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Reengineering

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  1. Reengineering Created by Michael Mann Operations Management 345

  2. Topics • What is Reengineering • Can you use it in your organization • What is involved • How it works • Examples • Exercise • Conclusion

  3. Reengineering Defined Reengineering is also known as Business Redesign. Business Process Redesign is "the analysis and design of workflows and processes within and between organizations" (Davenport & Short 1990).

  4. Business Process Reengineering • Has been around for a long time. • Written on extensively in trade journals and research articles. • Is it a fad? • Technology is vital to the Reengineering process.

  5. The success of Business Process Reengineering • Around 70% of all BPR projects fail. • Lack of management commitment and leadership • Unclear definition of the BPR project • Unrealistic scope and expectations • Resistance to change • Lack of resources

  6. Can you use this in your organization • Ask these questions about the project. • Is the process needed? • Can and should it be redesigned? • What purpose does it serve? • Who is responsible for it? • What competencies are needed for someone to successfully complete it?

  7. Organizations seeking to reengineer • Make the customer the starting point for change -- by identifying customer wants and creating the infrastructure to support these expectations • Design work processes in light of organizational goals • Restructure to support front-line performance.

  8. Reengineering Recommendations • BPR must be accompanied by strategic planning, which must address leveraging IT as a competitive tool. • Place the customer at the center of the reengineering effort -- concentrate on reengineering fragmented processes that lead to delays or other negative impacts on customer service. • BPR must be "owned" throughout the organization, not driven by a group of outside consultants. • BPR must be sponsored by top executives, who are not about to leave or retire. • BPR projects must have a timetable, ideally between three to six months, so that the organization is not in a state of "limbo".

  9. Surviving Reengineering • BPR calls for radical change • Change brings out negative reactions in many people • How to cope: • Spend time with co-workers who have the most positive attitudes. • Do one thing differently each week. Break the old habits. • Talk to outsiders who have gone through reengineering. • Read trade and business publications to put reengineering in perspective

  10. Goals of BPR • Increase service level • Reduce total process cycle time • Increase throughput • Reduce waiting time • Reduce activity cost • Reduce inventory costs

  11. Tools for developing a BPR • Flow diagramming-based simulation tools • System dynamics-based simulation tools • Discrete event-based simulation tools

  12. Implementing BPR • Analysis • Is the redesign feasible? • Which issues will pose the most complexity? We will need to allocate resources to these issues?

  13. Implementing BPR • Software Functionality • Tools are assistants for participants in the implementation plan. • Tools are needed to guide the implementation through the different phases. • Tools must provide the overall roadmap.

  14. Implementing BPR • Management plans • Standards for consistent descriptions of processes, process strategy and plans. • The framework of entities necessary for effective process management. • Linkages showing how each employee's job contributes to the building and delivery of value to the enterprise's customers.

  15. Implementing BPR • Human resources • Identify essential agents within the organization. • The behavioral aspects of the agents • Motivation • Culture • Incentives • Adaptability

  16. Summary of Implementing BPR • Define • Model • Analysis • Software • Management • Human resources

  17. Real World Example • Xerox • Redesign of the organizational structure • To facilitate the reorganization of the Corporate Information Management Function • Response to expiration of patents and competition from Fuji and Canon.

  18. Real World Example Continued • Main goal of Xerox was to increase market share and their return on assets • Focused on four major areas • Corporate strategies and programs • Corporate technology strategies • Corporate telecommunications strategies • Executive and office information systems

  19. Real World Example Continued • A new CIO was selected • Objectives to hire and train the right people for the new CIM • Defined roles and responsibilities for the new CIM group

  20. Xerox Continued • Three level architecture was developed • Data processing • Distributed processing • Workstations and OIS

  21. Xerox Case Summary • Primary focus to redesign the organizational structure • People and technology were both needed to be successful

  22. Ask these questions for a reengineering exercise • What changes in the present system are needed? • How quickly should the changes be made, draft a time line. • In what order will the changes be scheduled? • What approvals, buy-ins and partner involvements are needed?

  23. Exercise continued • What is the strategy for gaining these approvals? • Who will be responsible for what, when, where and how? • Identify each person • Draw a table for each implementation step.

  24. Exercise Continued • Identify strategies for possible major obstacles that might emerge. • Plan for monitoring and working out problems. • What staff changes will be needed? • Establish schedules and objectives for communication and training.

  25. Exercise continued • Look at all new working arrangements and new shifts. • Are any equipment or facility changes needed?

  26. Summary • The first question to ask is “What needs to be done” • Over time BPR involves changes in • People • Processes • Technology

  27. Summary • Set objectives • Do you want to increase service level • Reduce total process time • Increase your throughput • Reduce waiting time • Reduce your activity cost • Reduce your inventory time

  28. Summary • BPR is used for • Combining duplicate activities • Eliminate multiple reviews & approvals • Reduce batch sizes • Put processes in parallel • Implement demand pull • Outsource inefficient activities • Eliminate movement of work • Organize multifunctional teams

  29. Conclusion • Remember over 70% of BPR projects fail • Proper understanding of BPR is needed before taken on a project. • BPR is used for radical redesign and improved work processes

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