One of the major reasons for companies to adopt new ways of doing business is jettisoning old costs and functioning without being cost chained by the process of past . That is why , there is close relationship between TPM and BPR . After all , business process reengineering — as its inventors James Champy and Michael Hammer point out — is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in contemporary measures of performance , such as cost , quality , services , and speed – which are all connected to costs .
Indeed , BPR is the logical concurrent tool to cost management since the latter demands change and the former provides it . Mr . Sanjay Jain , partner , Anderson Consulting Firm observes “ Indian companies have already changed their orientation from turnover to profits . Now , they have to become cash oriented to fund the growth . And the only way to achieve this during a slow down is through BPR ” .
BPR kills and curtails costs by enabling processes to be structured as they should be in the first place to address customer needs instead of staying as the amalgamation of haphazard activities historically piled atop one another as a combined result of bureaucracy complexity and plain old inefficiency . The reorientation towards becoming a process centric enterprise eliminates a lot of non – value adding work . The process centerism of BPR makes it valuable chink of TCM , because it brings the totality into cost management . BPR has deep impact on manufacturing .
Simply put the manufacturing processes of a company involve the production , purchase , marketing and finance departments . As all managers in each functional area are aware of their individual problems , it is not likely that such awareness goes beyond the department . No wonder every manager tries to solve the problem with departmental solution , often perceiving symptoms as problems . However , BPR injects holistic perspective enabling the total cost process and not just of individual activities which are optimised .
In 1996 , the Premier Instruments and Controls Limited ( PRICOL ) was in a squandary of mounting costs . It was BPR which was introduced in 1999 which helped the company in three ways to come out of the rut .
First , if cut across boundaries , integrated function – specific operational improvement tools into a process wide solution , and it established the ownership of the process , paving the way for effective implementation . Together , it 100 percent schedule adherence by PRICOL and improved its lead time in product development from 365 days to 175 days . By 2 , 000 the company projected 25 percent cut in costs .
Second contribution of BPR to cost management is to force the organization to put all the value activities under the microscope . To cut the costs , the concerned team is to analyse the processes on the basis of time taken , the cost incurred , and the value added to the eventual product . The ideal starting point will be the critical processes which add the most value to the product . This critical starting point also can be sales and distribution also . The benefit that BPR bestows is prioritising which process to attack for the biggest impact on the cost structure .
Third BPR discovers inefficiencies in sales forecasting process that led to high inventory costs , sub optional procurement practices and a longer working capital cycle . This BPR has been used widely by Dabur India , India Pistons , Whirlpool India , UB Group , Godrej Phillips India , Johnson and Johnson India , Citi Bank , Satyam Renaissance Consulting , and so on .