Operations Consulting Skills &Business Process Re-engineering

- 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

Operations consulting

4

Boom in Operations Consulting

Market pressures on clients to reengineer their core processes and eliminate non-core processes

Globalization

Need to better manage information technology

5

Categorization by Specialty

Size

Specialization

In-house

External

Example 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 AquilanoSource: Chase and Aquilano

Roles within Consulting Firms

Partners(Finders)

Managers(Minders)

Consultants(Grinders)

Source: Chase and AquilanoSource: Chase and Aquilano

Service departmentsFinance, Marketing, HR

Stages in Consulting Process

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

Decision point

Tools 1: Heuristic Problem solving

Problem definition

Analyse situation

Generate andCompare solutions

Implementationplanning

Review systems

Trend, urgency, sizeTrend, urgency, size

Actual vs symptomsActual vs symptoms

Objectives/resourcesObjectives/resources

Options/criteria/costsOptions/criteria/costs

Info systems/visibilityInfo systems/visibility

Plant observation/audits

Work sampling & analysis

Flow charting

Organisation charts

Tools 2: Surveys/Data gathering

Method study

Informationsystemsanalysis

Informationsystemsanalysis

Methods• Issue trees• 5 forces competitive

advantage• Supply chain• Value-added• QualServ• Systems analysis• Customer &

employee surveys• Gap analysis• Prototyping• Technical vs human

Methods• Issue trees• 5 forces competitive

advantage• Supply chain• Value-added• QualServ• Systems analysis• Customer &

employee surveys• Gap analysis• Prototyping• Technical vs human

BPR Introduction

Why does so much Tech investment seem not produce corresponding increase in productivity and performance?

1. Faulty measurements2. Information Technology3. 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”

Business 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

Hammer and Champy,

Re-engineering the Corporation,

Harper Collins, 1993

BPR 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 > 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

What 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)

What 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.

Kinds 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)

System Thinking

Systemic:“of 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 can’t just do this without those being affected”

BPR - 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

BPR 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.

BPR as Neo-Taylorisim?

The aims, processes and outcomes of BPR have roots in various organisational efficiency, productivity and competitiveness movements.

BPR Phases

Undestanding the Process

Streamlining Measurements and Costs

Continuous improvement

Organising for

improvement

BPR 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

Information System

Business Process

Business Strategy

Steps in process analysis

1. target the process area for change

Business process

Task process

2. form a team. Select project leader

3. decide on the objectives of the analysis

4. define customers & suppliers

5. analyse (identify/ chart) the process elements & steps in the process flow

6. describe the existing transformation process

7. develop improved process design

8. gain management approval of the improved design

9. implement new process design

PHASE 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

PHASE 2: Understanding & redesign the processObjective: 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 costpoor 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)

Process definition and charting

Analyse (identify and chart) the process elements and steps in the process flow

PHASE 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

PHASE 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

PHASE 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

Method 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? ….

BPR 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.

BPR 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

John Gall, “Systemantics” - If it works, don't change it!

John Gall, “Systemantics” - If it works, don't change it!

BPR programmes

tended

To run out of steam.

Has BPR gone away

- unfashionable?

BPR programmes

tended

To run out of steam.

Has BPR gone away

- unfashionable?

BPR 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

Redesigning Business Processes

1. Customer-facing

2. provide value to process recipient

3. outputs used by external or internal customers

4. Cross-functional, cross-department, cross-enterprise

5. completed task handed to another do next task in sequence

6. Altering dynamics of information flows

7. Knowledge that participants need created around the process (data, reports, trends, exceptions, FAQ & ideas)

8. Multiple versions of business processes rather than one-size-fits all

9. Degree of structure of a process –highly structured or fluid & not tightly determined

10

When are Operations Consultants Needed?

When faced with major investment decision(s)

When management believes it is not getting the maximum effectiveness from the organization’s productive capability.

