Process View of Organization

Prepared by:
A.LATHA
IT-FACULTY
INC –VIJAYAWADA,GUNTUR

process view organization 1

 What is a process?

Let’s take for instance a grocery shop where you stand in a queue
The process begins with you stepping into line, and ends with you
receiving your receipt and leaving the store. You are the customer (you
have the money and you have come to buy food), and the store is the
supplier.
So process steps are the activities that you and the store personnel
do to complete the transaction

What is a business process?

Business processes are simply a set of activities that transform a

set of inputs into a set of outputs (goods or services) for another
person or process using people and tools

process view organization 2

 What is Business Process?

• A group of logically related tasks that use the firm's resources to

provide customer-oriented results in support of the organization's
objectives.
• It has beginning and end points, interfaces and organizational
units.
• The three aspects of Business process are
 Objects: physical or informational
 Entities: process occur between organizational entities. they
could be inter organizational ,inter functional or inter-personal
 Activities: process encompasses two types of activies
:Managerial and Operational

process view organization 3

 Many companies began business process improvement with a continuous
improvement model. This model attempts to understand and measure the
current process, and make performance improvements accordingly.

You begin by documenting what you do today,

Establish some way to measure the process based
on what your
Do thecustomers want
process, measure the results
Identify improvement opportunities based on the data you colle

You then implement process improvements, and

measure the
performance of the new process
This loop repeats over and over again

process view organization 4

In the present scenario the continuous improvement model
does not work out effectively because of emerging new
technologies. As a result, companies have sought out methods for
faster business process improvement. Now they have to beat the
business by using the following questions so as to competitive the
business world like:

what should the process look like?

What do my customers want it to look like?
What do other employees want it to look like?
How do best-in-class companies do it?
What might we be able to do with new technology

process view organization 5

 Business Process Reengineering (BPR)

It begins with
defining the scope and objectives of your reengineering
project,
then going through a learning process (with your customers,
your employees, your competitors and non-competitors, and with
new technology).
Given this knowledge base, you can create a vision for the
future and design new business processes.
Given the definition of the "to be" state, you can then create a
plan of action based on the gap between your current processes,
technologies and structures, and where you want to go.
It is then a matter of implementing your solution.
process view organization 6
 Reengineering

• Totally reinventing and rebuilding the structure of a

corporation.
• Deciding to reengineer a company is a major decision
that has fair amount of risk attached to it.
• An existing process may be completely changed or
eliminated in favor of a new structure.
• Large savings in terms of money and time
Example: 1.Hp, XEROX,IBM
Distribute and Print to Print and distribute

2. case study of canon.doc

table of cannon.doc
process view organization 7
Issues:
» Understand why organizations opt for reengineering and restructuring

» Understand and appreciate the intricacies of restructuring and reengineering processes

» Understand the differences between reengineering and restructuring

In the mid-1990s, Japan's leading photocopier and camera manufacturer - Canon Inc
(Canon) - embarked upon a massive reengineering program to turn itself into a truly
global corporation. Fujio Mitarai, who took over as president in 1995, introduced
many changes in the company's manufacturing and management processes.
These changes were implemented in two phases - Excellent Global Corporation-
Phase I and Phase II. By reengineering its business processes, Canon was able to
revive itself without adopting painful strategies like retrenchment. In 2002, Canon's
total sales were ¥ 2,940,128 million, an increase of ¥ 381,901 million from 1996. Its
net income increased from ¥ 94,177 million to ¥ 190,737 million during the same
period.
Analysts attributed the success of Canon to the farsightedness of its management
led by Fujio Mitarai. Commented Hiroshi Kato, analyst at Tkegin Investment
Management Co. (Japan-based investment firm), "Mitarai is taking Canon in the right
direction."3

process view organization 8

The history of Canon dates back to 1933, when Saburo Uchida (Uchida) and Goro
Yoshida (Yoshida) established Precision Optical Instruments Laboratory (POIL), at
Roppongi, in the Azabu district of Tokyo. The lab was started to develop a camera
to compete with the German Leica model C.4
In 1934, POIL introduced 'Kwanon,'5 Japan's first 35mm camera with a focal plane
shutter. Priced at ¥195, Kwanon had a considerable price advantage over the Leica
which was selling at ¥500. In 1935, POIL launched 'Hansa Canon', a 35mm focal
plane-shutter camera and in the same year it also applied for 'Canon' as its
trademark. In 1937, POIL was incorporated as a joint stock company under the
name Precision Optical Industry, Co., Ltd (Precision), with a capital of ¥1 million.
During the late 1930s, the company also started manufacturing accessories such
as enlargers, filters, and special tanks for developers. In 1939, Precision began
making camera lenses, and in 1940 production of X-ray cameras commenced

