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Manufacturing Cost Estimating 

PART II. 

 


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Reengineering vs. Simplifying

Knowing that there were opportunities for improvement, we have continually made changes to our systems. Some­times this was done as a project specifically focused on improving the systems, and sometimes under a different "umbrella" such as CIM, JIT, or TQM. Reengineering is a current "hot button" that is attracting much attention and gathering many other projects under its "umbrella." It implies a "start from scratch" approach and a broad scope to recreate a business in every way. Changing the systems is only one of many things that must be done to reengineer a company. Some people have been very selective in their application of the concept of reengineering, applying it only to the areas they feel need improvement. This violates the basic philosophy behind the concept. The process of reengineering, correctly applied, is obviously an enormous undertaking. All business processes must be reviewed and redesigned. The systems that support these processes must also be reengineered to accommodate these changes.

While there have been some very successful reengineering efforts, other companies have not had the motivation or stamina to carry out the full set of activities it requires. Some management teams have not felt the benefits of reengineering justified its costs. Others have not been willing to take the risks such change implies. There has been resistance to revolutionary change at lower levels in some companies. There are more actions than can be accomplished with the available resources in others. For many, it has turned into a long term endeavor.

In the meantime, underutilized systems remain unchanged awaiting the results of reengineering. Systems that could be improved and could lead to improved overall perfor­mance are on hold. For those who cannot handle the costs and magnitude of reengineering, a short term approach may be to simplify their existing systems. This is not a replacement for reengineering. It is an assumption that the basic strategies that were behind the initial development of the systems were sound, but their execution was less than perfect. It assumes that, as other business processes improve, the systems must be flexible enough to continue to change to support them. It assumes that the short term benefits of addressing the systems are good enough to give this activity a high priority.


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