Description
It explains process innovation with the help of Taste my pizza example.
Business Process Improvement
Business Process Innovation
K.B.C. Saxena Management Development Institute Gurgaon
• Entails strategy of developing focused solutions so as to eliminate the root causes of process performance problems. • Seeks to fix a problem leaving the basic structure of the business process intact.
Business Process Innovation
2
Approaches to Process Innovation
Problems with Process Improvement
• Process improvement involves performing the same business process with increased efficiency or effectiveness. • Process improvement often involves standardization, which in turn means rigidity. • Process improvement is an attractive approach to time and cost reduction, but is not likely to increase output variety and process flexibility.
Business Process Innovation 3
• Innovation as synonym for ‘reengineering’. • Innovation as ‘inventive problem solving’; e.g. using Altshuller’s systematic approach called TRIZ. • Innovation as creative thinking, focusing on brainstorming and a variety of related techniques that can help process teams think of alternative ways of accomplishing a process tasks. • Innovation as focus on communication flows in a process and not merely on process workflows.
Business Process Innovation 4
Business Process Innovation
• Involves redesigning a process making it more flexible and simpler than the old one, through innovative application of IT and/or organization structural changes. • Combines a structure for doing work with an orientation to visible and radical performance improvement. • Not merely improves process performance dramatically but also brings major improvements in quality, flexibility, service levels, or other business objectives. • Such initiatives start up with a relatively ‘ clean slate’ rather than basing them on the existing process.
Business Process Innovation 5
Clean-slate Thinking for Process Innovation
• How would you set up a competitor? • How would the ideal process look? • If you had to rebuild the organisation from scratch, how would it look? Public sector organisations: • What would be expected from the service if it was contracted out?
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1
Process Innovation as a Cleanslate Approach
Clean-slate approach requires answers to following questions: • What underlying needs are we trying to satisfy and for whom? • Why are we trying to satisfy these needs? (strategic fit) • Where do these needs need to be serviced? • When are we required to meet those needs? • How will we deliver the above?
– What processes need to be in place? – Who will operate them? – What technological opportunities exist?
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Developing New Process Design
Process Idea
Process Concept
Process Design
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Process Innovation Framework
• • • Review the information about existing processes and the customer s. If necessary, obtain additional knowledge of customers and world-class benchmarks. Generate innovative ideas for meeting current and future customer requirements, and for achieving breakthroughs in performance. Convert each idea into a ‘process concept’ consisting of a description of process output, a high-level flowchart, and estimated requirements for human resources, information systems, technology and equipments, facilities, and supplier inputs. Complete a ‘process concept selection matrix’ and identify the m ost promising concept beased on selection criteria. Develop a preliminary feasibility analysis of the process concept and qualitatively estimate benefits, costs, and risks.
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Understanding Existing Processes
• Identify core processes. • Review information about current purpose of these processes, its problems, and its sub-processes and workflows. • Concentrate on ‘ process value chain’: “How does the process create value for customers and the business?”, and not on “How does the process work?”. • Review customer requirements by interacting with them, which will help you see the process in a new context. Listen carefully to what customers describe as important and probe to ensure that you fully understand what they mean.
Business Process Innovation 10
• •
Review Benchmarking Information
• Benchmarks indicate results that other businesses have achieved. Studying benchmark processes may help borrow some of their useful ideas and techniques. • During benchmarking study, ask the following questions:
– Which competitors and industries are appropriate benchmarks? – What are the characteristics of worldclass processes? What are the workflows? – What do customers view as the ideal process output? – What process performance do competitors and non-competitors achieve? – What new technologies are competitors and other industries using in processes? – How much do worldclass processes cost?
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Taste My Pizza Example
Taste My Pizza is a local restaurant with a reputation for making the best pizza in the city. Two years ago, Taste My Pizza (TMP) decided to begin delivering pizzas to customers. It initiated the delivery process on a small scale with just one person delivering in a restricted area. Even in the restricted area, TMP took twice as long as competitors and pizzas were more expensive (but better tasting). The managing director (MD) recognised the opportunity for a substantial increase in profits if the business could attract new customers by providing fast delivery. The MD set breakthrough goals and appointed a team to reengineer the pizza delivery process.
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2
Taste My Pizza Example (contd.)
