Lecture 7 - BPR Methodologies

Reference:

[1] Prasanta Kumar Dey, "Re-engineering materials management: A case study on an Indian refinery", Business Process Management Journal, Vol. 7 Iss: 5, pp.394 - 408, 2011

[2] S. Muthu, "Business process reengineering: A Consolidated Methodology", Proceedings of the 4th Annual International Conference on Industrial Engineering Theory, Applications and Practice, 01/11/1999

[3] Reviewing Reengineering Methodology, 17/03/2012,

http://www.prosci.com/bpr_method.htm

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Recap of the lecture:

Five Phases in BPR Methodologies [2]

Phase 1 - Visioning

• question on whether BPR is necessary/essential to the company
• involves great changes to the current situation to the company, needs in-depth planning from the top management to sustain the well-defined vision of the company
• know well about customers' expectation, the current area for improvements

Phase 2 - Mobilization

• balance between analysing as-is and to-be process, not to spend all time on to-be
• understand the current process
• importance of knowing the as-is: not neglecting the basic functionalities and required workflow after BPR
• prevent any dislocation of function

Phase 3 - Process redesign

• produce alternatives for the current situation, that fulfill the strategic goals
• involves evaluation of each alternative approach, people with similar backgrounds can help in giving opinion for betterment
• modeling and simulation can be used to compare outcome and efficiency of the alternatives

Phase 4 - Implementation

• IT infrastructure, organization and people's skills are adjusted to fit the to-be process
• opposition may occur for the re-engineer process
• development of transition plan for organization, IS and business policies.  this can be facilitated by using prototype and simulation techniques

Phase 5 - Monitoring and maintaining

• progress and result of the bpr has to be monitored continuously
• acceptance and feedback of personnels in the company are taken
• survey can be used to gather areas of improvement
• prepare moves for TQM

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Topic: BPR methodology phase revision

(Based on the case study of an Indian refinery)

Underlying reason for having BPR for Indian Oil Refinery – Mis-alignment of the conventional Materials Management

Materials constituted 60% of the total working capital of an industrial organization, however inefficient materials management has led to great loss of productivity.  Below is the illustration from case study on general BPR methodology (5 phases).

Phase 1:

With inefficiencies in the business process, many of the business process are running in unfavorable states.  These processes led to productivity decrease, loss of assets (e.g. materials) in the companies, rise in operating cost (e.g. accumulate of non-useful stock) etc.  The executive triggering issues are referenced below [1]:

Process prioritization

The prioritization was recognized by the overall scores of the attributes, which are graded according to the customer value structure.  CVS included the identification of customer in the process, and attributes of customers’ value.

Phase 2:

Mobilization: to formulate to-be processes, meetings were hold with participants in the BPR project.  It is used for understanding the areas for improvement for the current business processes.  In this case study, different functional groups’ executives were invited to a 5 day workshop.  Things to be discussed include the re-engineered process, as well as some essential steps such as mapping of current process (AS-IS), mapping re-engineered process (TO-BE), identifying assumptions, determining benefits and paradigm shifts etc.

This is one of the AS-IS process for investigation during the BPR meeting workshop [1].  Originally, a series of steps are gone through for one of the Material Management process.  The steps are illustrated by the case study.

Phase 3:

For the materials planning and procurement process, proposed process are formulated to fulfill the strategic goals of BPR, like increasing the overall efficiency.  Thus the process redesign are highlighted as following (2 are included here).

• Single window clearance
• More IT oriented system

Phase 4:

When talked about the implementation, the involved functional group and organization/people skills are adjusted to fit-in the implemented processes; in this case IT systems are incorporated.  From the above 2 re-engineered process, new unit called the CIPU was comprised into part of the IT system [1].  It retrieves specification for each material, which can be updated by correlated user departments (it also consists of an updated vendor database).  Thus, purchase proposals can be much easier done by the system after in-coming offers received.  Related personnel are trained to utilize the new CIPU system.

Phase 5:

Lastly, for monitoring and maintaining, the actual processes are evaluated.  Action projects are carried out to monitor the daily operation [1].

These projects ensured success practicing of new processes (TO-BE) within the business process.


Conclusion

There are quite a number of similar BPR methodologies practiced by many real world BPR projects, and they share common phases with only small differences.  Such differences can be due to the unique nature of certain businesses, which requires particular procedures/process re-designed to allow optimal BPR.  However, by looking at the Indian Oil Refinery case, we can easily identify the similarities of proposed BPR methodology learnt in class with the phases available above.