Week 10 (Lecture 10) – Redesign Principles and Tactics (1)

Source / Reference:

1. Omar A.EI Sawy, Redesigning Enterprise Processes for e-Busines

2. Case study of Ford Motor Company:

http://www.qualitywaves.com/Articles%20about%20Process%20Reengineering/BPR%20UOW.pdf

Response:

In lecture 10, we mainly focus in the phase 3 Process Redesign of BPR Methodologies. I have learnt the Tactics for redesigning the architecture of business process for the e-business. All these principles and tactics are driven by diversified assumptions. The first assumption is maximizing the value adding content of a process. Value can be appeared in different manner, such as speed, cost, learning, and return on investment. The second assumption is manages non-value adding activities, such as management process, accounting. The third assumption is minimized everything else such as waste, valueless complexities, unnecessary obsolete activities and similar activities. The purpose of all the BPR projects are assumed to speed up the process by changing the structure of the flows associated with them.

Base on the assumption, we have the following eight principles for redesigning the architecture of business process.

Principle #0: Streamline

Principle #0 is the commonsense principle. Business process redesign is to streamline a business process to minimize waste, remove valueless complexities, obliterate unnecessary obsolete activities, and consolidate activities.

After defining the fundamental ground zero principle, the remaining principles are divided into three types for redesigning the architecture of business processes for e-business:

1.          Principles and tactics based on changing the configuration and structure of processes.

2.          Principles and tactics based on changing the information flows around processes.

3.          Principles and tactics based on changing knowledge management around processes.

In the following diagram, it shows the eight principles for redesigning the architecture of business process.  

1.         Restructuring the process

There are four principles that are related to the restructuring and reconfiguring the process. They are Lose Wait, Orchestrate, Mass-Customize and Synchronize.

Principle #1: Lose Wait

The major idea of Lose Wait is squeeze out waiting time in process links to create value. Common tactics for Lose Wait are Concurrency, Closed-Loop, Not Gating Main Process, Continuous Flow and Upstream Relieves Downstream.

Ø   Concurrency

The first common tactic is redesigned time-sequential activities to be executed concurrently. All the components have the same period. Therefore, they can perform parallel and complete at the same time. The process can be restructured from a serial batch process into a continuous parallel process that is coordinated with the help of IT which can use database and groupware to have multiple parties work on the same information at same time.

Ø   Closed-Loop

The second common tactic is created closed-loop teams for quicker flexible interaction. A process can be redesigned so that all the people necessary to deliver the outcome of the process and make the process flow smoothly are together in one coordinated team that crosses functions and specializations.

Ø   Not Gating Main Process

The third common tactic is the core value adding process should not be held up by a support or management activity. This can increase the efficiency of the core value adding process.

Ø   Continuous Flow

The forth common tactic is implemented real-time processing rather than the batch processing for avoiding delay on average in a service. Customers can have an instance response rather than waiting for a long time.

Ø   Upstream Relieves Downstream.

The fifth common tactic is to modify upstream practice to relieve downstream bottlenecks. Consequently, the upper structure will be modified in order to facilitate the downstream process.

   

Principle #2: Orchestrate

The major idea of Orchestrate is a group of enterprises collaborate jointly to execute and coordinate different parts of the process, each enterprise should be allowed to execute the area that they are good at. Common tactics for Orchestrate are Partnering, Outsourcing, In-Sourcing, Routing through an Intermediary.

Ø   Partnering

The first common tactic is partner a process with another enterprise which is partner with others to complete the job.

Ø   Outsourcing

The second common tactic is outsourcing a process to another enterprise, which means pay for an organization to complete the job.

Ø   In-Sourcing

The third common tactic is insource a process back into the enterprise which assign a specific procedures to an internal entity that specializes in it.

Ø   Routing through an Intermediary.

The forth common tactic is route the process through an intermediary which a person play an role between the consumer and the vendor.

Principle #3: Mass-Customize

The major idea of Mass-Customize is flex the process for anytime, anyplace and anyway. Common tactics for Mass-Customize are Flexing Time and Space, Modularity and Dynamic Customization

Ø   Flexing Time and Space

The first common tactic is flexible access by expanding the time window for the process. The flexible access by expatriating the physical space in which the process occurs. The purpose by supplying products or services that is not limiting to time or place.

