What does mean Process Reengineering with their Examples, Meaning, Definition and Steps involved 2400 words Essay; It isn’t just a change, but actually, it’s a dramatic change and dramatic improvements; this can only achieve through overhauling the organization structures, job descriptions, performance management, training, and therefore the most significant, the utilization of IT i.e. Information Technology. it’s the act of adjusting an organization’s major functions to extend efficiency, improve product quality, and/or decrease costs. This starts with an in-depth analysis of the business workflows and identifying key areas that require improvement; those that do that quite work are often remarked as PR specialists hire by companies to facilitate transitions to more standardized processes.
Here is the article to explain, Process Reengineering Examples, Meaning, Definition and Steps involved 2400 words Essay!
Your agency is making first-rate progress. You’re assembly goals without problems, but the way you meet desires is wherein the problem is. Business strategies play a vital position in driving dreams; but, they’re now not as efficient as you’d like them to be. Making modifications to the procedure gets increasingly hard as your business grows due to conduct and investments in old techniques. But in reality, you can’t enhance procedures without making changes.
Process Benchmarking, Processes ought to be reengineered carefully because experiments and errors carry in lots of confusion. In Process Re-engineering, corporations start with a blank sheet of paper and rethink existing procedures to deliver more fees to the patron. They usually undertake a brand new value gadget that locations increased emphasis on customer wishes. Companies reduce organizational layers and remove unproductive activities in two key areas. First, they redecorate practical companies into go-useful groups. Second, they use the era to improve statistics dissemination and choice-making.
It’s important to differentiate between this and enterprise process development; which makes it a specialty of clearly updating an employer’s modern-day procedures. PR, however, has ambitions to make fundamental adjustments to the whole scope of a business’ structures. PR specialists exist in all sorts of industries, so the specific everyday obligations will vary from process to activity. Below are you’ll study process reengineering examples, their history, meaning and definition, and also the Steps involved.
History of Reengineering;
The concept of reengineering started in the nineteen nineties when the Massachusetts Institute of Technology (MIT) conducted research entitled “Management in 1990”. The sole purpose of that research was to know the role played by information technology organizations during that time. Since that time a lot of research has been done on reengineering and different authors have different views on reengineering; which has raised a lot of controversy and disagreement among authors.
There are some like Druker who believed that inputs from new and innovative concepts should be used to optimize the productivity of all the operations; while there are some who believed that reengineering is a misconception and will soon disappear. In the 1880s Frederick Taylor suggested that process reengineering was used by managers to discover; the best process (way) to perform the work thereby increasing the productivity of the whole operation.
In the early 1900’s Henri Fayol originated the concept of reengineering and explained; it as a concept to derive optimum advantage from all the available resources by finding the best process to perform the work. During the time of Taylor and Fayol, technology was a bit of a constraint; and it was really difficult for the large companies to design the process in a cross-functional or cross-departmental manner.
Meaning and Definition of Reengineering;
The most popular meaning and definition of reengineering is;
“the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.”
This definition of reengineering includes four essential points which can summarize as follows:
While doing reengineering, business officials must ask them basic questions about their business like “what is their business”? “What are they do they want to do in their business”? And “what do they want to change?” Asking these questions brings clarity about the business operations and forces the people to look at the tactic rules; which their organization follows for doing business. Reengineering works in two steps. First, it determines what the company must do for the improvement and second, how they have to do it. Reengineering accepts nothing as it is, it ignores what is it like and concentrates on what it should be like.
The radical redesign means to get into the details of the things and not to make superficial arrangements for the things which are already in the place; but, to get into the roots of the things and look for new innovative and efficient ways to do the same thing more productively.
It is often said that business reengineering is about business reinvention and not about business enhancement, business improvement, or business modification. Hence, Reengineering is not about making small improvements but about making big, efficient, and noticeable changes to achieve quantum leaps in performance. Marginal improvement requires the fine-tuning of the operations but reengineering should only buy-in when there is a need for big changes for dramatic improvements Reengineering should buy in only when there is a need for drastic improvements which include changing the old things with the new things.
The word “process” is central to reengineering and it gives hard time to most of the managers of the organizations; because most of the managers job-Oriente rather than process-oriented. Job-oriented managers focus mainly on the job (task) at hand rather than the process involved in the job. Business processes are the collection of activities that takes in inputs of different kinds and create the output; which is of value for the client or the customer of the organization. Reengineering not only focuses on the different departments of the organization; but also the organization as a whole because of which reengineering sees the full picture of the work moving from one department of the organization to the another with keeping an eye on the operational hindrances on the way.
Steps involved in Process Reengineering;
Process reengineering methodology mainly includes the following steps below are;
Planning for reengineering:
Planning and preparation play a vital role for any process or event to be successful and the same applies to reengineering. Since reengineering involves major changes and is not for small improvements; and also it may include heavy costs, there should be a dire need for reengineering. This step starts with the consensus of executives of the firm for the process of reengineering. During reengineering the processes are reengineers in such a way that they actively work in tandem with the mission & vision statements of the firm. Understanding customer expectations is most important because the processes need to be re-engineered in a way that will lead to the maximization of customer satisfaction.
Mapping and Analysing As-Is Process:
Before reengineering any process, the reengineering team should know the existing process. The underline aspect of business process reengineering is to bring the changes drastically. Process reengineering is not for small and slow changes. Many people advocate that it should be a “To-Be” Analysis instead of an “As-If” Analysis. The usefulness of this step is in identifying anything that prevents the process from achieving desired results and in particular information transfer between organizations or people and value-adding processes and implemented by using different models used for the creation and documentation of activity and process models. Then with the use of activity-based costing amount of time and amount of cost consumed by each activity calculate.
