Business re-engineering and kaizen


In today’s competitive environment, when we are trying to integrate our economy to the world economy, globalization and restructuring have become buzz words. In this context, business reengineering has emerged as a powerful tool to revitalize corporate activity.

Reengineering is concerted with overall redesigning. The key element in this connection is technology. We have to put to information technology in process design. Flexible manufacturing system replaces old traditional centralized system. Process improvement is the overall goal. Reengineering does not start with redesigning processes. It is futuristic. First future goals are set out, and then the reengineering team works backward to carry out the set goal, ignoring existing set-up. They work out new designs for existing processes. The concept has four components which are synergistically combined.

1. Process redesign and improvement
2. Organizational restructuring leading to cross-functional team building.
3. A new information system.
4. A new value system, customer and quality-driven.

Reengineering is akin to surgery which cuts certain vested interests. Reengineering is phased over a period of time. The guiding factor for reengineering is strategy. Then it should initiate change process. Reengineering is marketing oriented and is a change process which bring competitive edge to the business without disturbing existing techniques like TQM.

Kaizen is the philosophy of on-going improvement involving everyone—from the CEO to the unskilled worker. If reengineering is an equivalent of the overhaul of an engine, Kaizen means its continuous fine tuning. It expects people to upgrade the standard of performance.

Business process Reengineering (BPR) has been invented by James Champy and Michael Hammer. According to them, it consists of the fundamental rethinking and radical re-design of business processes to achieve dramatic improvements in contemporary measures of performance such as cost, quality, service and speed. Processes to be restructured should address customer needs instead of staying as a mix of haphazard activities piled up as a result of bureaucratic approach, and inefficiencies.

BPR is thus process-centric. BPR affects manufacturing. In manufacturing processes, there is involvement of production, materials, marketing and finance departments. Most manufacturing problems cut across the departmental lines. But managers take a narrow view and think in terms of their department. They often mistake symptoms as problems.

BPR introduces a holistic perspective. Costs are thus optimized. BPR expects re-examination of all value-activities. They are analyzed o the basis of time taken, costs incurred, and the value added to the final product. The starting point is to identify critical processes which add the most value to the product. In this fashion, we can prioritize the processes in terms of their impact on costs.

Kaizen is a Japanese concept founded in 1986. Masaaki Imai has made it very popular. In a production process, one has to anticipate the problems which can turn up later in design and planning stage itself, and take the necessary steps to prevent them so as to save substantial costs. To implement this simple concept, it is necessary to become a hands-on manager and visit the work place as often as one can.

Many accidents can be prevented by kaizen, e.g. a spanner falling into an assembly line. Every problem in the work place is linked to the five M’s—man, machine, material, method and measurement. We should follow gemba gembutsu approach, where gemba means work place, gembutsu means a tangible thing like the customer, the product, the machine. Gembutsu has great relevance, since it helps designing a product with the customer in mind. Kaizen is a continuous process of improvement. In kaizen process, first the company is made ‘normal’ after removing problems and then it is made ‘productive’ and finally given ‘longevity’.