Accounting for Time :

Reengineering Business
Process to Improve
Responsiveness
by : A. Faye Borthick and Harold P. Roth

Halimah Tusya Diah/htdiahh@gmail.com

Kemala Putri Ayunda/
FAIL FAST, LEARN FAST, IMPROVE FAST

-Unknown
TIME-THE NEW COMPETITIVE ELEMENT

IDENTIFYING NONCONTRIBUTING TIME

USING FINANCIAL DATA TO IMPROVE RESPONSIVENESS

USE THE INFORMATION IN THE SUPPLY CHAIN TO AVOID REDUDANCIES

SYNCHRONIZE LEAD TIMES AND CAPACITIES IN THE SUPPLY CHAIN

REASONS FOR NON CONTRIBUTING TIME

 What is Business Process?

is a set of interconnected business

activities necessary to accomplish a
common objective or produce a
significant organizational outcome or
output
 What is Reengineering?

Is the fundamental rethinking and

redesign of business process to achiieve
dramatic improvements in critical,
contemporary measures of performance
such as cost, quality, service and speed
 What is Business Process Reeingineering?

is a business management strategy, the comprehensive

examination and redesign of an entire organization or a
major organizational unit for the purpose of making order of
magnitude improvements in organizational performance
originally pioneered in the early 1990s, focusing on the
anaysis and design of workflows and business process within
an organization.
 COMPANY COMPETITION

RESPONSIVENESS

ELIMINATING NON-CONTRIBUTING TIME

THROUGH BPR
 What is non-contributing time?

Any time in the total product or

services life cycle that could be
eliminated without diminishing the
cycle product's or service's value
 The existing types of process are as follows
1. Main process : process that contribute directly to the value of
services and products (eg;Product development, purchasing,
production, product care, logistics
2. Management Process : involve mainly the company's management,
administration, maintenance of the quality management system and
the development strategy performed by organization's management
(eg; document management, record management)
3. Support process : are administative process that contribute to the
performance of key perocess (eg: scheduling, accounting, finance,
human resources
How accounting can support te elimination of noncontributing
time. The techniques as follows :

1. Implementing Electronic Data Intercharge(EDI)

2. Modifying Capital Investment Evaluations, and
3. Improving Communication With Suppliers
Three kind of companies interested in redesign :

1. Companies engages in a fierce competition that need

major improvement
2. Companies which can anticipate problems to keep
their current competitive advantages
3. Comanies interested to keep their market leadership
position
 TIME-THE NEW COMPETITIVE ELEMENT

Blackburn
JIT Performance measuement
TIME IS AN ELEMENT OF COMPETITIVE ADVANTAGE
 IDENTIFYING NONCONTRIBUTING TIME

Reducing or Eliminating Non Contributing Time:

1. Using the information in the supply chain to avoid
redudancies
2. Compressing the supply chain cycle, internally and
externally
3. Synchronizing lead times and capacities in the
supply chain
 USING FINANCIAL DATA TO IMPROVE RESPONSIVENESS

• it needs accurate information about the activities that

cause the noncontributing time and the cost of those
activities.
• Company needs to use ABC
• Constructing a value chain makes it easier to determine
cost drivers, link consecutive activities, value intermediate
product, calculate supplier and customer margins