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Chapter 1
Introduction
Definition, Business Process, Business Process Improvement, Business Process Reengineering-The
Need Of BPR
# Definition
Business process reengineering (BPR) is the analysis and redesign of workflow within and between
enterprises.
BPR is the fundamental rethinking and redesign of business processes to achieve dramatic improvements
in critical, contemporary measures of performance, such as cost, quality, service and speed.
BPR is not:
Automation
Downsizing
Outsourcing
# 7 principles of BPR:
Organize around outcomes, not tasks.
Identify all the processes in an organization and prioritize them in order of redesign urgency.
Integrate information processing work into the real work that produces the information.
Treat geographically dispersed resources as though they were centralized.
Link parallel activities in the workflow instead of just integrating their results.
Put the decision point where the work is performed, and build control into the process.
Capture information once and at the source.
# Goals of BPR:
Customer friendliness:
Meeting customer requirement
Providing convenience
Effectiveness:
Output based approach
Gaining loyalty of customers
Image and branding
Efficiency:
Time
Cost
Effort
# Challenges of BPR:
Identifying customer needs and performance problems in current process.
Reassessing the strategic goals of the organization.
Controlling risks.
Maximizing benefits.
Managing organizational changes.
Defining the opportunities for reengineering.
# Business Process
A business process can be defined as a set of logically related tasks performed to achieve a defined
business outcome.
Chapter 2
Business Process Reengineering
Winning Order Criteria, Qualifier, Principles In Applying BPR, Methodology, Some Success Factors Of
Re-engineering
differ in their evaluation of the competitive strengths of a firm. Analyses the selling and buying actors’ perceptions
of order winners and competitive strengths as the degree of fit between these perceptions. A good fit means that
the two actors agree on order winning criteria and the firm’s competitive strength on these criteria. It is expected
that a good fit relates to a positive sales growth of the selling firm’s product.
The criteria can be:
Cheapest price than the competitors.
Better quality than the competitors.
# Qualifier
Order qualifiers are the basic criteria that permit the firms products to be considered as candidates for
purchase by customers. For example: A brand name for a car can be an “order qualifier”.
The criteria can be:
Registered company.
Legally exist.
Quality declaration.
Meeting specified quality and price.
# Methodology
BPI employs a structured methodology that reduces work processes to their essential composite activities,
and provides cost performance metrics to facilitate a business case for dramatic improvements. Both functional
and cross-functional processes are evaluated through workflow analysis and activity based costing. In many cases,
the application of new technology and industry best practices will enable quantum improvements in an
organization's cost and performance.
# Re-engineering model:
Develop expectation and organizational vision, mission, objectives
Strategic business planning
and actions plans
Scoping and redesign effort High level activity modes, select candidates processes
Assessment of the “AS-IS” process Activity and data modeling, activity based costing
Reengineering and design of the “TO-BE” Generate redesign alternative, evaluate and tests, simulation
process modeling
BPI cycle
Chapter 3
Change Management
Change Management From Different Perspective, Critical Elements Of Change Management
Business
Context
Organization
Current Processes
And
State People
Change
Management
Desired
State
Technology
# Top
10 mistakes made by top managers while implementing change:
Failed to provide visible support and reinforce the change with other managers.
Did not take the time to understand how current business processes would be affected by change.
Delayed decision making, which leads to low morale and slow project progress.
Were not directly or actively involved with change project.
Failed to anticipate the impact on employees.
Underestimate the time and resources needed.
Abdicated ownership of the project to another manager.
Failed to communicate both the business reasons for the change and the expected outcome to employees
and other managers.
Changed the project direction mid-stream.
Did not set clear directions and objectives for the project.
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Chapter 4
Quality Management
Defining Quality, TQM, TQM Tools, Process Capability, Statistical Process Control
# Defining Quality
Commitment
Quality is the degree, to which the design specifications Model
for a product or service are appropriate to its
function and use, and the degree to which a product or service conforms to its design specification.
