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Business Process Reengineering - Essay Example

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. N. 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. I”. 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. V. Redesign strategies and value added processes It means that the organization changes the business strategies and creates or improves their value added activities. 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 margin will be higher and it will lead to a greater income for the company. T. 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. ‘. 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. 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.

Empowerment 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. 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 ‘kaki’ 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. Mammas 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 centre 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 that actual production cost are less than the prior year cost. . 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. 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.

Acknowledge problems openly Every company has certain problems related to finance, competition, change in emend etc. Kamikaze companies are no exception, but by fostering an appropriately supportive, constructive culture it becomes easier for any team to get its problem in the open. The whole organization works as a team to solve the problem. The problems are openly shared by the management with the employees which avow ads rumors. It Simply means “FIGHT WITH YOUR PROBLEMS DON’T RUN BARROOM THEM”. Promote openness There seems to be less functional ring fencing I. . Only the senior managers have private cabins. Otherwise the workplace is generally open and in many companies even the dress code and canteen for everyone is the same Create work teams Each individual in a Kamikaze company belongs to work team headed by a leader. Working in various overlapping teams draws employees into corporate life and reinforces the mutual understanding. Cross- functional teams Kamikaze states that no individual or team has all the required skill and knowledge to complete a task.

Cross-functional teams help in getting all the valuable information’s from the view of all the related people. It calls for letting ideas to flow as wide as running on moon. Disadvantages Reluctant to change Most employees do not like changes as it will lead them to a new style of working By giving the opportunities to help in getting all the suggestion from the view of all the related people, they may be confuse to focus what are the best way to follows and also required a lot of time in considering which ways is the beneficially to them.

Real life example: A Case Study of New Kamikaze Activities at Tara plant (Toyota) This type of costing was used by Japanese automobile companies (Toyota). The assembly line at Tara plant was reorganized in 1995 clearly following the new concept realized first at Toyota Shush. However it was the assembly section itself that conceived this new assembly line, taking the initiative in product design and reconstruction of the assembly line. It began in 1991 where the revision in 1995 of the Helix Surf (sports utility) being assembled and the assembly of another sports utility (Land Cruiser Prod) from 1996 were planned.

On the basis of discussions held in the Committee above mentioned, the director of this assembly plant suggested to his assembly section’s manager (section chief) to prepare the revision of this sports utility by searching for an ideal assembly line. He then started to conceive it and organize engineers, “try team” staff, chief leaders and group leaders so that everyone would collaborate in order to realize an ideal assembly line about which he did not have any clear conception.

Then he fixed the orientation toward the reconstruction of his assembly line as follows: Construct an assembly shop where the workers can work easily and execute their operations “rhythmically’; Organize a human centered Toyota Production System; Form a kamikaze mind of everyone so that he/she willingly does kamikaze. The section chief thought that if the assembly shop were organized in such a way, it loud also contribute to increase production efficiency assuring quality and security, and then to reduce costs.

There were many problems to solve, which necessitated the collaboration of the product manager of these models, Product Engineering Design Sections, Production Engineering Division as well as those of Race and Hon. (Race designs the body of Land Cruiser Prod; Hon., that of Helix Surf whereas Toyota develops their chassis). In fact, the conception of new assembly line could not be developed without modifying vehicle structures and parts designs of these models. Comparison between BPR and Kamikaze approach.

Re-engineering Kamikaze Type of process Work best: cross organizational boundaries as complex interrelationship of variables. Degree of change Incremental or radical and usually affect an entire integrated process. Incremental or radical but usually only affect a limited sub process at a time. Speed Generally implemented in a big bang changeover Generates immediately noticeable and measurable changes Acceptance High risk of things reverting back to the way they were soon after the consultants leave. Since the people that actually do the work are the ones making the changes – acceptance are very high.

Cost Often involves expensive technologies, computers, and other system. Most “lean” changes are inexpensive or even free. Technology Reengineering project is often led by computer consultants. Most “lean” methods minimize or even eliminate reliance on technology with a preference toward visual methods and simplification. Similarities of Business Process Reengineering and Kamikaze Approach I. They increase the effectiveness and efficiency of the way the organization operates. It. These two approaches focus on lowering cost. Iii.

Customers’ satisfaction is always the goal for these two strategic management accounting approaches. Conclusion The Business Process Reengineering is the process of redesigning the business processes and the associated systems and organizational structures to achieve a dramatic change in the whole business process and performance. On the other hand, Kamikaze is a small improvements and changes for a better for business process and performance. It must be accompanied by change of method. Business Process Reengineering is a “project” with a defined beginning and ending. Kamikaze is a never ending process.