Designing To-Be process:
This phase starts with looking for alternatives in the current situation; which molds well with the strategic goals of the organization. The first part of this phase begins with benchmarking which is a comparison of the firm with the other firms in the same industry. It’s a general practice to select industry leaders for the comparison so that the firm can use its best practices. This is not necessary to select the firm for comparison from the same industry; one can choose any firm from any industry with similar processes.
For example, both textile mills and food processing industries use Reverse Osmosis technology (process) for water purification; hence they can compare for the water treatment process. Next, we do activity-based costing analysis for analyzing the time and costs involved for different processes. Once ABC analysis is done To-Be models prepare using different modeling techniques. This is important to know that this modeling is an iterative process and different To-Be models prepare for the analysis. At last, we make a trade-off matrix to select the best To-Be scenario.
Implementing Reengineered Process:
The implementation phase is that phase where reengineering encounter maximum resistance. It is because the environment is not readily changeable and hence; it is the most difficult phase of all the phases in reengineering. As the firm invests a lot of time and incurs heavy expenses for the planning phase; it is justifiable to invest in training programs for the employees of the firm for the cultural change. Winning the hearts of all the employees and motivating them is crucial for process reengineering.
The next step is to make a transition plan to move from As-Is to the redesign process. The plan should choose in a fashion that goes well with the long-term strategy of the firm. Implementation of information technology that supports reengineering is a must for the process. The total amount of work that needs to be done for the reengineering broke down into different components using work break down structure techniques and these individual components are worked upon.
Improve Process Continuously:
The last but most important phase of any reengineering process is continuous monitoring of processes and the results which come from modified/improved processes. If there are deviations from the expected to actual then they should take care of immediately. The performance of reengineering measures the competitive advantage the firm gain by reengineering; the amount of satisfaction of the employees, and the amount of commitment management shows. Next, you know and understand why we need process reengineering in business from a few examples.
Process Reengineering Examples:
The ascendant popularity of business process reengineering since the 1990s means there are many business process reengineering examples. The most illustrative and frequently cited model is that of Ford Motor Company. In the 1990s, Ford began to use business process reengineering to make itself more competitive against global competitors such as Toyota, Honda, and Mazda.
In comparing operations to their more efficient Japanese competitors; Ford noticed they were employing a hugely outsized number of people in their Accounts Payable division: 500 in comparison to Mazda’s 100. Also, Ford used business process reengineering to understand and solve the problem of this overstaffing. Ford found that every time their purchasing department wrote an order for purchase.
A series of processes were triggered that required accounts payable to do not one but three things process the order from the purchasing department; process the copy of the order sent by the material control department, and process the copy of the receipt sent by the vendor. All of this took place before the accounts payable clerk could match the three orders and finally issue a payment. As part of the business process reengineering, Ford used digital technology to redesign the process and eliminate the inefficiency.
Ford process reengineering examples;
In the 1980s, many expanding American companies were looking for ways to cut down on administrative and overhead costs. Ford was no different. When ford started looking for things that could improve in the organization; they have spotted that their account payable department currently employs 500 people.
When Ford looked at their smaller competitor, Mazda, they were astounded to find out that their accounts payable department consisted of 5 workers. This meant if Ford implemented a similar technology, the company could reduce the number of workers to 100.
To understand, how they can make the department more efficient, Ford analyzed the old process:
- Once the purchasing department writes a purchase order, they have to send a copy to accounts payable manually.
- Then, the person responsible for resource allocation would receive the goods, and send a copy of the related document to accounts payable.
- Afterward, the vendor would send a receipt for the goods to accounts payable.
- The old process involved 3 distinct human interactions that required approvals, which had to obtained manually.
Ford decided to implement the innovative (at that tie) strategy of using computer software and databases to store and transfer information automatically. When done digitally, accounts payable processing becomes quicker and reduces the number of workers involved. The redesigned process worked like this:
- Purchasing office issues an order and inputs it into an online database.
- The resource manager receives the goods and checks if the order matches the information in the database
- If there’s a match, material control accepts the order on the computer.
The company selling commemorative cards Examples;
In a company that offers products such as Christmas, anniversary, commemorative cards, etc., renewing the stock and changing the design of the cards is constantly fundamental. On average, it takes three months for new items to reach the shelves. Across market research, it’s possible to realize that there would ideally be new products every month.
At first glance, it’s easy to say that the delay was at the production stage. When analyzing and mapping the process, it’s verified that the creation stage was the most time-consuming. Oftentimes the creative team receives the concept and several employees begin to perform the same task (duplicate actions), or an idea takes days to get off the paper. With this information, we can redesign the process completely, defining a cross-functional team from concept and creation, with incredible results in speed, costs, and effectiveness.
Cereal products Examples;
The process of transforming food into cereal products begins on the farm with the harvest. This follows by primary processing, packing, and transportation to the processing plants (depending on the grain). This large company analyzed its process and discovered a serious logistical problem. It lost almost 20% of the grains harvested during transportation from farms to the factories, located near the biggest consumption centers, due to the precariousness of the roads.
After a study, this Business Process Reengineering case concluded that it would be more profitable to move the factories nearer to the farms. Afterward, they transport final products to large centers with much fewer losses. The old factory sheds were transformed into distribution centers, helping to reduce the impact of the initial investment; they already had haddocks and other ready-made logistics infrastructure. The above examples of process reengineering are a very simple explanation, you may try our best Studybay Essay writer.