Aesthetics
Phase
Serviceability
Adoption
t
Perceived quality
Reliability
Conformance
Installation
Acceptance
training. This involves the continuous improvement of organizational processes, resulting in high quality products
Contact
and services.
# Dimension of TQM:
#Quality
Critical Elements Of Change
strategy Management
ISO 9000
Change plan
Quality improvement
What and why you wantContinuous improvement
to change?
Deployment plan
Quality tools
How you will get the Cause
unit to&change?
effect analysis, brainstorming, process mapping, quality function
Implementation plan deployment, etc
How the unit will execute?
What the unit will do?
# TQM components:
# Critical Elements Of Change Management (also)
Planning
Implementation
Awareness
Monitor and control Why the change is needed?
Design
# Basic tenets of TQM: To support and participate in the
The customer makes the ultimate
change.determination of quality.
Top management must provide leadership and support for all quality initiatives.
Knowledge
Preventing variability is the How
key to
toproducing
change? high quality.
Quality goals are a moving target, thereby requiring a commitment toward continuous improvement.
Ability Improving quality requires theTo implement newof
establishment skills and metrics. We must speak with data and facts not
effective
just opinions. behavior.
Reinforcement
# TQM Tools To sustain the change (long term
Check sheets durable).
Pareto analysis
Control chart
Cause and
# Keyprinciples effect
driving thediagram
elements of change management:
Run chart
Targeted commitment levels
Flow chart
Executive ownership
# Process Capability
To know about the process capability first of all we must know what process control is – Process Control
refers only to the “voice of the process” i.e. looking at the process using an agreed performance measure to see
whether the process forms a stable distribution over time. Now we can say that Process Capability measures the
“goodness of a process” i.e. comparing the voice of the process with the “voice of the customers”; where, voice of
the customers is the specification range (tolerance) or the nearest customer specification limit.
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Here, the objective is to get as close to the theoretical best that your process can achieve by eliminating
special causes of variation, so that only common (natural) causes are acting on the process, and then to reduce
these to a minimum, whenever possible.
Process capability-:
Is a statistical indicator that measures how close a process is running to its specifications limit.
Measures of how well a given process is functioning.
Is dependent on a calculation of the total probability of defects reflected through sort-term variation
generally expressed.
Is a comparison of the actual variability of a process to the process specification.
# Types of processes:
Conversion (ex. Iron to steel)
Fabrication (ex. Cloth to clothes)
Assembly (ex. Parts to components)
Testing (ex. For quality of products)
Chapter 5
Product Design And Development
Product Life Cycle, Product Design Process, Concurrent Engineering, Quality Function Deployment,
Value Analysis, Product Design In Service Sectors
# Value Analysis
Value analysis is:
An organized effort directed at analyzing the functions of systems, products, specification standards,
practices, and procedures for the purpose of satisfying the required function at the lowest total cost of
effective ownership consistent with the requirements for performance, reliability, quality, and
maintainability.
The organized use of methodologies that focus on the functions of materials, processes, or services in
providing value to the customers.
People
Service
Post launch review
Full scale launch Technology System Concept development
Idea generation & screening
Formulation of strategies
Design Analysis
Chapter 6
Process Analysis & Design And Capacity Planning
Classification Of Process, Process Analysis, Process Selection, Selection Of Equipment And
Technology, Strategy Capacity Management, Some Quantitative Tools For Capacity Planning Process
Analysis In Service Sectors, JIT, Lean Production
# Classification Of Process
A process is a particular course of action intended to achieve a result.
