Process Redesign

• The strategies that organization follow to achieve operational excellence.

• In other words, it is a fundamental rethinking of business processes to bring
about dramatic improvements in performance.
• The objective is to achieve a quantum jump in a performance measures such as:
return on investment, cost reduction and a quality of a service.
 Process redesign strategies
1. Employee focused: This approach focuses on empowering employees and
maintaining frequent touchpoints with the customer.
2. Cost focused: The organizations that adopt this strategy aim to achieve operational
excellence through cost reduction and the establishment of rigid, inflexible business
processes.
3. Hybrid: This strategy represents a mixed form of process redesign characterized
simultaneously by customer centricity and a focus on efficiency. It combines best
practices from the employee and cost-focused strategies.
4. Work-stream focused: A workstream-focused redesign strategy enables the
operational system to adapt to the situation at hand through managing exceptions and
establishing separate processes for normal and exceptional customer orders or
requests.
 Product Redesign
• Example : operation management at the barber shop
• The inspiration of Japan’s largest chain of barbershops came, not surprisingly, while kuniyoshi konishi
was getting his hair cut one day.
• It took his barber to apply numerous hot towels, shoulder rubs and other amenities that had little to do
with getting one’s hair cut, charge 3000 to 6000 yen ($25 to $50).
• Mr. konishi recognized the need for a new system of delivering fast, inexpensive haircuts, so he formed
QB house, a fast, no-frills men’s barbershop. QB house doesn’t take reservations, so none of the outlets
have phones.
• Unlike traditional way QB house barbers use the company’s air wash system pulling down a hose from
overhead to vacuum heads clean.
• In the place of a cash register, each QB house is equipped with a ticket vending machine. High-tech
touches were added along the way. Sensors under each seat in the waiting area.
• Seven years after opening his first barbershop,Mr. konishi has 200 outlets nationwide providing the
formerly impossible: 10-minute haircuts for 1000 yen. With OM techniques, the company has creatively
improved productivity in a very traditional service and is now going global. Next stop is Singapore.
 Ethics and environmentally friendly processes
• Many firms have found opportunities in their production processes to reduce the
negative impact on the environment.
• The opportunities range from activities that society perceives as ethical and socially
responsible to actions that are legally required, such as pollution prevention.
• Making your business environmentally friendly not only benefits the environment but
can also save you money, attracts new customers and improves sustainability.
 Ethics and environmentally friendly processes
 These activities include a focus on such issues as:
 Efficient use of resources.
 Reduction of waste by products.
 Emission controls.
 Recycling.
• Avoiding, reducing, reusing and recycling can lower your costs. For example, a few
simple changes to how you deal with paper can involve your staff in environmentally
friendly processes while saving you money.
 Managing Demand
• In any kind of firm, it is very important to manage capacity and demand yet it is very
difficult.
• Either there is too much demand for the capacity or too little demand giving rise to
unused capacity. i.e. perishability factor.
 Issues of perishability factor:
a. If demand far exceeds capacity it cannot be met as in manufacturing, by taking goods
from a warehouse.
b. If capacity far exceeds demand the potential revenue from that service is lost.
 Managing Demand
 The organization may experience the following situation:
1. Demand exceeds optimum capacity: The level of demand exceeds maximum
available capacity.
• Cost reduction
• Increase the capacity
• Schedule long- lead times
2. Capacity exceeds the demand: The situation where demand is below optimum
capacity.
• Cost reduction
• Aggressive marketing
• Product changes.
3. Adjusting to seasonal demands: In such situation, management might find it helpful
to offer products with complementary demand patterns i.e. products for which the
demand is high for one when low for the other.
 Managing Demand
Tactics for matching capacity to demand:
1. Making staffing change.
• Increase or decrease the no. of employees
• Recruiting part time employees
2. Adjusting equipment and processes.
• Purchasing additional machinery
• Selling or leasing out existing equipment
3. Improving method to increase throughout and/ or.
• Manipulating price
• Offering a mobile service
• Changing the service offer
4. Redesigning the product to facilitate more throughout.
• Employee focused
• Cost focused