11

Steps in a Typical Consulting Process

1. Sales & Development Proposal

2. Perform Problem Analysis

3. Design, Develop, and Test Alternative Solutions

4. Develop Systematic Performance Measures

5. Present Final Report

6. Implement Changes

7. Assure Client Satisfaction

8. Assemble Learnings from the Study

12

Operations Consulting Tool Kit

PROBLEM DEFINITION

Customer Survey Gap Analysis Employee Survey Five Forces Model

DATA GATHERING

Plant tours/audits Work Sampling Flow charts Org. charts

DATA ANALYSIS AND SOLUTION DEVELOPMENT

Problem analysis

Bottleneck analysis Simulation Statistical tools

COST IMPACT AND PAYOFF ANALYSIS

Decision Trees Balanced scorecard Stakeholder analysis

IMPLEMENTATION

Responsibility charts Project management techniques

Master Flowchart

Is ROI above par?

Investment too high?ROS low?

Costs above parLow Revenue

Industry Sales lowMarket Share Low Price too low?

Go to Industry Expansion Flowchart

Go to Financial Restructuring

Flowchart

Go to cost control

Flowchart

Go to Marketing Flowchart

Go to industry Expansion Flowchart

Go to Industry Expansion Flowchart

Yes

Yes

Yes

YesYes

No

Yes

Yes

Yes

FIG 1: MASTER FLOWCHART

Flowchart for Cost Control

High Direct Cost ? High Fixed Cost ?

High G & A and Non

Traceable cost?

High Internal Cost ?High Supplier Cost ? High R & D Cost?High S & M Cost?

Strategy to Reduce supplier Cost:

1. Just in time ( JIT)

2. Qualify other Suppliers

3. Qualify programme for Suppliers Q1

4. Critical Path Scheduling

Strategy to Reduce own direct Cost:

1. BPR

2. Renegotiate labour costs to allow flexibility

3. Material Resources Planning

Marketing Efficiency Strategy:

1. Target Only High Potential Segments

2. Replace Sales force with Telemarketing

3. Less Expensive Channels

4. Activities Based Costing ( ABC)

R & D Efficiency Strategy:

1. Focus Basic Research towards Development for target segments

2. QFD

Overhead Reduction Strategy:

1. Flatten the Hierarchy

2. Outsource non core functions in value chain

3. Decentralize into strategic Business units

At end of this flowchart Go to : Marketing

flowchart to check that cost reduction do not

destroy customer preference

FIG 2: COST CONTROL FLOWCHART

Flow chart for marketing

Do Loop For Each Segment i

Segment I already repeat purchasing

brand

Product Modification1. Flanker product to appeal to segment I2. Redesign existing product

Strategies to increase Volume1. Find new uses2. Increase frequency of use for segments

Has Segment I tried brand and liked it

Does Segment I prefer your brand to competitors

Does Segment I know brand’s strong

attributes

Can latent attributes be found that are

important to segment I, where brand always exceeds competition.

Strategies to increase Repeat Purchase1. Improve availability2. Channel push programme3. Reminder promotions

Strategies to increase Trial1. Samples2. Demos3. Coupons4. Point of purchase displays

Strategies to increase knowledge1. Advertising2. Public Relations3. Sales force training4. Channel training5. Change Ad agency

Brand Positioning

Yes

Yes

Yes

No

Yes

Yes

No

No

No

No

FIG 3: MARKETING FLOWCHART

Flowchart for Industry Expansion

Is Market Share in top 2?

Strategy for declining Markets

1. Sell Business

2. Buy up competitors below book value

3. Abandon unprofitable segments

Industry Growth Strategy

1. New uses, more frequent uses

2. New Customers regional or international expansion

3. New Products. Expand product line

4. Avoid unrelated diversification. “Stick to your knitting”.

Strategy for countering an unattractive industry:

1. Spin off Businesses

2. Reduce power of customers or suppliers

3. Encourage competitors to exit

4. Target a niche market that is sheltered

5. Legal intervention to reduce competition

Premium Pricing Strategy:

1. Skimming

2. Lifecycle analysis

3. Conjoint Analysis

FIG 4: INDUSTRY EXPANSION FLOWCHART

High Direct Cost

Is ROI high?

Why is revenue low

Star Business Strategy:

1. Develop more New products

2. Invest in Marketing

3. Standardize product more

4. Invest in R & D

5. Add Capacity

6. Automation

YesYes

Yes

NoNo

No

Price Premium DecliningIndustry Sales Declining

D ecreas in gC om p . p ressu re?

