Exam Practice 📝
Short answer
- What is business process improvement (BPI)?
- Expand DMAIC and state the purpose of each phase.
- Define business process reengineering (BPR).
Exam Practice 📝 (continued)
Long answer
- Compare BPI and BPR in terms of goals, scope, approach, risk, and the role of IT. When should an organization use each?
- Explain the DMAIC framework with an example of a process from a hospital, bank, or college in Nepal.
Revise the answers in the full note.
Unit 2.3
Improving Processes: BPI vs. BPR
The Need for Change
Organizations must constantly evolve their business processes to remain competitive.
There are two primary approaches to process change:
1. Improvement (BPI)
"Doing things better"
2. Reengineering (BPR)
"Doing things differently"
Interactive: BPI or BPR?
Instructor: Call on students to classify scenarios, then confirm on screen.
Quick Check: BPI or BPR?
Click a scenario card, then choose BPI or BPR.
A bank reduces form-filling time by pre-populating known customer data.
A manufacturer scraps its entire assembly line and installs fully automated robots.
A hospital trains nurses to enter patient records faster into the existing system.
An airline replaces all ticketing agents with a fully digital self-service kiosk system.
A restaurant reduces food waste by tweaking portion sizes based on sales data.
A government office eliminates physical files entirely and rebuilds on a cloud platform.
Business Process Improvement (BPI)
BPI focuses on identifying and eliminating the root causes of defects and inefficiencies in existing processes.
- ✅ Focus: Incremental change (step-by-step).
- ✅ Goal: Reduce variation, eliminate waste.
- ✅ Risk: Low risk, low cost.
- ✅ Example: Six Sigma, TQM (Total Quality Management).
🔁 DMAIC: The Five Steps of Six Sigma
DMAIC is the step-by-step method Six Sigma uses to improve an existing process.
| Phase | Purpose | Key question |
|---|---|---|
| Define | Set the problem, the customer and the goal | What are we fixing, and for whom? |
| Measure | Collect data on how the process performs now | How bad is it, in numbers? |
| Analyse | Find the root causes of the problem | Why does it happen? |
| Improve | Test and put solutions in place | What change removes the cause? |
| Control | Monitor so the gains last | How do we stop it slipping back? |
🎬 Watch: DMAIC in 40 Seconds
🏥 Worked Example: DMAIC in a Hospital OPD
Illustrative example with sample numbers.
- Define: Outpatients complain about long waits. Goal: cut the average wait to under 90 minutes.
- Measure: Staff time 100 patients. Average wait: about 3 hours.
- Analyse: Most of the wait is at the single registration counter, where staff hand-write every card.
- Improve: Add online pre-registration and SMS tokens, and open a second counter at peak hours.
- Control: A weekly dashboard tracks waiting time, and the manager acts if it rises above 90 minutes.
Same process and same building, just done better. That makes it BPI.
📏 What Does "Six Sigma" Mean?
- "Sigma" measures how much a process varies. More sigma means fewer mistakes.
- A Six Sigma process makes no more than 3.4 defects per million opportunities.
- Developed at Motorola in 1986, and made famous by General Electric under Jack Welch from 1995.
- TQM (Total Quality Management) shares the same idea: everyone, every day, improves quality a little.
Quick check: a bank processes 1,000,000 transactions. At Six Sigma, how many can go wrong? About 3.
Interactive: Find the Bottlenecks
Instructor: Have students mark bottleneck steps before submitting.
BPI in Action: Find the Bottlenecks
A loan application process. Click on the steps that are bottlenecks (taking too long or adding no value). Then submit.
Customer Submits Form5 min⚠
Clerk Re-types Data45 min⚠
Supervisor Signature3 days⚠
Credit Check10 min⚠
Physical File Archive2 days⚠
Approval Issued15 min⚠
Green = efficient step | Red = bottleneck / waste
🏭 Real Case: Toyota's Small Daily Improvements
Kaizen (改善, "change for the better")
Every worker is expected to suggest small improvements to their own job, every day.
The andon cord
Any worker can pull a cord to stop the line when they spot a defect. The team fixes the root cause, then restarts.
This is BPI: bottom-up, low-risk and continuous, and it helped make Toyota a byword for quality.
🎬 Watch: Pulling the Andon Cord
Business Process Reengineering (BPR)
BPR is a radical redesign of business processes to achieve dramatic improvements in critical measures of performance.
- 🚀 Focus: Radical redesign (Clean Slate).
- 🚀 Goal: 10x improvement in cost, quality, speed.
- 🚀 Risk: High risk, high cost, high failure rate.
