ABOUT BPR

The concept of BPR was popularized in the early 1990s by Michael Hammer and James Champy in
their best-selling book, ‘Reengineering the Corporation.’ The authors said that radical redesign and
reorganization of an enterprise was necessary to lower costs and increase the quality of service.
According to them, IT was the key enabler for that radical change. Hammer and Champy felt that the
design of the workflow in most large corporations was based on assumptions about technology,
people and organizational goals that were no longer valid. They recommended seven principles of
reengineering for streamlining work processes and, consequently, achieving significant levels of
improvement in quality, time management and cost.

TABLE I

BPR PRINCIPLES

1. Organize around processes, not tasks – Instead of work being divided among different people, one
person is given the responsibility for an entire process. Each person’s job is designed around an
outcome, such as a finished component or a completed process, rather than one of the tasks
necessary for producing the finished component or completing the process. This could mean
replacing functional departments such as manufacturing and marketing with interdisciplinary teams
that concentrate on completing a particular business process.

2. Have output users perform the process – Instead of departments functioning as distinct
specialized entities doing only ‘their work,’ passing the output to someone else, BPR requires each
department to take full responsibility for one complete process.

3. Have those who produce information process it – People responsible for generating a piece of
information should be involved in processing all the information regarding it. For instance, instead of
the traditional way of receiving goods (involving receiving, accounts payable and other
departments), only one receiving clerk receives the goods using specialized software.

4. Treat geographically dispersed resources as centralized – To provide better customer service,

companies decentralize operations. With current technology, a company’s data can be centrally
located and yet be made available to all its geographically dispersed units. This way, companies get
the benefits of centralization as well as decentralization.

5. Link parallel activities in the workflow instead of just integrating their results – Certain processes,
such as product development, are performed in parallel and then integrated at the end. However,
quite often, the teams involved do not communicate well. In such a scenario, BPR would put people
from various functional areas on the team in charge of a particular product.

6. Empower workers and use built-in controls – Most organizations have many layers of personnel
working and several more to manage, audit and control them. BPR empowers the people actually
doing the work by giving them the authority to take certain decisions. This results in faster responses
to problems and increases the quality of the task performed.

7. Capture information once and at the source – Different departments capturing their own data at
their own pace leads to inefficiency, resource wastage and data discrepancy errors. By utilizing
information technology effectively, data can be captured electronically at source, entered once in an
online database, and made available to all who need it.

Source: ICMR.

Simply put, BPR refers to a complete overhaul of the way an organization does its business.

Instead of focusing on improving or modifying processes, it focuses on reinventing the way the

company carries out its business. And instead of focusing on the existing business, it tries to

determine what business the company should be involved in. BPR thus results in dramatic changes

in a company’s business activities. The kind of results the company looks for are not marginal in

nature, BPR results in dramatic and huge improvements in the processes being reengineered.

Mahindra & Mahindra – Implementing BPR

TABLE III

BPR IMPLEMENTATION CYCLE

Phase 1 Phase 2 Phase 3

1. Business Understanding 3. Business Process Identification 5. Process Redesign

2. Project Planning &

Training 4. Process Envisioning 6.Process Implementation

Source: www.geocities.com
According to analysts, companies usually opt for reengineering when they are in serious trouble,

have foreseen trouble or are taking proactive measures to avoid landing in trouble. Companies that

implement BPR to avoid landing in trouble usually have ambitious and aggressive managements.

As a result, they are able to implement BPR effectively and derive the benefits of reengineering.

Many BPR exercises fail because the concerned organizations do not ensure the presence of

critical success factors for BPR implementation (Refer Table IV). Often, BPR is confused with

practices such as automation, downsizing and outsourcing. However, such practices are only tools

that can be a part of the overall BPR program; they can never ‘be the all’ of such an exercise.

TABLE IV

BPR SUCCESS FACTORS

Strong and consistent top management sponsorship.

Addressing cultural transformation through effective change management.

Proven methodology including a vision process.

Reengineering team composition (in both breadth and knowledge).

Compelling business case for change (with measurable objectives).

Strategic alignment with company strategic direction.

Line ownership (pair ownership with accountability).

Source: www.geocities.com

M&M’S EXPERIENCE WITH BPR

By the mid 1990s, BPR had become a popular tool globally, with many leading organizations

implementing it. However, when M&M undertook the exercise, it was still a new concept in India.

M&M’s workforce, as mentioned earlier, resisted this attempt to reengineer the organization. Soon

after the senior staff began working on the shopfloors, the first signs of the benefits of BPR

became evident. Around a 100 officers produced 35 engines a day as compared to the 1200

employees producing 70 engines in the pre-BPR days.

After five months, the workers ended the strike and began work in exchange for a 30% wage hike.

As the situation returned to normalcy, BPR implementation gained momentum. M&M realized
that it would have to focus on two issues when implementing the BPR program: reengineering the

layout and method of working, and productivity.

M&M worked on the principle of cellular manufacturing.2 In this type of manufacturing, plant

layout is reorganized drastically and workers are required to do multi-tasking through multimachine

manning. The plant and machinery layout at the company had to be revamped to reduce

non-productive activities and introduce cellular manufacturing. To enhance productivity, M&M

Cellular manufacturing allows companies to produce just what is needed with minimum materials,

equipment, labor, time and space. This translates to lower operating costs. In addition, a cell has a
simple

and direct routing between operations, so bottlenecks can easily be identified and eliminated,
reducing

lead times. As cells can accommodate small lots, quality problems are discovered and corrected
sooner.