Project Batch Mass Continuous
Type of customer One at a time Few individuals Mass market Mass market
No. of different
Infinite variety Many, Varied Few Very few
products
Mixing, Treating,
Primary type of work Specialized contracts Fabrication Assembling
Refining
Limited range of
Worker skills Experts craft person Wide range of skills Equipment monitors
skills
Highly efficient,
Flexibility,
Custom work latest Efficiency, Speed, Large capacity,
Advantage
technology Low cost
Quality
Ease of control
Non-repetitive,
Difficult to change,
Capital investment,
Small customer Costly, Slow, Difficult
Disadvantages Lack of
base, to manage Far reaching errors,
responsiveness
Limited variety
Expensive
Automobiles,
Machine shops, Print
Television,
Construction, Ship shops, Paint, chemicals,
Examples
building, Space craft Food stuffs
Computers, Fast
Bakeries, Education
food
# Process Analysis
Process analysis is the systematic examination of a process to understand the process in order to develop
ideas for improvement of the process.
Process flow charts
Symbolic representation of processes
Incorporates
➢ Non productive activities (inspection, transportation, delay, storage)
➢ Productive activities (operations)
Transportation Storage
Seasonal variations
Production quality and improvement
Resource protection
Availability, accessibility and reliability
Institutional factor:
Legal framework
National strategy
Institutional setup
Support from government, NGO and external support
Community and managerial factor:
Local economy
Living patterns and population growth
Living standards and general balance
Users preference
Financial factor:
Capital/cost
Budget allocations
Financial participation of users
Local economy
# Types of strategy:
Lead strategy is adding capacity in anticipation of an increase in demand. Lead strategy is an aggressive
strategy with the goal of luring customers away from the company’s competitors. The possible
disadvantage to this strategy is that it often results in excess inventory, which is costly and often wasteful.
Lag strategy refers to adding capacity only after the organization is running at full capacity or beyond due
to increase in demand (North Carolina State University, 2006). This is a more conservative strategy. It
decreases the risk of waste, but it may result in the loss of possible customers.
Match strategy is adding capacity in small amounts in response to changing demand in the market. This is
a more moderate strategy.
# Some Quantitative Tools For Capacity Planning Process Analysis In Service Sectors
Capacity planning is the process of determining the production capacity needed by an organization to
meet changing demands for its products. In the context of capacity planning, "capacity" is the maximum amount
of work that an organization is capable of completing in a given period of time.
Quantitative tools for capacity planning process:
Modeling
A methodology for predicting the future impact of change. In IT, this usually means a tool that can
map the existing environment and demands, and then add to this the projected demand, resulting in a
picture of the resource demands expected.
Trending
A simpler way of looking at future growth, it assumes that growth rates in the past reflect growth rates
in the future. It generates a straight line into the future to determine growth. This technique is
generally used only when actual projections are not known.
Linear regression
A method for determining the relation between two (or more) metrics. Assuming that they are related,
an equation can be developed which explains this relationship, so you can figure out what the value of
one would be from the value of the other. Most methods for calculating linear regression will develop
an equation and a line, even if there is no relationship between the variables, so it is important to test
the relationship (correlation) before putting too much weight on the result.
Forecast
The process of estimating the unknown. Take all the data you can find about the subject, hopefully
leaving only one variable to estimate.
Workload characterization
This is the process of mapping IT processes and transactions to a business unit of work. In the past, a
CICS transaction often was the same thing as a business transaction, but now, as many business
applications span multiple platforms and IT applications, this exercise is necessary. The end user view
is critical in performance reporting, availability management and even chargeback.
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Ultimate goal
A balanced rapid flow
# Benefits of JIT:
Low inventory carrying cost
Fast detection of defects in production
Reduce inspection and networks of parts
High quality parts at low cost
# Lean Production
Lean production or lean thinking (Womack et al., 1990; Womack and Jones, 1996) has its origin in the
philosophy of achieving improvements in most economical ways with special focus on reducing muda (waste). The
concept of muda became one of the most important concepts in quality improvement activities primarily
originated by Taiichi Ohno's famous production philosophy from Toyota in the early 1950s (Dahlgaard-Park, 2000,
p. 128). This philosophy was widely called as Toyota production system in Japan (Udagawa et al., 1995; Womack
et al., 1990), and it became later on (1986) labelled as lean production and lean thinking by Womack et al. (1990).
