8us|ness process reeng|neer|ng ?

8us|ness process reeng|neer|ng ls Lhe analysls and deslgn of workflows and processes wlLhln an
organlzaLlon Accordlng Lo uavenporL (1990) a buslness process ls a seL of loglcally relaLed Lasks
performed Lo achleve a deflned buslness ouLcome 8eenglneerlng ls Lhe basls for many recenL
developmenLs ln managemenL 1he crossfuncLlonal Leam for example has become popular because of
Lhe deslre Lo reenglneer separaLe funcLlonal Lasks lnLo compleLe crossfuncLlonal processes
Business process re-engineering is also known as
business process redesign,
business transformation,
or business process change management.

kLA8ON8 IOk kLLNG|NLLk|NG
ld Era
New Era
EIIiciency
Control
High Demand
High Competition
Innovation
Speed
Service &Quality

1
Key Steps
SeIect The Process & Appoint Process Team
Understand The Current Process
DeveIop & Communicate Vision Of Improved Process
Identify Action PIan
Execute PIan


42
Select the Process & Appoint Process Team
Two Crucial Tasks
Select The Process to be Reengineered
Appoint the Process Team to Lead the
Reengineering nitiative

43
Select the Process
Review Business Strategy and Customer
Requirements
Select Core Processes
Understand Customer Needs
Don't Assume Anything

44
Select the Process
Select Correct Path for Change
Remember Assumptions can Hide Failures
Competition and Choice to Go Elsewhere
Ask - Questionnaires, Meetings, Focus
Groups

45
Appoint the Process Team
Appoint BPR Champion
dentify Process Owners
Establish Executive mprovement Team
Provide Training to Executive Team

46
Core Skills Required
Capacity to view the organization as a whole
Ability to focus on end-customers
Ability to challenge fundamental
assumptions
Courage to deliver and venture into unknown
areas

47
Core Skills Required
Ability to assume individual and collective
responsibility
Employ 'Bridge Builders'

48
Use of Consultants
Used to generate internal capacity
Appropriate when a implementation is
needed quickly
Ensure that adequate consultation is sought
from staff so that the initiative is
organization-led and not consultant-driven
Control should never be handed over to the
consultant

49
Understand the Current Process
Develop a Process Overview
Clearly define the process
Mission
Scope
Boundaries
Set business and customer
measurements
Understand customers expectations
from the process (staff including
process team)

50
Understand the Current Process
Clearly dentify mprovement
Opportunities
Quality
Rework
Document the Process
Cost
Time
Value Data


1
Understand the Current Process
Carefully resolve any inconsistencies
Existing -- New Process
deal -- Realistic Process


52
Develop & Communicate Vision of mproved Process
Communicate with all employees so that
they are aware of the vision of the future
Always provide information on the progress
of the BPR initiative - good and bad.
Demonstrate assurance that the BPR
initiative is both necessary and properly
managed


53
Develop & Communicate Vision of mproved Process
Promote individual development by
indicating options that are available
ndicate actions required and those
responsible
Tackle any actions that need resolution
Direct communication to reinforce new
patterns of desired behavior


54
dentify Action Plan
Develop an mprovement Plan
Appoint Process Owners
Simplify the Process to Reduce Process
Time
Remove any Bureaucracy that may hinder
implementation


55
dentify Action Plan
Remove no-value-added activities
Standardize Process and Automate Where
Possible
Up-grade Equipment
Plan/schedule the changes

56
dentify Action Plan
Construct in-house metrics and targets
ntroduce and firmly establish a feedback
system
Audit, Audit, Audit


57
Execute Plan
Qualify/certify the process
Perform periodic qualification reviews
Define and eliminate process problems
Evaluate the change impact on the business
and on customers
Benchmark the process
Provide advanced team training



