Business Process Reengineering (BPR) Definition
Fundamental rethinking and radical design to achieve dramatic improvement in cost, quality, service and delivery (Hammer & Champs, 1993; Manageable & Klein, 1994). It means that business process reengineering involves many steps that change the entire business process. This is done to reduce the cost of production of a product or service, increasing the quality, and satisfying customers by offering an excellent service and delivery.
BPR can be done in four ways that are:
I. Business transformation By using this way, the whole organization is changed. This includes the business process, business management and business strategies.
II. Redesign business process In this way, only the business processes are changed. Usually, the number processes will be reduced. The non value added processes are eliminated.
III. Business process change management This is the process for managing human/employee side of change. It includes the steps taken to change the management team or a project leader.
IV. Redesign strategies and value-added processes It means that the organization changes the business strategies and creates or improves their value added activities.
Adjectives AT Business Process Reengineering
There are many objectives of business process reengineering. The main objective is of course to increase the effectiveness and efficiency of the whole business. Listed below are the specific objectives of business process reengineering:
I. To save time and cost
Time can be saved once the non value added activities are removed from the process as there is fewer work process to be done.
This will lead to cost saving as the cost incurred during the production will also decrease. As the cost decreases, the profit argil will be higher and it will lead to a greater income for the company.
II. To improve the quality of work
By implementing business process reengineering, the fragmentation of work can be reduced. This is contributed by the fewer process involved in production. This will reduce the errors that occur in production as fewer machines or human are involved. The performance of the business process reengineering can be improved through feedback received by the users of the goods or services.
III. To satisfy customers
This is also one of the objectives of implementing business process reengineering. Customers will always be the main priority. BPR will ease the customer in many ways. For instance, nowadays we no longer have to stand in a queue line while waiting to be served if we go to any bank as the number system had been introduced. This is one example of the contribution of business process reengineering for customers’ satisfaction.
Advantages of Business Process Reengineering
I. Lower cost
Reengineering proves to be cost effective as the cost of operating after implementing BPR will decrease significantly.
I’. Better use of existing staff
The existing staff expertise can be retained enhance through training them at the point of implementation of BPR.
III. Increase effectiveness and efficiency
As the employees are aware of the processes that they involve in that has been reduced, it also reduces the time lag between different process. Implementation of BPR Key Steps:
Selection of strategic added value processes
Simplify new process
Once the engineering take place, organization should stop and execute the selection of idea from the above step.
The top management cannot live in limbo between yes or no and what are going to do with the idea. Organize a team & workflow Assign responsibilities Train the process team Manager will act as a coaches for the workers as they do not orders but they will dude, direct, coordinate and empower the Job to the workers. This involved the top management and subordinates in working together as a team. Critical success factors required to compete are identified and prioritize. Participative business makeovers reject the “top- down” approach to reengineering in favor of a middle ground, where the managers and workers come together to redesign business processes.
The BPR team will be split into two parts, a design team made up of senior managers, and an execution team composed of people who will actually do the work Introduce the redesigned process These initiatives seek to provide understanding of the markets, competitors, and the position of the organization within the industry Implementation BPR Success factors Revising reward and motivation system New reward and incentive scheme must be revised as supporting BPR effort to encouraging people to endorse BPR such as introduce new Job titles in order to motivate the workers to the new system implementation.
The workers are a resource for an organization to manage the operation effectively. The BPR will successfully be implemented if the workers are highly motivated to the changes made. Effective communication It is needed throughout the changes process at all levels in order to ensure patience and understanding among all employees. Communication breakdown between top management and the workers tend to happen due to the significant changes in the new system. By improving a better way of communication could lead the company to successfully implemented BPR in the organization.
The organization should establish a culture which staff at all levels feel more responsible and accountable to their respective Job scope. Empowerment will make the staff feel more appreciative of their work when the organization give them the authority which in other means recognized and appreciate their work towards the success of the organization. The staff also will be able to set their goals and monitor their own performance thus supporting the implementation of BPR. Management AT rills BPR involves radical changes to several systems in organization.
Continuous risk assessment is needed throughout the implementation process to ensure the BPR success. The calculation of risk will help the organization in decision making regarding BPR implementation. Aligning BPR strategy with corporate strategy As corporate strategy determines objectives and guidance on how the organizational abilities can be best utilized to gain competitive position, BPR strategy guides the alteration of tasks into integrated process. It also must accompanied by strategic planning in order to be successful in the long run.
Kamikaze Costing Introduction Kamikaze costing also has a Japanese heritage. It comes from the combination of the Japanese characters ‘aka’ and ‘Zen’ which mean ‘change’ and ‘good,’ respectively. The word ‘Kamikaze’ translates to ‘continuous improvement’ or ‘change for the better’ and aims to improve productivity by making gradual changes to the entire manufacturing process. Mask Imam known as the “Lean Guru” and the father of Continuous Improvement (C’) Miasmas Imam has been a pioneer and leader in spreading the Kamikaze philosophy all over the world.
Understand Kamikaze Costing
To understand Kamikaze costing, one first needs to grasp standard costing methodology. The typical standard costing approach works by designing a product first, and computing costs by taking into account material, labor and overhead. The resulting figure is set as the product cost. The standard cost is set and revised on a yearly basis. Cost deviation analysis involves checking to see whether the projected cost estimates tally with the final figures. Manufacturing procedures are assumed to be static.
In example, approach centers around recognizing that employees who work on a particular Job are aware of how that particular task can be greatly improved. Employees are treated as valuable sources of viable solutions, an approach that differs greatly from the standard cost system that views employees as laborers with variable performance levels. Goals In order to properly implement Kamikaze principals for process improvement, there are four goals towards reaching successful implementation of Kamikaze:
1 . To ensure hat actual production cost are less than the prior year cost.
2. To reduce the difference between profit estimates and target profits (every department in the company makes an effort to introduce operational changes on a daily basis).
3. Analyzing every part of the process and generating ideas on how they can be further improved.
4. Kamikaze costing takes into account aspects such as time-saving strategies, employee efficiency and wastage reduction. Advantages Focus on customers Kamikaze permits no middle ground its either you provide best products and customer satisfaction or not.
All the activities should aim at providing customer with whatever he wants and should help the firm long term objective of customer’s satisfaction at the same time building up good relationship. It is a responsibility of each and every person working in a Kamikaze company to make sure that the product is up to the mark and it satisfies customers need. Make improvements continuously In order to search for excellence Just does not end. We should work on the improvement implemented and see if we can make it even more effective.