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1、Business Process Analysis - A Letter from AmericaProfessor V. ArunachalamDistinguished Service Professor, Departments of Material Science and Engineering Robotics and Engineering Public Policy Carnegie Mellon University Pittsburgh, PA, 15217 and Dr. Eswaran SubrahmanianSenior Research Scientist,Engi
2、neering Design Research Center Carnegie Mellon University Pittsburgh, Pa, 15217 August, 1995 A report to Engineering and Scocial Science Research Council, UK To enable the reader to access this BPRC report speedily and flexibly, it has been organised into the following separate sections: Contents Pa
3、ge Abstract Introduction Reengineering Corporations and Reengineering The Chrysler Corporation Caterpillar Jet Propulsion Innovation in Defense: Hughes Aircraft Innovation in Technologies Government Initiatives Methods and Tools for BPA IT and BPR Japan and Reengineering Human Resources in BPR Probl
4、ems in Reengineering A Few more lines References A report to Engineering and Scocial Science Research Council, UKSection 1: AbstractThis report is on the recent innovations implemented by American companies in the way they manage their business and by the US government in supporting the industrial a
5、nd technological base in the country. American corporations visible to outsiders are generally very large, with annual budgets running well above the national budgets of many countries, and with a range of diverse operations transcending divisional, organisational and national barriers. In respondin
6、g to changes in the global market place, they are continually introducing innovations in process and product technologies and in product development and manufacturing cycles. It is difficult to enumerate, let alone discuss, all the innovations that are seen in US business today. Instead, we shall fo
7、cus on innovations that are significant and generic for improving business processes. This is relevant as more than fifty percent of US firms are medium or small sized, and the general competitiveness of US industry depends on them as well. In this report, we do not discuss the recent trends in fina
8、ncial, merger, ROD and marketing strategies and processes. Instead, we discuss only those issues related to business processes that impact the ability of US business to meet the identified market demands in cost, quality and time. A phrase, now increasingly in vogue, to describe the efforts in proce
9、ss improvements is Business Process Re-engineering (BAR). Hammer and Champ define BAR as the radical rethinking of the business processes to achieve dramatic improvements in critical contemporary measures of performance as cost, quality and speed. This characterisation of re-engineering is often int
10、erpreted in multiple ways resulting in different models and methods of implementation of business process re-engineering. Reported failure rates of about forty to seventy percent for BAR applications in achieving stated goals can indeed be attributed to the differences in perceived definition of wha
11、t constitutes re-engineering and the level of implementation. In practice, implementations of re-engineering span from re-engineering local process to a complete restructuring the entire organisation. Business process re-engineering for local improvements have led to the development of analytical mo
12、dels for optimisation of existing processes through simpler procedures and incorporation of Information technology. Activity based accounting, an American invention, is also used in conjunction with process re-engineering projects efforts. The drive towards BAR in American industries has spawned an
13、industry of consultants and process mapping and simulation tools. A brief review of the state-of-the art in analytical methods and tools such as IDEFO, SAT, BPMAT and Design Process Matrix is also provided in this report. At the other end, there are examples of well established organisational struct
14、ures and processes being totally replaced by new structures and flexible processes. Such total re- structuring efforts may well include use of cross functional teams, retraining and activities related to the management of innovation as integral parts of the business processes, well beyond the conven
15、tional activities of design, manufacture, and service of products. The difference between successful and unsuccessful firms that use BAR appears to lie more on the scope and coverage of the BAR efforts than on the mere application of tools and methods. We illustrate the above inferences by discussin
16、g the various models used by some US firms and the experience of a few select industries in adopting BAR. There are examples of a laboratory re-engineering itself and others from defence industries re-engineering themselves to accommodate ending of the Cold War and declining defence budgets. Re-engi
17、neering depends on people: the way they learn their jobs, work and collaborate with their colleagues. Often, this involves learning new trades and work practices, and embracing a new work ethic that transcends the narrow specialization that the workers find themselves in. Past industrial innovations
18、, successful as they had been, practiced division of labor on the work force to a degree that almost eclipsed the need for human ingenuity and innovation. BPR has brought changes in the way the work force is perceived for effecting organizational changes. Most successful examples of BPR are therefor
19、e from the corporations that practice retraining programs. While bigger corporations have the resources to re-engineer their processes and re-train their work force, their successes also depend on how effective their suppliers in the value chain are in practicing BPR. The problem of implementing BPR
20、 and the training of the work force in supporting firms is generally believed to be the responsibility of the individual firms. Contrary to general belief, the US government is not a passive observer of the restructuring of business processes that are now underway in the country. It is intervening a
21、ctively by providing initiatives and inducements to all firms for continuing education and retraining programs. The US govemment is also intervening actively in an innovative fashion to fill the gaps seen in US companies, specially in processing and manufacturing stages. These are considered essenti
22、al to keep American products globally competitive. The US federal and university laboratories, large and successful as they are, have been singularly ineffective in transferring these technologies to US industries. Existing laws in place and concerns about patent rights and public knowledge have dis
23、couraged close collaboration between the laboratories and industries. The US government has introduced multi-agency (Defense, Commerce, NASA, NSF and ARPA, and Transportation) programs in defense, dual-use and civilian sectors supporting short term programs of research in high risk, high value manuf
24、acturing process technologies. The major condition of support of such programs is that the program should be commercially relevant to industry and jointly pursued by laboratories and industries, with leadership and matching financial contributions from industry. In this report, we discusses these in
25、itiatives, known as ATP (Advanced Technology Program) and TRP (Technology Re-investment Program) and their performance to date. The success of Japanese firms in capturing a significant part of the US automobile market in the 70s and 80s and their ability to adapt to changing economic conditions, wit