LXAMIlL8
1


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8


8LNLI|18 OI kLLNG|NLLk|NG
l} |oworlo oloyoos.
2} |lllootlo wosto, cooocossory oooooot ovorooou, oou
obsoloto or looIIlcloot rocossos.
3} lroucclo oItoo slolIlcoot roucctloos lo cost.
=} lrovooots lo gcollty oou ccstoor sorvlco
5} uollo to oroolzotloos stoy oo to oou low-ocolovors to
bocoo oIIoctlvo cootltors.
10


;
enchmarking is the process oI comparing one's business processes and perIormance metrics to
industry bests and/or best practices Irom other industries. Dimensions typically measured are
quality, time and cost.
In the process oI benchmarking, management identiIies the best Iirms in their industry, or in
another industry where similar processes exist, and compare the results and processes oI those
studied (the "targets") to one's own results and processes.
The term benchmarking was Iirst used by cobblers to measure people's Ieet Ior shoes. They
would place someone's Ioot on a "bench" and mark it out to make the pattern Ior the shoes.
Also reIerred to as "best practice benchmarking" or "process benchmarking",
Dr. Zargari
Jf |s 8encfrk|ng?
enchmarklng ls Lhe process of comparlng ones
buslness processes and performance meLrlcs Lo
lndusLry besLs and/or besL pracLlces from oLher
lndusLrles
Why are oLhers beLLer ?
Pow are oLhers beLLer ?
WhaL can we learn ?
Pow can we caLch up ?
Pow can we become Lhe besL ln our secLor ?


Dr. Zargari
Jf |s 8encfrk|ng?
enchmarklng ls crlLlcal Lo formulaLlng a
knowledgebased plan of acLlon Lo achleve
ob[ecLlves A benchmark ls a sLandard LhaL
provldes a measurlngsLlck for relaLlve
performance
uS ueparLmenL of Lnergy

Dr. Zargari
8encfrk
A benchmark ls an organlzaLlon recognlzed for lLs
exemplary operaLlonal performance
1here are many benchmarks ln Lhe world lncludlng
@oyof for
Scfnd|nf|fn A|r||nes for
Mooro|f for
Ine| for
nondf for
rocesses
Des|gn
@rf|n|ng
Ser|ce
kfp|d produc dee|open

Dr. Zargari
Jy 8encfrk|ng?
Survlval lles ln emulaLlng besL and noL ln lagglng
behlnd ench marklng ls Llme and cosL efflclenL
because lL lnvolves lmlLaLlon and adapLaLlon
raLher Lhan pure lnvenLlon revenLs Lhe 8e
lnvenLlng Lhe wheel"

Dr. Zargari
Jy 8encfrk|ng?
enchmarklng glves us Lhe chance of galnlng
eLLer Awareness of Curselves (us)
WhaL we are dolng
Pow we are dolng lL
Pow well we are dolng lL
eLLer Awareness of Lhe esL (1hem)
WhaL Lhey are dolng
Pow Lhey are dolng lL
Pow well Lhey are dolng lL

Objectives of Benchmarking
Determine whether a company is performing particular
value chain activities efficiently by studying practices and
procedures used by other companies
Understand the best practices in performing
an activity learn what is the best" way
to do a particular activity from those
demonstrating they are bestinworld"
Assess if company's costs in performing particular value
chain activities are in line with competitors
Learn how other firms achieve lower costs
Take action to improve company's cost
competitiveness


Dr. Zargari
Jy 8encfrk|ng?
enchmarklng sLlmulaLes seeklng new ways of dolng Lhlngs
and promoLes a culLure LhaL ls recepLlve Lo fresh approaches
and ldeas
enchmarklng provldes opporLunlLles for sLaff Lo learn new
skllls and be lnvolved ln Lhe LransformaLlon process from Lhe
ouLseL


Dr. Zargari
Jy 8encfrk|ng
.
.
.
.
Cope w|
Cope||e
Mfrkes
keep fce w|
Sc|ence fnd
@ecno|ogy
Cfnges
Innof|on
In
Mfnfgeen
Meods
Mee|ng
;uf||y
Sfndfrds
erforfnce
Iproeen
Cref|e
@|nk|ng
Mee|ng
Cusoers
Lxpecf|ons
8encfrk|ng