P rice

- M arke t C on d ition s- C om p etit ion

D ec rease

H ig h er M arg . C os ts- O rg . D ys fu n c tion

- O vertim e

In c rease

V o lu m e

S e llin g L essP ro fitab le Item s

P rod u c t M ix

R even u es

- A d d ed C ap ac ity?

F ixed C os ts

- R aw M ateria l P rices

V ariab le C os ts

- W riteo ffs- L awsu its

U n u su a l E xp en ses

E xp en ses

A n a lyze U s in gP ro fit E q u ation

G ath er In fo rm ation

W h at's D rivin gth e D ec lin e?

P ric e S en s it iv ity- E las tic ity

C om p etit ive E n viron .- S u b s titu tes

P ric e

E xis tin g M ark e t- P rom otion

- P lace

N ew M ark e ts- G eog rap h ic

- E c on om ies o f S cop e

U n it V o lu m e

R even u es

S ca le E con om ies/D is ec on om ies

- S u p p ly C on s tra in ts

In ven to ry M g m t.- C arryin g C os ts

- S h rin k ag e

D irec t M a te ria l

R ep lac e w /m ach in es- U n ion ?

D irec t L ab or

C os t A c c tg .- A lloc a tion D rive rs

- D oes p ric in gre flec t C os t

V ariab le O /H

C O G S S G & A

Can we explore economies of scope with entry into adjacent industry?

C om p etito rs P lan s

G lob a l C om p etit ion

S u b s titu tes

Th rea ts

In d u s try C ap ac ity

C yc lica l / S eason a l

E con om y

C on su m er tas tes

M arke t Tren d s

M arke t D em an d

B ott len ecks

D es ig n fo r m an u f.

Im p rove P rod u c tivity

A d d sh ifts

A cq u ire

O u tsou rce

A d d C ap ac ity

In ves tm en t vs . Im p rovem en t

S h ou ld W e In c rease C ap ac ity?

Prod u c tIs q u a lity sag g in g ?

PriceH ave sen s it ivit ies ch an g ed ?

O verp riced versu s ou r com p etit ion ?

P laceIs ou r d is trib u tion g e tt in g sq u eezed ou t?

A re C u s tom ers C h an g in g C h an n e ls?

Prom otionA re we sp en d in g ?

P u sh vs . p u ll?

H as p u b lic im ag e ch an g ed ?

Com pany

Tas tes ch an g in g ?

D isp osab le in com e?

D em og rap h ics o f ou r ta rg e t?

D o n ew su b s titu tes exis t?

Custom er

A re low cos t com p etito rss tea lin g from u s?

A re d iffen tia ted com p etito rss tea lin g from u s?

A re com p etito rs in teg ra tin gin to d is trib u tion an d

sh u tt in g u s ou t?

A re th ey o ffe rin g ou r cu s tom erssp ec ia l in cen tives to sw itch ?(p articu la rly w ith su b s titu tes )

Com petition

D o n ew taxin cen tives exis t?

A n y n ew reg u la tion sres tric t in g th e u se o f ou r

p rod u c t an d favorin g su b s titu es?

Regulatory

W hat Has Changed inthe Follow ing Environm ents?

Su sb situ tes

Dem og rap h ic ch an g es

New cu stom ers?

Valu es/Tastes

D isp osab le in com e

Matu re m arket?

P rice Sen sitivity

D istrib u tion ch an n el

Bu n d led p rod u ct?

Norm al g ood ?

Pu rch asin g Hab its

Cu sto m er- W h at d o th ey wan t?

- How d o th ey ch oose?

P rod u ct

P lace

P rice

P rom otion

Co m p etito r- W h ere are we p osition ed ?- W h ere is th e com p etition ?

Cost stru ctu re

Tan g ib le

In tan g ib le

F in an ces

Resou rces to resp on d ?

D istrib u tor

Ven d or

Cu stom er

Bu sin ess relation sh ip s

Co m p an y- How d o we ad d valu e?

• Given the above, is it worth making a competitive response?• How will the competition react?

• Applying game theory or PARTS analysis may help.