Reviewing reengineering goals and constraints:
The BPR team began by reviewing the breakthrough goals set by the MD: – Deliver pizza in half the time of competitors -- customers want to have pizza delivered within approximately ten minutes. – Deliver pizza that wins taste tests against both other delivered pizzas and restaurant pizzas. – Provide the extras typically found in restaurants, such as grate d cheese, garlic, and hot peppers. In addition to setting ambitious goals, the MD also set a few cr iteria (constraints) that the BPR team must meet: – Deliver pizza to any customer in the city. – Capital investment for new equipment or technology cannot be more than 1.2 times the current yearly profits.
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Taste My Pizza -- BPR Review Process
The BPR team reviewed the existing pizza delivery process: 1. Customer telephones the restaurant to place an order. 2. Employee answers telephone, writes the order, and hands order to chef in the kitchen. 3. Chef assembles pizza by hand. 4. Chef bakes pizza by hand. 5. Assistant verifies the heated pizza matches the order and places it in a cardboard box and then in a insulated carrier. 6. Driver picks up pizza, gets small bills for change, checks map in store, gets in car, and drives to customer’s location. 7. Driver gives pizza to the customer, collects cash (no credit), and gives change to the customer.
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Taste My Pizza -- BPR Review Process (contd.)
• Review of customer requirements:
– – – – – – – – – – – – Easy to contact and order pizza Good variety of toppings Pizza comes with the toppings ordered Pizza costs less than competitors Vegetarian version available Balance of crust, sauce, toppings Pizza tastes great Pizza is hot when delivered Pizza is delivered quickly Pizza is a good value Pizza is not greasy Crust tastes good
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Taste My Pizza -- BPR Review Process (contd.)
• Review of benchmark information:
– Most competitors guarantee delivery in under an hour, the best competitors guarantee delivery within 30 minutes. – Prices for a large cheese pizza range between $6 and $11, most competitors do not charge directly for delivery. – Both customers and competitors rate Taste My Pizza as the best tasting pizzas delivered in the city. – All competitors have similar processes, with a centralised store that takes the order, assembles and heats the pizza, then hands it off to a delivery person. – The competitors with the shortest delivery interval have many centralised stores in the delivery area, evenly distributed throughout the city.
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Taste My Pizza -- BPR Review Process (contd.)
The BPR team also reviews benchmarks from local pharmacies that deliver prescriptions to customers. Although this is a different industry, the BPR team thought that the delivery processes were similar:
– Most pharmacies add an additional charge for delivery. – Most pharmacies that deliver are stand-alone stores. – The best pharmacies deliver prescriptions within 15 minutes, although none of them guarantee delivery within 15 minutes to customers who live more than five miles away. – To generate revenue and subsidise free or low-cost delivery, a few pharmacies deliver and actively promote the sale of nonprescription merchandise ordered with prescriptions.
Generating Innovative Process Ideas
• Brainstorming ideas for solving process problems. • Selecting plausible ideas.
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What is an idea?
• An idea is a simple, bare-bones thought about a possible process. It is a simple, core solution that enables the business to achieve its ‘radical performance’ or breakthrough goal. • Generate one to three truly innovative ideas. Express the ideas as simple sentences:
– A centralised database will eliminate redundancies, resulting in significant reductions in interval. – Automated operations will drastically reduce costs. – Co-location of functions and parallel processes will result in a significant reduction in cycle time.
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Generating Ideas: Creativity Barriers in the Culture
• • • • • • Right answers. You may be anxious about the need to reach the right answer. In problem -solving, several answers may be right. Logical thinking. You may be tempted to disregard solutions that you cannot immediately prove with logical thinking. Rules. You may be tempted to follow the rules. You must challenge the rules to become creative. Practicality. You may focus on practical ideas. You should answer “what if” questions that are contrary to fact, for example, “Wha t if it is easy and inexpensive to travel faster than light?”. Seriousness. Overly serious people may hinder your creativity, which is enhanced through “playful thinking”. Specialists. Experts and specialists may know so much that they hinder your creativity.
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Generating Ideas: Creativity Barriers in the Culture (contd.)
• • • • Obvious solutions. You may be tempted to accept the first obvious solution. Group think. You may have a tendency to grow with the crowd. Perfection. You may be afraid to fail!! Self-fulfilling prophecies. You may have a negative perception of your own creativity!!
Generating Ideas: Thinking Like A Customer
• Thinking in terms of what customers actually need often sheds new light on the purpose of the process. • Example: Improving a supermarket operations
– Traditional view: Consider wider aisles, fresher produce, shorter check-out lines. – Perceived customer requirements: Consider bar -codes, money taken electronically from credit card. – Actual customer need: Consider food delivered to the customer’s house after the customer presses a touch-screen terminal to order food, with the purchaser price electronically charged to a credit card.