Lean production is a strategy that aims at high levels of production using lesser effort, time, and materials.
It is an integrated business approach to eliminate non – value added activities from the customer delivery cycle in
the operations. This approach enables companies to respond quickly and profitably to changes in customer
demands. The technique of lean manufacturing can be applied to every situation in a company by finding out what
the customer wants, eliminating waste from processes and making flow continuously according to customer pull.
The idea is to create a culture in which people at various levels of an organization are continuously improving their
productivity every day in every way.
Lean Production V/S Traditional Production
Systematic efforts are made to reduce supply chain lead Separate organizations link together through the
times market, and take what the market offers
Buffers are sized and located to perform their function Participants build up large inventories to protect their
of absorbing system variability own interests
Chapter 7
Operation Technology
The Internet, Design Technology, Production Technology, Technology In Service Sector, Benefits &
Shortcoming Of Investing New Technology, Enterprise Resource Planning, Management Information
System
# The Internet
An internet is a group of networks connected together. The internet refers to the global connection of
networks around the world. The internet is a world wide, publicly accessible network of interconnected computer
networks that transmits data by packet switching using the standard internet protocol (IP). It is a network of
networks that consists of millions of smaller domestic, academic, business, and government networks which
together carry information and services such as electronic mails, online chats, file transfer, and the interlinked
webpage and other documents of the World Wide Web.
The size, scope, and design of the internet allows user to:
Connect easily through ordinary personal computers and local phone numbers.
Exchange information using e-mails.
Access multimedia information that include sound, photographic images, and even videos.
Download information.
# Design Technology
Design technology will help:
Evaluate the viability of a design
Recommend appropriate development techniques
Propose appropriate manufacturing processes and systems
Propose appropriate quality assurance procedures in design and manufacture
Implement and evaluate technology in a business environment
Manage technology systems
Manage information systems
Specify and manage computer based resources
# Production Technology
Production technology includes:
Types of Automation
Automated Production Systems
Factories of the Future
Automation in Services
Automation Issues
Decision Approaches
# Types of automation:
Machine Attachments – one operation
Numerically Controlled (N/C) – reads computer or tape inputs
Robots - simulates human movements
Automated Quality Control – verifies conformance to specifications
Auto ID Systems - automatic acquisition of data
Automated Process Control – adjusts processes per set parameters
Automated Flow Lines (Fixed Automation)
Automated processes linked by automated material transfer
Automated Assembly Systems
Automated assembly processes linked by automated material transfer
Flexible Manufacturing Systems (FMS)
Groups of processes, arranged in sequence, connected by automated material transfer, and integrated
by a computer system
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improvement, satisfaction and cooperation. Principles of Total Quality are embodied in such applications
helping both humans and enterprises to become more efficient, to be satisfied and to achieve goals.
# Advantages of ERP:
Highly Graphics based User Interface.
Zero down time/planned down time.
Ready made solutions for most of the problems.
Integration of all functions ensured.
Easy enterprise wide information sharing.
Suppliers and Customers can have on-line communication.
Knowledge transfer between industries guarantees innovation.
Automatic adaptation to new technology.
# Management Information System (MIS)
In general term MIS is a computer system in an organization that provide information about its business
operations. Typically, it is also referred to as a central or centrally coordinated system of computer expertise and
management after including by extension the corporation’s entire network of computer resources. Thus, it is a
system that provides management with needed information on regular basis.
# Advantages of MIS:
Core competency support.
Enhanced distribution channel management.
Increased brand equity.
Boost production process.
Expand e-commerce.
Leverage stability.
