Business Re-engineering

The use of cells and other techniques has often reduced WIP lead times so as to obviate the need for work order control. Accounting has little use for work order reporting automation when WIP is reduced to a financial minimum. Inventory management has demonstrated that managing inventory requires little automation when inventory levels are limited to current requirements.

Before trying to determine how an activity can be automated, first consider how it might be eliminated. I tend to categorize activities into three classifications. The first type actually add value to the product. These are keepers, though may be candidates for incremental improvement. The second type add no value to the product and will be eliminated. The third type add no value and I haven't yet figured out how to eliminate them.

This concept is a cornerstone in most quality and productivity programs. Simpler solutions tend to have less operating overhead, fewer error introductions, less development and implementation costs, fewer operating delays, less paperwork, fewer communication problems, shorter implementation time frames, more transparency and more flexibility than more complicated alternatives.

Simple solutions often reflect more rigorous and critical analysis and definition. It's pretty easy to design solutions replete with procedural complexity, requiring input from large numbers of distant users, and that generate vast quantities of reports, confusion and frustration. Business reengineering provides an opportunity to revisit the systems that have been ingrained in the fabric of the company. If the solution is not simple, it must not be the correct solution.

There are a number of technologies that are rapidly becoming more commonplace. Often, these technologies are being implemented without reengineering the processes to which they are applied. This approach fails to capitalize upon the benefit opportunities of the technology. EDI, electronic data interchange, is one of the technologies commonly applied in this manner.

EDI allows organizations to communicate application to application. That is, the replenishment planning application of the customer can be used to directly drive the production planning application of the supplier. Such linkages can eliminate processing delays and errors, communication delays and errors, purchase order documents, sales order acknowledgements, clerical overheads and an array of other non-value-add elements of the typical customer/supplier relationship. Yet many companies have become EDI capable only in that they now communicate electronically. These companies retain the very overheads of systems and procedures that prevailed before they acquired EDI technology, failing to recognize that EDI enabled them to do business differently.

Technology is most effective when used to enable business to be conducted differently. It should enable us to focus resources on activities that add value to the products and services we supply to customers.