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Intro to Re-engineering
Intro to Re-engineering
The Crisis
Definition of Re-engineering
Bureaucracy
Bureaucracyis
isthe
theglue
gluethat
thatmakes
makesthe
thecurrent
currentfragmented
fragmented
tasks
come
together
to
produce
a
result.
You
need
tasks come together to produce a result. You needititso
solong
long
as
the
tasks
remain
fragmented
and
do
not
become
a
as the tasks remain fragmented and do not become a
business
businessprocess.
process.
Examples of Re-engineering
IBM Credit Corp Managers walked through an actual credit
approval request and found it took 90 minutes of work and 7
days of wait time. Solution: replaced a host of specialists by
single generalist who did the whole process which took 4
specialists. No hand-offs.
Kodak did CE to speed up the development of a 35mm singleuse camera in response to Fuji. Engineers in all departments
worked simultaneously instead of sequentially, but shared
changes every day and resolved conflicts. Cut 70 weeks to 38
weeks. And involvement of tooling designer early has made the
design more inexpensive to manufacture by 25%.
Reengineering
Reengineeringmeans
meansdoing
doingmore
morewith
withless.
less.
Copyright Concurrent Engineering Research Center
Reduce checks and controls. Replace transaction-bytransaction controls with aggregated controls, done at
deferred time. Tolerate possibility of limited fraud.
Minimize reconciliation (number of checks on something
before it happens).
Provide single contact case manager with responsibility to the
customer to shield him/her form internal complexity.
Exploit information technology to share information across
boundaries. But do not automate old processes. You may
make them harder to change, and the damage they do may be
magnified.
Combine the freedom, flexibility, and focus that comes from
de-centralization, with the advantages that go with
centralization (shared information, uniform procedures, etc.)
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Values and
Beliefs
Jobs and
Structures
Management and
Measurement Systems
Copyright Concurrent Engineering Research Center
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ItItis
isthe
thedisruptive
disruptivepower
powerof
oftechnology,
technology,its
itsability
abilityto
tobreak
break
the
rules
which
limit
how
we
conduct
our
work,
that
makes
the rules which limit how we conduct our work, that makes
ititcritical
criticalto
tocompanies
companieslooking
lookingfor
forcompetitive
competitiveadvantage.
advantage.
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ItItis
isthe
thedisruptive
disruptivepower
powerof
oftechnology,
technology,its
itsability
abilityto
tobreak
break
the
therules
rulesthat
thatlimit
limithow
howwe
weconduct
conductour
ourwork,
work,that
thatmakes
makesitit
critical
criticalto
tocompanies
companieslooking
lookingfor
forcompetitive
competitiveadvantage.
advantage.
Copyright Concurrent Engineering Research Center
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Broken Processes
Symptom: Inventory, Buffers, Redundant assets
Disease: Uncertainty in supply, unpredictability of demand.
Solution
Don't try to control inventory with elaborate inventory
management schemes. Get rid of it. Plan. Manage the
uncertainty. Work with suppliers, customers.
Symptom: High ratio of work checkers, expediters and managers,
to work doers.
Disease: Fragmentation of work. Lack of inculcation of pride and
taking responsibility for work.
Solution
Internal checks may be necessary for auditing and
control, but it should not become a governing principle.
When it comes to non-finance-oriented work, let the
workers do their own checking, perhaps in teams, let
them police the standards they are to attain, and build
that into the process.
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Broken Processes
Symptom: Rework and iteration.
Disease: (1) Lack of inter-communication throughout work
process to keep everyone informed; or (2) tools and
equipment and technique not refined enough for what is
being attempted.
Solution
(1) Work as a process team responsible for end product
or service and communicate continuously during work.
(2) Invest effort in development or acquisition of tools to
bring process "in control".
Symptom: Too many special cases and exceptions, and therefore
process complexity to deal with it.
Disease: Originally simple process has been patched over and
over again.
Solution
Restore simplicity by creating several simple processes
and deciding at the input which of several processes to
use. One standard process with complex decision points
all along its length is confusing and difficult and errorprone.
Copyright Concurrent Engineering Research Center
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Understanding Processes
Look from the output end and question is this the output that
is desired by the customer, or can the customer ask for
something more advantageous to his need?
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Understanding Processes
Old processes can take only so much fixing before the marginal
benefits are not worth the bother.
Get into the work environment and find out by watching. Do not
sit in the office and interview. Get to understand the business. It is
a source of ideas.
Consider
Considerthe
thecustomer's
customer'sunderlying
underlyinggoals
goalsand
andproblems,
problems,not
notjust
justthe
the
mechanics
mechanicsof
ofthe
theprocess
processthat
thatlinks
linksthe
thetwo
twoorganizations.
organizations.
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Instills urgency.
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Must
Mustgalvanize
galvanizemanagers
managersand
andemployees
employeesto
toaction,
action,
and
andfight
fightoff
offthe
thelethargy
lethargyof
ofthose
thoseon
onthe
thesidelines.
sidelines.
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AAVision
Visionmust
mustsuggest
suggestconcretely
concretelyhow
howthe
thecompany
companywants
wantsto
tooperate.
operate.
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Met their customers AT&T, MCI, Sprint to appreciate needs: ondemand connection and zero defects.
Key
Keyoperating
operatingproblem
problemof
ofthe
theCAS
CASdivision
divisionwas
wasrecognized.
recognized.
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Solved
Solvedthe
thefragmentation
fragmentationwhich
whichwas
wasat
atthe
thecore
coreof
ofthe
theproblem.
problem.
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The lab team had operational responsibility and reduced the time to
days instead of weeks, sometimes hours only..
Commitment
Commitmentto
tomaking
makingthings
thingshappen
happenreplaces
replaces
compliance
with
doing
what
the
manager
compliance with doing what the managertells.
tells.
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In the next step the case team to deliver the CAS service will
be replaced by one case worker plus some new technology.
One worker will take the customer request and from his/her
terminal will make all the electronic connections necessary to
complete the request.
After doing the connection s/he will do all the work needed to
bill and keep records.
Zero
Zerocycle
cycletime
timewill
willbe
beachieved
achievedin
in33steps,
steps,and
andthere
therewill
willbe
begreat
greatreduction
reduction
in
cost,
increase
in
customer
satisfaction
and
elimination
of
errors
in cost, increase in customer satisfaction and elimination of errors. .
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My Questions
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