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Business Process Reengineering

Business Process Reengineering. Example Division of Work. 1776 Adam Smith: The Wealth of Nations Example: producing needles. without division of work: 1 worker all performings result: 20 needles/day 20 needles/worker. with division of work: 10 workers 2 to 3 performings each

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Business Process Reengineering

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  1. Business Process Reengineering

  2. Example Division of Work • 1776 Adam Smith: The Wealth of Nations • Example: producing needles • without division of work: • 1 worker • all performings • result: • 20 needles/day • 20 needles/worker • with division of work: • 10 workers • 2 to 3 performings each • result: • 48000 needles/day • 4800 needles/worker Comparison in productivity: With division of work increasing by factor 240

  3. Hypothesis of Division of Work • Productivity rises with increasing division of work Productivity Division of Work • Results of Division of Work: • increasing dependencies • increasing complexity

  4. Productivity Division of Work Limits in Division of Work • Co-ordination • Technology • People

  5. Useful Division of Work How to Start Organising • Why does a company have to organise? General task Multipersonal completion of the general task Different tasks Division of Work • Which Division of Work (organisational structure) does • a company have to choose?

  6. Yesterday: Structure Follows Strategy Today: Structure Follows Process Follows Strategy

  7. What We Have Inherited Themes: specialisation of labour, hierarchical management, task efficiency, control Consequence: fragmentation

  8. The Old Process

  9. The „Improved“ Process

  10. The Reengineered Process

  11. Core Processes And Value Chain

  12. Example: Process Organisation

  13. 44% 38% 29% 27% 24% 23% 15% 15% Cut costs Increased revenue Cut cycle times Increased productivity American companies European companies Success of “Business Process Reengineering”-Projects

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