Title: Operations Consulting Skills
1Operations Consulting Skills Business Process
Re-engineering
2Overview
- Operations management
- Consultancy stages
- Some Tools
- Principles of BPR
3Operations consulting
- - an expertise and research service to clients,
assisting them to -
- develop operations strategies e.g. product
leadership, operational excellence, quality,
just-in-time, BPR etc. - improve production service delivery processes
- Internal (management services, operational
research) and external
4Example Operations Consulting projects
- Plant, location and facilities management
- Adding locating new plant
- Expanding, contracting, or refocusing facilities
- Parts/Supplier Network
- Make or buy decisions
- Vendor selection decisions
- Processes
- Technology evaluation implementation
- Process improvement reengineering
- People
- Quality improvement
- Setting/revising work standards
- Planning and Control Systems
- Supply chain management
- Outsourcing
- ERP
- Work flow control and scheduling
- Logistics, warehousing and distribution
Source Chase and Aquilano
5Roles within Consulting Firms
Partners (Finders)
Service departments Finance, Marketing, HR
Managers (Minders)
Consultants (Grinders)
Source Chase and Aquilano
6Stages in Consulting Process
Decision point
- Feasibility
- Analysis and Unfreezing
- Sales development proposal
- Detailed Problem Analysis
- New system design and modeling
- Develop performance measures
- Evaluate options
- Present report recommendations
- Join team to implement changes
- Fine tune and ensure client satisfaction
- Review what has been learnt
Decision point
Decision point
Decision point
Decision point
Decision point
7Tools 1 Heuristic Problem solving
Analyse situation
Trend, urgency, size
Problem definition
Actual vs symptoms
Objectives/resources
Generate and Compare solutions
Options/criteria/costs
Implementation planning
Review systems
Info systems/visibility
8Tools 2 Surveys/Data gathering
- Methods
- Issue trees
- 5 forces competitive advantage
- Supply chain
- Value-added
- QualServ
- Systems analysis
- Customer employee surveys
- Gap analysis
- Prototyping
- Technical vs human
Plant observation/audits
Work sampling analysis
Information systems analysis
Flow charting
Organisation charts
Method study
9BPR Introduction
- Why does so much IT investment seem not produce
corresponding increase in productivity and
performance? - 1. Faulty measurements
- 2. Information Technology
- 3. Organizational process, structure and design
- Hammer Champy radically redesign key business
processes Reengineering The Corporation A
Manifesto for Business Revolution - Davenport Short highlight the relationship
between IT and BPR relationships The New
Industrial Engineering Information Technology
and Business Process Redesign
10Business Process Reengineering (BPR)
- Making processes
- effective - producing the desired resulted
- efficient - minimising the resources used
- adaptable - to changing customer business
needs. - BPR Philosophy
- Radical, cross functional, dramatic
- Focus on organise around outcomes
- Provide direct access to customers (internal
external) - Harness technology
- Control through policies, practices and feedback
- Enable independent and simultaneous work
- Build in feedback channels
Hammer and Champy, Re-engineering the
Corporation, Harper Collins, 1993
11BPR Focus
- on end-to-end business process that extends all
to the way to a customer (external or internal)
who receives some value from the process - on essential processes that deliver outcomes
- - moving flow
- - cross-functional in scope within enterprise
- - cross-enterprises
- assumptions about performance improvement thru.
reengineering - 1. clean-sheet rethinking
- 2. quantum improvements gt incremental
improvements - 3. use IT to re-engineer process in
qualitatively different ways - 4. maximum value-added in process, minimise
everything else - 5. measure value thru. surrogate performance
measures - 6. Change work environment to fit reengineered
process
12What is a Process?
- Definition
- A specific ordering of work activities across
time and place, with a beginning, an end, and
clearly identified inputs and outputs a
structure for action (Davenport, 1993) - A collection of activities that takes one or more
kinds of input and creates an output that is of
value to a customer (Hammer Champy, 1993)
13What is a business process?
- . a group of logically related tasks using the
firm's resources to provide customer-oriented
results to support organisation's objectives. - ..an operational or admin. system that
transforms inputs into valued outputs - typically
a task sequence arranged as a procedure perhaps
involving machines, depts. people. - making sandwiches to order
- seeing a sales order through from beginning to
end - stock replenishment procedures
- aircraft maintenance e.g. in hanger or on tarmac
between flights - . includes service support processes e.g.
engineering change or payroll process,
manufacturing process design.
