Business Process Reengineering Key Terms

Business process reengineering terms you might find as you explore this topic

Business process reengineering is a methodology that is used by organizations to improve productivity and performance. The earliest type of business process reengineering was used by the Japanese and became well known in the U.S. as many companies struggled to stay competitive in a global economy. Most businesses today utilize some type of business process reengineering to improve performance. As you explore this topic it would be useful to know some of terms you may run across.

 

Kaizen

Kaizen is Japanese for improvement and is a philosophy that focuses on continuous improvement in all functions of a business from manufacturing to management. The focus of Kaizen is to improve the standardized processes and activities so that waste can be eliminated. Business process reengineering is an offshoot of Kaizen.
Try: World Class Manufacturing discusses this term.

Continuous improvement process

Continuous improvement process (CIP) is the evaluation and management of processes so as to determine their effectiveness, efficiency and flexibility. The purpose of CIP is the identification and elimination of inefficient processes. It is usually an ongoing process that is used in business process reengineering and in which feedback from customers is evaluated against organizational goals.
Try: See CBS Interactive for a definition of CIP.

Six Sigma

Six Sigma is a strategy that was first implemented by Motorola and seeks to improve the quality of manufacturing and business processes by identifying and eliminating errors. There are a set of quality management methods that are applied to projects and which follow a well defined sequence of steps that have quantified financial targets which will either reduce costs or increase profits. Six Sigma is usually included in any business process reengineering effort that is implemented within an organization.
Try: TechTarget has a description of this term.

Flowchart

A flowchart is a type of chart that represents a process and which shows steps as boxes of various kinds and their order by connecting them with arrows. Flowcharts are used to design, analyze, document or manage a process and are commonly used in business process reengineering projects.
Try: iSixSigma explains this term and has a graphic showing what a typical flowchart looks like.

Activity-based costing

Activity-based costing (ABC) is a costing model that is used to identify activities in an organization and assigns the cost of each activity resource to all the products and services that each requires. Once this is done, an organization can find out what they true cost of its services or products are and can then eliminate those which are unprofitable. Business process reengineering includes activity-based costing as part of its steps.
Try: Rockford Consulting does a good job of explaining this term in detail.

Benchmarking

Benchmarking is used in business process reengineering and refers to the process of comparing the quality, cycle time, cost or productivity of a process or method to another that is considered to be a best practice or industry standard.
Try: Go to BusinessDictionary.com for another definition.

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