Business process reengineering: practical implications in the Source-to-Contract process : A case study at a large manufacturing organization

Abstract: This study’s purpose is to give recommendations on how the purchasing process, specifically the Source-to-Contract (S2C) process, can be reengineered by evaluating areas of improvement inspired by Lean and digitalization. To fulfill the purpose, a five-step framework of business process reengineering (BPR) and its methodology was developed, of which this thesis primarily covers the last three steps. The data collection process was based on a total of 19 interviews with three tactical purchasers at the case study company (CSC), three managers from large manufacturing organizations (LMOs), and extracted data from the CSC’s ERP-system. In the third step of BPR, the most crucial areas for improvement for the CSC and LMOs in the S2C-process were identified by Lean and digitalization. These areas were: lack of sharing the right information at the right time, poor integration of systems, a shortfall of internal transparency, an inefficient request for quotation (RFQ) software, and an absence of working proactively. Based on the most crucial areas for improvement, best practices in the S2C-process could be derived from the interviews conducted with the CSC and LMOs. In the fourth step of BPR, short- and long-term solutions are proposed regarding the most crucial areas for improvement. Finally, in the fifth step of BPR, recommendations are given on measuring the effectiveness and efficiency of the S2C-process based on the proposed solutions recommended in BPR step four. This study aims to suggest practical implications for LMOs on how the developed five-step framework of the BPR methodology can be utilized, especially the third step, to analyze and potentially reengineer its S2C-process. Additionally, the study gives insights on how the most crucial improvement areas could potentially be solved by LMOs in order for them to be considered best practice. Currently, there is considerable literature covering theoretical parts of BPR. However, the literature lacks guidelines on practically executing each step in the BPR methodology that this study partially aims to fulfill. This study is delimited to one part of the purchasing process, the S2C-process, and briefly covers the Procure-to-Pay process as the process had to be considered before changes were recommended.