Business Process Re engineering(BPR)

7/27/2019 Business Process Re engineering(BPR)

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Hallmark was founded more than a century ago in1910 by a teenage entrepreneur Joyce C. Hall with acouple of shoeboxes of postcards under his arm andthe American dream in his heart. Todays Hallmark isa $4.4 billion business with greeting cards and other

products sold in 38,000 retail stores across the U.S.and in 100 countries worldwide. Its brand alsoreaches people online at Hallmark.com and ontelevision through Hallmark Hall of Fame movies andcables Hallmark Channels.


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The 83 year old Kansas City company reengineeredalmost every aspect of its operations with the objectiveof dramatically reducing the time that elapses fromnoting a new market need to filling it with a card on

the retailers shelf.


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Hallmark Cards, Inc. looked to reengineeringas a preventive competitive strike ratherthan as a response to a bad situation.

The one who did reengineering wasRobert L. Stark, president, HallmarkCards, Inc.

Their reengineering effort started in

February 1989. In the summer of 1991 Hallmark developed a

new line of cards in an entirely differentway.


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Product cycle time was approximately 3 years.

2/3 of the time was spent in developing the plan and concept for the card.

Growing trends of more and more niche markets.

The company was making about 50,000 revisions to designs each year,

and Hallmark had no accurate way of finding out what was selling well

and what was not.

Numerous hand-offs of work during card development. The concept spent 90% of the time within the creative staff sitting in

someone's in/out slot.

Retailers demands of fast and tailored products and marketing programs.

The no. of stock-keeping units expanded far faster than the sales rate.

Run time came down from 20-24 hours to 8 hours but make-readytime(time to get the press ready, the dies aligned, and so on) still

remained 8 hours, with all kinds of implications for costs and capitals.

New forecasting tools for sales in new segments were required.

Sales data arrived too late, to refill the hot sellers, pull the slow ones, and

plan for new lines.


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In February 1989, an off-site meeting of 40 senior executives was

held. Donald J. Hall, the chairman of the company and son of the

founder, articulated the companys beliefs and guiding values to

communicate them to the employees.

In April 1990, the company formulated its business priorities. The

key objectives were articulated: To reduce new product development time to 1 year.

To produce products buyers and retailers would love.

. To reduce costs with improvements in quality.

A reengineering team was set up, staffed by some of the companys

best and brightest employees. 100 employees were appointed to 9 teams, each of which

addressed a specific "leverage point" -- the critical parts of thebusiness that needed to be changed. These teams came up with100 recommendations and presented them to 5 person operatingcommittee, 12 of which were chosen for a pilot project.


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The pilot program:

Capture sales data at the point-of-sale using barcodes.

Communicate actual sales data throughout the company.

. Assign 5 groups to set up decision-support systems tointerpret trends in stores.

Form cross-department groups to develop new cards.

Eliminate entirely old style review processes.

Once it became clear the pilot program was generatingimpressive results, the reengineering initiatives were put intoaction company wide.


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Before After

Getting new line of products from conceptto market took 2 to 3 years.

Inefficiency due to queue time.

Costly revision to design.

Sales data arrived months late.

Had no accurate way of finding out what is

hit and what is flop.

To many hand-offs.(about 25)

Artists and editors work was reviewed

periodically.

Now less than 1 year is taken for newproduct development.

Products hit the stores 8 months ahead ofschedule.

Computerized point-of-sale informationsystems that used barcodes.

Decision support systems to interpret

trends in stores.

Cross department groups were made toreduce hand-offs, cut down queue time andincrease creativity.

The team reviewed its own work.


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Employees were concerned that Hallmarkwas abandoning their legacy.

Difficulty understanding the relationshipbetween continuous improvement andbusiness reengineering.

Employees thinking its a productivity

improvement program.Acceptance.

Technology.


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The ability to track the effectiveness of astore layout or advertising campaign moreprecisely and quickly will reshape the way

they merchandise and market.Due to new review process the development

process got much faster and creativityincreased.

It enabled Hallmark employees to reactswiftly and successfully to continuous,unpredictable change.


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Three things that we learning from Hallmarkreengineering are:

Communication. Getting senior management and their best people

committed to the effort.

Clear goals.


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Business Process Re engineering(BPR)

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