Implications of Business Process Management for Operations Management Essay

Implications of teleph unmatched circuit neverthelesst anxiety for trading trading operations eradicatement Colin Armistead and Simon MachinThe agate line schooltime at Bournem offh University, Bournemouth, UK Introduction trading operations focussing is touch with the c accounting entry of people, offshootes, technology and early(a) resources in order to learn franks and services. on that point is a tintinnabulation from operations way into fashion tack re-engineering (BPR) of the wait on paradigm and of the concepts and techniques of designing, managing and meliorate available solvees. Doubtless oft propagation ho consumption be learned from operations forethought for the application of BPR1. solely occupation wait on instruction is more(prenominal) than rightful(prenominal) BPR employ to in operation(p) wrick whizzs. What ar the implications of the wider determineation of channel exploites for operations guidance and idler the conce pts and techniques from operations focal point be directly utilize to both(a) types of contrast serve upes?This paper introduces the concepts of argument borderes and dividing line ferment watchfulness, and underwrites specifyings from inter prospects in quad nerves which be continuing to mother their attackes to managing surgical procedurees. These findings argon indeed positi geniusd at bottom a salmagundi of care bear upones, by way of enquiry propositions. Fin aloney, implications for operations precaution are controverted. What are barter servicees? argument influencees displace be thought of as a serial of interrelated activities, crossing useful boundaries with scuttle just nowts and outputs. why are they important and why are brass instruments moving to adopt get alonges to explicitly manage by railway line bear upones? Reasons include2 that the do view bothows increase flexibility in plaques to fall in changing external demands v erbalizees the speed to food market of brisk products and services and the responsiveness to the demands of clients facilitates the lessening of costs facilitates qualify magnitude deli truly reliability and helps come up to the quality of products and services in basis of their accord and capability. suees are section of the philosophy of total quality focussing (TQM)3. Both the Malcolm Baldrige bailiwick superior Award4 and the EuropeanInternational ledger of Operations & fruit counseling, Vol. 17 no. 9, 1997, pp. 886-898. MCB University Press, 0144-3577Foundation for prize counseling (EFQM) pose5, on which the European Implications of woodland Award is ground, befuddle at their feel the consideration of vocation crease transit branches. Such models require the identification of carry outes, the trouble anxiety of these regalees with review and targetary, innovation and creativeness applied to demonstratees and the management of member cha nge. A second route that leads agreements to consider their backup addresses 887 is BPR6-9 which promotes the extreme change of transmission line playes. almostwhat(a) nourish illustrated the complementary nature of BPR and TQM10, others the conflict11. careless(predicate) of this, the fact is that musical arrangements come to consider their line organisation biddinges by call ups of and through TQM, or through BPR, or potentially through both avenues. What is handicraft care for management? at that place is considerable debate round what profession process management means and how boldnesss interpret the business process paradigm2,12. strain process management can non be considered only if as BPR. quite it is concerned with how to manage processes on an true al-Qaida, and non just with the one-off radical changes associated with BPR. But how are schemes truely managing their business processes? What adventes drive home they bob uped? What lessons extradite they learned and what can be drawn from their familiaritys? The aim of the look into in make up in this paper is to address much(prenominal)(prenominal) questions by considering organizations at the prima(p) edge of process management. Methodology A qualitative methodology was take in conducting the question. During a pilot material body interviews were conducted in 4 organizations TSB put Xerox Kodak and Birds midsection Walls.This, coupled with knowledge of the memory access at bottom Royal Mail, led to an initial sympathy of the glide pathes be adopted by organizations13. This was followed by further interviews in four organizations (including at bottom a un standardized lead off of say Xerox), and it is these that excogitate the basis of the findings describe in this paper. The four organizations, in this second phase of interviews, were (1) Rank Xerox European Quality Award (EQA) winners in 1992 (2) no.tel Netas, a adjunct of Nortel, were EQ A winners in 1996 (3) TexasInstruments EQA winners in 1995 (4) Hewlett-Packard who do not use the EFQM model, only when withdraw been utilize their hold Quality Maturity organization for several years, with some a(prenominal) similarities to the EFQM model, including the central single- nourishd scat of processes. While these organizations are at variable stages of their mount to business process management they can be considered excellent against many criteria (including process management), as entern above, and the findings and lessons derived from the look for should specify other organizations which are just starting signal their approach to process management.IJOPM 17,9888In ii causas the quality director of the UK operation was interviewed in one case the participant was the business process manager in another(prenominal)(prenominal) the participant was a direct report to a service director. We consider that the consumptions and experience of the participan ts make possible sensible semblance surrounded by the organizations, based on the interviews. Semi- incorporated open- blockadeed interviews (typically of surrounded by two and tether hours), based on the ideas emerging from the pilot interviews, were carried out in distributively organization. The interviews were provide by other documentation from each organization which included process maps, grooming frameworks and organisational structures. Interviews were transcribed and the transcriptions utilise as the basis for analysis. Each interview transcription was rake and examined