Pro d u ctHave we d on e h om ework?

W h at d oes th e seg m en t wan t?Proliferation of p rod u cts alread y?

PriceHave we exp lored sen sitivity?

Can we m ake a p rofit at th is p rice?

Pro m o tio nPu sh or Pu ll?

Cost of lau n ch ?W ill cu rren t p rom otion s h elp ?

PlaceIs d istrib u tion alig n ed w ith cu stom er?Are we exp erien ced in th is ch an n el?

Custom erDoes p rod u ct m et a n eed ?

Is m arket g row in g ?

Can we eat th e you n g ?

Man y

W h at w il b e th e strateg y?Low cost or D ifferen tiated ?

F ew

Yes

YesCan we b eat th em ?

NoCan we erect som e?

Are th ere b arriers to en try?

An y p reciou s resou rceth at we own ?

(R icard ian ren ts)

W ill we b e first m overs?

No

Com p etitionIs th ere an y?

F in an ceAre we ab le to fin an ce th e lau n ch ?

Sh ou ld we b u y an existin g p rod u cer?

Op eratio n sD0 we h ave cap acity?

Su p p ly n etwork?

M arketin gW ill we can n ib alize existin g p rod u cts?Is th is a com p lem en t / b u n d led g ood

Does it b u ild on resou rces?

Com p an yCan we d o it?

D oes it m atch ou r g row th s tra teg y?- R O E /R O I

A llian ce w ith loca l firm ?- Jo in t ven tu re /d is trib u to r

C an ou r resou rces su cceed overseas?- F lexib le en ou g h to ad ap t?

Is o rg an iza tion con s is ten tw ith overseas 'au ton om y'

C orp ora te V a lu es- B rib e ry

W orker's con d it ion s / ch ild lab or

In te rn a l

C u ltu ra l D iffe ren ces o f C u s tom ers- Tas tes / p rod u c t p re fe ren ces

- V a lu es / g en d er ro les

M eth od s o f C on d u c tin g B u s in ess- In trod u c tion s

- G overn m en t con tac ts

E d u ca tion a l D iffe ren ces

E con om y & E xch an g e R ates

S eason a lity- W eath er

D is trib u tion sys tem- Tran sp orta tion in fras tru c tu re

- D iffe ren t ch an n e ls

P o lit ica l C lim ate- In s tab ility

L oca l M arke t- S ize

- C om p etit ion

E xte rn a l

A m ou n t

T im in g- S ta rtu p / d isp os it ion

- O p era tin g

D iscou n t R a te

C ash F low s

R O I / H u rd le R a te

Q u an tita tive

U sefu l L ife

T im in g- O p p ortu n ity C os t

S ize- M arke t P o ten tia l

- O u tflow s- W ork in g C ap ita l

C ash F low s

- R isk F ree R a te- In fla tion

- R isk A d ju s t

D iscou n t R a te

N P V A n a lys is

S tra teg ic F it

- M iss in g L in kso f V a lu e C h a in

S yn erg ies

- S eason a lity- V o la tility- In fla tion

D em an d C yc le

E n viron m en ta l

S tab ilityR eg u la tion

P o lit ica l

- C u rren t S u p p lyP oten tia l D em an d

C om p etito rs

O th er F ac to rs

In ves tm en t D ec is ion

S tra teg ic O b jec tive S tren g th s & W eakn esses

R esou rces A cq u is it ion F it

In te rn a l F ac to rs

P orte r's F ive F orcesTh ree C 's

In d u s try A ttrac tiven ess

S oft Is su es- C u ltu re /F it

- M an ag em en t

H ard Issu es- P rice

- B a lan ce S h ee t

Id en tify A cq u is it ionC an d id a tes

E xte rn a l F ac to rs

A n a lyze O p p ortu n ity

U n d ers tan d P u rp oseD ivers ifica tion ?

G a in M arke t S h are?G eog rap h ic E xp an s ion ?

Y esTh en B u y B ack S tockto R a ise S tock P rice

N oC an W e R e lease G ood N ew s

to R a ise S tock P rice?

D o W e H ave C ash ?