21 Business Process Innovation 22
Business Process Innovation
Principles of Process Redesign
• Organise around outcomes and not tasks. One person should perform all steps in a process. • Have those who use the output of the process perform the process. • Subsume information-processing work into the real work that produces the information. • Treat geographically dispersed resources as though they were centralised by using databases, networks, and standardised processing systems. • Link parallel activities instead of integrating their results after the fact.
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Principles of Process Redesign
(contd.)
• Put decision points where the work is performed and build control into the process through IT (such as expert systems or executive information systems). • Capture information once and at the source. Use barcoding, relational databases, and electronic data interchange (EDI) to make it easy to collect, store and transmit information for all who need it. Eliminate extensive information exchange, data redundancy, and rekeying.
Business Process Innovation
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4
Tips for Clearing Roadblocks in Process Redesign
• Eliminate multiple external contact points. • Harness the disruptive power of new technology to automate existing operations and enable new operations. • Capitalise on improved information management . Coordinate inventory, buffers, and other assets by sharing data. • Design for parallel sub-processes whenever possible to reduce wait-time between tasks. Integrate sub -processes. • Strive for “doing things right the first time”. Eliminate rework and iteration. • Remove complexity, exceptions, and special cases. • Build in feedback mechanisms at each step to minimise the need for checkpoints and control.
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Use Benchmarking
• One of the best ways to think creatively is to use benchmarking information to stimulate ideas and new possibilities for the process. • BPR team should learn about them and then apply good ideas from world-class processes.
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Brainstorming Process Attributes
• Attributes are descriptive phrases that partially or completely describe the characteristics of a process. • Identify all attributes of the process and then, for each attribute, brainstorm how the redesigned process would operate if that attribute changed. • Examples:
– How would the process operate better if …employees were empowered? – If employees were empowered, ten employees would not have to check the accuracy of this form. – If employees were empowered, would this form even be necessary?
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Process Attribute Groups
• Operations: The design and flow of the process. • Employees: Human respurce issues during operation of the process. • Information: Knowledge and its transfer within the process.
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Process Attribute Table
• • • • • •
•
Process Attribute Table (contd.)
• Easy to modify? • Effective, with few handoffs or bottlenecks? • Effectively using assets? • Integrated with decision points? • Outsourced? • Able to communicate effectively? • Facilitated by organisational design? • Supported by automation? • Supported by management? • Easily linked and transmitted? • Updated on a real-time basis? • Collected based on decision-making needs? • Collected once at the source? • Easy to interpret and extrapolate? • In a standard format • Projected into the future??
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What if operations are … Simple, with short paths? Parallel, with short end-to-end intervals? All value-adding? Highly reliable? Prevention-based? Based on low inprocess inventory? Technology-based?
What if employees are … • Empowered? • Successfully working in teams? • Highly trained in different skills? • Closer to management in a flat organisation? • Mobile and flexible? • Active in customersupplier partnerships
Business Process Innovation
What if information is … • Integrated with process tasks? • Accurate? • Highly automated? • Accessible? • Available when needed? • Available through easy-to-use expert systems?
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Selecting Plausible Ideas
• Screen all the ideas created. • Decide which attributes are most critical and which ideas seem most promising. • Analyse feasibility of the idea later after completing a more detailed process concept.
Taste My Pizza Example - Idea Generation
Focusing on the goal “to quickly deliver a great tasting and hot pizza to customers”, the BPR team brainstorms the following innovative ideas for delivering pizza:
– – – – – – – – – – – –
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Star Trek like transporter Helicopter (parachute drop) Delivery person in car/bicycle Delivery person in bus/subway Taxi driver who delivers Delivery person and chef in a van Delivery person on motorcycle Running delivery person Carrier pigeons Trained monkeys Robot Conveyer belt in office buildings
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Business Process Innovation
Taste My Pizza Example - Idea Generation (contd.)
In brainstorming these ideas, the BPR team found the following attributes particularly useful:
– What if our operations are parallel, with short end-to-end intervals? – What if our operations involve fewer handoffs? – What if our operations are based on new communications technology? – What if our employees are mobile and flexible? – What if our employees are empowered? – What if our information is collected once and at the source?
