The impact of Business Process Re-engineering (BPR) on labour productivity in the automotive assembly organisation in South Africa

Abstract

Companies develop strategies of promoting innovativeness relating to productivity improvements in their production processes. These may require radical changes aimed at improving short-to long-term growth in productivity. This sentiment describes the concept of business process re-engineering (BPR). South Africa has, over the years, been experiencing low productivity growth in its manufacturing industry. Its labour productivity level is low when compared with BRICS countries like Russia, India and China. Hence, this study focuses on BPR, given low productivity levels in the South African automotive and manufacturing industries. The automotive company that has adopted a BPR strategy participated in the study. The collection of data was carried out in two phases. This includes the collection of pre- and post-BPR quarterly data from company records on overtime and spoilage rates. The pre-BPR results were quarterly data of the company’s performance over a three-year period prior to BPR implementation. The post-BPR data reflect the company’s performance for three years after BPR was implemented. Hence, the study examined the production and related experiences of the automotive assembly organisation that has adopted a BPR strategy. The company operates in the eThekwini District Municipality in KwaZulu-Natal. The results established that BPR has a positive relationship with labour productivity. It has an influence on the levels of overtime and spoilage rates. Hence, the automotive companies in South Africa should assess their performance and implement structural changes that help achieve new business goals. These include the job structure, as well as the administrative procedures. The implementation of such changes must be based on an understanding of the economic factors affecting labour productivity.