Types of Benchmarking
nternal This is a comparison among similar
operations within one's own organization.
ompetitive This is a comparison to the best of
direct competitors
nctional This is a comparison of methods to
companies with similar processes in the same
function outside one's industry.
eneric process This is a comparison of work
processes to others who have innovative, exemplar
work processes


"3.
Wbat is Process Mapping?
!rocess mapping is a workIlow diagram to bring Iorth a clearer understanding oI a process or
series oI parallel processes.
Most organizations that want to move "up a notch" are process mapping using one or more oI the
Iollowing: Deming`s Total Quality Management model, International Standard rganization
criteria, Goldratt`s Theory oI Constraints, Baldrige Criteria Ior Excellence, or the Balanced
Score Card.
Constructing a Process Flowcbart
Step : etermlne the BounJurlex
a. Where does a process begin?
b. Where does a process end?
Step : Ilxt the Stepx
a. Use a verb to start the task description.
b. The flowchart can either show the sufficient information to understand the general process flow or
detail every finite action and decision point.
Step : Sequence the Stepx
a. Use post-it notes so you can move tasks.
b. Do not draw arrows until later.
Step 4: ruw Approprlute Symbolx
a. Start with the basic symbols:
i. Ovals show input to start the process or output at the end of the process.
ii. Boxes or rectangles show task or activity performed in the process.
iii. Arrows show process direction flow.
iv. Diamonds show points in the process where a yes/no questions are asked or a decision
is required.
v. Usually there is only one arrow out of an activity box. f there is more than one arrow, you
may need a decision diamond.
vi. f there are feedback arrows, make sure feedback loop is closed; i.e. it should take you
back to the input box.
Step S: Syxtem MoJel
a. Draw charts using system model approach.
b. nput - use information based upon people, machines, material, method, and environment.
c. Process - use subsets of processes in series or parallel.
d. Output - use outcomes or desired results.
e. Control - use best in class business rules.
f. Feedback - use information from surveys or feedback.
Step 6: Check for Completenexx
a. nclude pertinent chart information, using title and date for easy reference.
Step 7: Flnullze the Flowchurt
a. Ask if this process is being run the way it should be.
b. Are people following the process as charted?
c. Do we have a consensus?
d. What is redundant; add what is missing.
The purpose oI process mapping is to use diagramming to understand the process we currently
use and ask what is expected oI us; what should we be doing to provide better customer Iocus
and satisIaction. It will identiIy what best practices we need to incorporate and Iind appropriate
benchmarks Ior measuring how we can arrive at better ways oI communicating our services. As
Dr. George Washington Carver put it 9issimplyservice9ha9measuressuccess.
ample Flowcbart





What is process mapping?
process mapping reIers to activities involved in deIining exactly
what a business entity does,
who is responsible,
to what standard a process should be completed
and how the success of a business process can be determined.
nce this is done, there can be no uncertainty as to the requirements oI every internal business
process.

How it is done ?
The Four Major Steps of Process Mapping
1. Process identification -- attaining a full understanding of all the steps of a process.
2. Information gathering -- identifying objectives, risks, and key controls in a process.
3. Interviewing and mapping -- understanding the point of view of individuals in the process and
designing actual maps
4. AnaIysis -- utilizing tools and approaches to make the process run more effectively and
efficiently.

