Business process reengineering is the fundamental rethinking and engaging in radical redesigning of business processes aimed at achieving dramatic improvements especially with regard to contemporary performance measures such as quality, cost, speed and service (Altinkemer 1998)
It envisions novelty in the work strategies together with the total implementation of change in the complex human, technological and organizational dimensions. This process seeks radical and continuous improvement by escalating efforts made by the Total Quality Management (TQM) and the Just-in-Time technique (JIT). This is aimed at making process orientation to be a strategic tool which enables an organization to gain competitive edge over its competitors and thus becomes a core competence of an organization. Business process reengineering is majorly aimed at achieving efficiency in the processes of the business by focusing on the customers and kind of service being offered (Ardhaldjian 1994).
Many organizations engage in business process reengineering for different reasons but the commonest of all is to increase efficiency in the delivery of its services by placing the centre focus on the customer (Sawy 1999)
. Since many organizations are driving towards achieving business process reengineering, it is essential to understand that engaging in such a process is normally driven by certain objectives that the organization wants to achieve. Some of the objectives of this study on business process reengineering include the following;
- To determine how business process reengineering eliminates customer complaints by focusing on customer oriented processes.
- To determine how business process reengineering achieves increased speed in customer processes through compression of time normally required in accomplishing a certain task.
- To investigate how compression is achieved in terms of reducing operational costs of the organization.
- To determine how flexibility can be achieved by focusing on adaptive processes and organizational structures which bring the organization closer to the customer?
- To determine how business process outsourcing enhances product and service quality which was not being experienced before?
- To investigate how increased productivity is achieved through drastic improvements in effectiveness and efficiency.
Business process reengineering has been adopted by many firms for different reasons, all aimed at realizing the goals of the organization. One of such firms that adopted this process is Mahindra & Mahindra (M&M) which is a manufacturing company of automobiles. In the middle of 1990s, Mahindra & Mahindra which is India's largest manufacturer of tractors and multi utility vehicles was facing multiple problems at its two plants namely Kandivili and Igatpuri in Maharashtra. The two plants had reported cases of inefficiencies in terms of manufacturing, long cycle of production, poor productivity and sub-optimal output which did not rhyme with the level of inputs. This, the company attributed to bloated workforces who were under-productive because of their militantly unionized nature. Furthermore, Mahindra & Mahindra had a work culture that was seen to be very unhealthy with cases of rampant corruption in most of its departments. Keshub Mahindra who was at the helm of the leadership of the company was alarmed at this dismal condition of the two plants and decided to sack those who were allegedly involved. Previously, the company had exercised leniency in running the two plants, the end result being crumbling under the pressure from the union (Bradley 1995)
Efforts by Mahindra & Mahindra to implement some voluntary retirement schemes were thwarted by the union which was uncooperative and the company was thus unable to reduce its workforce. As this was happening, the company was weighing the option of implementing Business Process Reengineering in the whole organization, including the manufacturing units. Due to the problems that the two plants were facing in Maharashtra, the company decided to implement the business process reengineering speedily. This was followed by resistance from the union which caused a strike but this time round, the management of the company made it clear that they would not succumb to the demands of the union. This is what led to the full implementation of business process reengineering by the company in 1994 with major restructuring changes especially in the organizational model (Champy 1995)
Mahindra and Mahindra decided to undertake Business Process Reengineering by conducting a gap analysis which revealed the strengths and weaknesses of the company especially with regard to its business processes. This enabled the company to identify causes of performance gaps and implemented the program to achieve the following (Chan 1997)
The business process reengineering was to help in the creation of business strategies for the company, coming up with achievable policies and formulating guidelines which would streamline the operations of the vehicle manufacturing company. This would eventually help to monitor the performance of the employees and the organization as a whole in order to achieve maximum results.
Product management was also an issue that was raising concern in the operations of the company. The business process reengineering was adopted to help in the conceptualization, design and development of new vehicles which would be upgraded. This was also accompanied by the setting up of well equipped manufacturing facilities for efficient production of the motor vehicles especially at the two plants which had attracted the concern of management.
Inefficiency at the two plants had been identified especially with regard to management of orders. Business process reengineering was adopted so as to convert orders and spares for motor vehicles into finished products. Furthermore, it was also to help bring efficiency in the manufacturing, assembling, purchasing and dispatching of finished products.