14Kinds of process
- Operational (production) directly achieves
operational objectives - Control goal to maintain a state relating to
another process - Generic applicable to any group member (an
abstraction or class, essentials of a process
that may be shared) - Customised adaptation of a generic process to
suit specific objectives and using identified
resources - Enactable defined executed using process
technologies - Meta-process concerned with another process(es)
15System Thinking
- Systemicof a bodily system as a whole
(medically oriented definition) - of or concerning a system as a whole
- A framework of thinking, analysis and synthesis
- the ability to see the world as a complex system
- these are connected to those and everything
else - you cant just do this without those being
affected
16Systems view of business
Environment
Entropy
Transformation Process
Inputs
Outputs/outcomes
Adaptation
Information
Feedback
17Leavitt Diamond (adapted)
- A conceptual framework
- for evaluating balancing
- IT-enabled change
IT Use
Business Processes
Organisational Form
Change one variable adjust others e.g. new IT
business processes need to be changed. New skills
organisational form to match the IT?
Requisite People Skills
18Leavitt Diamond (cont.)
- BPR as well as successful organisational change
needs a balance of all these elements in a viable
combination - IT-driven perspectives emphasise importance of
integrated IT architecture - Organisational design perspectives focus on
finding new organisational form - Human resource perspective emphasise empowerment,
rewards systems and training - BPR perspectives focus primarily on business
processes
19Evolution of BPR
Degree of enabling IT
Knowledge Management
Web-enabled e-business
Time-based competition
1st-wave BPR
2nd-wave BPR
TQM
Richness of business transformation
20BPR requirements
- Need
- process owners - accountable for how well the
process performs - well-defined boundaries (process scope), internal
external interfaces responsibilities - well-documented procedures, work tasks training
measurement feedback controls close to point of
performance - customer-related measurements targets
- known cycle times
- formalised change procedures
- performers to know how good they can be.
21BPR - process innovation
- Existing, long-in-the-tooth practices (solutions
to past problems) may no longer reflect core
business concerns nor what the customer may
actually want. - Rethink redesign BPs for sharp improvement
(radical change) in performance, costs, cycle
times quality. - "If you want to get to Heaven, I wouldn't start
from here." Start with a clean sheet of paper - Imperatives
- evaluate core business activities
- consider BPs cross-functionally
- re-design radically, don't just tinker
- aim for sharp improvements in performance levels
22BPR serves
- the aspirations of business strategy makers
implementors. - target better operating ability to satisfy
customers - radical change may be needed. - a BPR programme is a tactic, a programme to
achieve desired results. - BPR in isolation from strategic plans will not
work. Commitment of strategic managers is
essential. - isolated BPR efforts will lack direction and will
get lost.
23BPR as Neo-Taylorisim?
- The aims, processes and outcomes of BPR have
roots in various organisational efficiency,
productivity and competitiveness movements.
24BPR, TQM the March of Ind. Engineering
- George Siemens (1839-1901) information
measurement systems. - Sci Mgt. work and method study FW Taylor, Frank
Lillian Gilbreth - Frederick Herzberg - Job enrichment
- Systems analysis for computer systems
- Deming et al - TQM and Kaizen
- In Search of Excellence (Peters Waterman)
- Value-added analysis (Porter)
- Creativity, lateral thinking, brain-storming
25BPR and Information Processing Systems
- Large software systems growing old,
- Limitations of early construction tools
- millions of lines of patched code to maintain.
- New tools (client server databases, graphic
interfaces, 4GLs) cut development and maintenance
costs - more knobs, buttons, access processing power
- Slow change in operational/administrative methods
because of dependency on complex mainframe
applications. - New technologies timely to re-design business
processes - Why generate a new IT system without improving
the business process it serves?
26Is BPR different from CQI?
