Process Redesign

Process Redesign
James V Reyes-Picknell, P.Eng.

+1-705-431-6598
james@consciousasset.com
Agenda
What are business processes?
How processes evolve
Automating business processes – help or hindrance?
Know where you are today – map your current business processes
Are your processes meeting your goals?
Can your processes be made more efficient and more effective?
Redesigning for maximum effectiveness and efficiency
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James V Reyes-Picknell, President, Conscious Group Inc., “Process Redesign”
©2006 Conscious Group Inc.
What are business processes?
A process is nothing more than a systematic flow of action steps that achieves
some goal. A process can also be thought of as a “workflow”.
We want our business processes to be:

Effective – they deliver a desired outcome (service and quality)
Efficient – they deliver the outcome at low cost, quickly and at minimum risk
We want them to deliver value:
Value = Output = Results x Quality

Input Cost x Time x Risk
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Business Process Reengineering
Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises.
BPR was first introduced to the business world by Frederick Taylor when he published his article The Principles of
Scientific Management in the early 1900s. Following on from the earlier ideas of Time and Motion Studies pioneered by
Frank and Lillian Gilbreth, Scientific Management was the first step to the introduction of BPR which turned out to be
unsuccessful due to the many issues which were not resolved. During Taylor's time, not many knowledgeable workers
were employed in the manufacturing workforce, which at the time was the main wealth generator.
Scientific Management involved breaking the manufacturing process down to a thoughtless cycle of simple sequences
which were to be carried out in the least amount of time possible with the minimum amount of effort. This often raised
the factory workers' salaries but also caused the workers to work hard in back-breaking manual labour. Henry Ford’s
first assembly line is an example that is still repeated today. This practice of improving efficiency in manufacturing often
raises the concern of "dehumanization of the workplace" (Kock, 2002), especially where workers are more educated
and motivated by factors beyond mere survival.
The Scientific Management method gave birth to Total Quality Management in Japan after World War II. That
eliminated many of the discrepancies with the previous method of improving the business structure and increased its
focus on people as a part of the solution. William Deming and Dr. Joseph Juran helped Japan become a super
economic power by taking over market share from North American businesses with quality goods and services. Total
Quality Management's main goal is to improve the manufacturing operations.
In the 1990s, Michael Hammer and James Champy introduced their book Reengineering the Corporation, which gave
birth to the term business process reengineering.
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Business Process Reengineering
BPR is a highly technical approach that reflects its authors’ engineering backgrounds. It reached its heyday in the early
1990's when Michael Hammer and James Champy published their best-selling book, "Reengineering the
Corporation". The authors promoted the idea that sometimes radical redesign and reorganization of an enterprise
(wiping the slate clean) was necessary to lower costs and increase quality of service and that information
technology was the key enabler for that radical change. Hammer and Champy felt that the design of workflow in
most large corporations was based on assumptions about technology, people, and organizational goals that were
no longer valid, and they are often right, but not entirely so. They suggested seven principles of reengineering to
streamline the work process and thereby achieve significant levels of improvement in quality, time management,
and cost:
1. Organize around outcomes, not tasks.

