BPR Combines Several Jobs


The most basic and common feature of reengineered processes is the absence of an assembly line; that is, many formerely distinct jobs or tasks are integrated and composed into one. The payoffs of integrated processes, case workers, and case teams can be enormous. Eliminating handoffs means doing away with the errors, delays, and rework that they engender. Typically, a case worker-based process operates ten times faster than the assembly line version that it replaces. Moreover, because the new process generates fewer errors and misunderstandings, the company doesn’t need additional people to find and fix them.

 

Integrated processes also have reduced process administration overheads. Because employees involved in the process assume responsibility for making sure that customer’s requirements are met on time and with no defects, they need less supervision. Instead, the company encourages these empowered employees to find innovative and creative ways to reduce cycle time and cost continually while producing a defect-free product or service. Improved control is another benefit of integrated processes; because they involve fewer people, assigning responsibility for them and monitoring performance is easier.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

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Leveraging better Payment Terms


Negotiating better payment terms is always easier if a company has some bargaining chips. The party with the most to lose or the most to gain is always on the defensive; therefore, the secret to successful negotiating is to develop leverage that forces the other party into one or the other of these positions. Other than not meeting payroll, only two conditions might create circumstances more detrimental to a company on the brink of failure than to a creator: (1) being evicted from the building that houses the business, and (2) not receiving critical materials and services to keep the business going.

 

Not much can be done about either situation. A business must be housed, and it must have materials and services to make and sell products. That’s why landlords and critical suppliers top the payment priority list. Some leverage can be achieved, however. Most lessors would rather work out an extended payment arrangement than go to the expense and aggravation of a formal eviction. As long as the renter’s market holds, deferring rent payments for at least several months should be a real possibility. That’s not a permanent solution, but it does provide some breathing space.

 

It might be possible to leverage critical suppliers to gain better terms. The threat to go to a competitor usually brings even the most recalcitrant supplier to terms. In most cases, a supplier has more to lose (the overdue amounts plus legal costs to sue) or gain (future sales) than a debtor company does. At least making suppliers think that’s the case is good negotiating ploy.

 

Assuming that you have taken reasonable precautions to safeguard your personal assets, the worst thing that can happen is that you will be forced to liquidate the business. Granted, this can be a blow to any entrepreneur’s ego. It might also reduce personal income for a while, however, once the liquidation is over, you can always begin again. As long as creditors believe that they have the most to lose, you’re in driver’s seat. The ultimate creditors’ threat is to force the company into bankruptcy. By making it clear that this won’t hurt and that other plans for the future are in the works anyway, such leverage vanishes abruptly.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Recovery of Loss-making Companies


A surprising number of large companies have one or more subsidiaries making losses at any time. The number of private companies which fail is further ample proof of loss-making businesses. One response is a desire to sell the loss-making business, which is really an attempt to walk away from a situation which is both a problem and an opportunity. Even if a buyer is found, the purchase price is likely to be lower than net asset value. If loss-making business is sold to the existing management interesting questions are raised. What will they do as owners of the business different from before? Why was this not done at the direction of the group previously? The opportunity is to turn the business into profit before considering selling it, because even if a sale makes sense, it will be easier to achieve and a much higher price should be obtained.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

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