. %0 first st05 is process identification. Many com5ani0s tink t0y know t0ir
5roc0ss0s -- manufacturing, sal0s, accounting, building s0rvic0s. But it is just tis
silo m0ntality tat caus0s 5roc0ss0s to los0 t0ir custom0r-c0ntric a55roac. Inst0ad
of d0fining 5roc0ss0s bas0d on t0 com5any's und0rstanding, t0y must b0 d0fin0d
by t0 custom0r's und0rstanding. Walking troug custom0r 050ri0nc0s 0l5s t0
r0vi0w0r id0ntify tos0 trigg0r 5oints tat can mak0 or br0ak succ0ss. %0s0 t0n
form t0 basis for 5roc0ss id0ntification.
6. nc0 t0 5roc0ss0s ar0 id0ntifi0d, t0 s0cond st05 b0gins -- information gathering.
%0r0 is a larg0 volum0 of information tat sould b0 obtain0d b0for0 trying to l0arn
t0 intricaci0s of a 5roc0ss. Primary among t0s0 is id0ntifying wo t0 tru0 5roc0ss
own0rs ar0 -- t0 on0s wo can 0ff0ct cang0. %0ir buy-in and agr00m0nt
trougout t0 analysis is 5aramount. Additional information tat sould b0 obtain0d
includ0s t0 obj0ctiv0s of t0 5roc0ss, risks to t0 5roc0ss, k0y controls ov0r tos0
risks, and m0asur0s of succ0ss for t0 5roc0ss.
7. In ord0r to 0ff0ctiv0ly r0cord and maintain tis information, som0 im5ortant
works00ts av0 b00n d0v0lo50d. %wo of t0 most im5ortant ar0 t0 Proc0ss Profil0
Work S00t, and Work Flow Surv0ys. %0 !rocess !rofile Work Sheet includ0s suc
information as t0 5roc0ss own0r, t0 trigg0r 0v0nts (b0ginning and 0nding), in5uts,
out5uts, and, as m0ntion0d abov0 t0 obj0ctiv0s, risks, k0y controls, and m0asur0s
of succ0ss. Work Flow Surveys ar0 com5l0t0d by individuals actually working on t0
5roc0ss and r06u0st from t0m a list of tasks -- including in5uts and out5uts --
wic t0y 50rform in su55ort of t0 5roc0ss.
8. nly aft0r all tis is don0 is actual "Proc0ss Ma55ing" com5l0t0d. %is involv0s sitting
wit 0ac 0m5loy00 and aving im or 0r d0scrib0 wat it is t0y do. %is
information is r0cord0d using a sticky-not0 m0tod. Eac st05 in t0 5roc0ss is
r0cord0d on a sticky-not0 and built in front of t0 individual com5l0ting t0 work.
%is allows t0m to int0ractiv0ly 0nsur0 t0 final ma5 matc0s t0ir und0rstanding
of t0ir work. %0 final 5roc0ss ma5s ar0 d0v0lo50d using flowcarting softwar0.
%im0 flows down t0 5ag0, and 0ac individual involv0d is r05r0s0nt0d by a s05arat0
column. In tis mann0r, a sim5l0 ma5 can
r0sult from a com5licat0d 5roc0ss.
9. Wil0 Analysis is consid0r0d t0 fourt st05,
analysis must r0ally occur trougout t0
r0vi0w. Wil0 d0fining t0 5roc0ss0s, t0
r0vi0w0r may d0t0rmin0 tat obj0ctiv0s ar0 not
in lin0 wit t0 5roc0ss0s in 5lac0. In gat0ring
information, it may b0com0 a55ar0nt tat
m0asur0s of succ0ss do not corr0s5ond to
d05artm0nt obj0ctiv0s. %0s0 ar0 just som0 of
t0 0am5l0s of ongoing analysis.

How0v0r, t0r0 ar0 som0 s50cific 0am5l0s of
analysis tat can b0 com5l0t0d onc0 ma5s ar0
don0. %0s0 includ0 id0ntifying unn0c0ssary
a55rovals, isolating r0work, r0moving du5licat0
forms, 0liminating us0l0ss oldfil0s, and
inv0stigating d0cision r06uir0m0nts tat l0ad to no disc0rnabl0 r0sult. In and of
t0ms0lv0s, no singl0 incid0nt is n0c0ssarily wrong. But 0ac must b0 analyz0d in
t0 cont0t of t0 ma5 to 0nsur0 it su55orts t0 obj0ctiv0s.
10. %0r0 ar0 num0rous 5itfalls and tra5s tat can occur in t0 ma55ing 5roj0ct, but
5ractic0 will 0l5 any 5ractition0r b0com0 mor0 0ff0ctiv0. W0n don0 corr0ctly,
Busin0ss Proc0ss Ma55ing sould l0ad 0v0ryon0 to a b0tt0r und0rstanding of wat
t0 com5any is trying to aci0v0, a r0align0d s0ns0 of 5ur5os0, and a numb0r of
sugg0stions tat can str0amlin0 o50rations wil0 incr0asing custom0r satisfaction.