2. Identify all the processes in an organization and prioritize them in order of redesign urgency.
3. Integrate information processing work into the real work that produces the information.
4. Treat geographically dispersed resources as though they were centralized.
5. Link parallel activities in the workflow instead of just integrating their results.
6. Put the decision point where the work is performed, and build control into the process.
7. Capture information once and at the source.
By the mid-1990's, BPR gained the reputation of being a nice way of saying “downsizing." According to Hammer, lack
of sustained management commitment and leadership, unrealistic scope and expectations and resistance to
change prompted management to abandon the concept of BPR, embracing the next new methodology, enterprise
resource planning (ERP). He said, "Serving the customer is not a mechanical act but one that provides an
opportunity for fulfillment and meaning".
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BPR Successes
BPR, if implemented properly, can give huge returns. BPR has helped giants like Procter and Gamble Corporation and General Motors Corporation succeed after financial
drawbacks due to competition. It helped American Airlines somewhat get back on track from the bad debt that is currently haunting their business practice. BPR is about the
proper method of implementation.
General Motors Corporation implemented a 3-year plan to consolidate their multiple desktop systems into one. It is known internally as "Consistent Office Environment" (Booker,
1994). This reengineering process involved replacing the numerous brands of desktop systems, network operating systems and application development tools into a more
manageable number of vendors and technology platforms. According to Donald G. Hedeen, director of desktops and deployment at GM and manager of the upgrade program, he
says that the process "lays the foundation for the implementation of a common business communication strategy across General Motors." (Booker, 1994).
Lotus Development Corporation and Hewlett-Packard Development Company, formerly Compaq Computer Corporation, received the single largest non-government sales ever
from General Motors Corporation. GM also planned to use Novell NetWare as a security client, Microsoft Office and Hewlett-Packard printers. According the Donald G. Hedeen,
this saved GM 10% to 25% on support costs, 3% to 5% on hardware, 40% to 60% on software licensing fees, and increased efficiency by overcoming incompatibility issues by
using just one platform across the entire company.
Southwest Airlines offers another successful example of reengineering their company and using Information Technology the way it was meant to be implemented. In 1992,
Southwest Airlines had a revenue of $1.7 billion and an after-tax profit of $91 million. American Airlines, the largest U.S. carrier, on the other hand had a revenue of $14.4 billion
dollars but lost $475 million and has not made a profit since 1989 (Furey and Diorio, 1994). Companies like Southwest Airlines know that their formula for success is easy to copy
by new start-ups like Morris, Reno, and Kiwi Airlines. In order to stay in the game of competitive advantage, they have to continuously reengineer their strategy. BPR helps them
be original.
Michael Dell is the founder and CEO of DELL Incorporated, which has been in business since 1983 and has been the world's fastest growing major PC Company. Michael Dell's
idea of a successful business is to keep the smallest inventory possible by having a direct link with the manufacturer. When a customer places an order, the custom parts
requested by the customer are automatically sent to the manufacturer for shipment. This reduces the cost for inventory tracking and massive warehouse maintenance. Dell's
website is noted for bringing in nearly "$10 million each day in sales."(Smith, 1999). Michael Dell mentions: "If you have a good strategy with sound economics, the real challenge
is to get people excited about what you're doing. A lot of businesses get off track because they don't communicate an excitement about being part of a winning team that can
achieve big goals. If a company can't motivate its people and it doesn't have a clear compass, it will drift." (Smith, 1999) Dell's stocks have been ranked as the top stock for the
decade of the 1990s, when it had a return of 57,282% (Knestout and Ramage, 1999). Michael Dell is now concentrating more on customer service than selling computers since
the PC market price has pretty much equalized. Michael Dell notes: "The new frontier in our industry is service, which is a much greater differentiator when price has been
equalized. In our industry, there's been a pretty huge gap between what customers want in service and what they can get, so they've come to expect mediocre service. We may
be the best in this area, but we can still improve quite a bit—in the quality of the product, the availability of parts, service and delivery time." (Smith, 1999) Michael Dell
understands the concept of BPR and really recognizes where and when to reengineer his business.
Ford reengineered their business and manufacturing process from just manufacturing cars to manufacturing quality cars, where the number one goal is quality. This helped Ford
save millions on recalls and warranty repairs. Ford has accomplished this goal by incorporating barcodes on all their parts and scanners to scan for any missing parts in a
completed car coming off of the assembly line. This helped them guarantee a safe and quality car. They have also implemented Voice-over-IP (VoIP) to reduce the cost of having
meetings between the branches.
A multi-billion dollar corporation like Procter and Gamble Corporation, which carries 300 brands and growing really has a strong grasp in re-engineering. Procter and Gamble
Corporation's chief technology officer, G. Gil Cloyd, explains how a company which carry multiple brands has to contend with the "classic innovator's dilemma — most innovations
fail, but companies that don't innovate die. His solution, innovating innovation..." (Teresko, 2004). Cloyd has helped a company like Procter and Gamble grow to $5.1 billion by the
fiscal year of 2004. According to Cloyd's scorecard, he was able to raise the volume by 17%, the organic volume by 10%, sales are at $51.4 billion up by 19%, with organic sales
up 8%, earnings are at $6.5 billion up 25% and share earnings up 25%. Procter and Gamble also has a free cash flow of $7.3 billion or 113% of earnings, dividends up 13%
annually with a total shareholder return of 24%. Cloyd states: "The challenge we face is the competitive need for a very rapid pace of innovation. In the consumer products world,
we estimate that the required pace of innovation has double in the last three years. Digital technology is very important in helping us to learn faster." (Teresko, 2004) G. Gil Cloyd
also predicts, in the near future, "as much as 90% of P&G's R&D will be done in a virtual world with the remainder being physical validation of results and options." (Teresko,
2004).
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BPR Problems
The biggest problem that businesses usually face with BPR is overzealous expectations. BPR is a business tool with a high price and gradual
returns. BPR is quoted as having a 30% success rate due to the time and cost involved.
BPR has been used by corporations as an excuse for job cuts which has tarnished the name with employees. Specifically, in 1995, Pacific Bell
called for 10,000 job cuts, followed by Apple Computer Incorporated. Both used the word reengineering to explain the job cuts.
In addition, Michael Hammer and James Champy have admitted that in their book they did not take into account the human constituent of the
business process. In late 1996, Dr. Hammer made a confession on the Wall Street Journal where the article read: "Dr. Hammer points out a
flaw: He and the other leaders of the $4.7 billion re-engineering industry forgot about people. ‘I wasn't smart enough about that,' he says. ‘I was
reflecting my engineering background and was insufficient appreciative of the human dimension. I've learned that's critical.
Sometimes BPR implementation was based on generic best practices by a business, not specific to a particular company. One example of
using a generic idea to a particular company would be the implementation of a $28,000.00 voicemail system at Winguth, Dohahue and Co.,
which was later scrapped because of the computer generated voice which sounded a little too cold and clients were tired of going through all the
menu prompts to reach the desired person.
BPR is also time sensitive. In the case of Metropolitan Life, some claim that their bankruptcy was caused by their failure to switch from filing
cabinets of customer files and records to a database system.
With every new process implementation there is a security issue, like in the case of Equifax, where people's identities were stolen.
eBay was down for 15-hours because the company decided to test a new system, which was a part of the eBay reengineering process, that
they had hoped would help the company be more efficient and also provide quality service to the customers.
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Business process design – is it reengineering?
BPR (reengineering) addresses a corporate level requirement for change.
BPR was intended as a tool for dramatic change to improve company performance.
Because it was capable of dramatic change companies that were in good shape
ignored it – after all, they didn’t need dramatic changes.
Consequently, it tended to get used only when companies were in trouble. They
needed dramatic (often drastic) change to survive. It was often painful but, as major
surgery saves lives, it saved companies.
Business process redesign is like reengineering on a smaller scale. It can create

dramatic improvement, but its purpose is simply to support improvement.
It is not intended as major surgery, but if your processes are in sad shape, then
perhaps that is called for.
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A process is like a machine
When every part is working

right, the machine works
smoothly
It delivers what its users want:

power, smoothly and on
demand
When any one part is not

working the machine stops
working smoothly and may
even stop. It no longer does
what its users want
Do your processes all work

smoothly and deliver the
results that you, the user,
want?
If not, then some part is

broken. Process design can
fix that.
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Process share some common features
Inputs Process Outputs