Chapter 8
E-Commerce
Definition, Benefits And Limitations Of E-Commerce, E-Procurement
# Definition
E-Commerce, abbreviation for electronic commerce, usually defined as the conduct of business online, via
the Internet. Until recently, e-commerce was limited mainly to large companies and their suppliers, who connected
their computers together to speed up ordering and payment systems. Today, millions of people are involved in e-
commerce on the Internet – when, for example, they visit World Wide Web sites to buy books or CDs, order flowers
or pizzas, or check their bank accounts, etc. Thus, in short, e-commerce is the buying and selling of goods and
services on the internet, especially the World Wide Web.
# E-Procurement
E-procurement (electronic procurement, sometimes also known as supplier exchange) is the B2B or B2C or
B2G purchase or sale of supplies. Typically, e- procurement websites allow qualified and registered users to look
for buyers or sellers of goods and services. Depending on the approach buyers or sellers may specify costs or
invite bids.
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E-procurement is expected to be integrated with the trend toward computerized supply chain
management.
E-procurement is done with a software application that includes features for supplier management and
complex auctions. The new generation e-procurement is now on-demand or software-as-a-service.
# Types of E-procurement:
Web based ERP (Electronic Resource Planning):
Creating and approving purchase requisition, placing purchase orders, receiving goods and services
etc by using a software system based on the internet technology.
E-MRO (Maintenance, Repair and Operating supplies):
Same as web based ERP except that the goods and services ordered are non product related i.e. MRO
supplies.
E-Sourcing:
Identifying new suppliers for a specific category of purchasing requirement using internet technology.
E-Tendering:
Sending requests for information and prices to suppliers and receiving the responses of suppliers using
internet technology.
E-Reverse Auctioning:
Using internet technology to buy goods and services from a number of known and unknown suppliers.
E-Informing:
Gathering and distributing purchasing information both from and to internal and external parties using
internet technology.
E-Market sites:
Expands on web based ERP to open up value chains. Buying communities can access preferred
suppliers’ products and services, add to shopping carts, create requisition, seek approval, receipt
purchase orders, and process electronic invoices with integration to suppliers supply chains and
buyers financial systems.
Chapter 9
Reengineering And Humane Resources
Labor Planning, Job Design, Visual Workplace, Work Measurement
# Labor Planning
Labor planning or HR planning means forecasting the number and types of personnel whom the
organization will have to hire, train, and promote in a particular period in order to achieve its objectives, policies,
programs, and procedures.
What is workforce planning then?
At its simplest form it is ensuring that there would be: -
The right person
The right place
The right time
Accomplish aims of the organisation
No ONE workforce planning model
# Job Design
Job design is the process of linking specific tasks to specific jobs and deciding what techniques,
equipment, and procedures should be used to perform those tasks. It is also defined as the function of specifying
the work activities of an individual of group in an organizational setting. Job design helps to determine:
What tasks are done?
How many tasks are done?
In what order the tasks are done?
It takes into account all factors which affect the work and organizes the content and tasks so that the
whole job is less likely to be a risk of the employee.
Early approaches:
Scientific Management
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Job Enlargement
Job Enrichment
More recent approaches:
Job Characteristics Model
Social Information Processing Theory
Job design involves administrative areas such as:
Job rotation
Job enlargement
Job enrichment
Work breaks
Working hours
Job design is an ongoing process. The goal is to make adjustments as conditions for task changes within
the workplace.
# Visual Workplace
Visual workplace means showing labor work, teaching a line or providing a place to post their workshops
on answer questions. A visual work place means showing the all operational activities in one place in increasing
efficiency to the labor.
Set In Order means that you arrange needed items so that they are easy to use and label them so
Set In Order
that anyone can find them and put them away.
Standardize is the result that exists when the first three pillars – Sort, Set In Order, and Shine – are
Standardize
properly maintained.
Sustain &
Sustain is having the discipline to maintain a higher standard.
Safety
# Work Measurement
Work measurement is the application of techniques designed to establish time for a qualified worker to
carry out a specific job at a defined level of performance. It helps to:
Prepare realistic work schedule.
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