1. 7-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Business Process- Focused Strategies and Organizational Design Chapter 7

2. 7-2 Business Process Strategy and Organizational Design Questions  On which business processes should the company focus to achieve success in the market?  How should the company align its resources and capabilities to optimize performance of the business processes?

3. 7-3 Business Process Management: Principles of Business Process Re-engineering  Organize around outcomes, not tasks  Prioritize all of the processes in the organization in order of redesign urgency  Integrate information processing with the work that produces the information  Treat geographically dispersed resources as though they were centralized  Link parallel activities in the workflow instead of just integrating their outputs  Move decision-making to where the work is performed, and build control into the process  Capture information once and at the source

4. 7-4 Business Process Management: Functional versus Process-Based Views

5. 7-5 Business Process Management: Definition of a Process

6. 7-6 Business Process Management: Process Mapping

7. 7-7 Business Process Management: A Process Mapping Example

8. 7-8 Business Process Management: A Process Mapping Example

9. 7-9 Operations-Related Business Processes  Product and service generation  Order fulfillment and processing  Service and support

10. 7-10 Product and Service Generation: Portfolio Management

11. 7-11 Product and Service Generation: Generic Process

12. 7-12 Product and Service Generation: Elements of the Development System

13. 7-13 Product and Service Generation: Metrics

14. 7-14 Product and Service Generation: Organizational Design

15. 7-15 Order Fulfillment and Processing: Generic Process

16. 7-16 Order Fulfillment and Processing: Metrics  Perfect Order Fulfillment – the percentage of orders  delivered "on time and in full" to request date and/or to commit date  that meet the customer's three-way match (invoice, purchase order, and receipt)  have no product quality issues  Metrics commonly used to measure “on time and in full”  Line Fill Rate – percentage of lines on an order filled in full  Order Fill Rate – percentage of orders filled in full  Order Fulfillment Cycle Time - the amount of time from customer authorization of a sales order to the customer receipt of product

17. 7-17 Order Fulfillment and Processing: Organizational Design  Form cross-functional teams or task forces to map and improve the process  Designate a champion or leader tasked with the performance of the process

18. 7-18 Order Fulfillment and Processing: Information Technology Example

19. 7-19 Order Fulfillment and Processing: Information Technology Example

20. 7-20 Service and Support: Process

21. 7-21 Service and Support: Metrics  Speed of service  Quality of service  Customer satisfaction with service result

22. 7-22 Service and Support: Organizational Design  Form cross-functional teams or task forces to map and improve the process  Designate a champion or leader tasked with the performance of the process

23. 7-23 Service and Support: Information Technology  Spare parts management systems  Parts demand planning  Parts inventory planning  Parts supply planning  Parts distribution planning  Parts monitoring  Customer relationship management systems  Service order management  Service contract management  Complaints and returns  In-house repair  Case management  Installed base management  Warranty management  Resource planning  Call center management systems

24. 7-24 Organizational Design of Operations  Organizational structure  Decision-making processes  Human resources management  Incentives and rewards

25. 7-25 Organizational Design of Operations: Information Processing View  When there is little uncertainty, coordinate work through:  Rules or programs  Hierarchy  Targets or goals  When uncertainty increases, redesign the organization with:  Slack resources  Self-contained tasks  Vertical information systems  Lateral linkages or relationships

26. 7-26 Organizational Design of Operations: Corporate Organizational Structures

27. 7-27 Organizational Design of Operations: Organizing in Teams

28. 7-28 Developing a Business Process Focus  Scope the effort  Assign a process owner  Establish a cross-functional design team  Do the process design  Build buy-in at both management and working levels

29. 7-29 Developing an Organizational Design  Identify key stakeholders and their interests  Understand the business context  Identify the key dimensions of organizational focus  Create an organizational design and implement  Measure human resource performance for that organization  Measure the long-term impacts of the design  Adjust the organization design

30. 7-30 Developing an Organizational Design