The function of this
process delivers:
Fuel
Air Horsepower
Water Torque
Lube RPMs
Control Signals
Byproducts
•Heat
•Exhaust
•Used oil
Value = Output = Results x Quality

Input Cost x Time x Risk
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A the business level the processes integrate with
a broad range of influences (inputs, outputs,
requirements, environments, stakeholders)
POLITICAL, SOCIAL, ECONOMY ENVIRONMENT
Supplier Stakeholder
Risk & Environmental

Mine Production Mgt
Requirements Requirements
Mill Production Mgt
Business Process
CUSTOMERS
Improvement
Management
General Mgt.
Ore:
-Best Quality
Technology
-High Grade
-Affordable
SHAREHOLDERS
Materials
Geology Process $
SUPPLIERS
Mining Process Highest

Profits
Tools / Spares Parts Milling Process
EMPLOYEES
Mineral Recovery Process
Quality of Life
Information
Environment Mgt Process
Plant Services Process
COMMUNITY
MARKET
Human Resources Minimum Environmental

Impact
COMPETITORS
Safe
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There is a cascading of requirements, process
and management
Organization Stakeholders
Process GEOLOGY Level
Job Level Goals DesignManag
Level MINE DEVELOPMENT MINING MARKET

Goals DesignManag Goals DesignManag Expectations
Mine Technicians DRILL & BLAST MILLING

FIRST NATIONS
Goals DesignManag Goals DesignManag Goals DesignManag Expectations
Drillers LOAD, HAUL & DUMP ORE RECOVERY
Goals DesignManag Goals DesignManag Goals DesignManag SHAREHOLDERS
Expectations
Blasters UNDERG. CRUSHING ENVIRON. MGT. MINE
Goals DesignManag Goals DesignManag Goals DesignManag Goals DesignManag
MINE EMPLOYEES
Electrician CONVEYING/HAULING SAFETY MGT. Expectations
Goals DesignManag Goals DesignManag Goals DesignManag
Service Crew SURFACE CRUSHING PLANT SERVICES POLITICAL
Goals DesignManag Goals DesignManag Goals DesignManag Expectations
CONVEYING TO MILL HUMAN RESOURC.

ENVIRONMENTAL
Goals DesignManag Goals DesignManag Expectations
LOGISTICS SUPPOR.
Goals DesignManag
OTHERS
Goals DesignManag
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Integrated maintenance and support processes
Materials Management High Level

Process Map
Maintenance
Work Order and
Execution /
Shutdown
Planning
Issues Stock Re-Order
Stock Adds &

Deletes
Non-Stock Inventory
Requirement
Stock Returns
Management
Stock Cycle Counts;

Analysis, Adjustments
and Obsolete Stock
Elimination.
Direct Purchases Receiving
Services Provided by
Supplier
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Processes can be “stand alone” or “integrated”
with other processes
Here is a simple high level “stand alone” process –

work management
You can see that each step in this process may

actually have several steps of their own – sub-
processes.
E.g.: Planning has several important steps

Job steps (not too detailed)
Show what has to be done, not “how to” do it
Estimating duration (realistic)
Inputs:
Estimating resources required
Skilled trades (do you have them all?) •Work requests, manpower, materials, parts,
Contractors (contracting support required?) contractors, supervision, safety equipment, etc.
Tools, test equipment, support equipment (cranes, (all are costs)
lifts, scaffolding, etc.)
Parts, materials, consumables (any warranty
claims?) Outputs:
Manuals, drawings, instructions, JSA, MSDS, •Completed work (results)
work permits (hot, cold, confined space, etc.)
Estimating costs Byproduct:
Impact on other equipment / systems / operations
Notifications required (to operations, regulatory
•Scrap materials, used oils, broken tools, injuries,
authorities, etc.) lost production, scrap product, etc.
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An “integrated” process is linked with other
business processes
Here’s the Planning Sub-Process from the previous It has links to other processes outside of the
slide: overall “work management” process:
Job steps (not too detailed)

Show what has to be done, not “how to” do it Contracting process
Estimating duration (realistic)
Estimating resources required
Support equipment supply
Skilled trades (do you have them all?)
Contractors (contracting support required?)
Stores, purchasing, warranty management
Tools, test equipment, support equipment (cranes,
lifts, scaffolding, etc.)
Parts, materials, consumables (any warranty Engineering, safety information, permitting
claims?)
Manuals, drawings, instructions, JSA, MSDS, May link to accounting approvals
work permits (hot, cold, confined space, etc.)
Estimating costs
May link to operations planning systems
Impact on other equipment / systems / operations
Notifications required (to operations, regulatory
authorities, etc.)
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What VALUE does this process deliver to the
business?
Maximizes results and quality of those