Taste My Pizza Example - Idea Selection
The BPR team selects the following ideas to develop as concepts for a redesigned process:
– Delivery person in car or bicycle – Delivery person and chef in a van
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Taste My Pizza Example Generating Process Concepts
• A process concept is a well-formed description of a redesigned process, including its output, a high-level flowchart, and a list of basic process requirements. • Based on the innovative ideas, BPR team must develop concepts for a redesigned process. • For this, it should review pertinent information and continuous brainstorming using the innovative idesa as stepping stones to new process concepts. • With two plausible ideas as a result of brainstorming, the BPR team divides it into two sub -teams; each begins identifying the necessary sub-processes to achieve process output.
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Process Concept: Delivery Person and Chef in a Van
Cold assembled pizzas Load van with preassembled pizzas from restaurant Wait in delivery area Complete business transaction
Select a preassembled pizza (automated)
Consult digital map
Heat pizza while transporting it
Heat pizza (automated)
Transport pizza
Deliver pizza
Business Process Innovation
Hot pizza given to customer
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Evaluation of Process Concepts
• BPR team must compare the developed process concepts to each other and to the existing process to determine which concepts offer the greatest potential for obtaining a significant breakthrough in performance while maintaining or improving customer satisfaction. • Without proper evaluation, the business may loose millions rather than saving millions.
Evaluation of Process Concept Example
As the result of process redesign to shorten the brewing cycle and increase production efficiency and profits, the Joseph Schlitz Brewing Company lost focus on customer requirements for the taste and clarity of its beer. From the mid-1970s (when the changes were made) to the present, sales dropped by about 40%, placing the Schlitz brand in a tie for fourth in the industry from a previous strong second place. The Schlitz brand lost almost six of every ten customers. Stock value dropped from about $69 a share to a low of $5.
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Process Concept Selection Matrix
• Tool for evaluating new process concepts and comparing them to the existing process and to world-class processes. • One process concept is designated as the datum. It is a floating reference point and the baseline against which other concepts are compared. • The concept designated as “datum” may be changed from one evaluation to the next. • The existing process is often designated as the datum during the initial evaluation. • During later evaluations, the best new process concept is often designated as the datum and then compared to worldclass processes.
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Process Concept Evaluation Criteria
• Customer requirements
– If the new process is targeted primarily at reduction in cost or cycle time, the BPR team can verify that the redesigned process will continue to meet customer requirements.
• Identified breakthrough goals
– For example lower cost or decreased cycle time.
• Other performance characteristics
– For instance cost, cycle time, reliability, defect rate, etc.
• Other constraints
– For instance business, legal, social, environmental, and safety issues. – How the redesigned process will integrate with other processes?
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Evaluating a Process Concept
1. Select a process to be the datum. The most appropriate datum is usually the existing process. 2. Rate each process concept on each criterion as it compares to the datum. For each criterion, decide subjectively if the process concept is better than (+), about the same (S), or worse than (--) the datum. 3. Add the total number of +, S, and -- criteria for each process concept. The concept with the most + criteria becomes the candidate concept for the redesigned process.
Evaluating a Process Concept (contd.)
4. Examine the candidate concept and brainstorm ways to change it so that the -- or S criteria becomes + criteria. 5. Examine the other concepts to see if their best ideas can be incorporated into the candidate concept. 6. If this examination results in modifications to the candidate concept, evaluate it again on the matrix.
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Example Concept Selection Matrix
Evaluation Criteria Customer requirements Breakthrough goals (Operational cost) Performance characteristics (Reliability) Constraints (Government and safety)
Total + Total S Total --
Concept Selection Matrix for Benchmarks
Evaluation Criteria Customer requirements Breakthrough goals (Operational cost) Performance characteristics (Reliability) Constraints (Government and safety)
Total + Total S Total -43
Concept Concept Concept Existing 1 2 3 Process -+ + D -+ -1 0 3
Existing Process ----0 0 4
World-class Processes -S + +
2 1 1
Candidate Concept
+ + +
4 0 0
+ S +
3 1 0
A T U M
D A T U M
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Communication- focused Business Process Innovation
• Operational-level approaches to process redesign consistently maintained a focus on workflows, or chronological flows of activities in a process. • This is fundamentally inconsistent with the communication-intensive nature of the vast majority of processes found in organisations today. • This approach focuses on communication flow representations and methods.
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Communication-focused Process Innovation Guidelines
• • • • • • • • Foster asynchronous communication. Eliminate duplication of information. Reduce information flow. Reduce control (as it is non-value adding). Reduce the number of contact points. Execute activities concurrently. Group interrelated activities. Break complex processes into simpler ones.
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doc_227009415.pdf
It explains process innovation with the help of Taste my pizza example.
