W10 - Redesign Principles(1)

Source / Reference:
1) El Sawy's Redesign Principles and Tactics

 http://higheredbcs.wiley.com/legacy/college/turban/0471229679/add_text/ch09/el_sawy.pdf

Subject:
In Lect 10 -  Redesign Principles(1)
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Response:

Introduction

In Lecture 10, three generic ways for redesigning a business process have been introduced together with several principles and tactics for redesign. In this blog post, a brief introduction of ways to redesign a BP will be given first. Then a detailed analysis of the principles and tactics for redesign will be given, followed by a conclusion.

 

Analysis

Learned from the lecture, there are 3 generic ways for redesigning a business process including

• Restructuring the process - Restructuring and reconfiguring the process
• Informating the process - Changing the information flows around the process
• Minding the process - Changing knowledge management around the process
  

For each way, there are several principles and tactics associated with it, the following is a summary:

Restructuring

Principle #1: Lose Wait

Reduce waiting time in process links to create value

        -       Concurrency

        -       Closed-Loop

        -       Not Gating Main Process

        -       Continuous Flow

        -       Upstream Relieves Downstream

Minimizing the cycle time is usually the major goal for redesigning a process. In many processes, especially for processes adopting water flow approach, people often spend time on waiting. For example, waiting to be served in a bank, waiting for the completion of previous task in production line. 

However, waiting is a non-value added activity. Therefore, in order to increase the efficiency of a process, it is necessary to reduce the waiting time in process. Among the above tactics for reducing waiting time, I think concurrency is the most effective and widely-used one. Concurrency means redesign time-sequential activities to be executed concurrently. It also means parallel processing which is highly recommended to reduce cycle time. Just take the bank as an example, nowadays, most banks open several counters at the same time, this arrangement has shorten the waiting time of customers significantly. 

Principle #2: Orchestrate

Let the swiftest and most able enterprise execute.

        -       Partnering

        -       Outsourcing

        -       In-Sourcing

        -       Routing through an Intermediary

For each enterprise, there must be some areas which they are not familiar with. For example, H&M is a leading retailer but it is not an expert on establishing a supply chain system. In order to fulfill some unfamiliar functions and activities required to run a business, firms should rely on others instead of doing themselves. Outsourcing is one of the way which means to outsource a process to another enterprise. For example, some enterprise may hire a CPA to handle the financial and accounting issues. It would be a cost-reduction method if the company does not have the technology or expertise in this area. Thus, sometimes it is better to let the swiftest and most able enterprise do the execution.

Principle #3: Mass-customize

Flex the process for any time, any place, any way.

        -       Flexing Time

        -       Flexing Space

        -       Modularity

        -       Dynamic Customization

High customer satisfaction is always the key success for a business. Mass-customize is the most effective way to increase customer satisfaction. Mass-customize can increase the flexibility of a process, in other words, it increases the accessibility of customer to specify product or service. It would inevitably increase sales revenue and profit. Wal-mart is a good example of proving mass-customized service. Except for physical stores, Wal-mart has developed an online purchasing system which allows customers to shop online 24 hours a day, regardless of the location. This has significant increased the availability of the service and customer satisfaction as it brings much convenience to the customers. Dell is also successful in this area as it provide customers to design their own computers which has greatly increased customer intimacy.

Principle #4: Synchronize

Synchronize the physical & virtual parts of the process.

        -       Match Offerings

        -       Common Process Platforms

        -       Track Movement

Synchronization is important for every organization as it allows the physical part of a process to be complied with the virtual parts. Taobao has shown its effort in synchronization by allowing customers to track the movement of their purchased items electronically.

Informating

Principle #5: Digitize and Propagate

Capture information digitally at the source & propagate it throughout the process.

        -       Digitize at Source

        -       Make the process paperless

        -       Make Information Accessible Upstream and Downstream

        -       Shrink the Distance between the Information and the Decision

Digitization has become more and more popular these years. There is an increasing trend for companies to digitize all information. One common example of digitize and propagate is the issuance of passport. In Hong Kong, citizens can apply for a passport by only few steps through the internet, including accessing the government website, inputting the required information and choosing the delivery address. The whole process is digitally mediated. The process has become more efficient and convenient by digitization.

Principle #6: Vitrify

Provide glass-like visibility through fresher and richer information about process status.

        -       On-demand Information Tracking

        -       On-the-fly Reporting and Analysis

        -       Standard partner interface

        

It is proved that company with high transparency would be regarded as more reliable to customers. Providing adequate information to customers will greatly increase their desire to spend money on the business. FEDEX is one of the examples. It provides a tracking system for customer to track their packages. It makes the process highly transparent and increases the confidence of customers on the service. 

Principle #7: Sensitize

Fit the process with sensors and feedback loops to prompt action.

