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PART I. 


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Introduction

The objective of this paper is to review the experiences of a case history to reengineer responsibilities into a factory management organization. The activity purpose was to decentralize management organizations and combine them, to better align them with our reengineered factory facili­ties. This organizational realignment provided engineer­ing, operation, and material management, in one depart­ment, to support a focused factory concept. The facility layout was rearranged on the shop floor into focused factories (factories within a factory), with several line configurations. The initial focused factory installations were highly successful, so successful that it resulted in the return of product manufacturing that was being done offshore, in the Far East and Europe. Traditional func­tional management organizations had not provided timely responses for rapid problem solving, short interval product introduction, and shortened product configuration changes, activities necessary for individual focus factory successes.

The new management structure, within which Materials Management, Manufacturing, and Engineering all reported to a second level operating manager, was implemented for each focused factory. This manager had responsibility for the process, product and production. Individuals involved in the reengineered group encountered problems for which they were not prepared, some of which were created by the new facility arrangements, and some by the reengineered management structure. This approach worked well for several years. After that time, some basic disciplines began to degenerate inside the reengineered management envi­ronment. Some things began to "fall in the crack," and inherent problems not foreseen began to take their toll. This paper discusses these successes and failures, and summarizes the assessments of both those individuals managing these organizations and those individuals work­ing within the reengineered organizations.

Restrictions Within Traditional Organizations

First let's look at restrictions that are fostered by the traditional organizational structure. The traditional orga­nization characteristically focuses on maximizing its re­source utilization on accomplishing specific organization goals that may or may not align with other organizations and/or the overall operational goals of the enterprise. Top management typically expects the director level of man­agement in each of these functions to assure that their groups are functionally correlating their activities with the other functional organization's goals and activities. But one might ask who are these directors. They usually got promoted to the top of their organization by being the subject matter expert in that particular field of expertise. There is no reason to believe that they possess a broader

understanding of just how their group impacts on others, nor that they will cascade this mutuality throughout all of the levels within their organization.

The traditional organizational alignment provides indi­vidual security by isolating people from other functional groups. It allows each functional group to develop its own metrics and vocabulary, and its own recognition and re­ward system. This approach is frequently counter-produc­tive to overall profitably and performance. Organizations can become "functional silos" that are shown in Figure 1.

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What is represented in Figure 1 is a segmented separation of activities into "functional silos." Each of these may have internal codes of behaviors, hierarchical "pecking orders" and self serving expectations that can be counter produc­tive to overall operational effectiveness. There are many entities vital to the manufacturing enterprise: product developers, maintenance, transportation, legal depart­ments etc. The point is, each of the functional entities can become isolated and develop their own measures and language. Each separate functional group may be achiev­ing excellent internal results, by which they measure themselves, while their contribution to the goal of produc­ing product at a profit in the total operation may be non-existant. We had a business unit in which 60% of the people were rated as "Exceeds Objectives" within their organiza­tions in terms of achieving their objectives, and but this business unit had experienced significant $$$ losses for over two years. One of the major business unit objectives was to make $$$.....What's wrong with this picture???

To be Continued


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