Business Process Improvement
Business Process Innovation
K.B.C. Saxena Management Development Institute Gurgaon
• Entails strategy of developing focused solutions so as to eliminate the root causes of process performance problems. • Seeks to fix a problem leaving the basic structure of the business process intact.
Business Process Innovation
2
Approaches to Process Innovation
Problems with Process Improvement
• Process improvement involves performing the same business process with increased efficiency or effectiveness. • Process improvement often involves standardization, which in turn means rigidity. • Process improvement is an attractive approach to time and cost reduction, but is not likely to increase output variety and process flexibility.
Business Process Innovation 3
• Innovation as synonym for ‘reengineering’. • Innovation as ‘inventive problem solving’; e.g. using Altshuller’s systematic approach called TRIZ. • Innovation as creative thinking, focusing on brainstorming and a variety of related techniques that can help process teams think of alternative ways of accomplishing a process tasks. • Innovation as focus on communication flows in a process and not merely on process workflows.
Business Process Innovation 4
Business Process Innovation
• Involves redesigning a process making it more flexible and simpler than the old one, through innovative application of IT and/or organization structural changes. • Combines a structure for doing work with an orientation to visible and radical performance improvement. • Not merely improves process performance dramatically but also brings major improvements in quality, flexibility, service levels, or other business objectives. • Such initiatives start up with a relatively ‘ clean slate’ rather than basing them on the existing process.
Business Process Innovation 5
Clean-slate Thinking for Process Innovation
• How would you set up a competitor? • How would the ideal process look? • If you had to rebuild the organisation from scratch, how would it look? Public sector organisations: • What would be expected from the service if it was contracted out?
Business Process Innovation 6
1
Process Innovation as a Cleanslate Approach
Clean-slate approach requires answers to following questions: • What underlying needs are we trying to satisfy and for whom? • Why are we trying to satisfy these needs? (strategic fit) • Where do these needs need to be serviced? • When are we required to meet those needs? • How will we deliver the above?
– What processes need to be in place? – Who will operate them? – What technological opportunities exist?
Business Process Innovation 7
Developing New Process Design
Process Idea
Process Concept
Process Design
Business Process Innovation
8
Process Innovation Framework
• • • Review the information about existing processes and the customer s. If necessary, obtain additional knowledge of customers and world-class benchmarks. Generate innovative ideas for meeting current and future customer requirements, and for achieving breakthroughs in performance. Convert each idea into a ‘process concept’ consisting of a description of process output, a high-level flowchart, and estimated requirements for human resources, information systems, technology and equipments, facilities, and supplier inputs. Complete a ‘process concept selection matrix’ and identify the m ost promising concept beased on selection criteria. Develop a preliminary feasibility analysis of the process concept and qualitatively estimate benefits, costs, and risks.
Business Process Innovation 9
Understanding Existing Processes
• Identify core processes. • Review information about current purpose of these processes, its problems, and its sub-processes and workflows. • Concentrate on ‘ process value chain’: “How does the process create value for customers and the business?”, and not on “How does the process work?”. • Review customer requirements by interacting with them, which will help you see the process in a new context. Listen carefully to what customers describe as important and probe to ensure that you fully understand what they mean.
Business Process Innovation 10
• •
Review Benchmarking Information
• Benchmarks indicate results that other businesses have achieved. Studying benchmark processes may help borrow some of their useful ideas and techniques. • During benchmarking study, ask the following questions:
– Which competitors and industries are appropriate benchmarks? – What are the characteristics of worldclass processes? What are the workflows? – What do customers view as the ideal process output? – What process performance do competitors and non-competitors achieve? – What new technologies are competitors and other industries using in processes? – How much do worldclass processes cost?
Business Process Innovation 11
Taste My Pizza Example
Taste My Pizza is a local restaurant with a reputation for making the best pizza in the city. Two years ago, Taste My Pizza (TMP) decided to begin delivering pizzas to customers. It initiated the delivery process on a small scale with just one person delivering in a restricted area. Even in the restricted area, TMP took twice as long as competitors and pizzas were more expensive (but better tasting). The managing director (MD) recognised the opportunity for a substantial increase in profits if the business could attract new customers by providing fast delivery. The MD set breakthrough goals and appointed a team to reengineer the pizza delivery process.
Business Process Innovation 12
2
Taste My Pizza Example (contd.)
