SCM Terminology

BPR (Business Process Reengineering)


BPR is an approach to redesign business processes for creating profit and restructure the business using engineering methodology. This approach was introduced by Michael Hammer in his book "Reengineering the Corporation" and drew world's attention.

"BPR (Business Process Reengineering)" was spotlighted by a book "Reengineering the Corporation" written by Michael Hammer. In that book, strong words such as "FUNDAMENTAL", "RADICAL", and "DRAMATIC" are used. However, by using a word "engineering" that mismatches business management, the book could create an image of a management body as a machine that produces money.

Considering BPR from the standpoint of Supply Chain Management (SCM), the methods of reducing inventory and increasing throughput by synchronizing supply chain processes will give you a lot of hints when pursuing reengineering. Ideas and hints for exploring management improvement and best practice often come from other companies through benchmarking.

In a sense, the start point is mimicking. However, talking about mimicking, copying every business operation at the shop floor level is totally different from mimicking others' ways of business at the abstracted level understanding the essence of the business. For example, the concept Just-in-time (JIT) of Toyota Motor Corporation introduced by Mr. Taiichi Ohno at the end of 1950's came from a method of replenishing goods on shelves in a supermarket in the U.S. Some people may say that the Just-in-time concept is a mimicked idea, but others may say that it is a sophisticated and original idea. For those expressed as concepts such as models and theories are formed from analogies common to multiple cases. That is why metaphors are thought important.

From the above point of view, reengineering is a great agitation for calling the necessity of improvement activities to explore new business practice but is not theoretical support for the thinking process to create new ideas. Benchmarking is more concrete and easy to understand.

The Supply Chain Management is also an idea that simultaneously provides a specific methodology by comparative analysis such as benchmarking introduced from outside for BPR and a framework of theoretical thinking.

Also, "BPR" is used as a word for standardizing business operations for introducing ERP. In addition, by looking a business structure as a chain of supply operations called "Supply Chain", you can create a base of a design theory. You can make BPR a firm one by thinking from the viewpoint of supply chain.


Taken with kind permission from the book:
"Understand Supply Chain Management through 100 words" by Zenjiro Imaoka.