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The theory of constraints; business process re-engineering: service organisation In a recent state government budget, the Motor Registration and…

The theory of constraints; business process re-engineering: service organisation In a recent state government budget, the Motor Registration and Licensing Office suffered substantial cutbacks. As a result, each department has been asked to submit a cost budget for the coming year that is 10 per cent lower than the costs for the current year. The Licensing Department, which employed 50 people, issues driver’s licences to qualified applicants. On average the department processes 250 licences per hour. To achieve the required cost saving, the branch manager has decided to re-engineer the process. The proposed process will consist of five consecutive activities and require a staff of 45 people: Area A would have a staff of five people and be responsible for receiving each application and checking that it is complete. They could process 250 applicants per hour. Area B would have a staff of eight people who confirm that the applicant is qualified to drive. They could process 350 applicants per hour. Area C would have a staff of 10 people who take the applicant’s photo. They could process 150 applicants per hour. Area D would have a staff of 17 people, who complete the licence card, by adding the photo and a driver’s licence number to the card. They could process 140 applicants per hour. Area E would have a staff of five people who issued the licence to the applicant and processed their payment. They could process 280 applicants per hour. 46 P ART 3 • I NFORMATION FOR M ANAGING R ESOURCES Required: 1 How many driver’s licence applicants would be processed per hour using the reengineered process? 2 Identify the bottlenecks that would have to be removed to reach the current level of output. 3 Make recommendations on the number of staff that are required for each area in order to achieve the current level of output. Remember that to achieve the required cost savings, the maximum staff size is 45.

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