Reviewing reengineering goals and constraints:
The BPR team began by reviewing the breakthrough goals set by the MD: – Deliver pizza in half the time of competitors -- customers want to have pizza delivered within approximately ten minutes. – Deliver pizza that wins taste tests against both other delivered pizzas and restaurant pizzas. – Provide the extras typically found in restaurants, such as grate d cheese, garlic, and hot peppers. In addition to setting ambitious goals, the MD also set a few cr iteria (constraints) that the BPR team must meet: – Deliver pizza to any customer in the city. – Capital investment for new equipment or technology cannot be more than 1.2 times the current yearly profits.
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Taste My Pizza -- BPR Review Process
The BPR team reviewed the existing pizza delivery process: 1. Customer telephones the restaurant to place an order. 2. Employee answers telephone, writes the order, and hands order to chef in the kitchen. 3. Chef assembles pizza by hand. 4. Chef bakes pizza by hand. 5. Assistant verifies the heated pizza matches the order and places it in a cardboard box and then in a insulated carrier. 6. Driver picks up pizza, gets small bills for change, checks map in store, gets in car, and drives to customer’s location. 7. Driver gives pizza to the customer, collects cash (no credit), and gives change to the customer.
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Taste My Pizza -- BPR Review Process (contd.)
• Review of customer requirements:
– – – – – – – – – – – – Easy to contact and order pizza Good variety of toppings Pizza comes with the toppings ordered Pizza costs less than competitors Vegetarian version available Balance of crust, sauce, toppings Pizza tastes great Pizza is hot when delivered Pizza is delivered quickly Pizza is a good value Pizza is not greasy Crust tastes good
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Taste My Pizza -- BPR Review Process (contd.)
• Review of benchmark information:
– Most competitors guarantee delivery in under an hour, the best competitors guarantee delivery within 30 minutes. – Prices for a large cheese pizza range between $6 and $11, most competitors do not charge directly for delivery. – Both customers and competitors rate Taste My Pizza as the best tasting pizzas delivered in the city. – All competitors have similar processes, with a centralised store that takes the order, assembles and heats the pizza, then hands it off to a delivery person. – The competitors with the shortest delivery interval have many centralised stores in the delivery area, evenly distributed throughout the city.
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Taste My Pizza -- BPR Review Process (contd.)
The BPR team also reviews benchmarks from local pharmacies that deliver prescriptions to customers. Although this is a different industry, the BPR team thought that the delivery processes were similar:
– Most pharmacies add an additional charge for delivery. – Most pharmacies that deliver are stand-alone stores. – The best pharmacies deliver prescriptions within 15 minutes, although none of them guarantee delivery within 15 minutes to customers who live more than five miles away. – To generate revenue and subsidise free or low-cost delivery, a few pharmacies deliver and actively promote the sale of nonprescription merchandise ordered with prescriptions.
Generating Innovative Process Ideas
• Brainstorming ideas for solving process problems. • Selecting plausible ideas.
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3
What is an idea?
• An idea is a simple, bare-bones thought about a possible process. It is a simple, core solution that enables the business to achieve its ‘radical performance’ or breakthrough goal. • Generate one to three truly innovative ideas. Express the ideas as simple sentences:
– A centralised database will eliminate redundancies, resulting in significant reductions in interval. – Automated operations will drastically reduce costs. – Co-location of functions and parallel processes will result in a significant reduction in cycle time.
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Generating Ideas: Creativity Barriers in the Culture
• • • • • • Right answers. You may be anxious about the need to reach the right answer. In problem -solving, several answers may be right. Logical thinking. You may be tempted to disregard solutions that you cannot immediately prove with logical thinking. Rules. You may be tempted to follow the rules. You must challenge the rules to become creative. Practicality. You may focus on practical ideas. You should answer “what if” questions that are contrary to fact, for example, “Wha t if it is easy and inexpensive to travel faster than light?”. Seriousness. Overly serious people may hinder your creativity, which is enhanced through “playful thinking”. Specialists. Experts and specialists may know so much that they hinder your creativity.
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Generating Ideas: Creativity Barriers in the Culture (contd.)
• • • • Obvious solutions. You may be tempted to accept the first obvious solution. Group think. You may have a tendency to grow with the crowd. Perfection. You may be afraid to fail!! Self-fulfilling prophecies. You may have a negative perception of your own creativity!!
Generating Ideas: Thinking Like A Customer
• Thinking in terms of what customers actually need often sheds new light on the purpose of the process. • Example: Improving a supermarket operations
– Traditional view: Consider wider aisles, fresher produce, shorter check-out lines. – Perceived customer requirements: Consider bar -codes, money taken electronically from credit card. – Actual customer need: Consider food delivered to the customer’s house after the customer presses a touch-screen terminal to order food, with the purchaser price electronically charged to a credit card.