#eIer diagram


What is gap analysis?
gap analysis is a tool that helps companies compare actual perIormance with potential
perIormance. At its core are two questions: "Where are we?" and "Where do we want to be?" II a
A simpIe and definitive guide to
Process Mapping suitabIe for
individuaIs at any management IeveI.

Business Process
Mapping: mproving
Customer
Satisfaction by J.
Mike Jacka, CA,
CPA, and Paulette
J. Keller, CPA,
MBA

company or organization does not make the best use oI current resources, or Iorgoes investment
in capital or technology, it may produce or perIorm below its potential.
Gap analysis involves determining, documenting, and approving the variance between business
requirements and current capabilities.
Gap analysis naturally Ilows Irom benchmarking and other assessments.
nce the general expectation oI perIormance in the industry is understood, it is possible to
compare that expectation with the company's current level oI perIormance. This comparison
becomes the gap analysis. Such analysis can be perIormed at the strategic or operational level oI
an organization.
Gap analysis is a Iormal study oI what a business is doing currently and where it wants to go in
the Iuture. It can be conducted, in diIIerent perspectives, as Iollows:
1. rganization (e.g., human resources)
2. Business direction
3. Business processes
4. InIormation technology


Purpose

The purpose of gap analysis technique is to compare the current actual performance of an activity to
either its theoretical target or its vision.






enefit of gap analysis:
The benefit of gap analysis technique is that it provides an objective basis for comparison of actual
performance of an activity to either its theoretical target or its vision.


Q4
ust in time (%) is a production strategy that strives to improve a business return on
investment by reducing in-process inventory and associated carrying costs. Just-in-time
production method is also called the Toyota !roduction System. To meet JIT objectives, the
process relies on signals or Kanban ( anban

) between diIIerent points in the process,

which tell production when to make the next part. Kanban are usually 'tickets' but can be simple
visual signals, such as the presence or absence oI a part on a shelI. Implemented correctly, JIT
Iocuses on continuous improvement and can improve a manuIacturing organization's return on
investment, quality, and eIIiciency. To achieve continuous improvement key areas oI Iocus could
be Ilow, employee involvement and quality.
Quick notice that stock depletion requires personnel to order new stock is critical to the
inventory reduction at the center oI JIT. This saves warehouse space and costs. However, the
complete mechanism Ior making this work is oIten misunderstood.
For instance, its eIIective application cannot be independent oI other key components oI a lean
manuIacturing system or it can "...end up with the opposite oI the desired result."
|1|
In recent
years manuIacturers have continued to try to hone Iorecasting methods (such as applying a
trailing 13 week average as a better predictor Ior JIT planning,
|2|
however some research
demonstrates that basing JIT on the presumption oI stability is inherently Ilawed.
|3|




