Business Process Reengineering- A Case Study Dr.

Mohammed Fazle Rabbi Introduction Business Process Reengineering or BPR is a proven methodology used world-wide to improve overall business performance. One of the major steps in BPR is process mapping using process flow diagram. The process flow diagram helps to understand how business is conducted. It also assists in the analyses for the causes for business problems. Other steps in BPR are then applied to reengineer or change and enhance the processes to eliminate the problems, resulting in significant business performance improvement. This article describes a real case study of a transportation business in Jeddah. Transportation business Goods and materials must be moved from one point to other in order to meet customer demands. Let us take an example- a customer goes to a store to buy a television. The television has just arrived from a foreign country by a cargo airplane. Most of us are not aware of the role of transportation in bringing a consumer product like television to the shelf of a store. Let us explore this further. A television has hundreds of parts and components produced by hundreds of manufacturers in different parts of the world. These parts are then procured and transported to one or more assembly plants. From assembly plants finished televisions are sent to hundreds and thousands of wholesalers, distributors and retailers in thousands of locations. Thus transportation plays vital role of moving parts, and finished goods safely and timely in order to meet specific requirements and demands at each of these destinations. To meet transportation requirements, there are organizations that do varieties of business to transport goods using different types of transportation mode such as ships, rail roads, trucks, airplanes, and in some places push-carts. The whole logistics of transportation management is a highly complex problem and involves many organizations working beyond national boundaries. Transportation management is a vital part of any business dealing with products and services. Most universities and colleges offer courses, and some institutions offer undergraduate and graduate degrees on the logistics systems. Our focus here is the internal transport system within Saudi Arabia. There are a number of transportation companies engaged in transportation business in Jeddah. Among them are trucking companies. These companies pick-up and deliver goods from customers to different destinations in Saudi Arabia. This particular case study deals with such a trucking company. The company delivers both full-load (full truck load one customer from one pick point to a single destination) and partial load or package delivery- similar to DHL or FEDEX. The company has 27 trucks of different sizes and serves major cities within Saudi Arabia. The trucks operate on a fixed schedule. This article describes the case of partial load delivery system. For the sake of confidentiality requirements let us call this company ABC Transport. Problem statement ABC Transport is a new company in the area, and is about one year old. Among its

competitors are international companies as well as local companies of various sizes and reputations. ABC Transport started with a vision to become a world-class transportation company. Because of lack of experience in transport business they started with a small fleet of 27 trucks of various capacities. They hired one experienced transportation manager to look after marketing as well as operations. They also hired necessary drivers and staff to run the operations. Initially they wanted to serve major cities Jeddah, Dammam, Riyadh, Madinah, Makkah and Abha. Each city has a loading/unloading and transfer locations. Couriers (local trucks) pick up shipments. The shipments are sorted and consolidated at the stations before dispatching to different destinations. The company uses manual systems to track shipments. Within six months of operations the company started experiencing serious problems. Among the major problems were: Delayed shipments Missing shipments Shipment damage and huge claims for payment for damage Constant customer complains Loss of customers Not being able invoice and collect money from the customers on time Cash flow problems Internal discipline problems. Many others They hired a consultant to investigate causes for all these problems. The consultant utilized the BPR methodology. After visiting the company, interviewing key people including managers the consultant developed a process map as a first step in BPR. The following section provides details of the flow chart for the process. Process map Figure 1 shows the process map of the operations. Major activities are recorded in the flow diagram using Microsoft Visio software. The flow diagram helps to visualize how the business is run. It shows from the time a customer calls to pick up a shipment until it reaches the final destination. Note that POD means proof of delivery, COD means Cash on Delivery. Figure 1. Process Flow Diagram for the partial load delivery system Using the flow chart, the consultant started collecting data on individual shipments and document flow. After observing the operations and collecting data on all the activities in the chart, he submitted his diagnostic report to the management. Following is the summery of the findings. Root cases: ABC Transport partial load services, and later on 'speed' services were started without thorough understanding of the complexities of the business and without adequate planning. Due to eagerness to capture market share, customers were promised services that could not be fulfilled with the facilities and resources that ABC Transport has. ABC Transport suffers from o Inadequate areas and locations of the facilities o Lack of fleet management including fleet maintenance o Lack of systems to monitor and control shipments o Lack of telecommunication and internet services. o Lack of qualified people. o Lack of training

 Poor management practice: o Concentration of power to a few managers and centralized authority. Mr. X who was hired for his experience with transportation business, was trying to control everything. He has the knowledge but he is trying to do an impossible task to manage every thing. o Very little evidence of delegation of authority to the employees who were doing the hard jobs. o Old style management using position power rather than using leadership and coaching. This caused employees not to take any responsibilities for doing a good job. o External focus (marketing and sales) while neglecting operations and finance. o Lack of coordination among sales, operations and finance. o No formal organization structure with clear roles and responsibilities to support the business processes. o Lack of process improvement mind-set. o Responsibility without authority and inadequate tools and support. o Lack of planning and coordination. o Lack of teamwork and too much finger pointing. o Poor management and employee relations Consultant also submitted a proposal showing areas of the process that need to be changed or reengineered. Part of the report showed how to do all the necessary changes. It is beyond the scope of this paper to describe the details here. Conclusion The ABC transport accepted the recommendation and started implementing BPR. Among the major changes was change in the management. BPR is a powerful tool that any business can use to significantly improve business performance. Process mapping is a critical part of the BPR methodology. Experts from within or outside the organization are available to perform BPR. Now BPR has become a part of Continuous Improvement Process (CIP) in many successful organizations in the world.