Integration of Business Process Reengineering (BPR) and Risk-Based Costing (RBC) and Its Impact in Enhancing Efficiency and Rationalizing Resources Utilization: An Applied Study in General Company for Automobile and Equipment Manufacturing – Battery Factory

Abstract

The aim of this paper is to examine how the combination of BPR and RBC could enhance operational efficiency and resource efficiency. The research was applied to the General Company for Automotive and Equipment Manufacturing – Battery Factory with a focus on the 90 Ampere dry battery product during the year 2024. The importance of this research is due to national industries, such as the low operating level of many national industries, rising of raw material prices, and rising in production cost. This research methodology is a combination of quantitative and descriptive analyses, applying it as an applied study. BPR technique was employed to diagnose the core processes of primary battery production line to identify the waste and inefficiencies. In addition, product cost influencing risks were mapped to the identified priority manufacturing operations using the RBC approach. The performance differences observed were in the order of decreased production cycle times, waste material, operating costs based on logical analysis, and risk adjustment in the allocation of resources from combining BPR and RBC. It also demonstrates that using both strategies together is more effective than using either one alone. The report concludes with a recommendation that the General Company for Automobile and Equipment Manufacturing adopt this strategy and broaden it to cover more products. It also emphasizes the development of accounting and management information systems, equipping staff with special skills in risk-based cost management, and business process reengineering to ensure sustainability of the benefits and added value competitiveness of the business.