Comparison of BPI and BPR in Chevron’s Practice
Being a renowned oil producer and supplier, Chevron has experienced numerous difficulties over the course of its history. In order to grow, the company had to make fundamental changes to the structure of its processes. This task necessitates the use of business process reengineering (BPR), which overhauled the way Chevron is managed. At the same time, for the purpose of streamlining the production, the corporation employed business process improvement (BPI). Comparing Chevron’s use of BPR and BPI is essential in understanding how the company has succeeded in implementing and sustaining the corporate changes.
First, both processes were initiated and regulated by different controllers. Appendix A contains a table describing the differences between Chevron’s use of BPI and BPR. This difference is explained by the scope of business processes (Kasim et al., 2018). BPR presupposes global changes, which manifest at every layer of the company. Such alterations are supervised at the highest corporate level, and the responsibility is placed on the key people. In contrast, BPI does not necessitate the presence of high-level management. All improvements are local, and the effect does not influence other branches.
This discrepancy can be observed in Chevron’s case in the nineties. Until 1995, the company’s supply chain was deficient, which resulted in low production rates. Vice President McCrea initiated the overhaul of all processes “from the acquisition of crude oil to the distribution of final products to Chevron customers” (Rainer et al., 2020, p. 44). In the aftermath of this undertaking, “six Chevron employees initiated a project to improve water treatment processes at a company plant in California”, which led to a substantial reduction in operating costs (Rainer et al., 2020, p. 44). McCrea used BPR, while the employees relied on BPI, yet both initiatives helped Chevron restructure its business processes.
After the success of the 1995 BPR effort, Chevron sought to standardize its operations further. For instance, the company wanted to make production more automatic. However, not only was it a risky undertaking, but it would also be expensive as any BPR is high-cost (Kasim et al., 2018). This is a stark difference from BPI, which is low-cost and is m. Therefore, Chevron’s management decided it would coordinate multiple BPI efforts across the company (Rainer et al., 2020). It uses a central repository for consolidating all process information.
At the same time, Chevron did not abandon BPR initiatives entirely. The corporation’s management saw the success of employees’ innovation in waste disposal. In particular, they were using the Six Sigma methodology to ascertain more efficient techniques for eliminating used materials (Rainer et al., 2020). The employees’ creativity in waste management is, in reality, BPI. However, once Chevron started to implement this system in all its facilities, it became a BPR effort (Rainer et al., 2020). The subsequent implication is that Chevron’s management prefers BPI to BPR unless they are sure that a large-scale reengineering will increase operating efficiency.
Altogether, it should be evident that BPI and BPR are processes used for different purposes. When a company needs to restructure its operations at the core, it uses BRP. When local improvements are needed, BPI is sufficient. Chevron balances between these two processes, preferring BPI because it is cheaper, less risky, and not as impactful. Once the company realizes that employees’ initiatives can be safely extended to all divisions, it implements BPR. Otherwise, Chevron encourages its workers to improve operations while accumulating all information in the central repository.
Kasim, T., Haracic, M., & Haracic, M. (2018). The improvement of business efficiency through business process management. Economic Review: Journal of Economics and Business, 16(1), 31-43.
Rainer, R. K., Ebrahimi, S., Sanchez-Rodriguez, C., Prince, B., & Splettstoesser-Hogeterp, I. (2020). Introduction to information systems. Wiley.
|Controller||CEO oversees the entire process||Responsibility is placed on middle managers|
|Costs||Massive reengineering requires high expenditures||Local improvements are cheap|
|Frequency||Chevron uses BPR only when management is sure it will succeed||Management prefers to make most of the improvements via local BPI|