In 1942, Takeshi Mitarai (Mitarai) an auditor with the company became Precision's
first president. In 1945, Precision commenced production of midrange JII focal-
plane shutter cameras, and, in the following year, it opened the Ginza camera
service station.

process view organization 9

In 1947, Precision changed its name to Canon Camera Co (Canon Camera). In
1949, the company's shares were listed on the Tokyo Stock Exchange, and it
established a chemical division to provide solutions to problems related to camera
materials. In the early 1950s, Canon Camera set up manufacturing plants at
Shimomaruko, Ohta-ku in Tokyo district. It also forged alliances with research
laboratories to develop new products. In 1954, the company along with NHK
Science and Technical Research Laboratories,7 developed television cameras. In
the mid-1950s, Canon Camera started setting up branches abroad. In 1955, it
established an office in New York (USA). In 1957, Canon Europa the sole
distributor in Europe was established in Geneva (Switzerland).
During the same period, the company acquired Chichibu Eikosha Co., (optical
components supplier) to establish Canon Electronics Inc. In 1958, Canon's
chemical division was reorganized as a research division and the company started
focusing on optical fibers and fixed lasers.

In 1959, Canon Camera entered the micrographics market through a tie-up with a
US-based company Documat Inc. In the same year, it entered the magnetic heads
market and the Synchroreader8 - Canon's first audio visual product was launched.
In 1961, it introduced Canonet - a 35mm camera with automatic exposure
mechanism. Canonet was a highly successful product with one million units being
sold in less than two years. In 1962, the company formulated its first five-year plan
with an aim to enter the business machines market and expand its research
activities. In the same year, the company established a product development
section. In July 1963, it produced a prototype of the 10-key calculator,9 but the
management was not keen on commercializing the product due to doubts about its
success...

process view organization 10

When Fujio took over as president of Canon, the company was structured in
different divisions based on the product lines with each product division working as
separate entity.
Though Canon had a wide range of products, it was not earning profits in all its
product segments. The company was making losses in PCs, liquid crystal displays,
optical memory cards, calculators and electric typewriters. There was no
coordination among the different divisions in the company.
So much freedom was given to each division that right from hiring people to setting
up overseas plants, they acted independently and without coordinating with the
other divisions.
In an interview with BusinessWeek, Fujio said, "These [profitable] divisions had
become so independent, they didn't think in terms of what would benefit the entire
company. It got to the point where divisions were building separate plants in China
at the same time. If they had planned it centrally and moved to China together, they
could have combined their costs. As it turned out, it cost Canon twice as much
because these divisions...functioned like separate companies..."

process view organization 11

Why Reengineering?

• Customers
 Demanding
 Sophistication
 Changing Needs
• Competition
 Local
 Global
• Change
 Technology
 Customer Preferences

process view organization 12

 What does BPR do?

It REVIEW the past AND RELOOK into the present REPOSITION

for the future. Everything is RE. This entire new approach is now
known as Business Process Reengineering (BPR)

REASSESSES – your business

purpose
REPOSITION -- for greater market
penetration
RECONFIGURE – for smoother
workflow
RESTRUCTURE – so that jobs
match reality
REVITALISE – for ongoing
competitiveness

bpr case study.doc

process view organization 13
 Enterprise-wide BPR for a Leading Indian Auto
Manufacturer

Business Challenge
Satyam helped a leading Indian automobile manufacturer of multiutility
vehicles and light commercial vehicles (LCVs). The manufacturer had
plants in four locations, an extensive supplier base and a distribution and
service network across India. For decades, the client dominated its
market. Recently, however, it has battled substantial competition in
several product categories. As such, the company worried that its
dominance would wane due to globalization, entry of manufacturers such
as Toyota into the Indian market, import of second-hand vehicles under
World Trade Organization (WTO) mandates, and more stringent
emission, noise and safety norms. Consequently, the company engaged
Satyam to analyze emerging scenarios and create a 5-year plan.

process view organization 14

Satyam Solution
Satyam outlined three broad phases the client would undergo during a Business
Process Reengineering (BPR)program. They were:

* Long-term Business Strategy.

Satyam helped the company identify suitable business opportunities and craft
strategies to capitalize on them, enabling the client to achieve its business
objectives, despite mounting
competition.
* Process-Centric Enterprise
(PCE) Phase I – Preparation.
Satyam created a plan for the client to migrate into a Process-Centric
Organization.
* Process-Centric Enterprise
Phase II – Transformation.
Satyam helped the client become a PCE by redesigning key business processes.
As part of the Long-term Business Strategy, Satyam advised the client to
establish new lines of business to mitigate risk. It also suggested that the client
leverage its current capabilities
in new markets.

process view organization 15

Satyam then assessed the client’s business functions and reconceived them as
key business processes. Senior managers were made responsible for the end-to-
end performance of these business processes. Later, fixed process goals, derived
from the corporate vision, were established. As part of this undertaking, Satyam
folded competitiveness improvement initiatives into the business process
framework, classifying them with the appropriate business process, and asking
respective senior managers to own them. Satyam also suggested that
management change its strategy slightly to sensitize employees to the need for
change, as well as its business impact.

