Business Systems Reengineering 

4. Strategies 

A. Scope

Several approaches have been observed:

Specific area: A more limited approach to Reengineering is to pursue a program to improve a specific process, such as Purchas­ing, by concentrating on its objectives, including improvements in results for the principal internal and external "Customers," such as Production, Engineering, etc. The advantage of this approach is to focus on a limited objective, and one that is usually under the control of the initiators. The drawback: it is not part of a larger, integrated effort with common objectives and synergy.

Business process improvement program: The next rung up the ladder is a larger scale program. Typically featuring overall goals, objectives, performance measurements, such programs may take 1-3 years, although interim results may show up much sooner.

Finally, there is a complete company Reengineering, which may consist of changes affecting the:

• Overall mission and goals

• Business philosophies

• Social system

• Technical approach

• Hard process technologies, such as production equipment, bricks and mortar

Such approaches are considerably more ambitious in scale, requir­ing strong, knowledgeable, high level commitment for a long time (3-6+ years), and often, lots of money. They typically start with major re-education of key players and then proceed to the entire organization. Business philosophies, team dynamics, behavioral modification and similar initiatives are then followed with broad analyses of Customer and organizational require­ments, leading then to specific planning and implementation of supporting business systems changes. Successful attempts have resulted in dramatic positive transformation of companies.

Which of these paths to take? It depends on the beliefs, compe­tence, resources and charter of those responsible for making decisions. The current level of ability of the organization counts too. Unless your organization is very knowledgeable, sophisti­cated, and possesses the resources for a massive program, I'd recommend starting with smaller demonstration projects, to prove it can be done, to develop a methodology and a cadre of people to help take it company-wide later.

B. Justification

The justification should be formal, but not elaborate. It needs to key in on the areas covered in section 2.B.

Try to schedule or implement improvements with greatest benefits first to help pay for the effort and generate favorable impressions to support continued activities. Try for some early quick wins if these can be achieved without harming the overall effort's integ­rity and schedule. Do something soon. Otherwise, the resources you need for these efforts may be sucked up by some junior engineer claiming a 4 month payback on his new whizzit machine. This also helps to overcome the skeptics who charge that you're perpetrating an academic exercise or some huge boondoggle.

While it is most desirable to show a clear, clean hard dollar payback early on, it's not always possible for each element of the program to stand on its own. Why:

•  The whole program, or major portions of it, may be needed to attain critical mass improvements and savings. For exam­ple—a new integrated business system may actually require more time and effort to enter a purchase order. But once fully implemented, it makes electronic access much simpler, saves time, cuts the cost of changes, cuts redundant entry and errors in receiving, accounting, QA, project management, etc.

•  The program may be required merely to survive. For example, if a competitor has reduced lead times to 10% of yours, the economics of your present situation may shortly become untenable anyway, so you've got to do it, even if profits go down. We refer to benefits of such programs as "survival dividends."

C. Organization

We've seen a number of organizational approaches for supporting Reengineering. Examples:

• Dedicated team reporting to CEO/General Manager

• Representatives from line departments

• Outside teams

• Combinations of the above

• Separate company directorate (not recommended)

• Reengineering Czar working alone (not recommended)

• Reengineering Czar coordinating or heading teams

The best way may vary for each situation, so here are some factors to consider:

• Which organization best fits the company culture and style?

• Is the company able to employ teams, or does it require more traditional hierarchical structures?

• Who has the most interest and competence to see it succeed?

• How much resource can be brought to bear?

• What about ownership?

D. Philosophies and Techniques

There is no lack of gurus, philosophies, and techniques available in the marketplace today. The hard part is to separate the wheat from the chaff, and to get consensus on a single set of approaches, since more than one might work, but all can't be done at once.

WCM (World Class Manufacturing), CI (Continuous Improve­ment), JIT (Just-in-Time), CFM (Continuous Flow Manufactur­ing), CE (Concurrent Engineering), TPM (Total Productive Maintenance), MRP II (Manufacturing Resource Planning),

TQM (Total Quality Management), PMS (Performance Measure­ment Systems), TEI (Total Employee Involvement), SMED (Sin­gle Minute Exchange of Dies), Focus Factories, Cells, ABM (Activity-Based Management), QFD (Quality Functional Deploy­ment) are some of the more common ones to draw from.

Some of these have been overdeveloped or shrilly claim almost religious status. If one followed all the tenants of all these philosophies, there wouldn't be time to make and ship product. Most of these offer something to be learned. Pick some that are proven, compatible, will help solve your problems, and can gain consensus. Then get on with it.

Next Week Part V. 

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