results:
Captures all required work
Gets the right work done right
Captures knowledge that helps us
eliminate the need for future work
Minimizes cost, time and risk
Re-uses standard job plans so that no plan
is created more than once
Achieves a high level of schedule
compliance so work is only scheduled
once
Uses plans for all proactive work, all
project work, all non-urgent repairs,
anticipated emergencies
Work is done once and only once
The process happens quickly so that less
urgent work does not become urgent
All work done is prioritized to minimize
business risks (safety, environment, costs)
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How does the process add that value?
What it delivers How it delivers
Maximizes results and quality of those results: The process must be:
Captures all required work Thorough – miss nothing
Gets the right work done right Accurate – identifies the right work from
Captures knowledge that helps us eliminate the sometimes vague requests
need for future work Comprehensive – it’s not just about getting work
Provides information to other processes done, it’s about learning from what we found and
Minimizes cost, time and risk did so we can improve
Re-uses standard job plans so that no plan is Efficient –
` It doesn’t force us to do things twice, it saves plans for
created more than once
future use
Achieves a high level of schedule compliance so ` It does not require multiple reviews and approvals –
work is only scheduled once each step is carried out by someone who can get it done
Uses plans for all proactive work, all project work, entirely
all non-urgent repairs, anticipated emergencies ` Urgent work is handled urgently with a minimum of fuss
Work is done once and only once Effective –

` It anticipates what work will arise and plans for that work
The process happens quickly so that less urgent before the event occurs (proactive)
work does not become urgent ` Deals with all work requests arising
All work done is prioritized to minimize business ` Priorities and urgencies are honored
risks (safety, environment, costs)
Provides information to other processes It must add value overall!
The process step that adds value may cost us up
front but the value may be captured elsewhere.
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Do all of these processes add value?
Contracting process Do their sub-processes always add value?
Support equipment supply For example

Contracting:
Stores, purchasing, warranty management Defining work scope to be contracted
Defining work conditions
Engineering, safety information, permitting Defining contractual terms and conditions
` Do they all add value or are they merely there
to alleviate fear
Accounting (or other) approvals • Fear is always driven by the “unknown” and the
“unreal” – things that have not happened and may
never happen
Operations planning systems • If you fear it you will make it happen
Requesting bids from multiple suppliers
` What if the best supplier is already known?
Evaluating bids
` Again, what if the supplier has been chosen
ahead of time by the decision maker (not the
purchasing agent or contracts officer)
Work oversight
` If you are contracting the work, are you really
the best person to oversee the work?
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Not every step and not every process adds value
Do we really intend to destroy value ?
So how did we get there ?
What caused us to add steps and processes that don’t add value ?
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How processes evolve
The only constant in life is change!
Every change in our working environment demands some sort of response
When our business processes can no longer do what we want them to do, we adapt and change them so that
they can do what we want
If the change we want is not “allowed” we simply work around the rules, our “real” processes become
informal, undocumented and highly dependent on those who operate them
Causes of change:
People and their preferences change – the demands on our processes will change so we must change to meet
those demands (e.g.: the new boss wants to do things differently)
Assets change – new equipment, new technology can lead to changes in what we need to do to manage them
(e.g.: we add automation to a previously manual production process)
New methods – better ways of doing things arise so we streamline our process (e.g.: we outsource)
Regulations and other rules change – we need to respond with process changes, often adding approvals,
checks, balances…
` Sadly, many of these are imposed in response to some “failure” of another process so often they add little of value
Technology drives change – computerization, use of wireless devices, use of internet
The old methods just aren’t fast enough any more – customers demand faster service, mass customization
Demands to cut costs or material usage as a result of global competition
Quality expectations continue to rise so we add methods to improve the quality of what we deliver (this
transformed the entire North American automotive industry)
Someone “cheats” and causes harm to others (&/or themselves) so we put checks and balances in place to
prevent it from happening again (e.g.: Sarbane’s Oxley in the US has transformed management consulting and
auditing)
Exceptional circumstances arise and the process is modified to accommodate them
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What happens to our processes over a long
time?
All these causes of change lead to responses that modify our existing processes
Some of those are well documented and some are not

Changes in response to quality program demands are often well documented
Changes in response to regulation changes are often well documented
Changes that simply help get the job done better are often NOT well documented
` These are the most common changes and the troublesome in the long term
Some of those changes are introduced as “work-around actions” by the individuals

responsible for the process or for part of the process
People just want to do their job “better” or “faster”
` E.g.: a planner uses his own stash of pre-planned jobs to enable him to plan more work as the workload
increases, but he may not share the stash with other planners
` E.g.: store rooms are left unlocked at night for “emergency” parts issues to tradesmen so they can get parts
more quickly than waiting for a stores-man, but the stock issues are seldom recorded and stock counts often
reveal inaccuracies
We respond to the reasonable demands of our “customers”
` E.g.: a buyer issues a PO number to a supplier in order to expedite delivery before the Purchase Request is
formally approved
` E.g.: tradesmen are assigned to an emergency job before the work order is even raised for the work
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The changes add up
All these little changes, each one for its own good reasons, will add up.
Just like stress on our minds and bodies this puts stress on the formal business process and it can fail to
deliver.
This complicates our business processes

The process that we actually follow seldom matches the process that we have documented
` In this case the formal process is clearly “broken” and in need of repair
This isn’t always a problem, especially if the new (unofficial) process works more smoothly than the official
version, it is consistent, repeatable and sustainable
` Unfortunately it’s the consistency, repeatability and especially the sustainability that are often lacking
So all these well intentioned changes can add up to be a (big) problem:

Someone new comes to do the job but doesn’t know about the work-arounds and no one can explain them (the
process will get bogged down and at worst stop working altogether)
Others, whose cooperation is needed, suddenly stop cooperating (e.g.: supplier demands a written PO instead of
a verbal PO number; stores is locked at night by a new stores supervisor; maintenance demands formal work
requests where previously verbal requests were sufficient)
The entire process gets bogged down in its own complexity and work that is being processed effectively gets
“lost” (e.g.: paperwork submitted to governments; change requests to large contracts; appraisal systems for
employee performance in large companies)
` My old navy “in-box” was date stamped. If someone asked for something it got done, but if they didn’t it just sat until it became 1
month old or more – then it got trashed (over 4 years no one ever discovered this). So, was the work that was being requested
really needed? Answer: NO.
Process results are no longer consistent and repeatable – everything gets treated as an exception or the process
is used consistently, but most of the work flowing through it is a genuine exception. In that case the process is
clearly out of date with the reality of what’s happening in the business.
Your computerized work flow systems and processes need constant over-rides and manual changes where
results should be automated
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How do you know you have a problem?
You depend on only one person to get something done because no one else can do it right.
Your people are working around the processes you thought were in place – they are constantly
working to correct for deficiencies in the processes
People are complaining about lack of consistency
It takes a long time to train someone new in your processes and even after the training is
complete, things just don’t work right
You are not getting the results you want (costs are high, time is long, inconsistency, lack of
service, poor quality of service delivery) i.e.: value is low
You decide to automate the process and you can’t agree on how it works today nor can you
agree on how it should work in the future
Most cases get treated as “exceptions”
Computer system require frequent manual intervention and over-rides
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Automating business processes – help or
hindrance?
Effectiveness is all about doing the right things – the steps to ensure that happen must be
designed into the process, whether it is automated or not
Effectiveness comes from designing the process
Where speed is important to being effective then automation can help
Efficiency is all about getting things done quickly and at minimal cost. It is possible to become
very efficient while doing the wrong things and being completely ineffective.
Efficiency comes from automating parts of the process
Automation (computerization) can reduce the time it takes to process information, can speed
the transmission of information from one step or person to the next, can enforce repeatability
of process (very consistent), can help cut processing costs, but
It can’t ensure you are doing the right things – those must be thought out before hand
It can’t be flexible in handling exceptions without being complex

Complexity can slow things down and create opportunities for errors
A computer can make any process, even an ineffective one, efficient.

