“BPR AS A MEANS OF REINVENTING THE ORGANIZATION: AN OVERVIEW” NISHIT VIJAY SHAH HPGD/JA14/0534 SPECIALIZATION: OPERATIONS WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT AND RESEARCH

INTRODUCTION TO BPR A key stimulus for re-engineering has been the continuing development and deployment of sophisticated information systems and networks. Leading organizations are becoming bolder in using this technology to support innovative business processes, rather than refining current ways of doing the work. BPR is basically rethinking and radically redesigning an organization's existing resources. it is an approach for redesigning the way work is done to better support the organization's mission and reduce costs.

NEED FOR RE-ENGINEERING The new world requires organizations to build working system that can make them responsive, flexible and customer focus. Increase in consumer requirements for both product and service efficiency and effectiveness. Significant contribution is required to an organization's competitive strength. The process time (throughput) is to be reduced significantly. Economies of scale of centralization & to decentralize decision making to its operational units.

Benefits of BPR Increasing organizational effectiveness and efficiency. Greater sense of responsibility. All processes are completely monitored under the strict control of the management. High quality products to customers. Reduces the time lag between different processes. Reduces Cost of processes. Increase levels of motivation for employees and the desire to perform well. Increase in flexibility and adaptability for change. Instrumental for supporting growth of business

DELAY IN PROJECTS

OBSTACLES TO FLOW

THEORY OF CONSTRAINTS (TOC) TOC says that the output /capacity of any sequential set of activities is determined by the constraint of the system. i.e. the capacity of a network is dictated by the capacity of one of it’s nodes. This node is called the constraint. Any improvement on other nodes will not show any appreciable increase in the output of the system .On the other hand any improvement on the constraint node will show equivalent improvement in the output of the system

OLD PARADIGM NEW PARADIGM Bad multi-tasking OLD PARADIGM NEW PARADIGM Start as early as possible Start as late as possible One task at a time Protect each task with safety Complete each task on time Complete each project on time Conflicting Priorities across functions Assign max tasks per resource Assign optimum resources per task Protect project with project buffer Common priorities across functions

3 MEASUREMENT TOOLS Throughput (T): The rate at which the system generates money through sales i.e. Throughput = Sales value – Total variable cost Inventory (I): All the money invested in purchasing the things the system intends to sell Operating Expense (OE): All the money the system spends in turning Inventory into Throughput. The objective of TOC is increasing T while decreasing I and OE.

5 STEPS OF TOC

CASE STUDY: TOC IMPLEMENTATION IN PROPOSAL ENGINEERING, ESTIMATION & DESIGN DEPARTMENT

Implementation of TOC in multi-project environment can really turn out to be useful, in view of that L&T has also started to restructure the organization. Several workshops were conducted to understand the fundamentals of TOC and implementing them on execution front. As a part of TOC Implementation in proposal engineering and estimation, both functions are combined under a joint head of Proposal engineering and estimation group. TOC speaks about Capacity augmentation and capacity utilization. By combining both the departments, number of total resources available to handle enquiries gets increased. The designers in Proposal group were given a training to do the estimation of the equipments and estimators in estimation group were trained to carry out preliminary design work.

BENEFITS AFTER TOC IMPLEMENTATION The number of resources have gone up. This had resulted in handling more number of enquiries. Time lag between handing over of the project work from Proposal group to estimation group is eliminated. The person designing the equipment became aware of its implication on the cost of equipment, so better alternatives were proposed to customer in order to reduce the cost. The person doing designing work became familiar with the rate of materials, its availability and lead time.

Utmost care being taken right from the beginning of the design execution phase. This had resulted in reduction of rework in design and estimation due to unavailability of certain material or vendors not able to meet certain requirements. Estimator became familiar with the designing of the equipment, this resulted in increased capacity and resource utilization. As the design and estimation is being done by one person, Enquiry for Critical material can be floated well in advance which resulted in faster estimation process as the quotation can be collected before completing the design work. Gained insight about weight and cost factor in qualifying bid subsequently winning the order. Overall cycle time to complete the enquiry reduced to great extent.

NEW PRACTICES UNDER TOC Implementation of Full kit in Proposal engineering and Detail design engineering. Adopted new practice of making Specification. summery sheet in Proposal stage of design. Conducting regular Cross functional meeting . Dividing Projects in Different phases. Introduction of Phase -1 at enquiry stage. Dedicated Resource for Phase -1 and handling various critical Technical clarification from customer. Defining standard template for different kinds of equipment. Introduction of Release control dash board. Avoid Bad Multitasking.

MAKING TOC AS A WAY OF LIFE Change is any alternative in the current work environment which is experienced by any individual and organization. It is very easy to make full kit and other document but difficult to maintain at every task level. Making TOC as a way of life is the only solution for this. .Rather than seeing TOC as a BPR Tool, it is necessary to understand that it is a need of an hour to reinvent the organization in today’s highly competitive market. It is important for the organization to grow so the employees of the organization also grow. To increase the flow in a better way, improvement at project level is essential.

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