At the same time, Satyam produced a Gap Analysis and catalogued the
company’s strengths and weaknesses for each involved business process.
This enabled the team to identify the root causes for performance gaps, and
gave it a better understanding of how to redesign the client’s process, structure,
and performancemonitoring frameworks. It also helped Satyam identify the
company’s core processes, which became the centerpieces of its operational
excellence program. The core processes were identified as:
Business Planning
Responsible for creating business strategies, setting policy and outlining
guidelines for operations and monitoring performance.
• Product Management.
Responsible for conceptualizing, designing, and developing new and
upgraded vehicles, as well as setting up manufacturing facilities
for their production.

process view organization 16

• Order Management. Responsible for converting orders for vehicles
and spares into finished products. Also oversees purchasing,
manufacturing, assembling and dispatching of finished goods.
• Customer Management.
Responsible for generating demand for vehicles and spares; resolving
customer complaints and maintaining relationships with customers; and
monitoring dealers and other intermediaries.
• Vendor Management. Responsible for identifying and selecting
vendors, monitoring their performance and helping them upgrade as
necessary. Identifying these core processes allowed Satyam to focus
its BPR during this company-wide transformation and gave the client a
significant advantage over its competition.

process view organization 17

Benefits
The BPR program produced dramatic benefits that affected every area of the
company. In the Product Management process, the manufacturer reduced
new product development time by 50 percent, from 72 months to 36, while
eliminating launch delays by instituting upfront planning mechanisms. In Order
Management, schedule adherence for vehicle dispatch improved from 70 percent
to 95 percent. And, in the spare parts department, order-to-delivery cycle
times were trimmed by more than 50 percent. Customer Management Processes
were enhanced, too. Sales forecasting improved from 30 percent to 70
percent and a customer complaint redresses were reduced by 50 percent.
Finally, in Vendor Management, the client reduced materials costs by six
percent and vendor development time by 30 percent.

process view organization 18

Salient Features of Reengineering

• Reengineering is improvement and it could be done with

individual process and on the whole.
• Leads to performance improvements by maximizing value added
content and minimizing production level costs.
• It involves in
 rewriting organization’s procedures.
 reviewing reward system and internal competitiveness.
 installing new measures of performance.
• It expects a total change in Organization culture.

process view organization 19

Stages of Reengineering

• Realization
 Identify the needs and threats
 Identify the sustaining level
 Leadership at all level of functions
 Collective effort to resolve problems quickly

• Essentials
 Identifying key essentials for customer satisfaction
 To establish key product and service performance
indicators

process view organization 20

• Rethink
 Reexamining the existing process

• Redesign
 Understanding the substance, make-up, behavior,
configuration and elements of work process.
 Through appraisal of the entire system.
 Individually evaluated for performance
 The redesign should follow the three principles:
• Requirements of customers and organization is met
• Job Satisfaction
• To Eliminate all waste and enhance the organization
competitive position.

process view organization 21

• Retool
 Identifying Competitive systems
 Evaluating the effectiveness through
• Mean Time to Failure
• Mean Time to Repair
• Mean Time to Dismantle
• O/P determined
 Reviewing the new tools for its weakness and effectiveness.
• Reevaluation
 To check whether Retool and Redesign have achieved the
goals.
 Reevaluating the entire process through the factors like
quality, productivity, customer satisfaction, market share,
variation levels, profitability index, job satisfaction indexes
and cost reduction savings.
 Ensuring Quality and Performance.

process view organization 22

Initiating Reengineering

• Reengineering a Large Business

 P & G – Reengineered towards Specialist Org.
• 1st: Reorganized into three separate businesses
• 2nd : Expedited the reengineering process
 Goal: To increase Shareholder value.
• Managing a Large Reengineering Initiative
 Analysis and Design
 Identifying Critical Factors
 Implementation Phase

• P&G identified a dedicative team called streams – Where each

stream works towards their objective.

process view organization 23

• Managing Change in a Reengineering Initiative.
 Eliminate human Resource issues
 Looking for feedback
 Involvement
 Identifying financial results
 Maintaining Speed

process view organization 24

Forms of Reengineering

• Three basic forms

 Systems reengineering
• Hardware reengineering
• Software reengineering. – CAD, CAM, CIM
 Infrastructure
• Includes people, processes, technology and resources.
 Business Process Reengineering
• A methodical, regimented progressive move towards critical
examination, rethinking, redesign and implementation.

