Implementation of Business Process Reengineering in Thermax Ltd. to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed by the fundamental rethinking and radical redesign of business processes

1. Implementation of Business Process
Reengineering in Thermax Ltd.
By: Mr. Pramod Patil

2. Company profile
• Thermax Group is an INR 5577 crore company, providing a range of
engineering solutions to the energy and environment sectors.
• It is headquartered in Pune, India and operates globally through 19
International offices, 12 Sales & Service offices and 12 manufacturing
facilities - 7 of which are in India and 5 overseas.
Solutions Suite – Innovative and Eco-friendly
• Heating equipment - using a variety of fuels, including biomass
• Absorption chillers - fired by waste heat or steam
• Power and captive cogeneration plants
• Waste heat recovery units
• Waste water management systems – pre-treatment, waste water treatment
and chemical conditioning of water, sewage effluent treatment and
recycling
• Air pollution control systems
• Performance improving chemicals
• Solar based heating, cooling and power

3. Business Problem
– Decline in profit after tax from 350 Cr in FY 2012-13
to 253 Cr in FY 2013-14 even though order booking
increased by 11%.
– Manufacturing Inefficiencies
– Increased manufacturing cost
– Poor productivity
– Long production cycle (90 days)
– Sub-optimal output (629 units per year)
– Backlog orders
– Unhealthy work culture

4. Cntd..

5. 3
Business Process Reengineering
• “Reengineering is the fundamental
rethinking and radical redesign of
business processes to achieve
dramatic improvements in critical,
contemporary measures of
performance such as cost, quality,
service and speed.”

6. 4
Key Words
• Fundamental
– Why do we do what we do?
– Ignore what is and concentrate on what should be.
• Radical
– Business reinvention vs. business improvement
• Dramatic
– Reengineering should be brought in “when a need
exits for heavy blasting.”
• Companies in deep trouble.
• Companies that see trouble coming.
• Companies that are in peak condition.
• Business Process
– a collection of activities that takes one or more kinds
of inputs and creates an output that is of value to a
customer.

7. Why Reengineer?
• Customers
– Demanding
– Sophistication
– Changing Needs
• Competition
– Local
– Global
• Change
– Technology
– Customer Preferences

8. Business Process Reengineering
Integrate people, technology, & organizational culture
To Respond to rapidly changing technical & business
environment and customer’s needs to achieve Big
performance gains in terms of Cost, Quality, Service
and Speed.

9. Principles of BPR
– Organize around processes, not tasks
– Have output user perform process
– Have those who produce information process it
– Treat geographically dispersed resources as
centralized
– Link parallel activities in the workflow instead of
just integrating their results
– Empower workers and use built-in controls
– Capture information once and at the source

10. BPR Success Factors
– Strong and Consistent top management
sponsorship.
– Addressing Cultural Transformation through
effective change management.
– Proven methodology including a vision process.
– Reengineering team composition.
– Compelling Business for a change
– Strategic alignment with company strategic
direction.
– Line Ownership

11. Circumstances that lead Thermax to
implement BPR Factors
– Manufacturing Inefficiencies
– Poor productivity
– Long production cycle
– Sub-optimal output.
– Unhealthy work culture
– Decision to focus on enhancing productivity and delivering
world-class quality at the least possible cost.
– Ambition to become the largest boiler manufacturer in
the world.
– The three C’s (customers, competition, change)

12. Why Thermax will face resistance from
unions while implementing BPR?
– Fear of Downsizing
– Several jobs were combined into one.
– Management accepting the Union demands every
time.
– Lenient approach of management towards
running the plant.
– Inflexibility of the workers.
– Idle time available to workers due to unorganized
processes

13. Implementing a BPR Strategy

14. The C’s related to
Organization Re-engineering Projects
The 3C’s of
organization Re-engineering:
The 4C’s of effective
teams:
- Customers
- Competition
- Change
- Commitment
- Cooperation
- Communication
- Contribution

15. Key Steps
Select The Process & Appoint Process Team
Understand The Current Process
Develop & Communicate Vision Of Improved Process
Identify Action Plan
Execute Plan

16. Selection of process
• Manufacturing process of boiler starting from order
receiving from customer to order dispatch to
customer.

17. Understanding of current Process
Customer requirement
sales dept
Engineering dept (design)
Job folder released to preparatory Shop
by Engg dept
Material offer to boiler preparatory
plant (Mfg. dept.)
IBR check for material identification
Plate cutting
Plate punching
Plate rolling for shell up to 2500mm
length
L-seam set up of rolled shell
Tacking on shell
IBR inspection
CO2 root welding on shell
L-seam saw welding outside
of shell
Back Gouging and DP test
L-seam saw welding inside of
shell
Dress up punching
Proposal dept
Material dept
QC dept
QC dept

