies of scale normally associated with mass production

to maintain the flexibility required for small- and medium-lot-size production of a variety of parts

FMS

Benefits

less waste fewer workstations quicker changes of tools, dies, and stamping

machinery reduced downtime better control over quality reduced labour more efficient use of machinery work-in-process inventory reduced increased capacity increased production flexibility

FMS

Limitations

Handles a relatively-narrow range of part varieties

Increases complexity and cost Requires a longer planning and development

period Reduces equipment utilization Requires skilled staff and competent

management

CAD/CAM

Computer Aided Design (CAD) It is the use of computer technology for the

process of design and design-documentation.

Computer Aided Manufacturing (CAM) It CAM is the use of computer software to

control machine tools and related machinery in the manufacturing of work-pieces.

CAD Features of CAD

It is used to design curves and figures in 2D space; or curves, surfaces, and solids in 3D space

Applications include industries such as: Automotive, Shipbuilding, Aerospace Industries, Industrial

And Architectural Design, Movie Animations etc

Types 2D Drafting, 3D Wireframe, 3D Dumb Solids, 3D Parametric

Solid Models

CAM

Features of CAM

High Speed Machining, including streamlining of tool paths

Multi-function Machining 5 Axis Machining Feature recognition and machining Automation of Machining processes Ease of Use

ROBOTICS AND ROBOTS

Robot is a piece of equipment with the capability to be programmed to perform quick and accurate operations multiple times.

An industrial robot is defined by ISO as an automatically controlled, reprogrammable, multipurpose manipulator programmable in three or more axes.

The field of robotics may be more practically defined as the study, design and use of robot systems for manufacturing.

Typical applications of robots include welding, painting, assembly, pick and place, product inspection, and testing; all accomplished with high endurance, speed, and precision.

INDUSTRIAL ROBOT

ROBOTICS

GROUP TECHNOLOGY

Group technology was introduced by Frederick Taylor in 1919 as a way to improve productivity.

One of long term benefits of group technology is it helps implement a manufacturing strategy aimed at greater automation.

Group technology (GT) is a manufacturing philosophy that seeks to improve productivity by grouping parts and products with similar characteristics into families and forming production cells with a group of dissimilar machines and processes

GTGroup technology has the following actions on the manufacturing process: Part Simplification Process Standardization Production Control

The changes group technologies can have on the production process.

Tighter Parts Control Close physical layout of machine groups Orderings tied to production

Results of GT at the organizational level Systematic design and redesign High-quality level Less process planning time and setup time

Impacts of GT on production process Reduced purchasing cost

Less redundant purchases. Accurate cost estimation

A more efficient process Quicker design changes

Standardized Parts Improved customer service

Classification builds customer relationships

TREND IN SERVICE AUTOMATION

Service industries, which are essential to the economy, continue to grow at a fast pace.

The addition of automation to the service industry has led to improved performance and quality of service delivery to the nation’s consumers.

Services

Wholesaling

Trading

Retail

SocialTransport

Financial

Hospitality

Food

THE SERVICE WHEEL

SERVICE AUTOMATION

AdvantagesMakes business expansion possible Competitive businesses Lowers costsRelatively low set-up and equipment cost Reduces Staff and hence Work-Hours E.g.: ATMs

Limitations Initial InvestmentRequires more technical job skills Leads to unemployment