It takes brains to make a process effective.
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Process and information flows are sometimes
opposed to each other
Computers feed information in any needed direction as a process moves only forward
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The capabilities of computers
Maintenance Management Systems are designed around the basic work management process
Different systems handle it different ways
They deal with transactions, just like accounting systems, except that here the transaction document is the
work order where:
1 Work Order = 1 Job
Generally these systems have some capability, either built in or from integration with other systems for
materials management (stores), purchasing and accounting for costs
More complex systems will interface with budgeting systems, project management, GIS, human resources,
finance (for capital works and asset tracking), condition monitoring systems (for automated work order
triggering), production scheduling (for equipment availability) and others.
Some systems have a limited ability to track failure data to feed reliability improvement efforts but many make
an attempt to help (e.g.: use of how found and failure codes, use of data fields with RCM titles, automated
statistics about failures / work frequencies, drop down lists of failure modes to pick from)
These systems are very good at tracking activities and transactions (because they are set up to do those
things), but they are limited in capability as statistical analysis tools (because they are not designed as such)
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Configuration vs. customization
Most systems provide for a degree of user configuration that allows the users to modify certain settings:
Failure codes
“How found” codes
Insertion of logos on reports and work orders
Layout of reports
Switch capabilities on / off – e.g.: currency conversion, metric vs. imperial units, date formats, allow material
reservations, user permissions, security
Configuration changes “survive” system modification upgrades by the vendor
But major changes that vary from the designed in (fundamental) business process may require customization
to the system code to meet the business requirements
e.g.: a natural gas gathering and processing company modified its tracking of fuel and oil consumption to take
advantage of unique tax and royalty advantages in their Canadian operation regions
` These customer specific changes go beyond the changes allowed by the configuration capabilities of the system and can be
extensive (as they were in the example above)
` These customizations often include integration points with other systems (e.g.: finance or purchasing systems that might be from
different vendors or even “home grown”)
Customizations often don’t survive vendor code upgrades so it’s very common to stop upgrading the basic
system after customizations have been applied
This prevents you from taking advantage of process improvements offered by the vendor
It prevents you from taking advantage of the easy technology improvements offered
It prevents you from getting the “bug fixes” and “patches” that correct system deficiencies
It can make future upgrades as technology changes (e.g.: green screen to Windows and GUI) very expensive
If dramatic changes are needed you may not be able to “migrate” your data and processes to an upgraded and
updated system – this could force you to undergo a complete “conversion” to a new system
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To integrate or not to integrate – that is the
question
If your system is a basic CMMS it will have all the functionality you need for maintenance, but only limited
functionality for accounting or other corporate functions (e.g.: MRO Maximo, DataStream, Ivara)
These simpler systems tend to be easy to learn and to use and they are often favored by tradesmen
These can be “best of breed” systems that handle their function extremely well
Process changes are often not needed within these systems, but at the interfaces with other systems
Transferring information between these various functions must be done either manually, through batch transfer
processes, through data warehouses, or through system integrations that automate the transfer
If your system is a complex corporate “enterprise” system you will already have full “integration capability”
with other corporate functions provided they are implemented and turned on (e.g.: SAP, JDE/Oracle, Mincom)
These complex systems are harder to implement, learn and to use simply because they are inherently more
complicated
These systems attempt to incorporate “best of breed” capabilities but have a tough time keeping up with best
practice simply because of their complexity
` Any change in these systems can have far reaching implications elsewhere in the system
` Process changes can be difficult to implement so many users simply “work around” them – as a consequence, these systems tend
to breed the need for process redesign
Even though information can be input once and used many times, the entire system capability has to be
implemented to make that happen seamlessly
` This is often not done because of the high cost of initial implementation and the resource drain that implementation puts on the
company
` This lack of use of full functionality can also breed work-arounds and the need for eventual process redesign.
Deciding which to use can be a difficult choice that entails trade-offs between functional excellence (which
may be best served by best of breed solutions) and overall corporate performance (which may be best served
by highly integrated solutions)
www.ipamc.org
One company’s dilemma (a natural gas collector
and processor)
Purchased a corporate ERP system in 2001 to gather data from broad range of international operations
Implemented it across the company with basic configuration decisions
Carried on with customizations for each of more than a dozen business units to meet local needs
Continued to customize the system in response to regulatory and accounting changes over the past 5 years
Failed to enforce usage discipline at all levels and in all functional areas
` Some users used it extensively but most did not, some not at all – very inconsistent from one business unit to another and this
made transfer of personnel challenging due to the training required to learn different processes in different areas
` It wasn’t always used for purchasing, inventory and human resources needs – today, purchasing is highly uncontrolled
` Gathering of financial data is automated but must be manually verified for accuracy
In the past 2 years (new CEO on board) the company has shifted focus from an international market to a purely
North American market with a focus on low yield gas and oil fields where production is more dependent on large
quantities of processing equipment (generally a lot of gear with low capacity) so asset reliability is more
important to cost containment
` They can no longer afford high levels of unreliability and high levels of downtime
` They can no longer afford to “throw money” at problems
` They can no longer afford inefficiencies in purchasing and supply chain management
Today (only 5 years later) the company needs consistent business processes and results in maintenance across
all business units to meet its overall corporate business strategy
` It must support consistent “successful practice” processes
` It must support continuous improvement in reliability and asset management
` Maintenance processes must “integrate” smoothly with inventory and purchasing
However, their highly customized system can no longer be supported or upgraded by the vendor
` The company IT department has modified it beyond the point where it can be integrated with other functional areas yet that
integration is a key to their success
They are being forced to look at whole scale replacement of a corporate-wide enterprise management system
only 5 years after the initial investment
` These investments are on the order of $100 million +
www.ipamc.org
One company’s dilemma (a natural gas collector
and processor)
They are in this situation because they failed to focus on their business processes when they
first installed the system and they failed to enforce any discipline for those they did configure.
They bought one of the best systems that was and still is excellent for supporting corporate
integration and turned it into a collection of “best of breed” modules that fail to communicate
with each other and fail to deliver the results they need today
Their actions also provided a system that can’t be changed at any reasonable cost to meet
changing demands
They focused on the technology and limited their field of view to one functional area at a time,
ignoring the needs of the overall business.
•Had they followed successful practice in implementing their original system they could
upgrade it to current technology and retain full integration capabilities
•They would not need to change their purchasing and inventory management “culture” as
extensively as they are now faced with
•Maintenance could focus on reliability improvements without the need to get the basic
process disciplines in place (a two year job at least)
•They would not be faced with full scale system replacement – another two year project that
will likely cost them in excess of $100 million.
•Today all of this will take place in a tight labor market brought on by demographic trends and
a booming business environment
www.ipamc.org
What could they have done differently?
Instead of purchasing an integrated ERP to support only financial requirements they should have looked at all the needs of the
business
While integrated financial results were needed, the rest of their business culture would have been better served by best of breed
solutions
Examine existing business processes to learn what makes them work

Part of their business success is due to an entrepreneurial (cowboy) culture that is stifled by excessive controls, rigid processes and
complex systems – again, best of breed solutions would be suited this environment better
Look to the future of the business and its strategy to determine what directions the company is likely to take and what process
requirements may arise
Oil and gas demands have been rising steadily but limitations on supply have been demanding new and creative exploration and
exploitation techniques. This company was very good at that, but failed to allow for a great deal of flexibility that would invariably be
demanded
Design new, integrated business processes across all corporate functions with sufficient initial flexibility to support potential future
process needs
Their processes were not integrated nor were they consistent, even at a high level. This suited the cowboys but didn’t serve the
financial needs very well – the initial implementation missed the mark even for its primary customer (accounting & finance)
Implement a system to support the new fully integrated processes
Avoid the temptation to customize to achieve “best practice” in any one functional area – all changes must support the company’s
direction as a whole
Customizations build you into a box that is difficult and expensive to get out of, as it did here
Take advantage of technology upgrades from the IT supplier