The basic idea behind implementing business process reengineering was to focus on customer satisfaction (Hunger 1995)
. Organizational barriers were to be broken and make the customer to be the center of focus. This aimed at improving service delivery to customers by maintaining good relationships with them through timely resolving their complaints, monitoring intermediaries and other dealers among others. This would in turn generate more demand for vehicles and spares as the customers would be satisfied with the goods and services of Mahindra & Mahindra.
Business process reengineering was designed to do a complete overhaul of the processes of Mahindra & Mahindra especially with regard to management. Vendor management was to specifically help in the identification and selection of vendors who would be dealing with the company. The process was supposed to help in monitoring the performance of the vendors and help them to do upgrading where it was deemed to be necessary.
Apart from the reasons mentioned above on the need to engage in business process reengineering, Mahindra & Mahindra had a rationale in mind for recommending implementation of the process. This especially aimed to address multiple problems at Kandivili and Igatpuri plants in Maharashtra. Some of the rationale for implementing the process includes the following;
For an organization to initiate significant changes aimed at improving its performance there has to be sufficient motivation for the cause. The fear of failure acted as sufficient motivation for Mahindra and Mahindra to reengineer the processes of the company. This act was prompted by the dismal performance displayed by the two plants in Maharashtra and the management feared for its failure. The company was losing its competitive edge as a result of inefficiencies identified in the field of production and other processes. Compared to its competitors, Mahindra & Mahindra was on the verge of losing its customers due to redundancies in production brought about by inefficiencies in the manufacturing department. This was therefore one of the rationales for implementing the process in the company (Chan 1998)
This is another commonly used rationale for initiating major changes in an organization. This majorly deals with the management structure of an organization on how it handles its activities from top management down to its subordinates (Crowe 1997)
. Because management of Mahindra & Mahindra wanted to place much focus on the customer, it broke down organizational barriers by adopting a structure that is less bureaucratic. Performance appraisals were also introduced through performance reviews and weekly status reports which was to monitor the performance of employees and gauge if they worked much towards ensuring that the company attained its goals of increasing its sales and remaining the dominant player in the motor vehicle industry. The management sought to be closer to the customers by opening communication channels which allowed customers to send their responses and queries which would eventually be addressed (Childe 1994)
This principle aimed at aligning the strategic goals of the company with the various objectives of the different departments together with those of the employees (Collins 1995)
. Furthermore, it aimed to review the tactical processes which were aimed at achieving the overall strategic objectives. This was to ensure that the various departments in the company worked towards ensuring that the overall aims of the organization were achieved.
For success to be realized, the management saw it wise to try and identify new opportunities in the market and addresses the changing needs of both the customers and the employees of the organization. By being agile, Mahindra & Mahindra would be able to adapt to any business environment as it would have abreast itself with the latest developments that have taken place in the market (Hales 1994)
With a clear picture of what was happening in the organization especially at the two plants in Maharashtra, the management of the company came up with strategies aimed at ensuring successful implementation and application of the business process reengineering.
Achieving business process reengineering by Mahindra & Mahindra
In order to fully achieve the process, the organization engaged in the following activities;
Empowering employee’s means giving them the ability to carry out their duties! This includes providing them with the right information, the required training, right tools, a sound working environment and any authority that they may need (Hammer 1993)
. For Mahindra & Mahindra, this was a complete transformation of the workforce which began with the assessment of their current skills in order to identify areas that they need further training. This called for personal evaluations, supervisor evaluations and also peer evaluations to try and check the level of performance of the employees especially at the Kandivili and Igatpuri plants both based in Maharashtra. Limits of what employees were supposed to do while on duty were also lifted so as to give room to innovation which may have been hindered earlier on.
