Reengineering…. BPR, Process Innovation, ERP, Mass Customization, Networked Organization, Empowerment, Teams, Virtual Corporations, TQM, JIT

Supply Chain  Flow of materials, information, and services  Includes organizations and processes  Manage the entire process  Business Process Reengineering(BPR)

Reengineering the Corporation  Written  Michael Hammer –One of 1996 most influential people in the U.S. Time Magazine July 17,1996  James Champy

What is Reengineering?  “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures or performance, such as cost, quality, service, and speed” p. 32

Reengineering is...  Reversing the Industrial revolution  Innovation  Process Oriented  Re-Inventing  Re-creating  Starting Over from Scratch

Impacts  Increase product by an order of magnitude  Examine process  Vision  Increase Profits  Benefit from better product  Needs are met  Tendency to return  Loyalty  Teams  Less Workers - More Work  Empowered  Layoffs Company Customers Employees

Why Reengineer  The 3 C’s –Customers –Competition –Change  Nothing is Constant or Predictable  Change is the only constant

 To reengineer a company is to take a journey from the familiar into the unknown. The journey has to begin somewhere and with someone. Where and with whom? –P. 101

Keys  Leaders  Staff Empowerment  Broader Scope –Knowledge / Skills  Tasks to Process –Redesign of Systems  Information Technology  Community

The 3 R’s  Redesign –Cross-function approach  Retool –Information Tools  Reorchestrate –Organization changes

Problems  Fix vs. Change  Focus  Ignore  Quit  Scope  HR / Unions  Success Rate

Bell Atlantic’s Experience  The difference is that in a compliance mode I do what I must do because my boss tells me I must do it. In a commitment mode, I understand what the corporation is trying to achieve and how we’re going to achieve it, and I will do whatever it takes to make that happen, including changing the way I do my job if that is what is required –p. 196/197

BPR  No longer a need to destroy everything - start from scratch  Instead - Flexible approach that can be executed by proven methodologies and principles. Hammer and Stanton[1995] & Champy [1995]

Process Innovation Encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human, and organizational dimensions – order-of-magnitude improvements Davenport (1993)

Process Innovation vs. Incremental Improvement  Change  Effects  Involvement  Investment  Orientation  Focus  Abrupt, volatile  Immediate  Few champions  High initially, less later  Technology  Profits  Gradual, constant  Long-term  From few to everybody  Low initially, high to sustain  People  Processes Process Innov. Incr. Improv.

Networked Organization  Formal  Highly Structured  Manage  Control  Direct  Employee a cost  Information management owned  Risk avoidance  Individual contributions  Informal  Loosely Structured  Delegate/lead  Ownership/participation  Empower  Employees an asset  Information shared-ownership  Risk management  Team contributions Classical/Hierarchical Networked Organ.

Enabling IT (P. 133)  Information appears in only one place  Only expert can perform complex work  Only managers make decisions  Locate items manually  Shared Database, Inter, Intra  Expert Systems  Decision support systems  Tracking technology  Information appears simultaneously  Novices can perform work  Decision making is part of everyone’s job  Items located automatically Old Rule Intervene Tech New Rule

Add p 138

CHANGE  “It is an educational and communications campaign” –p.148