Even if the technology undergoes a major change (as it has) it is easier to take advantage of vendor supported upgrades and migrations
than major conversions to new systems
Customizations (on a large scale in this case) completely shut the IT suppliers out of their business – it was good for IT department
jobs, but bad for the business in the longer term because the business is now faced with a huge bill to upgrade
www.ipamc.org
Don’t let yourself get into that same situation
Know where you are today – map your current business processes
Can your processes be made more efficient and more effective?
Redesigning for maximum effectiveness and efficiency
www.ipamc.org
Know where you are today – map your current
business processes
Some proponents of business process reengineering suggest that you don’t need
to spend time understanding the old processes – after all, it’s the new ones that
matter, so spend your time designing efficient and effective new processes
I disagree
Understanding the old processes and what it is that makes them work helps you
understand the company culture and how it really gets things done
It’s the people in the processes that really matter. Ignoring the old processes is
equivalent to ignoring that most important element – your people
Also, don’t just focus on processes, look at the business and where it is headed.
Look at the business environment and what it is likely to bring.
You won’t have a crystal ball, but you can still make the best forecast of future
needs if you “step back from the trees and look at the forest”
www.ipamc.org
Process mapping
In this activity you draw a line diagram (flow chart) of the steps in your existing
business processes
The steps will reflect the manual activities and the automated activities
www.ipamc.org
Sample process map
3.4.1 Identify and Evaluate Maintenance (1 of 2) This diagram shows

Policy Should clearly stated
links with other
Policy for
Emergency
communication requirement,
Definition etc. processes and
Work
MIC5 /
Maintenance
Supervisor
MIC5 /
Maintenance
where CMMS is
Originator Originator
START
Supervisor
used
Yes Yes
Should this be 3.5.1 Emergency

Is it real Maintenance
Any Fault / considered Emergency Verify Facts Emergency
Request work?
work?
Planners take
No
Possession
of Own Work Request
No or assign to Others
Originator Originator Planner Planner

3.6.1 Implement
Maintenance
Improvement Cycle Yes No Yes 1
Raise a Frequently
Do You Have Access Are You authorized to Has WR been
Work Review
To Ellipse raise WO for the assigned
Request Open WR
required WG to the correct
MSQ541
Work Group
No
Agreed that the only
position in Work Planner
Originator
Group to create WO No
Yes for Plan Work is a
Planner
Correct Work
Group
(MSQ541)
Originator
Advise
Supervisor
(MIC 5) Yes
TIC
Roles Involved in Process:
Originator Is a Work Request
MIC 5 required for subsequent
Maintenance Supervisor Ellipse Action?
Maintenance Planner
Maintenance Engineer No
Area Superintendent
www.ipamc.org
Sample process map
This diagram shows

links with other
processes but not
where CMMS is
used
It does imply CMMS

use by reference to
a data base
www.ipamc.org
Process analysis is aided by use of process
maps
Who does the

work is shown
in “swimming
lanes”
Activities are analysed

to see where the
volume of work lies
and where the costs
are incurred
www.ipamc.org
Data gathering
If you don’t have the sort of data identified on the previous slide, then you need to
gather it
Process observations and estimates
Data sampling
“Day in the life” studies
Experiment and observe just as you would for a Six-Sigma project
Pareto analysis
For variable data test for correlation against possible causes (e.g.: quality
variations vs. experience of employee)
www.ipamc.org
Gather documents that illustrate the various
steps in the process
Collect sample reports, sample work orders that are completed, work sheets,
check lists, etc.
You want to examine the real documents that are in use, not the ones that are
supposed to be in use
Look at those documents critically:

Are they understood?
Are they being completed?
What parts of them are being used? What parts are not being used? Why?
Does the document require excessive work to complete?
Does the document get used by someone downstream in the process or in another
process? Ask the user if it as valuable to them? How could it be improved?
Is all the information that is collected being used? If not, why not? Is it needed?
www.ipamc.org
Examination of the existing processes provides
insight
What is the purpose of the process? What’s its function?
What is being done? Who is doing it? Is that person the best for this activity?
Why is it being done? What are we achieving? Is it adding value? How does it add value for the organization? For who?
Why is it being done that way? This can reveal a lot about the culture of the organization and the way it “really works”
How much is being managed (# of WOs, # of transactions, etc.)?
What does each one cost? Is the cost reasonable?
How long does it take? Is the time frame meeting user demands?
How much is being backlogged? Do we have sufficient capacity to handle things the way we are today?
How much is being routed through “exception” channels? Or outside the process?
Are there any disconnects or discontinuities at handoff points, especially between departments?
Are risks being managed effectively?
Is the process under control? Is it being measured, managed and improved? Do measures drive behaviour? Is the behaviour what
you want?
Is the process informing those interested stakeholders with a legitimate “need to know”?
www.ipamc.org
The insights we gain from our existing processes can tell us a great deal about whether or not
our processes are meeting our goals
Can you get the results you want from

your process? Is it performing its
function?
Is it running smoothly or not?
What parts seem to be breaking down

the most?
Why are they incapable of taking the

load we are asking of them?
Is there a reason for that – were they

designed to take it in the first place?
Have the demands on the process

changed?
www.ipamc.org
Can your processes be made more efficient and
more effective?
This is a decision point.
If you decide that there is an opportunity you follow up by changing the process.
The fundamental questions:
Does the process add or destroy value as it stands?

