Business process re-engineering or BPR is fundamentally about improving the productivity (efficiency and effectiveness) of the organisation by re-designing its processes. A successful BPR helps improve metrics such as profit/ employee, customer satisfaction, operating margin, asset turns and ultimately return on capital employed.
Inevitably BPR involves changing the “As-Is” way of doing things in search of better alternatives, and any change is usually met with resistance since it involves a certain degree of risk – not to mention moving people away from their comfort zone.
But the bottom-line is that human talent, management principles and technology continue to evolve and organisations that do not tap them to improve their ways of working are bound to fall behind on productivity.
A case in point is some of the PSU banks in the country that are mighty in size (revenues, number of branches, employees etc.) but continue to lag the private sector banks significantly in terms of profit/ employee. One of the main reasons for the low productivity levels at these banks is redundant and cumbersome processes that have become a drain on efficiency.
The business case for BPR is best made (although inadvertently) by an old poem written by the American poet Sam Walter Foss (1858-1911) called ‘The Calf-path’ (excerpted below). This poem drives home the point.
Lean and Six-sigma are two BPR philosophies that help companies transform themselves. While Lean focuses on improving efficiency by cutting down waste, Six Sigma is about improving effectiveness by working on accuracy and precision. But there is significant overlap between the two philosophies and these days they are both adopted by organisations under the moniker ‘Lean-Sigma’. ‘Lean’ helps improve processes within a company by taking the customers’ perspective to define value.
This is followed by developing a detailed value-stream map to capture how the value is being created by the organisation. Subsequently, the value stream is analysed to determine which steps really add value to customers vs. which do not, as well as which are necessary vs. unnecessary in order to decide what needs to be retained, reduced and eliminated. ‘Lean’ classifies potential wastes as excessive movement, waiting, over production, unnecessary processing, defects, inventory and transportation. It also provides prescriptions for how organisations can tackle these on the path towards productivity improvement.
For those interested in learning more about how Lean can transform an organisation, you could check out the Lean Enterprise Institute ( www.lean.org ) founded by James Womack.
The calf-path
One day, through the primeval wood,
A calf walked home, as good calves should;
But made a trail all bent askew,
A crooked trail, as all calves do.
Since then three hundred years have fled,
And, I infer, the calf is dead.
But still he left behind his trail,
And thereby hangs my moral tale.
The trail was taken up next day
By a lone dog that passed that way;
And then a wise bell-wether sheep
Pursued the trail o’er vale and steep,
And drew the flock behind him, too,
As good bellwethers always do.
And from that day, o’er hill and glade,
Through those old woods a path was made,
And many men wound in and out,
And dodged and turned and bent about,
And uttered words of righteous wrath
Because ’twas such a crooked path;
But still they followed — do not laugh —
The first migrations of that calf,
And through this winding wood-way stalked
Because he wobbled when he walked.
This forest path became a lane,
That bent, and turned, and turned again.
This crooked lane became a road,
Where many a poor horse with his load
Toiled on beneath the burning sun,
And traveled some three miles in one.
And thus a century and a half
They trod the footsteps of that calf.
The years passed on in swiftness fleet.
The road became a village street,
And this, before men were aware,
A city’s crowded thoroughfare,
And soon the central street was this
Of a renowned metropolis;
And men two centuries and a half
Trod in the footsteps of that calf.
Each day a hundred thousand rout
Followed that zigzag calf about,
And o’er his crooked journey went
The traffic of a continent.
A hundred thousand men were led
By one calf near three centuries dead.
They follow still his crooked way,
And lose one hundred years a day,
For thus such reverence is lent
To well-established precedent.
Sam Walter Foss
(The author is a business consultant. Feedback can be sent to perspective@thehindu.co.in )