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Business Process Innovation
Principles of Process Redesign
• Organise around outcomes and not tasks. One person should perform all steps in a process. • Have those who use the output of the process perform the process. • Subsume information-processing work into the real work that produces the information. • Treat geographically dispersed resources as though they were centralised by using databases, networks, and standardised processing systems. • Link parallel activities instead of integrating their results after the fact.
Business Process Innovation 23
Principles of Process Redesign
(contd.)
• Put decision points where the work is performed and build control into the process through IT (such as expert systems or executive information systems). • Capture information once and at the source. Use barcoding, relational databases, and electronic data interchange (EDI) to make it easy to collect, store and transmit information for all who need it. Eliminate extensive information exchange, data redundancy, and rekeying.
Business Process Innovation
24
4
Tips for Clearing Roadblocks in Process Redesign
• Eliminate multiple external contact points. • Harness the disruptive power of new technology to automate existing operations and enable new operations. • Capitalise on improved information management . Coordinate inventory, buffers, and other assets by sharing data. • Design for parallel sub-processes whenever possible to reduce wait-time between tasks. Integrate sub -processes. • Strive for “doing things right the first time”. Eliminate rework and iteration. • Remove complexity, exceptions, and special cases. • Build in feedback mechanisms at each step to minimise the need for checkpoints and control.
Business Process Innovation 25
Use Benchmarking
• One of the best ways to think creatively is to use benchmarking information to stimulate ideas and new possibilities for the process. • BPR team should learn about them and then apply good ideas from world-class processes.
Business Process Innovation
26
Brainstorming Process Attributes
• Attributes are descriptive phrases that partially or completely describe the characteristics of a process. • Identify all attributes of the process and then, for each attribute, brainstorm how the redesigned process would operate if that attribute changed. • Examples:
– How would the process operate better if …employees were empowered? – If employees were empowered, ten employees would not have to check the accuracy of this form. – If employees were empowered, would this form even be necessary?
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Process Attribute Groups
• Operations: The design and flow of the process. • Employees: Human respurce issues during operation of the process. • Information: Knowledge and its transfer within the process.
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Process Attribute Table
• • • • • •
•
Process Attribute Table (contd.)
• Easy to modify? • Effective, with few handoffs or bottlenecks? • Effectively using assets? • Integrated with decision points? • Outsourced? • Able to communicate effectively? • Facilitated by organisational design? • Supported by automation? • Supported by management? • Easily linked and transmitted? • Updated on a real-time basis? • Collected based on decision-making needs? • Collected once at the source? • Easy to interpret and extrapolate? • In a standard format • Projected into the future??
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What if operations are … Simple, with short paths? Parallel, with short end-to-end intervals? All value-adding? Highly reliable? Prevention-based? Based on low inprocess inventory? Technology-based?
What if employees are … • Empowered? • Successfully working in teams? • Highly trained in different skills? • Closer to management in a flat organisation? • Mobile and flexible? • Active in customersupplier partnerships
Business Process Innovation
What if information is … • Integrated with process tasks? • Accurate? • Highly automated? • Accessible? • Available when needed? • Available through easy-to-use expert systems?
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Business Process Innovation
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Selecting Plausible Ideas
• Screen all the ideas created. • Decide which attributes are most critical and which ideas seem most promising. • Analyse feasibility of the idea later after completing a more detailed process concept.
Taste My Pizza Example - Idea Generation
Focusing on the goal “to quickly deliver a great tasting and hot pizza to customers”, the BPR team brainstorms the following innovative ideas for delivering pizza:
– – – – – – – – – – – –
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Star Trek like transporter Helicopter (parachute drop) Delivery person in car/bicycle Delivery person in bus/subway Taxi driver who delivers Delivery person and chef in a van Delivery person on motorcycle Running delivery person Carrier pigeons Trained monkeys Robot Conveyer belt in office buildings
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Business Process Innovation
Taste My Pizza Example - Idea Generation (contd.)
In brainstorming these ideas, the BPR team found the following attributes particularly useful:
– What if our operations are parallel, with short end-to-end intervals? – What if our operations involve fewer handoffs? – What if our operations are based on new communications technology? – What if our employees are mobile and flexible? – What if our employees are empowered? – What if our information is collected once and at the source?