        -       Process dysfunction loops

        -       Monitor environmental change 

As the environment changes fast, it is important to be sensitive to the change of the surrounding. Process management is necessary to ensure the process run smoothly and correctly. Hertz has put some effort to achieve this by providing a sensitive pricing process. 

Conclusion

Although firms may differ in nature, the above principles and tactics are applicable for most processes. To successfully redesign a BP, it is possible to adopt several approaches at the same time. The key factor is to choose the one complies with the firm's structure. Also, it is possible to fine-tune the tactics so as to meet your requirements. 

W6 - Basics of BPR(2)

Source / Reference:
1)  "A BPR case study at Honeywell" by David J. Paper, James A. Rodger, Parag C. Pendharkar (2001)
http://www.bus.iastate.edu/nilakant/MIS538/Readings/BPR%20Case%20Honeywell.pdf
2) Total Quality Management 
http://en.wikipedia.org/wiki/Total_quality_management


Subject:
In Lect 6 - Basics of BPR(2)
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Response:
In Lecture 6, BPR evolution and a case study were given, as well as Business Process Management (BPM). In this blog post, I am going to compare TQM with BPR in different aspects and share something I've learned from the reviewed paper.

Part 1 : TQM v.s. BPR

Following is the comparison of TQM and BPR, which is based on what I have learned from the lecture and other resources on the internet.

Total Quality Mangement (TQM)
― A management approach for an organization that focuses on customer satisfaction in terms of continual improvement of the quality of its products and services.

-- J. Edwards Deming (Father of TQM)

Similarity: 

• Customer-oriented : aim at improving customer satisfaction
• Outside-in : think from customers' viewpoint
• Process-oriented : target to alter processes
• Teamwork : work on team

Difference:

•  Execution approach
• TQM : bottom-up
• BPR : top-down
• Assumption
• TQM : assumes that the existing system are principally right and useful
• BPR : assumes the existing system is useless and need to be take over

• Targeted improvement
• TQM : aims on smoothly and incremental improvements
• BPR : aims on dramatic improvements

• Duration
• TQM : Continuously absorbed in daily operation
• BPR : one-shot project

• IT involved
• TQM : non-IT based
• BPR : IT based

Summary:
TQM is a consolidation approach for the organizations to maintain continuously improvements.
BPR is suitable for firms in deep trouble or facing great challenges.
They are not mutually exclusive. Instead, a firm can adopt both approaches based on the situations. 

Part 2 :  Brief description and reflection on the reviewed paper:

This paper aims at uncovering how firms achieve success through exploring one organization's experiences with radical change which is called Honeywell. Different aspects in the firm's BPR are examined such as process mapping, execution and teamwork. At the end, ten lessons learned from the case study are given. 

 Reflection:
Among the ten lesson learned mentioned at the last part of the paper, I'd like to comment on the following points.


Lesson three: people need a systematic methodology to map processes

Process mapping is really important as it allows one to see how the process actually works across functional boundaries. In other work, it produces the "big picture" of the process. This creates a common language for dealing with changes to business processes.

However, in reality, it is common that most workers only know what their sections are doing but know nothing about how the previous steps are finished or what the next section would do. All they know is how the fulfill their duties. This is quite inefficient and affects changes. If all people involved in a process know all about the process, not only their own part but also the others, it will be easier to identify opportunities for improvement and becomes more efficient. Thus, it is important to development a systematic methodology to model the process and get everybody understand the whole process.

Lesson six: bottom-up or empowered implementation

One common reasons for BPR to fail is that the design process only involves top management. That is, the process and plan are designed by top management who may only have theoretical knowledge or even do not really know all about the process. This may inevitably lead to poor design. Instead, they should adopt bottom-up approach and empower workers at the bottom who actually do the work. Those workers at the front line may not good at planning and management, but they are skillful, experienced and have knowledge about how to do and implement the work as they are the one who actually do this. Involvement of lower workers in the design and planning process can help to produce a more suitable and efficient design.

Another thing I want to share about this article is the fail-safing mechanism.

Fail-safing is a method to identify a defect, analyze it to understand its root cause and then develop a solution that will prevent that defect from occurring again. It follows a PDCA cycle as shown below.

 

After process mapping, there would be a diagrams showing the entire flow of  a business process, however, no one can guarantee that it is defect-free. Thus, fail-safing is introduced to diagnose a defect within the process. One key feature of fail-safing is that it is a continuous process. After acting on the results, the team should ask itself what can be improved and then begins the cycle again. This happens again and again and generates continual improvement on the process. However, in reality, it is quiet hard to achieve as it is time-demanding.

Conclusion:
Although it is not easy to apply some theories or theoretical practices into the reality, a firm should try to achieve as much as possible. Because those are still useful and helpful even though you cannot apply all at the same time. The key point is to choose the most suitable one and modify it if necessary to make it yours.