Ø   Modularity and Dynamic Customization

The second common tactic is a process can be restructured for efficient mass-customization by creating a modular architecture for the procedure that allows different procedure outcomes to be generated through a common procedure platform, rather than having unique procedure paths for each.

  

Principle #4: Synchronize

The major idea of Synchronize is the physical and virtual parts of the process are synchronized. Common tactics for Synchronize are Match Offerings, Common process platforms and Track Movement.

Ø   Match Offerings

The first common tactic is the virtual component and physical component of the channel should be matched.

Ø   Common process platforms

The second common tactic is creating common process platforms for physical and electronic processes

Ø   Track Movement.

        The third common tactic is the movement of physical products should be able to       track electronically.

2.         Informating the process

There are three principles that are related to the changing the information flows around processes. They are Digitize and Propagate, Vitrify and Sensitize.

Principle #5: Digitize and Propagate

The major idea of Digitize and Propagate is capturing information digitally at the source and propagate it throughout the process. Common tactics for Digitize and Propagate are Digitize at Source, Make the process Paperless, Make information accessible upstream and downstream and Shrink the distance between the information and the decision

Ø   Digitize at Source

The first common tactic is shifting the data entry to customers and digitizes it

as close as possible to the source makes for more effective propagation of the information up and down the process.

Ø   Make the process Paperless

The second common tactic is making the process as paperless as possible ans as early as you can.

Ø   Make information accessible upstream and downstream

The third common tactic is the information should be easily accessible upstream and downstream to those who need it throughout the business process.

Ø   Shrink the distance between the information and the decision

        The forth common tactic is making the information more easily accessible upstream and downstream to those who need it throughout the business process.

Principle #6: Vitrify

The major idea of Vitrify is about the transparency of information. By vitrifying information, there will be glass-like visibility through information about process status. Common tactics for Vitrify are On-demand Information Tracking, On-the-fly Reporting and Analysis and Standard Partner Interface

Ø   On-demand information tracking

The first common tactic is providing on-demand tracking information for customers of the Process

Ø   On-the-fly reporting and analysis

The second common tactic is providing reporting facilities for on the fly analysis.

Ø   Standard partner interface

The third common tactic is Standard partner interface processes design can facilitate the exchange of information.

Principle #7: Sensitize

The major idea of Sensitize is the process should be fit the process with vigilant sensors and feedback loops can prompt action. Common tactics for Sensitize are Process dysfunction loops and Monitor environmental change.

Ø   Process dysfunction loops

The first common tactic is building in customer feedback loops to detect process dysfunctions.

Ø   Monitor environmental change

        The first common tactic is enabling software smarts to trigger quick business     reflexes, or attach environmental probes to the process to monitor change.

Case study of Ford Motor Company:

http://www.qualitywaves.com/Articles%20about%20Process%20Reengineering/BPR%20UOW.pdf

I would like to apply the concept on a company called Ford Motor Company (NYSE: F) which is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903.

For the principle #0 Streamline: Ford Motor done this successfully because the new process has a 75% reduction in head count (500 head counts before). The new process becomes faster, simpler and more accurate. It fulfills the principle #0.

For principle #1 Lose Wait: The reengineered process has also fulfilled this principle. The new process uses a Electronic Data Interchange (EDI) for transfer of purchasing orders, payment notices and other standard business documents .The centralized database allows multiple parties work on the same information at the same time. Therefore this case uses the tactic- Concurrency.

For principle #2 Orchestrate: I cannot find any significant tactics of this principle in this case study as there is no relevant information about partnering, outsourcing and in-souring.

For principle #3 Mass-customize: Ford’s use the flex the process as the database works for 24 hours every day. It allows all staffs to access the data at anytime.

For principle #4 Synchronize: The use of centralized database has the same offerings on the physical and virtual parts of the channel, both old and new process perform matching data.

For principle #5 Digitize and propagate:  Ford case obviously satisfies this principle as there are only three records for the account payable instead of 14 in the old process. The reengineered process can reduce the human effort, errors and shorten process cycle time. It also makes the process paperless.

For principle #6 Vitrify: The used of centralized database allows the on-demand information tracking on customers of the process. The authorized staffs, who are the receiver of the deliverables they can track the information by accessing the database, so it satisfies this principle.

For principle #7 Sensitize: The article I read did not mention about the customers feedback, however, I believe a successful company should apply this principle. Apart from collecting the data, control must be taken by analyzing the customer feedbacks. Therefore, I believe the Ford case satisfies this principle.