Y es

Issu e D eb t, B u y B ack S tock

N o

A re W e H ig h ly L evered ?(R e la tive to th e In d u s try)

S e lf-H e lp

H as F in an c ia l S tren g th

S tra teg ic C om p atab ility

C u ltu ra l F it

C lass ic M & AIs th ere a F irm Th a t...

W h ite K n ig h t

Tw o O p tion s B o thD es ig n ed to R a ise th eV a lu e o f th e C om p an y

Definition of BPR

Four Elements of Reengineering Radical or at least significant changes Business process as opposed to departments or functional areas Achieving major goals or dramatic performance improvements IT as a critical enabler

Different Terms Business process improvement (Harrington, 1991) Core process redesign (Kaplan and Murdoch, 1991) Process innovation (Davenport and Short, 1990) Business process transformation (Burke and Peppard, 1993) Breakpoint business process redesign (Johanssen et al., 1993) Organisational reengineering (Lowenthal, 1994) Business process management (Duffy, 1994) Business scope redefinition (Venkatraman, 1994) Organisational change ecology (Earl et al., 1995) Structured analysis and improvement (Zairi, 1997)

BPR Project Problems

Other problems:

the danger of another inefficient system ignoring the embedded system knowledge accumulation over many years hidden agendas of top management and discontinues in the leadership poor choice of metaphors in the organizational language lack of communication selecting wrong IT vendors lack of awareness of the lead times associated with IT

Biggest obstacles that reengineering faces are

(i) Lack of sustained management commitment and leadership

(ii) Unrealistic scope and expectations

(iii) Resistance to Change.

70% of the BPR projects fail

BPR must be seen as a strategic, cross-functional activity that needs to be integrated with other aspects of management

The key requirement is that managers understand in detail the current business processes before embarking on a BPR project.

The application of Tech can provide major improvements in the performance of business systems, and while considered a major part of the reengineering activity, must be integrated with the needs of all stakeholders in mind.

Tools to reach your goals

Organizational Silos

Change Management Tools

• Recognize and leverage

•“Make customer satisfaction the universal language

• Business Process Redesign (BPR)

• Change Leadership Principles

Silo-Busting – where do we begin?M

arke

tin

g

Man

ufa

ctu

rin

g

Lo

gis

tics

Sal

es

Fin

ance

Reasons “destructive” silos develop

Lack of top management awareness and involvement

Absence of cross-functional knowledge, processes, and tools

Fear of sharing knowledge Misaligned metrics “I win – you lose”

Customer is shortest path to concerted action Customer pays the bills Customer is ignorant to internal politics External customer focus enables “blameless”

dialogue and problem-solving

Your organization’s customer satisfaction metrics provide the “starting point” for your

supply chain improvement agenda and lay the foundation for your change initiative.

Why performance does not happen

Customer needs/expectations are unclear

Measures of success are not clear/captured

No repeatable, consistent, scalable processes

Organization not aligned, skilled &/or managed to deliver

Business Process Redesign (BPR)

Addresses these issues to improve organization performance

Clarify customer expectations Define measures of success in the customers’

terms Create processes that drive consistent execution Organization structure, skills and

measurements are set up to support the processes and organization’s mission/role

Critical success factors of BPR Senior management support – must be visible

– Alignment at senior leadership team level Clear and consensed understanding of

customer requirements and expectations– Everyone must “sing off of the same songsheet”

Be aware of, and engage, the “Shadow Organization”

Involve everyone and communicate often Build strong internal relationships

Keys to change management success

Prepare the organization for what’s new/different Understand and leverage your informal leaders Create alignment at top of organization around

what “success” looks like Understand the nature of “learning curves” Keep the dialogue grounded in the customer-

relevant metrics and language

“Management System” components

Team-BasedTeam-BasedReward &

Recognition

Scorecard that Scorecard that Reflects CustomerReflects Customer

RequirementsRequirements& Process & Process ““Health”Health”

Problem-SolvingProblem-SolvingAccountability Accountability

For ProcessFor ProcessOwnersOwners

Communication Communication of Performance toof Performance toCustomers, Staff &Customers, Staff &Process PartnersProcess Partners

Continual Continual AssociateAssociate

Education & Education & Process TweakingProcess Tweaking