Before undertaking a particular task, relevant information concerning the task is necessary. Mahindra & Mahindra decided to increase the amount of information which employees had access to. The company realized that the more informed the workforce is, the better the results produced at the workplace. Therefore, information concerning the products and production processes was made available to employees throughout the organization and also on the organization’s website. Furthermore, information regarding what was expected of each employee and the set targets was also communicated to ensure that employees worked with a certain goal in mind to be achieved (Gunasekaran 1997)
Providing the right information would only work if employees are also given the right tools. Management ensured that this was achievable by investing more in manufacturing technology that would speed up the production of motor vehicles in all the plants. The use of manual technology was significantly reduced and more advanced technology adopted aimed at achieving efficiency in the production process (Furey 1993)
An analysis of skills gap was conducted by the company to establish areas which employees had weaknesses. Training was also prompted by the introduction of new production technology by the company. Employees were trained in their areas of specialization where a gap in their skills had been identified. In order to perform better with the new production technology, employees were provided with the necessary training so that they would be able to operate the new machines with much ease. Training also aimed at increasing efficiency in the production process by making sure that employees had skills that match the jobs they were undertaking in the company (Feldmann 1998)
Time management at the workplace is of vital importance. The availability of information systems can help much in reducing the amount of time employees waste doing work that turns out to be unproductive (Morris 1993)
. Mahindra & Mahindra worked on eliminating unproductive uses of time by bringing in the concept of specialization where workers engaged in activities which were best suited to them. In the various production plants of the company employees specialized in producing different motor vehicle parts. Some dealt with the production of vehicle engines, wind screens and other body parts which were later assembled by other employees who had specialized in motor vehicle assembly. By breaking down the different production stages, it ensured that there is no replication of duties and each employee had a significant contribution to the whole production process. Specialization thus increased the level of output per employee and ensured that they did not engage in work which was unproductive. It also ensured that workers honed their skills in their area of specialization since they would be doing a certain task over and over hence mastering that particular field (Hall 1994)
One of the recommended ways of improving data processing is through elimination of unnecessary paper. Though the use of paperwork may be familiar and convenient for different purposes, it has its share of disadvantages. It is often bulky and cumbersome to move from one place to another (Grover 1995)
. Furthermore, information that is contained in paperwork is extremely tedious to use when analyzing large amounts of data. Mahindra & Mahindra thus adopted computerized data handling and storage which takes up little space and speeds up the operations of an organization by bringing in efficiency in data handling and processing. This also increases the safety of the data stored as compared to being stored in paper format, which is easily prone to destruction.
This was especially to do with the field of data processing. The company realized that it was using different procedures and systems to perform similar processes. Such included purchasing supplies, paying employees and maintaining track of inventories of the company. Although the procedures seemed to be adequate from a local point of view, engaging in the same work using different methods was found to be inefficient when viewed in a global sense. To eliminate unnecessary paper, a change in any system was accompanied by changes in technology and regulations which was done by starting from scratch (Harrison 1993)
Records kept in form of paper can be quite tedious to work with. Such are prone to destruction and it becomes cumbersome to search information stored in such documents. Mahindra & Mahindra thus adopted computerized information systems in storing its data for safety and efficiency purposes. This would take little space and it became easy to look up such information whenever need arose (Hunt 1996)
A greater challenge came from the union which was opposed to the organizational change. Union officials opposed this move saying that it would exploit its workers. However, Mahindra & Mahindra went on with the implementation of the process which saw improved performance in the production processes of the company (Goldratt 1985)
The cost of implementing the process was also another challenge. This included adoption of new technology, training of employees, bringing in computerized information systems among others. The problem of incompatibility with the current system also arose. This meant that major changes had to be done including the production processes and the storage of data (Obolensky 1994)
For the process of reengineering to be successful, the following are recommended (Dorine 1994)
- The process must be done together with strategic planning incorporating information technology as a competitive tool.
- The customer should be placed the center of the process. More focus needs to be placed on the customer to improve service delivery.
- BPR should be supported throughout the organization and not driven by a section of the organization.
- The implementation team should be comprised of managers and those who will do the actual work of reengineering.
Organizations seeking to reengineer should establish the rationale behind carrying out the process. The process should be guided by certain objectives to be achieved in the end. Furthermore, much focus should be placed on the customer to ensure that the customer is at the center of the reengineering process. The process needs to be supported by everybody in the organization by making them understand the benefits that the reengineering process brings to the organization. The rationale for reengineering should be clearly stated and be followed to the latter to ensure that the process does not deviate from its set course. If this process is not well monitored, it can as well turn out to be counter-productive to the organization (Donovan 1992)
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