Business Process Reengineering
Part 3 of 6 

Cone Drive is a small batch manufacturing operation that produces double enveloping worm gears and speed reduc­ers. It competes in a market that is both mature and very competitive (with many of the competitors being located in countries like Japan and Taiwan). In the early 1980s, the management at Cone Drive decided that the current sys­tems for managing operations had to be changed. They decided that what was needed was a comprehensive com­puter-based system known as Computer Integrated Manu­facturing (CIM). One of the implications of implementing this new system would be that every employee would become more productive. However, given that the demand for speed reducers and double enveloping worm gears was flat (remember the market was mature), this meant that fewer employees would be needed. It was estimated that the plant would need less than 250 of the 550 employees currently being employed. Management went to its em­ployees with the proposed changes. To justify the need for these changes, an impact statement was presented.

Reengineering the Process: The focus of this activity is the process, not the various functions through which the process flows. As a result, the activities of BPR tend to cut across departmental boundaries. In carrying out this redesign of the process, BPR emphasizes certain critical themes in that it (1) is ambitious, (2) is process oriented, (3) is rule breaking and (4) emphasizes the creative use of information.

When dealing with BPR, we must be able to answer two critical questions: What is the goal of BPR? and "Why BPR?" To answer the first question, it is important to realize that the goal of any BPR project is not BPR. Rather, the goal is to close the gap, either real or perceived between what the targeted processes can deliver and what the targeted processes should deliver. In other words, with BPR, we are trying to make the desired output an inevi­table result of the operation of the process. We call this perspective a Poka-Yoke approach to approaches. In the JIT literature, Poka-Yoke is defined as the "foolproofing" of a system or operation. The goal of Poka-Yoke is to make the creation of errors difficult to do while making the attainment of the desired results a natural consequence of following through with the prescribed set of steps or activities. This perspective is very applicable to BPR.

Before dealing with the "Why of BPR," we must first realize that BPR is a strategic not a tactical activity. That is, the results of any BPR project must be a process (or processes) able to satisfy the need of either the internal customers or the external customers. An effective BPR project must result in processes changes that are both visible to and valued by the targeted customer groups. We can now address the question of "Why BPR?"

BPR is a response to a significant gap between processes capabilities and the expectations placed on the targeted processes. This gap can be either internally generated or externally generated. An internally generated gap is often the result of a change in corporate strategy. Here, top management has identified an opportunity in the market­place that demands a change in the appropriate supporting processes. In contrast, externally generated gaps are reactions to changes taken outside of the firm. These changes can result from the actions taken by our competi­tors, a major/sudden drop in sales or increasingly negative customer feedback. With internally generated gaps, top management is faced by the problem of making the need for change real (i.e., the problem of generating an appropriate impact statement which creates a sufficiently high level of urgency). Here, we are responding to a "perceived" gap. In contrast, when dealing with externally generated gaps, the firm is often placed in a reactive position. The threat is real; however, the problem is that the firm must act and act quickly to close the gap or it faces some serious conse­quence. To date, many of the experiences with BPR have dealt with externally generated gaps.

To be Continued