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Ordering drinks at coffee shops is actually a business process. The waiter takes orders from customers and yells them to the kitchen.
The kitchen helper starts preparing the orders while the waiter continues to take more orders. Once all orders are taken, the drinks are collected from the kitchen and served to the customers. Customers then pay for their drinks, and if there isn't enough change, the waiter breaks big notes into smaller ones at the counter. Sometimes, mistakes happen because orders are not written down, only shouted to the kitchen. This is a typical scenario in a restaurant setting.
The coffee shop has accumulated enough funds for a renovation and transformation into a restaurant. The boss recognizes the need to retrain staff for the new operation and incorporate more efficient equipment for order processing. This process, known as business process reengineering, involves changing methods and processes to improve efficiency and effectiveness. Business process reengineering entails organizational change through drastic process transformation (Mehta, 2011).
Concepts BPR focus & Objectives for companies to operate more efficiently, reduce waste, retain customers and drive sales, understanding and applying BPR is essential.
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Mapping out organization’s goals, objectives, primary business function, people and tools is the first step. The second objective is to analyze current processes and redesign/revamp them. This will lead to better ROI, waste elimination, competitive advantage and increased profits (Muharram, 2007). Perspective of BPR
The BPR framework is specifically created for businesses to implement in order to enhance efficiency by streamlining processes. An effective illustration of this concept can be seen when comparing a vertical organization structure to a cross-functional one.
Horizontal organization is the unification
In a horizontal organization, the customer interacts with one party only, simplifying the process.
In contrast, in a vertical structure, customers may need to deal with multiple departments. Figure 3 illustrates a customer working with their account manager to apply for a loan, without needing to navigate various departments. This streamlined approach, as noted by Zigiaris (2000), enhances the loan application process. On the other hand, a vertical structure can be less efficient as customers are required to interact with several departments for their requests. For example, in a call center setting, when a customer reports an IT issue, the department taking the call will address their case.
After being assisted by the technical department for 1st level troubleshooting, if the problem cannot be solved, it will be escalated to a level 2 support and product specialist. Once the issue is resolved, the customer will be transferred to the payment department to pay for the IT services. Following payment, the feedback department will email the customer to request feedback on the case.
One of the main goals of Business Process Reengineering (BPR) is to optimize processes within an organization and reduce lead time, which ultimately slows down the overall problem-solving process. To achieve this, businesses must examine their processes from a fresh perspective and ensure that they add value to their customers. Any processes that do not add value can be automated, allowing the focus to be on adding value instead. This approach leads to higher customer satisfaction, improved efficiency, waste elimination, and higher return on investment (Park, 2008).
BPR Methodologies There are several techniques to business process redesign and reengineering. We will discuss a few in this section. Hammer and Champy suggest that a major overhaul in the organization’s process and structure is essential for lowering costs and improving service quality, with the use of information technology being a key means of implementation. In addition to reorganizing and utilizing IT to drive the business, redesigning and optimizing work processes helps organizations reduce time, cut costs, and enhance quality (Rouse, 2009). A Case study of Ford Motor Company
Formerly, Ford had a team of 500 accounts payable staff responsible for tracking faults in purchase orders, receipts, and invoices. However, through a process reengineering initiative, the number of staff required was reduced to 125. The reengineering efforts at Ford included the creation of an online database to capture all purchase orders, as well as implementing a system where goods are checked upon receipt to ensure they match the database. This system allows staff to easily verify if the goods received were indeed the items ordered, eliminating the need for extensive manual checks. Additionally, goods marked as received are updated in the database in real-time. (Hammer & Champy, 2000)
Perspective of process reengineering by Hammer and Champy
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.
According to Rouse (2009), the methodology advocated by Hammer and Champy aligns with the BPR focus and objectives discussed at the beginning of the report. The main focus is on eliminating waste and enhancing customer value through deliverables. Utilizing IT systems to automate processes that do not add value is emphasized, as seen in the case study of Ford Motors. This approach of rethinking and redesigning business processes can lead to various improvements, including cost reduction, enhanced customer service, quality assurance, and workflow acceleration.
Enhancing Efficiency Through Business Process Reengineering. (2016, Dec 15). Retrieved from https://studymoose.com/business-process-reengineering-3-essay
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