BPR quickly became a management fad, similar to (JIT) inventory
management.
BPR and JIT were both based on assumptions. And if those assumptions
were not met,
then they failed to achieve the great expected results.
That is, BPR
was not understood enough and was applied incorrectly, with terrible results. Many
JIT implementations increased inventory costs because JIT was based on the assumption
that warehousing costs were extremely high, as they were in Japan, where JIT
was initiated by Toyota. Why? Because JIT increases transportation and ordering
costs. The increase in the costs must be offset by an even larger drop in warehousing
costs. If not, JIT is more expensive. With BPR, companies first have to analyze
and understand the inefficiencies in their business processes. They then have to figure
out how to drive out waste and streamline processes and design those processes
to minimize the risk of errors that led to rework.Then, and only then, should remaining
processes be designed and automated. Many companies skipped the beginning
steps and jumped to downsizing—firing employees.