Business Process Reengineering
MAF 635: Strategic Management Accounting
Business Process Reengineering vs Kaizen Costing
Business Process Reengineering (BPR)
Definition
Fundamental rethinking and radical design to achieve dramatic improvement in cost, quality, service and delivery (Hammer & Champy, 1993; Manganelli & Klein, 1994). It means that business process reengineering involves many steps that change the entire business process. This is done to reduce the cost of production of a product or service, increasing the quality, and satisfying customers by offering an excellent service and delivery.
BPR can be done in four ways that are:
i. Business transformation
By using this way, the whole organization is changed. This includes the business process, business management and business strategies.
ii. Redesign business process
In this way, only the business processes are changed. Usually, the number processes will be reduced. The non value added processes are eliminated.
iii. Business process change management
This is the process for managing human/employee side of change. It includes the steps taken to change the management team or a project leader.
iv. Redesign strategies and value added processes
It means that the organization changes the business strategies and creates or improves their value added activities.
Objectives of Business Process Reengineering (BPR)
There are many objectives of business process reengineering. The main objective is of course to increase the effectiveness and efficiency of the whole business. Listed below are the specific objectives of business process reengineering:
i. To save time and cost
Time can be saved once the non value added activities are removed from the process as there is fewer work process to be done. This will lead to cost saving as the cost incurred during the production will also decrease. As the cost decreases, the profit margin will be higher and it will lead to a greater income for the
Business Process Reengineering vs Kaizen Costing
Business Process Reengineering (BPR)
Definition
Fundamental rethinking and radical design to achieve dramatic improvement in cost, quality, service and delivery (Hammer & Champy, 1993; Manganelli & Klein, 1994). It means that business process reengineering involves many steps that change the entire business process. This is done to reduce the cost of production of a product or service, increasing the quality, and satisfying customers by offering an excellent service and delivery.
BPR can be done in four ways that are:
i. Business transformation
By using this way, the whole organization is changed. This includes the business process, business management and business strategies.
ii. Redesign business process
In this way, only the business processes are changed. Usually, the number processes will be reduced. The non value added processes are eliminated.
iii. Business process change management
This is the process for managing human/employee side of change. It includes the steps taken to change the management team or a project leader.
iv. Redesign strategies and value added processes
It means that the organization changes the business strategies and creates or improves their value added activities.
Objectives of Business Process Reengineering (BPR)
There are many objectives of business process reengineering. The main objective is of course to increase the effectiveness and efficiency of the whole business. Listed below are the specific objectives of business process reengineering:
i. To save time and cost
Time can be saved once the non value added activities are removed from the process as there is fewer work process to be done. This will lead to cost saving as the cost incurred during the production will also decrease. As the cost decreases, the profit margin will be higher and it will lead to a greater income for the