process view organization 25

Business Process Reengineering

• A Process of changing the method of a task with the

use of current technology and meeting the demand of
current environment.
• BPR seeks improvements of
 Cost
 Quality
 Service
 Speed

process view organization 26

Key Characteristics

• Systems Philosophy
• Global Perspective on Business Processes
• Radical Improvement
• Integrated Change
• People Centred
• Focus on End-Customers
• Process-Based

process view organization 27

FEATURES OF BPR
Process Orientation: it helps the employee know how they
work with flexible/networked process.
Project Goal: project plans must include assignments,
responsibilities, deliveries, and schedule.
Rule Breaking :
Creative Use of Technology
Combining Several Jobs into One
Decentralization of Decision-making Authority
Multiple Versions of processes
Checks and controls are reduced
A single point of contact for a customer

process view organization 28

THE EFFECTS OF BPR
Changes in the nature of jobs
Changes in roles
Changes in the preparation for the job
Changes in the focus of performance measures and
compensation
Changes in the criteria for promotion
Changes in the values
Changes in the responsibilities of managers
Changes in the vertical organizational structure
Changes in the horizontal organizational structure

process view organization 29

Problems of Functional Division

• Process Departmentalization
 It refers to purchasing, manufacturing and sales.
• Purpose Departmentalization
 It refers to the arrangement of work around product
geographic locations or specific customers.
 The structure which focuses on the organizational output
rather than on the processes is also known as “Divisionalized
Organization”.

process view organization 30

• BPR and Functional Division
 According to philosophy hierarchical and functional
structure leads to inflexibility of organizations. It makes
slow, blamed for low productivity, long cycle times and
high costs.
 Common database
 Customer interaction
 Productivity
 Goal congruence
 Externalized

process view organization 31

 Division of Labour

• Organization is concerned with division of labour within

departments also.
• Work is divided into smaller units and encourages
specialization and high skills within functional area in
turn increases the output.
• Reduce communication delays
• Improve decision making

process view organization 32

BPR and Division of Labour

• BPR ensures integrity among members through its span of data

among departments.
• Task force team solves inter-departmental problems.
• Enables decision making at the lower levels of hierarchy.
• It prescribes self-managing teams comprising empowered
members as the solution to the problem.

process view organization 33

Technology as Process Enabler

• Using technology to reduce cost and increase quality of any

process
• It reduces labour cost
• Improves quality
• Reduce waste and Scraps
• Increase the efficiency
• Reduce set-up and lead time
• Improve communication, interaction and coordination

process view organization 34

Technology as Process Enabler

 Using technology to reduce cost and increase quality of any

process
 It reduces labour cost
 Improves quality
 Reduce waste and Scraps
 Increase the efficiency
 Reduce set-up and lead time
 Improve communication, interaction and coordination

process view organization 35

Failures

• Misuse of technology
• Non understanding of the technology
• No inclination towards change
• Fear among employees

process view organization 36

Automation

• It is a technology enabled process.

• It performs tasks by programmed commands.
• Enables process without human intervention.
• Controls, monitors and execute manufacturing activities.
• It follows the rules and procedures without any deviation.
• Optimize the process
• Improve the reliability of the results
• Predicts unsafe or abnormal operations in advance
• Results in increased productivity, efficiency and safety.

process view organization 37

Applications with Automation Technology

• Flexible Manufacturing System

 A Form of flexible automation in which several machine tools
are linked to the material-handling system.
• Robotics
 Based on two related technologies – Numerical control (NC)
and tele-operators.
• Automated Guided Vehicles (AGVs)
 AGVs are remote controlled vehicles that transfer materials
from stores to the workstations.
• Automated storage and Retrieval systems (ASRS)
 ASRS are computer controlled systems that automate storage
and retrieval of inventory.

process view organization 38

 Advantages of Automation

• Improvement in productivity
• Efficient use of materials
• Improvement in work environment for the workers
• Reduced factory lead time.

process view organization 39

 Disadvantages of Automation

• Negative feedback
• High initial investment
• Requires high level of maintenance
• Less flexible
• Requirement of technical manpower

process view organization 40

Mapping Existing process

process view organization 41

Mapping an Existing Process

• Identify the breaks

• Find the amount of time required by the activity to
perform
• Cost incurred
• Justify the reengineering

process view organization 42

Process Redesign

• An integral part of BPR.

• An Examination and plan of workflows and processes
both in and between organizations.
• It is an analytical study to bring improvements in the
performance and increase customer satisfaction.
• Goal is to simplify processes and to make organization
more efficient and effective.

process view organization 43

New Process Validation

• Done by allowing the user to simulate the execution of

a process.
• Using a process model validation tool
 helps the user to answer queries about the state of
process as it proceeds.
 Offers declarative language for process specification.
 Can simulate even when part of a specification is
available.

process view organization 44

process view organization 45