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Definition Process management is the formalization of business practices. There are three stages to process management. First, the processes are mapped out so that the current way of doing things is understood. Secondly, improvements are made to these processes. Finally, these new processes are monitored to ensure that they are being followed properly. Benefits According to proponents of process management, it has three important benefits. The is an increase in efficiency; process management is supposed to increase yields and reduce waste and rework in production.
The second is the creation of tighter intra-organizational linkages. The third is that firms that are more efficient and have tighter intra-organizational linkages should be able to better produce goods that meet consumer demands.
However, these purported benefits have not been conclusively supported by research, according to Mary J. Brenner and Michael L. Tushman's article, 'Exploitation, Exploration, and Process Management: The productivity dilemma revisited,' published in The Academy of Management Review in 2003. Brought to you by Disadvantages Aside from the lack of evidence supporting the purported benefits of process management, there is evidence that process management can - in some cases - be harmful to businesses. This is because process management has a tendency to limit innovations. Innovations that occur through process management are usually only incremental. This means that radical innovation is unlikely to occur in a firm employing process management.
Research by Brenner and Tushman suggests that firms employing process management will be less successful during periods of rapid change than firms that do not employ process management. Solution The solution to achieving the desired efficiencies of process management, without the disadvantages, is to build an ambidextrous firm. This is one that simultaneously manages exploration and exploitation. Research has found that ambidextrous firms that employ process management are able to achieve the purported benefits of process management, while avoiding the potential disadvantages, according to Brenner and Tushman.
Disadvantages of reengineering are some advantages and disadvantages to both starting points. Starting with Engineering If lead time, shop floor quality or purchasing related issues are at the top of the list, starting in engineering is the most direct way to address these with automation.
Identifies Waste and Encourages Ideas The aim of BPR is to help businesses pinpoint obsolete steps, items or workers in a business process. For example, if four workers perform a task, the business may discover only two workers can get the job done during reengineering.
BPR encourages employee input and participation. The workers who have familiarity with the processes under study can point out flaws and voice ideas for improvement. Requires Investment and the Right Business Types BPR typically requires an investment, particularly in technology. Outdated methods, such as doing a task by hand, face replacement by computer programs. The programs improve efficiency and reduce errors, but the company must invest in the software and training, a costly option for companies looking to cut expenses immediately.
Not all business types benefit from BPR. For example, a manufacturing company may not have the option of redesigning processes without sacrificing safety or product quality. Cuts Costs and Improves Functionality Removing unnecessary steps cuts down on time and confusion among workers. Assigning tasks that multiple workers would typically handle to one worker gives customers a clear point of contact for help or service. Even by investing more money in technology at the start, companies typically save money over time with the redesigned methods. For example, improving or updating electronic components incurs an upfront cost, but saves money over time by eliminating errors due to outdated components. Lowers Worker Morale Some workers may not adapt to the BPR changes, and those assigned new responsibilities can become overwhelmed.
Other workers become obsolete if their primary function is eliminated as part of a process overhaul. Management must provide support and guidance during BPR. Failure of the management team to assist workers and set an example during the BPR process may lead to failure, disorganisation and staff problems.