Page 137 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes 7.1 Business Process Reengineering

A central question in resource allocation is how the existing resources and competencies of the
organization can be adapted to fit new strategies. Strategic re-engineering focuses on designing
the organization to create a dramatic improvement in performance. This is accomplished by
undertaking strategic initiatives at the start of the reengineering process that seek to provide
understanding of the markets, competitors, and the position of the organization within the
industry so as to change existing business practices. Before the re-engineering of the business
processes are carried out, critical success factors required to compete are identified and prioritized.
Only then are the individual business processes addressed. Some of the important factors that
need to be considered in the re-engineering effort are given below:
 Place the customer at the centre of the reengineering effort — concentrate on reengineering
fragmented processes that lead to delays or other negative impacts on customer service.
 BPR must be “owned” throughout the organization, not driven by a group of outside
consultants.

 Case teams must be comprised of both managers as well as those will actually do the work
and should also be sponsored by top executives of the board.

 BPR projects must have a timetable.
 BPR must incorporate the organizational culture and must emphasize constant
communication and feedback.
The organization may sometimes choose to manufacture and market a new product range
through a new division or even a new company to avoid problems of conflict or incompatibility
with existing operations. In such a case, planning of resources requires structural considerations
and may also lead to issues of managing change.
An assessment of a fit between the strategy and the existing resources and competencies establishes
the extent to which implementation is likely to require major changes within the organization,
or is achievable by an adjustment of the current resource base and competencies.

Did u know? What makes a system?
Whenever several processes are interconnected using such input-output relationships, it
makes up the system.
Arvind Mills redesigned the value-delivery system for jeans. Arvind, the world’s fifth-
largest denim manufacturer, found domestic denim sales limited because jeans were neither
affordable nor widely available. At ` 1000 to ` 2000 a pair, they were beyond the reach of
the mass market. In 1995, they introduced ‘Ruf n Tuf’—a ready-to-stitch kit of jeans
components priced at about ` 300. Arvind Mills distributed them through tailoring outfits,
whose self-interest motivated them to market the kits to create demand for sewing services.
‘Ruf ’n Tuf’ are now the largest selling jeans in India, driving sales in Arvind’s main
product, denim, and netting the company a potentially powerful consumer brand.

Task “Organization through Business process reengineering can handle their change
management implications in operations and planning”. Give some practical examples of
the organization that applied the Business process reengineering concept in managing the
change for effectiveness.

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