26、hout undue changes in unemployment, triggered the rethinking of the nature of business operations in American industry. A serious search for new models of business began with the scrutiny of Japanese automobile industry by US companies and business theorists. This involved studies on process innovat
27、ions, quality management and lean production technologies as practiced by the Japanese. Meanwhile, Japanese firms are introducing information technology in their work practices that not only preserves much of their organizational and cultural advantages but also incorporates a few US innovations. In
28、 this sense both are learning from each other. The definition of Business Process Analysis is continually changing. It is, in the economic jargon, both macro and micro: details of every process matter as also the overall organizational objectives. Technology is not the only driving force for re- eng
29、ineering. Economic and cultural practices are relevant as well. Knowledge generated by individual companies and business theorists and the experience gained by its application will be the BPR tools and methods for tomorrow. Even with a limited repertoire of techniques and relative inexperience in ap
30、plying them to business practices, BPR, currently, is proving to be powerful approach for organizations wanting to be competitive.Section 2: IntroductionThe United States of America is branded as a Superpower when it comes to military strength, but the context can indeed be wider. In practically all
31、 areas of human endeavor it stands on top: it has the largest GNP, biggest industrial and manufacturing base and an impressive, efficient and enviable scientific and technological infrastructure. Its output in as traditional an area as agriculture or in as modern a field as information technology is
32、 prodigious. It is not only a granary for the world but also a demonstration and proving ground for harnessing new technologies or innovations for creating wealth or improving the quality of life. Among the worlds 500 largest corporations, the magazine Fortune lists 151 as American owned, larger tha
33、n any other country. In 1994 alone, these corporations earned a profit of more than $ 140 billion, a record among other competitors. As impressive as this is, it was actually better, especially after the Second World War and in the 1950s and 60s. Since then, this lead has eroded away in some key man
34、ufacturing industries such as iron and steel, automobiles and consumer electronics. Meanwhile, the deficit in trade balance in these areas between total value of exports and the total value of imports by the US has actually increased. Since the seventies, more areas have been lost to competition; ma
35、ny new countries, considered in the past as less advanced, are emerging as strong competitors. Formerly, the US tended to ignore these challenges and attributed the competitiveness of other countries, most notably of Japan, to their low wages, homogeneity of population, authoritarian culture, work-e
36、thic and low technology contents. It also rationalized the loss by arguing that as the worlds largest technological power, it was forever looking for new manufacturing opportunities relegating less technology- intensive or labor-intensive manufacturing to other countries. However, the danger signs w
37、ere visible in many areas. The automobile industry was, and still is, very special to the US. In addition to providing mobility to millions of Americans and linking this vast country, it remains the core of American manufacturing and also the crucible for manufacturing and managerial innovations. Th
38、e moving assembly line and management practices empowering and integrating manufacturing centers with customers and suppliers are all the consequences of automobile manufacture. But when this industry was overtaken by foreign competitors with their delivery of affordable and reliable cars of higher
39、quality on time, concerns were voiced about the productivity and competitiveness of US manufacturing and demands were made for urgent remedial steps. A major study on U.S industrial productivity in 1986 by a distinguished group of sixteen experts, including a Nobel laureate economist from the Massac
40、husetts Institute of Technology Berger,B., et.al. 1989, detailed the weaknesses prevalent in US industries, not just in macroeconomics terms, but in terms of the customer satisfaction, quality of products, efficiency of production, speed of manufacture and introduction of new products and costs. Thi
41、s study of 200 companies was the first to identify these gaps in the US system and traced their origin to the age of mass production, antitrust laws, use of workers as mere skilled operators, overemphasis on products rather than on processes and to an environment that has long ceased to exist. This
42、group found these strategies to be outdated in the face of increased global trading, emergence of new technologies and their speedy assimilation by many countries and the growth of sophistication among consumers. Thanks to new technologies, manufacturing and process technologies were making producti
43、on more flexible, streamlined and efficient bringing in a quality previously thought as unachievable and at a speed considered unattainable. The work-force was no longer a collection of skilled individuals but groups with competence transcending many areas of manufacturing, and motivated by team-spi
44、rit, delegated power and vested authority. All these, according to this study, were missing in the American industrial and manufacturing scene. Even in the 1960s, the management guru, Peter Drucker1969, in a deeply perceptive book, The Age of Discontinuity, lamented the lack of any change in the str
45、ucture of industrial organizations in step with the impressive growth of economy and technologies. Small mid-course corrections were introduced in the well established but outdated structures to provide continuity when radical reforms and path-breaking restructuring were in order. This report discus
46、ses one major business process innovation that is now sweeping the United States consuming the traditional, but increasingly inefficient, ways of doing business. Reengineering has been the banner of this change in business practices. This innovation is truly a home-grown one, and as we shall discuss
47、 later, not an import. As with all things American, its sweep is vast, its opportunities are immense and the dangers of failure real. In this report, we first provide the scope of this innovation its impact on business and the mutations it is undergoing through case studies. This is followed by a su
48、mmary of analytical tools used in this innovation. Subsequently, we examine its consequences in governmental policies and human resource strategies. We then briefly summarize the differences in the practice of reengineering between Japan and the United States, since the U.S. is concerned-some would
49、say excessively-with the way Japan conducts its business. In summary, we see an evolution, even within a short period of a few years, as reengineering is changing rapidly losing some of its hard-doctrinal stances and learning to work with new technologies. But more changes are needed, some urgently so, in areas such as human resources. Rightly, or wrongly, Business Process Reengineering has come to be identified with Big People Reduction! This image has to be shed if reengineering