postech strategic management of information systems lab bpr/erp

Postech Strategic Management of Information Systems LAB

BPR/ERP


What is BPR?

“Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measure of performance, such as cost, quality, service, and speed”

-Dr. Michael Hammer . 1990


Fundamental Concept of BPR

ProcessProcess

FundamentalFundamental

RadicalRadical

DramaticDramatic

Shift from function based thinking to process based thinking

Shift from function based thinking to process based thinking

Fundamental rethinking of the way of conducting business

Fundamental rethinking of the way of conducting business

Disregarding all existing structures and inventing complete new ways –not improvement or modification

Disregarding all existing structures and inventing complete new ways –not improvement or modification

Making quantum leaps in performance rather than incremental improvement

Making quantum leaps in performance rather than incremental improvement


Why BPR?

InnovationInnovation CustomerDriven

CustomerDriven

Core Competence

Core Competence

GlobalizatioGlobalization !n !

CustomerCustomer ChangeChangeCompetitionCompetition


What is Process?

Definition of Process A process is a cross-functional interrelated

series of activities that convert business inputs

into business outputs

SupplierSupplier CustomerCustomerInput OutputActivityActivity ActivityActivity ActivityActivity

Process


Seven Principles of BPR

Organize around outcomes, not taskOrganize around outcomes, not task

Have those who use the output of the process perform the process

Have those who use the output of the process perform the process

Subsume Information processing work into the real work that produces the Information

Subsume Information processing work into the real work that produces the Information

Treat geographically dispersed resources as though they were centralized

Treat geographically dispersed resources as though they were centralized

Link parallel activities instead of integrating their results

Link parallel activities instead of integrating their results

Put the decision point where the work is performed, and build control into the process

Put the decision point where the work is performed, and build control into the process

Capture all information at the sourceCapture all information at the source

BPR Principles

BPR Principles


Common steps when performing BPR

1. Selection of project1. Selection of project

2. Analysis of initial capability2. Analysis of initial capability

3. Selection of process and project scope3. Selection of process and project scope

4. Work analysis4. Work analysis

5. Redesign of alternative process5. Redesign of alternative process

6. Cost/benefit analysis for each alternative process6. Cost/benefit analysis for each alternative process

7. Selection of alternative process7. Selection of alternative process

8. Implementation of process8. Implementation of process

9. Change of process information9. Change of process information


Taylorism VS. BPR

Taylorism BPR(Hammerism)

Orientation Task, Function Process

Tool Stopwatch IT

DomainProduction

ManagementEntire organization

Goal Mass production Customer satisfaction

Age Industrial revolution Information revolution


BPR VS. Other Programs

Reengineering Rightsizing Restructuring TQM Automation

Assumptions

QuestionedFundamental Staffing

Reporting

Relationships

Customer

Wants and

Needs

Technology

Applications

Scope of

changeRadical

Staffing, Job

Responsibiliti

es

Organizations Bottom-up Systems

Orientation Processes Functional Functional Processes Procedures

Improvement

GoalsDramatic Incremental Incremental Incremental Incremental


What is ERP?

ERPERP

Advanced Process

Advanced Process

BPRBPR

Information Technology

Information Technology

Process Innovation

Process Innovation

Definition of ERP(Enterprise Resource Planning)

• A set of applications designed to bring business functions into

balance and represents the next generation of business systems

– by Gartner Group

• An accounting oriented information system for identifying and

planning the enterprise wide resource –by APICS


Development of ERP

MRP (Material

Requirement Planning)

MRPII (Manufacturing

Resource Planning)

ERP (Enterprise Resource Planning)

SCM (Supply Chain Management)

1970’s 1980’s 1990’s 2000’s

Material Planning

Minimum Inventory

Closed Loop MRP

Capacity Planning

Cost Reduction

Enterprise-wide Planning

Management Innovation

Inter-company Optimization

Win-Win-Win


Functions of ERP

ERPERP

Finance/Accounting

Engineer-ing

Sales/Mktg

Supplier

Production

Logistics

Customer

Product Development ProcessProduct Development Process

CAD/CAMCAD/CAMPDMPDM

Drawing/Docu Mgmt

EC Mgmt

Configuration ControlRelease Control

Order Fulfilment ProcessOrder Fulfilment Process

Manufacturing ProcessManufacturing Process

Management ProcessManagement ProcessEmployee

MESMES

Finite Scheduling

Data Collection/POP

Facility Management

Quality Management

FAFA


Structure of ERP System

SupplieSupplierr

ARAR

PlanningPlanning

APAP GLGL

ReceivingReceiving ShippingShippingInventoryInventory

ARAR

PlanningPlanning

APAP GLGL

ReceivingReceiving ShippingShippingInventoryInventory

Manufacturing PlantsManufacturing Plants Distribution CentersDistribution Centers

Product Life cycleProduct Life cycleEngineeringEngineering PurchasingPurchasing PlanningPlanning Order AdminOrder Admin FinanceFinance

OrderOrderEntryEntryOrderOrder

Shop Floor ControlShop Floor Control

OrderOrderEntryEntryOrderOrder

PDMPDM

EEDDII..

WWeebb

EEDDII..

WWeebb

FAFA

CustomerCustomer


Characteristics of ERP

BPR Tool

BPR Infrastructure

Data Integration

Single View of Distributed Systems

Communication Tool

Configuration Function

No Programming

Supporting Multi-language

BPR Enabler

Integration

Globalization

EnterpriseReal-time

Integration

postech strategic management of information systems lab bpr/erp

Documents

generation of business

selection of process

business inputs

business functions

definition of processa

alternative process7

selection of project2

costbenefit analysis