1. REENGINEERING WORK:
DON’T AUTOMATE, OBLITERATE
PRESENTED BY:
ASVINI
SHRADDHA
RUCHA
ABHISHEKA
PALLAVI

2. WHY
REENGINEERING?

3. Michael Hammer :
Michael Hammer, besides being one
of the founders of BPR, he is also
the president of Hammer and Co.,
a management education
company. Hammer started out as
an engineer and was a professor at
MIT in the computer science
department. Both TIME (1996)
and Business Week (2002) listed
Hammer as one of the Top 25
most influential businessmen of
all times.

4. WHAT IS REENGINEERIING?
Hammer and Champy’s definition…
“…… the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical contemporary
measures of performance, such as cost, quality, service, and speed.”

5. Background
 Process rationalization and automation (i.e. the usual
methods for boosting performance) didn't yield the
dramatic improvements companies needed at that time.
 Information technology
- Companies left existing processes intact and used
computers simply to speed them up
- Heavy investments in IT delivered disappointing results
 The watchwords of the new decade were
- Innovation, speed, service and quality

6. WHAT IT IS THEN?
Reengineering effort strives for dramatic levels of
improvement
It should use information technology not to automate an
existing process but to enable a new one
Reengineering cannot be planned meticulously and
accomplished in small and cautious steps
Rather than looking for opportunities to improve the current
process, we should determine which of the steps really add
value and search for new ways to achieve the result

7. EXAMPLES OF
REENGINEERING
• FORD MOTOR COMPANY :
Reengineered account payable process
• MUTUAL BENEFITS LIFE (MBL) INSURANCE :
Reengineered processing of insurance application

8. FORD’S ACCOUNT PAYABLE
DEPT. BEFORE REENGINEERING
• Affected : more than 500 people
MAZDA’S :
• Account payable organization consisted only of 5
people.
• Aim of reengineering:
 To cut cost
 To reduce head count by 20%

9. FORD’S OLD PROCESS
PURCHASING
DEPARTMENT
VENDORMATERIAL CONTROL
DEPARTMENT
ACCOUNTS PAYABLE
DEPARTMENT
“WE PAID WHEN WE RECEIVED
INVOICE”
INVOICE
PAYMENT
RECEIVING
DOCUMENT
GOODS
PURCHASE
ORDER
PURCHASE ORDER

10. DATABASE
FORD’S NEW PROCESS
PURCHASING
DEPARTMENT
VENDOR
MATERIAL
CONTROL
DEPARTMENT
ACCOUNTS PAYABLE
DEPARTMENT
“WE PAY WHEN WE RECEIVE THE
GOODS”
PAYMENT
GOODS
INFO.
PURCHASE ORDER
RETURN GOODS
IF NOT OK
CHECK
ACCEPT
TRANSACTION
IF OK

11. FORD MOTOR COMPANY AFTER
REENGINEERING
• Achieved 75% reduction in head count
• No discrepancies between financial records
and the physical records

12. MBL’APPLICATION PROCESS
BEFORE REENGINEERING
• Long, multistep process involved
• An application include : 30 discrete steps ,
5 departments and involved 19 people
• Time required : 24 hours (min.)
5-25 days(max.)
• Actual value added(VA) time needed : 17 minutes
Aim: To improve customer service
60% improvement in productivity

13. MBL’S OLD PROCESS
CUSTOMER
DEPARTMENT 1
DEPARTMENT 2
DEPARTMENT 3
DEPARTMENT 4
DEPARTMENT 5
SEQUENTIAL PROCESS

14. MBL’S NEW PROCESS
CUSTOMER
CASE MANAGER
+
WORK STATIONS
COMPUTER
NETWORK
CASE
MANAGER
CASE
MANAGER
DATABASE
MAIN FRAME
AND SHARED
DATABASE

15. • Could complete an application in minimum 4
hours.
• Average time required for entire application
processing reduced to 2-5 days.
• Elimination of 100 field office positions.
• Capacity increased by more than 2 times.
MUTUAL BENEFIT LIFE
INSURANCE AFTER
REENGINEERING

16. PRINCIPLES OF REENGINEERING
1. ORGANIZE AROUND OUTCOMES, NOT TASKS
2. HAVE THOSE WHO USE THE OUTPUT OF THE
PROCESS PERFORM THE PROCESS
3. SUBSUME INFORMATION-PROCESSING WORK
INTO THE REAL WORK THAT PRODUCES THE
INFORMATION

17. 4. TREAT GEOGRAPHICALLY DISPERSED RESOURCES AS
THOUGH THEY WERE CENTRALIZED
5. LINK PARALLEL ACTIVITIES INSTEAD OF INTEGRATING
THEIR RESULTS
6. PUT THE DECISION POINT WHERE THE WORK IS
PERFORMED,
AND BIULT CONTROL INTO THE PROCESS
7. CAPTURE INFORMATION ONCE AND AT THE SOURCE

18. Gujarat Cancer Research Institute,
India
21500000
22000000
22500000
23000000
23500000
24000000
24500000
25000000
25500000
26000000
2002-03 2003-04 2004-06
COMPARISION
INCOME AND EXPENDITURE
INCOME ₹
EXPENDITURE ₹

19. Their Existing Process :
OLD STRUCTURE
DIRECTOR
DEPUTY DIRECTOR ADMINISTRATIVE OFFICER

20. A new organization structure
DIRECTOR
DEPUTY
DIRECTOR
MEDICINE
DEPUTY
DIRECTOR
SURGERY
DEPUTY
DIRECTOR
RESEARCH
ADMINISTRATIVE
OFFICER

21. DRUGS AND MEDICINES
General tablets
and capsules
Anti -cancer
oral
Anti-cancer
injectibles
general
injectible drugs
so on........
•Selection of vendors
•List price
•Selection
A NEW SYSTEM FOR VENDOR SELECTION
BASEKET OF ITEMS

22. 1200 Purchase
orders every year
4-5 per working
day
A new prescription for placing purchase orders
Old system

23. Leading digits: 1-4 Digits 5-7 Last digits: 8-10
Major group code Minor group code Serial number of the item
12 Purchase orders
every month
Vendor
Hospital
New system
•A computerized database

24. Benefits of the new system

25. 0
100
200
300
400
500
600
700
800
Old system New system Old system New system Old system New system
No. of vendors No. of purchase orders No. of items in inventory
Impact of BPR
Drugs and medicines
Lab supplies
X-ray items
Surgical items