- Continuous improvement
- Incremental gradual change
- Low investment
- People-practices focus
- Improvement on existing
- Work-unit driven
- BPR
- Radical change
- High investment
- People technology focus
- Scrap and rebuild
- Champion driven
27BPR Phases
28BPR Project
- An organisational change project with three
components business strategy, business process
and information systems - BPR must be linked with business strategy and
information system
29Steps in process analysis
- target the process area for change
- Business process
- Task process
- form a team. Select project leader
- decide on the objectives of the analysis
- define customers suppliers
- analyse (identify/ chart) the process elements
steps in the process flow - describe the existing transformation process
- develop improved process design
- gain management approval of the improved design
- implement new process design
30Participants in BPR Project
Process Owners
Process Participants
BPR Project Sponsors
Core BPR Project Team
BPR facilitators consultants
IT e-commerce specialists
Human resources specialist
31Identify process elements
- raw materials
- product (output) design
- job (sequence, simplification, discretion etc)
- processing steps used
- management control information
- equipment or tools
- people actors (direct/indirect staff,
customers, supply relationships (internal
external)
32PHASE 1 Organising for improvement
- Objective build leadership, understanding
commitment - Activities
- establish Executive Improvement Team (EIT)
- Appoint BPR champion
- provide executive training
- develop an improvement model
- communicate goals to employees
- review business strategy and customer
requirements - select the critical processes
- appoint process owners
- select BPR Team members
33PHASE 2 Understanding redesign the process
- Objective understand all dimensions of current
business process - Activities
- define process mission, scope and boundaries
- provide team training
- develop a process overview
- define customer/business measurements
expectations for the process - identify improvement opportunities
- errors and re-work high cost
- poor quality long time delays/backlog
- Record/chart the process
- collect cost, time value data
- perform walkthroughs on new process
- resolve the differences (existing/new,
ideal/realistic)
34Process definition and charting
- Analyse (identify and chart) the process elements
and steps in the process flow
35PHASE 3 Implementation
- Objective secure efficiency, effectiveness and
adaptability of the business process on
implementation - Activities
- eliminate bureaucracy and no-value-added
activities - simplify the process and reduce process time
- standardise and automate
- up-grade equipment
- error proof the process and document it
- select and train the employees
- Plan/schedule the changes
36PHASE 4 Measurements and controls
- Objective
- develop a process control system for on-going
improvement - Activities
- develop in-house measurements and targets
- establish a feedback system
- audit the process periodically
- establish a poor-quality cost system
37PHASE 5 Continuous improvement
- Objective
- to implement a continuous improvement process
- Activities
- Qualify/certificate the process
- perform periodic qualification reviews
- define and eliminate process problems
- evaluate the change impact on the business and on
customers - benchmark the process
- provide advanced team training
38Process Chart Symbols
39Method Study Questions for Process Analysis
- What does the customer need?, operations are
necessary? Can some operations be eliminated,
combined, or simplified?. - Who is performing the job? Can the operation be
redesigned to use less skill or less labor? Can
operations be combined to enrich jobs? . - Where is each operation conducted? Can layout be
improved? . - When is each operation performed? Is there
excessive delay or storage? Are some operations
creating bottlenecks? .. - How is the operation done? Can better methods,
procedures, or equipment be used? .
40BPR and Bench-marking
- The BPR team may benchmark another company's
process to determine - process objectives
- innovative practices
- tried and tested methods
- Benchmarking partners need not be from the same
industry. - A photocopying firm on re-engineering its order
processing system compared itself to mail-order
firms as well rival photocopy companies.
41BPR Problems
- Starting with a clean sheet
- Preoccupation commitment to existing business
processes - Thinking the problem thru. in the light of new
methods technologies - Choice of the target process - too big, too small
- The power and resourcing of the cross functional
team - BPR in isolation from strategic and ops plans
will not work. - Top commitment essential. Short-termism of
decision makers - Isolated efforts will lack direction and will get
lost. - Done at times of stress and anxiety
- Keeping the BPR team on target
- BPR team as action researchers
- Costs of the change
- Vaccination against change another quick fix
- Finding the time and energy
- We need to keep the old, existing core systems
running
BPR programmes tended To run out of steam. Has
BPR gone away - unfashionable?
John Gall, Systemantics - If it works, don't
change it!
42BPR for e-Business
- rethinking/ redesigning business processes at
both enterprise supply chain level to take
advantage of Internet connectivity new ways of
creating value - Redesign front-office processes that interact
with customers back-office processes (across
entire supply chains) - Changing the way the organisation operates,
handling physical e- business processes and how
people work
43Redesigning Business Processes
- Customer-facing
- provide value to process recipient
- outputs used by external or internal customers
- Cross-functional, cross-department,
cross-enterprise - completed task handed to another do next task in
sequence - Altering dynamics of information flows
- Knowledge that participants need created around
the process (data, reports, trends, exceptions,
FAQ ideas) - Multiple versions of business processes rather
than one-size-fits all - Degree of structure of a process highly
structured or fluid not tightly determined -