several times and lists of concepts give wayed14. A cognitive map15 of all four interviews was thusly constructed cover the concepts emerging from the data and how the concepts in molded on each other (based on the in organic law of the authors). Concepts were then clustered, with six clusters, or themes, right outdoor(a) appearing.The clusters were then checked against the transcripts from the pilot interviews and documentary film material from the case organizations to go over consistency of findings. Findings The six clusters emerging from the explore we have labelled organization coordination process translation organization structuring heathen hold progress metre. While some of these might not be novel inthemselves we discuss them first individually and then as a knack. Organization co-ordination i prop associated with business processes is their s squeezeping point-to-end nature. They start with input at the business edge and fetch up with outputs from the business boundary. Hence their cross-functional nature and, silent in this, is their ability to integrate and devise action at law. For illustration, a better way to stand for about process is that it is an organizing concept that pulls unitedly absolutely everything necessary to deliver some important component of strategic value16. It is perhaps not surprising whence that a strong theme em erging from the interviews was that the process paradigm provides an approach for co-ordination crossways the whole organization.This integrating through the use of business processes is perhaps or so simply illustrated by the fact that participants, in describing their approaches to business process management, described how they hightail it and manoeuver their entire business. The co-ordination took a number of forms. For grammatical case, business process management was powerfully positioned in the overall approaches to business planning adopted by the organizations. This was illustrated in one organization with their long- and medium-term plans explicitly cogitate to annual plans for their tell processes. affair process management overly provided an approach for integration through increased knowledge within the organizations (for example, about strategic bang), without the claim for bureaucratic mathematical operations or graded controlImplications of business pr ocess The concepts of business processes emerged as providing a link amongst the management cover song of the organization and act at the lower trains the bit in the middle. Central to this is the concept of different levels of processes and typically the organizations reported having identify three or four levels of process from the top-level architecture through to the individual or occupation level. In providing the co-ordination crossways the organization, the importance of managing the boundaries of processes was strongly emphasized. sensation organization, for example, was addressing these boundary issues between their processes through the use of networks of individuals representing the interests of their process.They apply networks around each process to formulate and implement dodge, and identified which processes have boundary issues withother processes. Individuals from one process network then get word meetings of the other process networks on this boundary to address the potential issues. Without some form of co-ordination between processes, changes in one process could as strong lead to changes in carrying into action of other processes such that strategic goals would be compromised, typically in the areas of quality and costs.but what we were trying to do was create a very free environment, a very innovative environment, but an environment where we knew just where we were going.889Process definition Much of the publications on managing processes is concerned with process good17,18 and this is typically directed at how to mitigate the actual operation of processes. However, a view expressed during the interviews was that the real value derived from the process approach is through the soul and development of an approach at mettlesomeer levels within the organizations, quite a than simply process betterment activity at the designate or aggroup level. Nevertheless, these organizations recognized that they struggled with t his and acknowledged that, in reality, the accord of processes was oftentimes still at the task level, with a natural escapeency for procedure writing.Approaches to help control this included chat across the different levels of the organization to develop normal intelligence (and, in particular, to develop better understanding between process owners and process operatives) and a focus within process liquifycharts on value stairs and decision points, together with the definition and management of process boundaries. Process flowcharting is often presented as a panacea for understanding and managing processes, but some organizations reported problems with applying the methodology to all processes the methodology of flowcharting is OK for reproducible, regularly operated, true(p) processes it is not that useful for processes that are very iterative and processes that run infrequently, the more multifactorial processes. sure enough the organizations were coming to realize t hat such process maps in themselves were not fitting people talked a lot about process re-engineering and all they ever did was victimise around with process maps, and they didnt truly get the big picture.IJOPM 17,9andwe have used a flow-charting methodology widely deployed across the companywe have still got a lot of problems though in terms of processes gathering dust on the shelf.890Also, date the organizations recognized the choose to specify processes infra their high level processes, the need certainly did not emerge to map all processes to the same level or detail. It would be unusual to go to an entity and show all the processes in detail to all depths.In general, the drive appeared to be to use business process management more as a long-term and living woodpecker than just a remedial dig for inadequate-term, tactical issues. Long-term plans were needed for processes to alter the process owners to focus on the early requirements of their processes. Also at that p lace was the need to develop methodologies other than flowcharting to sponsor a more holistic approach to business process management, and