Can it add more value than it is today?
www.ipamc.org
Can you redesign?
The nature of some processes is that they are constrained by factors that are not
within your control
You may have a process that could clearly add more value if it changed by say,
removing bureaucratic steps, but those steps may be required by regulators
In that case, you can’t do much about it
Willingness to invest in technology may also constrain your redesign efforts. Your
company may not want to make the financial investment required to implement the
potential redesigns. For example, you may want to implement unmanned access
to store rooms with bar codes and scanners using RF technology to streamline the
stores issue process, but the return on investment is too low to pass your
company’s hurdle rate.
www.ipamc.org
Redesigning for maximum effectiveness and
efficiency
At this point you have a process that needs redesign to stop destroying value, to
create value or to create more value
You want to
Maximize the outputs (service, production, quality)
Minimize the inputs (cost, time, risk)
www.ipamc.org
Redesign tips
Look at the existing process
Identify the steps that are inefficient, time consuming, costly
Identify the constraints on the process that cause it to be inefficient or ineffective
Identify the time and costs associated with the hand-offs between steps
Identify areas where backlogs pile up and the flow slows or stops
Ask “why is this the way it is”? Know what reasons underlie your findings, they
may be irrelevant today or they may still be very important
Identify what more we need from the process that it is not delivering today
www.ipamc.org
Redesign considerations
Ask:
Can bureaucracy be reduced? E.g.: approval steps – are they really needed if your
people are trained and truly competent?
Are there any excess moves, waiting time, filing steps or rework? Can these be
streamlined out or can quality be improved to eliminate rework and waste?
Is there an easier, simpler or more streamlined approach? Can you change to order
of steps? Balance workloads? Shift resources? Can we contract some of it out?
Can duplication of effort be eliminated?
Can sequential activities be done in parallel?
Can critical path steps be shortened or eliminated?
Can steps be error proofed to eliminate quality problems? Can standardization help
here? Can a specialist be used here?
Can any of it be automated? Look at simple, repetitive steps. Is there an
automated work flow or other system that can do this for you?
Does the work need to be done at all?
If there are lots of exceptions consider designing a new process stream just for
them, or eliminating the cause of the exceptions up front.
www.ipamc.org
If you decide to reengineer…
•Do it as part of strategic planning

•Address the leveraging of IT as a competitive tool
•Place the customer at the center of the reengineering effort
Concentrate on reengineering fragmented processes that lead to delays or other negative
impacts on customer service.
•Ensure it is "owned" throughout the organization, not driven by a group of outside
consultants and not driven solely by senior management
Make it yours from the start or it will never truly be yours
When things go wrong people will blame the “owner” make sure they will need to blame
themselves and somehow problems just get resolved
•Use teams comprised of both managers as well as those will actually do the work.
The more you involve interested parties in the process the greater the chances of success
implementing the redesigned solution
•IT should be an integral part of the reengineering team from the start.
•It must be sponsored by top executives, who are not about to leave or retire.
•The project must have a timetable, ideally between three to six months, so that the
organization is not in a state of "limbo“ between past and future practices
Be decisive and quick
•Do not ignore corporate culture and emphasize constant communication and feedback.
Culture, individual and group resistance can derail just about any change effort
•Use an unbiased facilitator, preferably someone from outside the organization
www.ipamc.org
Thank you for listening
Recommended Reading:
Campbell, John & Reyes-Picknell, James: Uptime, Strategies for Excellence in
Maintenance Management, 2006, Productivity Press, NY
Maureen Weicher, William W. Chu, Wan Ching Lin, Van Le, Dominic Yu: Business
Process Reengineering: Analysis and Recommendations, 1995, Baruch College, NY
Any questions? Please feel free to contact me:

James (Jim) Reyes-Picknell: +1-705-431-6598 or james@consciousasset.com
Web site:
www.consciousasset.com
www.ipamc.org

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Process Redesign

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Process Redesign

James V Reyes-Picknell, P.Eng.

What are business processes?

How processes evolve

Automating business processes – help or hindrance?

Are your processes meeting your goals?

Can your processes be made more efficient and more effective?

Redesigning for maximum effectiveness and efficiency

We want our business processes to be:

We want them to deliver value:

Value = Output = Results x Quality

1. Organize around outcomes, not tasks.

BPR (reengineering) addresses a corporate level requirement for change.

Business process redesign is like reengineering on a smaller scale. It can create

When every part is working

It delivers what its users want:

When any one part is not

Do your processes all work

If not, then some part is

Inputs Process Outputs

Value = Output = Results x Quality

Risk & Environmental

Mill Production Mgt

Mining Process Highest

Plant Services Process

Human Resources Minimum Environmental

Level MINE DEVELOPMENT MINING MARKET

Mine Technicians DRILL & BLAST MILLING

CONVEYING TO MILL HUMAN RESOURC.

Materials Management High Level

Issues Stock Re-Order

Stock Adds &

Stock Cycle Counts;

Here is a simple high level “stand alone” process –

You can see that each step in this process may

E.g.: Planning has several important steps

Job steps (not too detailed)

Maximizes results and quality of those

What it delivers How it delivers

 Work is done once and only once  Effective –

Contracting process Do their sub-processes always add value?

Support equipment supply For example

Do we really intend to destroy value ?

So how did we get there ?

The only constant in life is change!

Every change in our working environment demands some sort of response

Some of those are well documented and some are not

Some of those changes are introduced as “work-around actions” by the individuals

This complicates our business processes

So all these well intentioned changes can add up to be a (big) problem:

People are complaining about lack of consistency

Most cases get treated as “exceptions”

Computer system require frequent manual intervention and over-rides

It can’t be flexible in handling exceptions without being complex

A computer can make any process, even an ineffective one, efficient.

Different systems handle it different ways

1 Work Order = 1 Job

Examine existing business processes to learn what makes them work

Implement a system to support the new fully integrated processes

Take advantage of technology upgrades from the IT supplier

Are your processes meeting your goals?

Can your processes be made more efficient and more effective?

Redesigning for maximum effectiveness and efficiency

3.4.1 Identify and Evaluate Maintenance (1 of 2) This diagram shows

Work is done once and only once Effective –