Unit 1 Functional areas of business and BPR

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Business Process Reengineering

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Business Process Reengineering:

Business Process Reengineering Relationship with the Functional Areas

BPR:

BPR Process Redesign Process Engineering

Need for Information Integration:

Need for Information Integration Business processes across functional areas and organizational boundaries. Distribution Logistics, Services Purchasing Finance R & D Production Sales Distribution Vendors, Suppliers Organization Customers Product development Order fulfillment Planning, resourcing, and control Customer service

HUMAN RESOURCE MANAGEMENT:

HUMAN RESOURCE MANAGEMENT

CUSTOMER SERVICE:

CUSTOMER SERVICE

PowerPoint Presentation:

FINANCIAL MANAGEMENT

PowerPoint Presentation:

SUPPLY CHAIN MANAGEMENT

Examples of BPR:

Examples of BPR

Think from the Customer Back :

Think from the Customer Back The Customer Management Organization Functions/Processes Activities/Tasks Define Outcomes Redesign Outputs Determine Activities Define Job Responsibilities Develop Organization Structure

BPR Examples :

BPR Examples Mutual Benefit Life: New Life Insurance Policy Application Taco Bell: Company-wide BPR

New Life Insurance Policy Application Process at Mutual Benefits Life Before Reengineering*:

30 steps, 5 departments, 19 persons Issuance application processing cycle time: 24 hours minimum; average 22 days only 17 minutes in actually processing the application Department A Step 1 Department A Step 2 Department E Step 19 . . . . Issuance Application Issuance Policy New Life Insurance Policy Application Process at Mutual Benefits Life Before Reengineering* *Source: Adapted from Rethinking the Corporate Workplace: Case Manager at Mutual Benefit Life , Harvard Business School case 9-492-015, 1991. Mutual Benefits Life Before Reengineering*

The New Life Insurance Policy Application Process Handled by Case Managers:

The New Life Insurance Policy Application Process Handled by Case Managers Case Manager Underwriter Physician Mainframe LAN Server PC Workstation application processing cycle time: 4 hours minimum; 2-5 days average Application handling capacity double Cut 100 field office positions

Taco Bell*:

Taco Bell* “ We were going backwards - fast ... If something was simple, we made it complex. If it was hard, we figured out a way to make it impossible.” - Taco Bell CEO, John E. Martin Customer buy for $1 are worth about 25 cents. 75 cents goes into marketing, advertising, and overhead. Reengineering from the customer’s point of view. “Are customer willing to pay for these ‘ value-added’ activities?” *Source: Adapted from Hammer and Champy, 1993

Taco Bell:

Taco Bell Corporate Vision: “We want to be number one in share of stomach.” Slashed kitchen: Kitchens : Seating capacity 70% : 30% ð 30% : 70% Eliminate district managers. Restaurant managers are given profit-and-loss responsibility. Moving cooking of meat and bean outside. Boost peak serving capacity at average restaurant from $400 an hour to $1,500 a hour. $500 millions regional company in 1982 to $3 billion national company in 1992.

Reengineering Example:

Reengineering Example Which line is shorter and faster? Cash Lane No more than 10 items

Reengineered Process:

Reengineered Process Key Concept: One queue for multiple service points Multiple services workstation

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