18. No
yes
ok
C-seam setup on shell
Tacking on shell
IBR inspection
CO2 root welding on shell
C-seam saw welding outside of shell
Back Gouging and DP test
C-seam saw welding inside of shell
main shell length
= or < 2500mm
Dress up punching, marking for RT
test.
RT test and
material test
shell sent to assembly plant (Mfg
dept)
Nozzle and tube plate set up
Not ok
Removing test plates and sending to
Material testing lab
Rerolling of shell
Material testing lab
Rework
yes
ok
RT dept

19. Cntd..
IBR inspection
Flux Coated Arc Welding
Hydro. test.
Final assembling
Painting
Boiler sent to dispatch
Customer
QC dept

20. Process Mapping
Customer communication
Manufacturing capability development
Strategy
development
Product
development
Order
fulfillment
Customer
design
support
concept
development
manufacturing
market
customer

21. Modified Process
• Combining plate cutting and punching process
• Use of waving mechanism welding for L-seam welding
and C- seam welding( eliminates CO2 welding, BG & DP
test and dressing up activities)
• CNC rolling machine which takes 10 minutes for rolling
or rerolling operations (existing system it takes 120
minutes)
• Combining preparatory and assembly dept.
• ERP implementation for tracking process and reducing
paper work, online approval system for next stage of
process, vendor management.
• Encouraging multiskilling

22. Modified Process
Customer requirement
sales dept
Engineering dept (design)
Job folder released to Shop floor by Engg dept
Material offer to preparatory plant
(manufacturing dept)
Plate cutting, punching
Plate rolling for shell up to 2500mm length
L-seam set up and tacking of rolled shell
IBR inspection
L-seam welding by waving mechanism
Proposal dept
Material dept
QC dept

23. Cntd..
No
yes
ok
C-seam setup and tacking on
shell
IBR inspection
C-seam welding waving
mechanism
main shell length
= or < 2500mm
Dress up punching, marking for
RT test.
RT test and
material test
shell sent to assembly plant
(Mfg dept.)
Nozzle and tube plate set up
Not ok
Removing test plates and sending to
Material testing lab
Rerolling of shell
Material testing
lab
Rework
yes
ok
RT dept
QC
dept

24. Cntd..
IBR inspection
Flux Coated Arc Welding
Hydro. test.
Final assembling
Painting
Boiler sent to dispatch
dept
Customer
QC dept

25. Case for action
• We are disappointed by the length of time we require to develop and
deliver the boiler to customer in domestic as well as international market.
• Our leading competitors achieve significantly shorter lead time & product
development cycles because they have established large scale, highly
flexible and lean manufacturing facilities with uniform set of work
practices and information system.
• The competitive trend goes against our traditional way manufacturing of
boiler.
• To sustain our business in long run we need to be innovative, lean and
advanced technology driven make our product with better quality in
minimum cost.
• We have strong competitive and economic incentives to move quickly as
possible towards lean and highly efficient model of operation. Each
month we can increase number units of boilers from currently 2 units per
day to 3 units per day. It will help to reduce order backlog and increase
profit.

26. Vision
• We aspire to become a leading technology company with a global outlook
delivering world-class products and services to customers.
• We exist to fulfill the needs of our customers with on time delivery of
products.
• We have shortened product development and production cycle time.
• We are an acknowledged leader in the energy efficient and ecofrienldly
boiler manufacturing.
• We have established uniform and more disciplined product development
planning, decision making and operational processes across all sites.
• We employ innovative technology based tools to support our work and
management practices at all levels and between all manufacturing sites.
• Our challenge is to continually expand and define new markets by
expanding the frontiers of research and engineering and customer
applications in our chosen field of business.
• We have developed and implemented a common information technology
architecture worldwide.

27. Action plan
• Focus on customer requirement.
• Concurrent engineering: Formation of cross
functional teams
• Formation of 3 full-time teams
– Horizon1: Increase in productivity
– Horizon2: Improvements & Up-gradation in
existing products
– Horizon3: Development of new products

28. Execution of BPR
– Implementation will start
– Resistance from the unions
– Re-engineering the layout and method of working
– Cellular Manufacturing
• Multi-tasking through multi-machine manning
• Reduction in non-productive activities
– Implementation of TPM & Kaizen
– Implementation of ERP

29. Measures taken by manager in a shop
floor to ensure BPR success
– Training and Motivating workforce
– Identifying leaders
– Creating a conducive environment and changing
work culture.

30. The performance measurements must
include indicators for:
• Delivery performance
• Resource utilization
• Flexibility
• Work in progress
• Claims from customers
• Planning and scheduling performance

31. Information Technology & BPR
• Implementation of ERP to make common
platform for all manufacturing facilities and
integrate with all department.
• It Enables Product & Service Innovations
• Improve Operational Efficiency
• Coordinate Vendors & Customers in the
Process Chain

32. Benefits of BPR
 Reduction in employee costs
 Better inventory control (reduction in WIP)
 Better sourcing
 Better order distribution across plants
 Online availability of data
 Transparent access to data
 Process transparency
 Integrated sales and supply chain
 Reduced production cycle time.
 Reduction in manufacturing cost.
 On time delivery of product to customer leads to customer
satisfaction. So order booking increased.
 Reduced defects, rework and improved quality.

33. Thank you