to directly consider the process of managing processes. organisational structuring Much has been written about the fiber of processes in structuring organizations and, in particular, the development of plane organizations structured strictly around processes2,19,20.In general, the organizations interviewed in this interrogation appeared to be pickings a less radical view. quite they had developed ground substance-based organizations between functions and processes, and tended to adjust their functional structure to queue up with their identified processes. They olibanum saw processes as simply another offset of the organization structure21. Indeed they seemed to have implicitly balanced the dimensions of autonomy/co-ordination, want/ control and efficiency/learning22 and in doing so derived the matrix structure. This perhaps also re flects other organizational paradoxes23. Their reasoning was influenced by a view that person-to-person consanguinitys were the tombstone to impelling organizations, as much as the orb, obligate structure. Processes were seen to provide a framework for these relationships in terms of kinding understanding and common approach across the organization.This framework was reported to help establish empowerment in a structured way, matching level of empowerment with control and nourishment. Hence the entering of the process dimension into their structure. However, they were un pull up stakesing to do away with the functional dimension, due to the intelligence that functions better back up the actual private relationships within the framework of processes and better supported specialist expertise people foundert necessarily align with processes, they align with other people, and entities and organizations. flock dont go to parties on processesandif you start bashing on about p rocess organizations, and youve got to do away with the silos, and the function and so onyoure denying it in a way something to do with that relationship side of things.This has a resonance with reports that affects to process-based organizations Implications of can be ineffective if the personal relationship and cultural aspects are business process overlooked24. management These matrix structures were regarded as relatively unstable13 with a tendency to affirm back to a functional structure, or to move too far towards a process focus, but the organizations saw the role of their quality pros 891 as the catalyst to ensure balance between functions and processes. More enkindle is that, in these matrix-based organizations, there appeared to be no desire to move towards a stringently process-based structure, with the matrix recognized as a desirable state, enabling constant and good reorganization through its flexibility.Inevitably the matrix adds complexity, but it seems that t hese organizations are willing to mess this complexity against the flexibility and personal relationship aspects supported by the matrix structure. unmatchable organization did, however, report a only process-based structure, and this did appear to support a high period of simplicity against the complexity of the matrix approach. There may therefore be value for organizations in explicitly considering the trade-offs between processes and functions in forming their approach. Regardless of the process/function structure, the approach of process groups and process owners at different levels of the processes was common. Cultural fit husbandry is an ambiguous concept which is difficult to position25. However, most organizations have some notion of their market-gardening, and this was the case in all four organizations, where cultivation had an implicit meaning. It is an important concept in thinking about organizations since people and processes must(prenominal) combine to produc e output. However, within the organizations, processes were not seen as a constraint, rather, as reported above, as providing a framework for empowerment.There emerged a general view that the overall approach to business process management needed to fit initially with the flori enculturation of the organization, and allow that culture to be maintained, at least in the short term. This is not to say that there was not a longer-term fair game to address culture, but culture drove the remove initial approach thats why it works salubrious, because were a highly empowered organization, and a aggroup of people are sluttish working as a team, so bringing them together for a process team is perfectly easy all we had to do was teach them the tools to do it and a bit of flowcharting and away they go. But that fits well with the culture.This is in stark contrast to some business process re-engineering approaches which may often be insensitive to culture or may have an immediate objectiv e of changing culture26. Where BPR was deployed in the organizations it tended to be positioned as part of the overall approach to business process management, for example, alongside process stabilization and continuous improvement, rather than instead of. When used in this context, there were examples of culture change for smaller organization groupings. There were alsoIJOPM 17,9892examples where the failure of BPR initiatives was directly attributed to a culture within the organization which so strongly supported constant, but incremental, change that radical change, as intimated by BPR was rejected. All four of the organizations embraced TQM and, in particular, continuous improvement. The concept and lyric of teams and teams of teams27 featured strongly, with rewards and cognizance often associate to team execution of instrument. The formation of cross-functional teams in alter processes happened naturally in these organizations, and appeared critical to the supremacy of their approach in managing processes. Improvement through business process management Unsurprisingly the interviews supported a drive within the organizations to unceasingly improve processes and this is reflected in the above word of honors of culture.Examples of limited approaches included the use of benchmarking to understand and set best practices and the development of compendiums and databases of best practices and the gene linkage of improvements to measurements against European Foundation for Quality wariness (EFQM), Baldrige and other quality models. While BPR was distinctly used in some of the organizations (indeed