- 🚀 Motto: "If we were starting today, how would we do this?"
BPR Clean Slate: Design a Digital Loan Approval
Imagine you are building a loan process from scratch today. Check the steps you would eliminate — they no longer add value in the digital era.
🚗 Real Case: Ford Reengineers Accounts Payable
- In the 1980s, Ford had more than 500 people paying suppliers, and hoped to cut about 20%.
- Then Ford saw that Mazda, which it partly owned, did the same job with about 5 people.
- Old process: match the purchase order, the delivery note and the supplier's invoice, then chase every mismatch.
- New process: when goods arrive, the database checks them against the order and pays automatically, with no invoice needed.
- Result: about a 75% cut in staff, not 20%.
Michael Hammer (1990): "Don't automate, obliterate." But Hammer and Champy also estimated that 50–70% of reengineering efforts fail to deliver dramatic results.
🎬 Watch: Incremental vs. Transformational
Ford's Moving Assembly Line, 1913
Comparison: BPI vs. BPR
| Feature | BPI (Improvement) | BPR (Reengineering) |
|---|---|---|
| Level of Change | Incremental | Radical |
| Starting Point | Existing Process | Clean Slate |
| Participation | Bottom-up | Top-down |
| Risk | Low | High |
Sort the Attributes: BPI or BPR?
Click an attribute card to select it, then click "Place in BPI" or "Place in BPR".
BPI (Improvement)
BPR (Reengineering)
Score: 0 / 8
🧭 BPI vs. BPR: Goals, Scope and the Role of IT
| Feature | BPI | BPR |
|---|---|---|
| Goal | Steady gains (e.g. 5–20% faster) | Dramatic gains (e.g. 10× faster) |
| Scope | One task or department | A whole process across departments |
| Time | Weeks to months, never-ending | One big project, often 1–3 years |
| Role of IT | A tool: measures, tracks and speeds up the current steps | An enabler: makes a completely new design possible |
| Use when… | The process works but has waste | The process is broken, or the strategy has changed |
Key Takeaways
- Use BPI for continuous, low-risk optimization of stable processes.
- Use BPR when a process is broken or when a major strategic shift is required.
- Technology works best when processes are optimized first. Automating a bad process just makes it fail faster.
Interactive: Nepal BPI vs BPR Scenarios (1/2)
Instructor: Cold-call on each card; confirm with the on-screen buttons.
Nepal Context: BPI or BPR?
Four real-world scenarios from Nepal. For each, choose the right approach.
NRB Regulation Upgrade
A commercial bank in Kathmandu notices loan officers take 3 days to verify KYC documents. They train staff on a faster checklist and add a second reviewer to reduce delays.
eSewa / Digital Payments
A government revenue office scraps its paper-based tax filing system entirely and launches an online portal where citizens file and pay taxes from their phones.
Interactive: Nepal BPI vs BPR Scenarios (2/2)
Manufacturing — Patan Crafts
A handicraft exporter standardizes packaging dimensions and improves inventory counting frequency to reduce shipment errors from 12% to 4%.
Telecom — NTC Overhaul
Nepal Telecom replaces its 1990s billing system and network hardware entirely with a unified 4G/fiber platform, eliminating all legacy manual billing processes.
Score: 0 / 4
🧪 Activity: DMAIC Your College Admission
In pairs, 3 minutes: New students at a Kathmandu college queue for a full day to submit forms, pay fees and collect ID cards. Write one line for each DMAIC phase.
- D: Cut admission day from about 8 hours to under 2.
- M: Time each counter for 30 students.
- A: Fee payment and photo checks take the longest.
- I: Online forms, payment by mobile wallet, photo upload in advance.
- C: Track average time each intake, and get feedback from students.
Follow-up: if the college scrapped admission day completely and ran everything online, would that still be BPI?
💬 Discussion
- Why do you think 50–70% of BPR projects fail? Think about people, not just technology.
- "Automating a bad process just makes it fail faster." Give an example from a Nepali office you have visited.
- Should an organization ever do BPI and BPR at the same time? How?
Image & Video Credits
Images
- DMAIC cycle diagram: made for this course
- Ford assembly line, Highland Park, 1913 (restored; the 1913 assembly line, not the 1980s accounts-payable case): unknown author, public domain, via Wikimedia Commons
Videos (YouTube)
- KaiNexus, "An Overview of DMAIC for Lean Six Sigma Beginners" (2–44 s)
- James Proctor, "What is Business Process Reengineering?" (50–116 s); his "BPM" here means BPI
- Leading with Lean, "Toyota Andon Video EN" (3–79 s)