Development of a methodology for the effective implementation of business process reengineering in manufacturing companies
Increasingly, companies around the world are reengineering their business process to be more profitable and to improve their customer satisfaction. The technique used is often known as Business Process Reengineering (BPR) which requires radical change in the structure of the company and offers high achievement on some performance dimensions. Statistics show that as many as 70% of large companies are involved in BPR projects and many others plan to begin projects soon. It also shows that up to 70-75% of these BPR projects fail. There are a few reasons for this high rate of failure. Lack of proper and well documented methodology is one main reason. It could also be due to unrealistic scope and expectation of the project, underestimating the time and cost involved, and the effect of company type on BPR projects. In this study a well structured methodology for BPR is proposed. The methodology includes several new concepts and tools orderly organised to ease the hardship of reengineering. Information Technology (IT) has been used as a tool to redesign the company in the form of a simulation tool. It has also been used as a tool within the company to automate the activities involved in the business process. The methodology was tested in industrial case studies and the results were quite satisfactory. The effect of company type on BPR was also tested. For Make-to-stock and Make/Assemble-to-order types of company, reengineering can have great impact. The effect of IT on BPR has been tested. IT if implemented by itself can improve the performance in the magnitude of 10-15%, and if implemented within the framework of BPR can have impact of 40-50% on the business. The simulation package of TOPIX was used for the first time in a manufacturing environment and it proved to be satisfactory software for BPR.