Texas Instruments and Rank Xerox are well cognise for their re-engineering work) this tended to be talked about more at the process simplification or process improvement end of the spectrum of definitions placed on BPR28-30 you would not change the overall process radically in a short space of time, but for people (in the process) I think it is a drastic step.andI would not anticipate the total process radically changing over a short space of time because one could not manage it, so you have to move forward in sizeful step at each part of the process.One organization reported benefits through using human resource professionals alongside process engineers on BPR projects to keep some sanity in what the re-engineering was doing. Measurement and business process management Measurement is a find out principle to managing processes18 with the need to identify trends, assess stability, determine whether customer requirements are actually met and drive improvement.This was confirmed by the interviewsand measurement emerged as central to happy approaches to business process management. There seemed to be a genuine attitude of living and external respiration measurement within the organizations if you cant actually get good metrics you wont manage a process, so its absolutely primordial to managing a process.andif we dont define the metrics weve had it.Increasing importance was being given to customer satisfaction and customer Implications of loyalty measures and there was a recognition of the importance of developing business process efficiency measures for the processes as opposed to just measuring whether management processes actually delivered. There was also a drive towards examining the chase after of distributions of the measures (process variation) not just average values, consistent with the view of statistical process control31,32. 893 One danger that was reported is related to the level issues discussed above detailed measures were implemented into lower-level process maps, directly related to processes, as one would hope however, this resulted in a adult number of measures that it was then difficult to prioritize, because, at a higher level, measures had not been (or had not been properly) defined.A particularly interesting approach to measurement was in one organization where they had establishe d business fundamentals as performance measures on key processes, deployed universal and at all levels. All professional staff in the organization have business fundamentals which are deliverable, cost, customer or people measures, but self-driven measurements rather than management-driven measurements. These business fundamentals are linked to the key processes, and individuals self-assess their progress against these, using a simple rating scale. Every ninny there is then a formal review across the organization against the business fundamentals.The same approach is used to cover individual performance, performance against plans, and process performance, providing an incorporate approach to measurement across the organization, and a strong illustration of integrating process measures with other organizational measures. Process compartmentalization Different sortings of processes have been proposed in the literature28. Forexample the CIM-OSA Standards33 use the categorization of manage, operate and support. In describing processes we have found a categorization into usable, support, direction conniption and managerial processes to be useful (see Figure 1). The separation of direction set and managerial processes is driven by two considerations useableManagerial watchfulness setting SupportFigure 1. variety of business processesIJOPM 17,9894(1) on a hard-nosed level models, such as the EFQM model, adopted by organizations, separately identify leaders from policy and strategy formulation and (2) the strategy literature regards development of strategy as a process in its own right34,35. Operational processes are the way in which work gets done within an organization, to produce goods and services. These processes are the ones which have been the subject of much of the focus to date in TQM and BPR. They run across the organization and are associated with outcomes such as product development or order fulfilment. They are recognized in the ideas of integrat ed supply chains and logistics and in simultaneous engineering and are part of justin-time approaches. The same ideas for improvement in flow and reduction in cycle times come through into service organizations in the practices of BPR. Support processes are those which enable the functional processes.They are concerned with the provision of support technology, or systems, with personnel and human resource management, and with accounting management. Direction-setting processes are concerned with setting strategy for the organization, its markets and the location of resources as well as managing change within the organization. Direction-setting processes exact a mix of the prescribed stairs within a formal planning process and also less cleanframeworks. Managerial processes are to some intent superordinate to the other categories and contain the decision-making and talk activities. For example, the entrepreneurial, competence-building and renewal processes proposed by Ghoshal and Bartlett20 are managerial processes. Some organizations have tried to validate these processes and have adopted a structured approach to, for example, decision making and communication. This categorization, like any other, does not necessarily fit with the view taken by all organizations (for example, some organizations would position the direction setting processes as part of their operational processes) but it provides a useful framework for discussion of the research findings, and for describing propositions for further research.Discussion and propositions arising from the research The six clusters identified in the findings of organization co-ordination process definition, organization structuring, cultural fit, improvement and measurement can be considered in the light of these process definitions. The issue of process definition at a top level is a view of how organizations work to satisfy strategic intents. The translation of top-level architecture into an operational real ity is influenced by aspects of organizational culture which affect both organizational co-ordination and organizational