Taste My Pizza Example - Idea Selection
The BPR team selects the following ideas to develop as concepts for a redesigned process:
– Delivery person in car or bicycle – Delivery person and chef in a van
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Taste My Pizza Example Generating Process Concepts
• A process concept is a well-formed description of a redesigned process, including its output, a high-level flowchart, and a list of basic process requirements. • Based on the innovative ideas, BPR team must develop concepts for a redesigned process. • For this, it should review pertinent information and continuous brainstorming using the innovative idesa as stepping stones to new process concepts. • With two plausible ideas as a result of brainstorming, the BPR team divides it into two sub -teams; each begins identifying the necessary sub-processes to achieve process output.
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Process Concept: Delivery Person and Chef in a Van
Cold assembled pizzas Load van with preassembled pizzas from restaurant Wait in delivery area Complete business transaction
Select a preassembled pizza (automated)
Consult digital map
Heat pizza while transporting it
Heat pizza (automated)
Transport pizza
Deliver pizza
Business Process Innovation
Hot pizza given to customer
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Evaluation of Process Concepts
• BPR team must compare the developed process concepts to each other and to the existing process to determine which concepts offer the greatest potential for obtaining a significant breakthrough in performance while maintaining or improving customer satisfaction. • Without proper evaluation, the business may loose millions rather than saving millions.
Evaluation of Process Concept Example
As the result of process redesign to shorten the brewing cycle and increase production efficiency and profits, the Joseph Schlitz Brewing Company lost focus on customer requirements for the taste and clarity of its beer. From the mid-1970s (when the changes were made) to the present, sales dropped by about 40%, placing the Schlitz brand in a tie for fourth in the industry from a previous strong second place. The Schlitz brand lost almost six of every ten customers. Stock value dropped from about $69 a share to a low of $5.
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Business Process Innovation
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Process Concept Selection Matrix
• Tool for evaluating new process concepts and comparing them to the existing process and to world-class processes. • One process concept is designated as the datum. It is a floating reference point and the baseline against which other concepts are compared. • The concept designated as “datum” may be changed from one evaluation to the next. • The existing process is often designated as the datum during the initial evaluation. • During later evaluations, the best new process concept is often designated as the datum and then compared to worldclass processes.
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Process Concept Evaluation Criteria
• Customer requirements
– If the new process is targeted primarily at reduction in cost or cycle time, the BPR team can verify that the redesigned process will continue to meet customer requirements.
• Identified breakthrough goals
– For example lower cost or decreased cycle time.
• Other performance characteristics
– For instance cost, cycle time, reliability, defect rate, etc.
• Other constraints
– For instance business, legal, social, environmental, and safety issues. – How the redesigned process will integrate with other processes?
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Evaluating a Process Concept
1. Select a process to be the datum. The most appropriate datum is usually the existing process. 2. Rate each process concept on each criterion as it compares to the datum. For each criterion, decide subjectively if the process concept is better than (+), about the same (S), or worse than (--) the datum. 3. Add the total number of +, S, and -- criteria for each process concept. The concept with the most + criteria becomes the candidate concept for the redesigned process.
Evaluating a Process Concept (contd.)
4. Examine the candidate concept and brainstorm ways to change it so that the -- or S criteria becomes + criteria. 5. Examine the other concepts to see if their best ideas can be incorporated into the candidate concept. 6. If this examination results in modifications to the candidate concept, evaluate it again on the matrix.
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Example Concept Selection Matrix
Evaluation Criteria Customer requirements Breakthrough goals (Operational cost) Performance characteristics (Reliability) Constraints (Government and safety)
Total + Total S Total --
Concept Selection Matrix for Benchmarks
Evaluation Criteria Customer requirements Breakthrough goals (Operational cost) Performance characteristics (Reliability) Constraints (Government and safety)
Total + Total S Total -43
Concept Concept Concept Existing 1 2 3 Process -+ + D -+ -1 0 3
Existing Process ----0 0 4
World-class Processes -S + +
2 1 1
Candidate Concept
+ + +
4 0 0
+ S +
3 1 0
A T U M
D A T U M
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Communication- focused Business Process Innovation
• Operational-level approaches to process redesign consistently maintained a focus on workflows, or chronological flows of activities in a process. • This is fundamentally inconsistent with the communication-intensive nature of the vast majority of processes found in organisations today. • This approach focuses on communication flow representations and methods.
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Communication-focused Process Innovation Guidelines
• • • • • • • • Foster asynchronous communication. Eliminate duplication of information. Reduce information flow. Reduce control (as it is non-value adding). Reduce the number of contact points. Execute activities concurrently. Group interrelated activities. Break complex processes into simpler ones.
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