business process re-engineering - lecture 8-9

8/22/2019 Business Process Re-Engineering - Lecture 8-9

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Reengineering Business Processes Called BRP or simply Reengineering

Fundamental rethinking and radical redesign ofbusiness processes

Seeks to achieve improvements in cost, quality, speed,and service

Potential payback is high, but so is risk ofdisruption and failure

Organizational redesign approaches are animportant enabler of reengineering Includes use of IT, process teams, case managers


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Role of IT IT plays a major role in reengineering most business

processes

Can substantially increase process efficiencies Improves communication

Facilitates collaboration


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A Cross-Functional Process Many processes are reengineered with

Enterprise resource planning software

Web-enabled electronic business and commercesystems


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Reengineering Order Management IT that supports this process

CRM systems using intranets and the Internet

Supplier-managed inventory systems using the Internet andextranets

Cross-functional ERP software to integrate manufacturing,distribution, finance, and human resource processes

Customer-accessible e-commerce websites for order entry, status

checking, payment, and service Customer, product, and order status databases accessed via

intranets and extranets


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Becoming an Agile CompanyAgility is the ability to prosper

In rapidly changing, continually fragmenting global markets

By selling high-quality, high-performance, customer-configured products and services

By using Internet technologies

An agile company profits in spite of Broad product ranges

Short model lifetimes

Individualized products

Arbitrary lot sizes


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Strategies for AgilityAn agile company

Presents products as solutions to customers problems

Cooperates with customers, suppliers and competitors

Brings products to market as quickly and cost-effectivelyas possible

Organizes to thrive on change and uncertainty Leverages the impact of its people and the knowledge

they possess


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Creating a Virtual CompanyA virtual company uses IT to link

People

Organizations

Assets

Ideas

Inter-enterprise information systems link

Customers Suppliers

Subcontractors

Competitors


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sco ys ems r uaManufacturing

Most people who have heard of Cisco Systems (www.cisco.com)would not be surprised to learn that Cisco is the worlds largestsupplier of telecommunications products.

What they may be surprised to discover, however, is the answerto the question, What does Cisco manufacture?

Answer: Absolutely nothing!

Cisco sells solutions to their customers, but their products comefrom an innovative virtual manufacturing company arrangement

with Jabil Circuit and Hamilton Standard, two large electronicssuppliers and manufacturers.


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An order placed for a Cisco product arrives simultaneously atCisco in San Jose, California, and Jabil in St. Petersburg, Florida,

via Ciscos online ordering system. Jabil immediately starts to build the product by drawing parts

from any or all ofthree onsite inventories: one owned by Jabil,one belonging to Cisco, and one owned and controlled byHamilton Standard.

When the manufacturing process is complete, the product istested and checked against the order in St. Petersburg bycomputers in San Jose, then shipped directly to the customer by

Jabil. The shipment triggers the generation of a Cisco invoice sent to

the customer and electronic bills from both Jabil and HamiltonStandard sent to Cisco in San Jose.

Ciscos virtual manufacturing company alliance with Jabil Circuitand Hamilton Standard gives them an agile, build-to-ordercapability in the fiercely competitive telecommunicationsequipment industry .


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Virtual Company


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Virtual Company Strategies Basic business strategies

Share information and risk with alliance partners

Link complimentary core competencies

Reduce concept-to-cash time through sharing

Increase facilities and market coverage

Gain access to new markets and share market orcustomer loyalty

Migrate from selling products to selling solutions


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Knowledge-Creating companyA knowledge-creating company or learning

organization

Consistently creates new business knowledge Disseminates it throughout the company

Builds it into its products and services


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Kinds of Knowledge Explicit Knowledge

Data, documents, and things written down or stored in

computers Tacit Knowledge

The how-to knowledge in workers minds

Represents some of the most important informationwithin an organization

A knowledge-creating company makes such tacit knowledgeavailable to others


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Knowledge Management Successful knowledge management

Creates techniques, technologies, systems,

and rewards for getting employees to sharewhat they know

Makes better use of accumulated workplace andenterprise knowledge


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Knowledge Management

Techniques


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Knowledge management systems

Knowledge management systems

A major strategic use of IT

Manages organizational learning and know-how Helps knowledge workers create, organize, and make

available important knowledge

Makes this knowledge available wherever and whenever

it is needed Knowledge includes

Processes, procedures, patents, reference works,formulas, best practices, forecasts, and fixes

business process re-engineering - lecture 8-9

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