% ust-in-%ime manufacturing
`Just-in-time' is a management philosophy and not a technique.
It originally reIerred to the production oI goods to meet customer demand exactly, in time,
quality and quantity, whether the `customer' is the Iinal purchaser oI the product or another
process Iurther along the production line.
It has now come to mean producing with minimum waste. "Waste" is taken in its most general
sense and includes time and resources as well as materials. Elements oI JIT include:
O onLlnuous lmprovemenL
4 ALLacklng fundamenLal problems anyLhlng LhaL does noL add value Lo Lhe producL
4 uevlslng sysLems Lo ldenLlfy problems
4 SLrlvlng for slmpllclLy slmpler sysLems may be easler Lo undersLand easler Lo manage
and less llkely Lo go wrong
4 A producL orlenLed layouL produces less Llme spenL movlng of maLerlals and parLs
4 ;uallLy conLrol aL source each worker ls responslble for Lhe quallLy of Lhelr own
ouLpuL
4 okayoke `foolproof Lools meLhods [lgs eLc prevenL mlsLakes
4 revenLaLlve malnLenance 1oLal producLlve malnLenance ensurlng machlnery and
equlpmenL funcLlons perfecLly when lL ls requlred and conLlnually lmprovlng lL
O LllmlnaLlng wasLe 1here are seven Lypes of wasLe
4 wasLe from overproducLlon
4 wasLe of walLlng Llme
4 LransporLaLlon wasLe
4 processlng wasLe
4 lnvenLory wasLe
4 wasLe of moLlon
4 wasLe from producL defecLs
O ood housekeeplng workplace cleanllness and organlsaLlon
O SeLup Llme reducLlon lncreases flexlblllLy and allows smaller baLches ldeal baLch slze ls 1lLem
MulLlprocess handllng a mulLlskllled workforce has greaLer producLlvlLy flexlblllLy and [ob
saLlsfacLlon
O evelled / mlxed producLlon Lo smooLh Lhe flow of producLs Lhrough Lhe facLory
O anbans slmple Lools Lo `pull producLs and componenLs Lhrough Lhe process
O ldoka (AuLonomaLlon) provldlng machlnes wlLh Lhe auLonomous capablllLy Lo use [udgemenL
so workers can do more useful Lhlngs Lhan sLandlng waLchlng Lhem work
O Andon (Lrouble llghLs) Lo slgnal problems Lo lnlLlaLe correcLlve acLlon
% - ackground and History
JIT is a Japanese management philosophy which has been applied in practice since the early
1970s in many Japanese manuIacturing organisations. It was Iirst developed and perIected within
the Toyota manuIacturing plants by Taiichi hno as a means oI meeting consumer demands with
minimum delays . Taiichi hno is Irequently reIerred to as the Iather oI JIT.
Toyota was able to meet the increasing challenges Ior survival through an approach that Iocused
on people, plants and systems. Toyota realised that JIT would only be successIul iI every
individual within the organisation was involved and committed to it, iI the plant and processes
were arranged Ior maximum output and eIIiciency, and iI quality and production programs were
scheduled to meet demands exactly.
JIT manuIacturing has the capacity, when properly adapted to the organisation, to strengthen the
organisation's competitiveness in the marketplace substantially by reducing wastes and
improving product quality and eIIiciency oI production.
There are strong cultural aspects associated with the emergence oI JIT in Japan. The Japanese
work ethic involves the Iollowing concepts.
O Workers are hlghly moLlvaLed Lo seek consLanL lmprovemenL upon LhaL whlch already exlsLs
AlLhough hlgh sLandards are currenLly belng meL Lhere exlsL even hlgher sLandards Lo achleve
O ompanles focus on group efforL whlch lnvolves Lhe comblnlng of LalenLs and sharlng
knowledge problemsolvlng skllls ldeas and Lhe achlevemenL of a common goal
O Work lLself Lakes precedence over lelsure lL ls noL unusual for a apanese employee Lo work 14
hour days
O Lmployees Lend Lo remaln wlLh one company LhroughouL Lhe course of Lhelr career span 1hls
allows Lhe opporLunlLy for Lhem Lo hone Lhelr skllls and ablllLles aL a consLanL raLe whlle offerlng
numerous beneflLs Lo Lhe company
These beneIits maniIest themselves in employee loyalty, low turnover costs and IulIilment oI
company goals.


Goals of Just-n-Time
8ystems
Design for Optimum Ouality and
Cost
Minimize resources needed for
Design and Manufacturing
Be Responsive to the Customers
Needs

Goals of Just-n-Time
8ystems{cont'd_
Develop Trust and Open
Relationships with 8uppliers and
Customers
Develop a Commitment to
mprove the Total Manufacturing
8ystem

Advantages of JT
Manufacturing
Materials Cost 8avings
Manufacturing Cost 8avings
8ales Cost 8avings