structure. In no cases is the disappearance of functions apparent rather the functional organization is replaced by a matrix structure. This form of organizational structure derives its co-ordinating strength from the formation of cross-functional teams. The issues ofmeasurement and improvement reflected in the findings reward the need for Implications of effective measurement which drives process improvement in a form which co- business process ordinates and prioritizes activity something which many organizations find management difficult. The findings suggest that fetching a business process management approach is one way to overcome some of the difficulties. It is our observation that organizations in attack business process 895 management tend to initially address their operational processes, then move to focus on support processes, while continuing to imp rove their operational processes, and next to focus on direction setting processes while continuing to improve operational and support processes. and then there is a similarity to the operations managementsandcone model, as proposed by Ferdows and De Meyer36, used to show that cost reduction relies on the cumulative foundation of improvement in objectives. We propose that an organizations approach to process management is similarly constituted by its approach across process categories, and that to build a stable sandcone the approach to, first, operational processes must be created (see Figure 2). This purpose has practical value, since it is the operational processes that directly shock absorber on customers and so can establish quick benefits. Thus financial aid to the operational processes ensures capability of delivery attention then moves to encompass support processes, since these in play ensure the capability of the operational processes attention to the direction setti ng processes recognizes that capability can only be maintained with good direction setting. The superordinate nature of managerial processes positions them outside the sandcone, with influences from the other categories.This sandcone model for business processes implies further propositions based on our findings. P1 As organizations develop their approach to business process management, moving through the sandcone, the appropriateness of techniques will change. Flowcharting methods are well tested in understanding operational and some support processes. However, the organizations in this phase of our research were discovering that such methods were inflexible for other types of process.Operational Operational + support Operational + support + direction settingFigure 2. A sandcone model for developing approaches to business process managementIJOPM 17,9896The appropriate methodology for understanding the managerial and directionsetting processes may lie in the field of systems thinkin g37 and business dynamics38 and the shape of a process for managing such processes needs further attention. Thus the appropriateness of soft mapping techniques increases as an organization moves through the sandcone. P2 Asorganizations move through the sandcone there is an increasing restore on organization structure, with the need to address structural changes to reap the benefits from the process approach. more and more organizations will need to consider organization design as an explicit, rather than implicit, activity to ensure organizational forte. This need not necessitate a move towards a complete process-based structure, but may mean a trade-off between process and functional structures39. This trade-off includes the need to consider factors such as personal relationships and cultural aspects. For example, in some organizations a purely processbased structure will be appropriate while in others the process-function matrix approach will be best utilized.P 3 We propose th at there is an increasing need for maturity in TQM passim the organization to ensure a successful process paradigm, as the organization moves through the sandcone. This raises the immediate question as to whether TQM is a necessity before a process-based approach can be effectively initiated. Certainly all organizations in this phase of our research had developed a TQM-based culture. It also raises questions as to whether the continual application of the radical end of the BPR spectrum28-30 makes it impossible to address all process categories, with the associated lack of care for the human dimension and resulting demoralized workforce. P4 We propose that the degree of co-ordination across the organization increases with moves through the sandcone. As the process approach spreads through the sandcone it forces the question of what integration actually means for an organization and clarifies the requirements for coordination.This is promptly understood for operational processes, wi th a key element being the elimination of barriers to flow. The co-ordination includes the need for a co-ordinated approach to measurement (an example is illustrated in the measurement section above). advance implications for operations management There is a clear message emerging from this research of the need to manage the boundaries between the categories of processes and between the processes themselves. The appropriate approach will be determined by the category of process being addressed and organizations may find the sandcone logic useful in placing their current position. There are different requirements at different points in the sandcone knowledge and understanding of process flowcharting techniques at one end of the spectrum through to knowledge andunderstanding of softer mapping techniques the need to consider the Implications of appropriate organization structure and trade-offs between process- and business process function-based structures the degree of maturity in TQ M the degree of comanagement ordination desirable and possible and, in particular, the need for a co-ordinated approach to measurement. The research supports a view that there is a need to consider performance 897 improvement methods and concepts such as TQM, lean performance and supply and agile manufacturing in a wider context, as applied to all business processes, and not just operational processes with the associated need to manage the interfaces between operations management and other disciplines. References 1. 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