Business process re-engineering (BPR) is applied at the local, managerial, and corporate levels of the business. This concept has a significant impact on the various phases of the business process, where the changes that occur can be related to the flow of information and products (Desel & Erwin, 2000). BPR is used in SCM to renovate the managed and integrated processes that create a capable and viable business environment (Chan and Qi 2003). The crucial tenants of BPR is that it reduces tension between inter-organisational departments and business partners, particularly when the there is friction within the SC process (McCormack & Johnson, 2000). Business process re-engineering, specifically related to the main focus of technology and communication in supply chain management includes:
(1)Further integration of activities between suppliers and customers across the entire supply chain;(2) on-going changes in supply chain needs and required flexibility from IT; (3) more mass customization of products and services leading to increasing assortments while decreasing cycle times and inventories; (4) the locus of the driver's seat of the entire supply chain and (5) supply chains consisting of several independent enterprises (Akkermans et al p 284 2003).
The benefits of using the BPR concept to promote SCM needs are that it connects information management (McCormack & Johnson, 2000); promotes cost saving activities through efficiency and communication (Horvath, 2001), and reduces financial risk in unsuccessful supply chains (Cross 2000).
Based on the above relationship between SCM and BPR, this essay will critically examine the use of both concepts in the airline and automotive manufacturing industries. The analysis focuses on the changes initiated that use (or do not use) BPR concepts as well as the manners in which SCM is (or is not) integrated into the business process. The analysis will examine what strategies are employed and their viability, with a final conclusion leading towards the similarities and differences of the selected industries through BPR and SCM.
The value chain of airline industries (Kearney pp 3 2003) shows that the airline manufacturer exists beneath the scope of government and other regulatory boards.
Airline Value Chain (Kearney pp 3 2003)
Paul Brinkley, head of the U.S. Defence Department's Business Transformation Agency, says the agency is committed to making business modernisation improvements every six months for the next 10 years (Aviation Week & Space Technology p 19 2006). This is supported by Kenneth Miller, senior advisor to Air Force Secretary Michael Wynne, where the focus on modernisation and innovation stems from "acquisition, governance and transparency" (Aviation Week & Space Technology p 19 2006). This creates further pressure on the prime manufacturer who operates beneath the scope of the government regulatory boards and must develop technologies that are at once transparent and governed. The customer, suppliers and distributor are subjected to the rules of these regulations. The pressure can be seen as negative for the airline industry,