Lean Manufacturing via Business Process Reengineering 



Information Technology—Make vs. Buy

Classical reengineering approach will suggest that the design of the new solution be completed to the required level of detail before beginning the design of the enabling information system solution. In reality however, this may not be a practical choice. Many companies get impatient with the long drawn out reengineering program and end up selecting the information system to be implemented, some­what prematurely. And, then they learn to simultaneously reengineer the business processes in the context of the system solution. This may indeed be a more effective approach, if coordinated effectively, due to the long time taken for developing a custom solution. Motivation to sustain the effort will fade quickly if it takes longer to deliver the reengineered solutions. Well designed inte­grated solutions may in fact offer rich ideas that may speed up the reengineering design and implementation activity.

Solution Component: The "Social" Design

Most reengineering efforts are primarily focused on the "technical" design and not on the "social" design aspects. The technical design includes the process design, linkages with other processes and functions, information require­ments etc. Social design, on the other hand, is where Human Resources (HR) can play a crucial role. As Dr. Hammer puts it "the soft stuff is the hard stuff." Unless social factors are included in the reengineering, the designs will most likely remain as designs that may not get imple­mented. Some of the tasks in developing the social design include: empowering customer contact personnel, defining jobs and skills, specifying the management structure, designing career paths, designing change management activities, and designing appropriate incentive structures.

Phase 3: Transition

After prototyping the new process, the organization must evolve to institutionalize the new capabilities. This phase has to be meticulously planned because this is when most

of the organization will actually experience change. Many

important decisions have to be made regarding the rollout strategy and sequence, particularly in global environ­ments. There are significant risks and tradeoffs in imple­menting the solution in a "bigbang" fashion vs. in a phased manner. The phasing of implementation can get very tricky. It is often not easy to decide whether to rollout the implementation one product division at a time, or one geographic location at a time. Cultural issues will have a significant bearing as well.

Transferring Ownership

The reengineering team makes the transition, during this phase, from a design focus to working within various organizations supporting the rollout. Management teams from individual organizations should lead the implementa­tion efforts. The reengineering team provides the expertise and experience required for successful transfer of owner­ship. Many of the change management issues pertaining to this phase are covered below.

To be Continued


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