Tata McGraw

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Chapter 13
Operations Consulting and
Reengineering
Operations Consulting Defined
Operations Consulting and the 5
Ps
Hierarchy Within a Consulting
Organization
Stages of Operations Consulting
Operations Consulting Tool Kit
Reengineering
OBJECTIVES
13-3
Operations Consulting

Operations consulting involves
assisting clients in developing
operations strategies (i.e.,
product leadership, operational
excellence, customer intimacy,
etc.) and in improving
production (and service delivery)
processes.
13-4
Operations Consulting & the 5 Ps
Plants
Adding and locating new plants
Expanding, contracting, or
refocusing facilities
Parts
Make or buy decisions
Vendor selection decisions
Processes
Technology evaluation
Process improvement and
reengineering
13-5
Operations Consulting & the 5 Ps (Continued)
People
Quality improvement
Setting/revising work
standards
Learning curve analysis
Planning and Control
Systems
Supply chain management
MRP
Shop floor control
Warehousing and distribution
13-6
Hierarchy within Consulting Firms
Partners
Finders
Who find new business
Managers
Minders
Who manage the
business
Consultants
Grinders Who actually
do the work
A way of looking at the typical
consulting firms organization
13-7
Economics of Consulting Firms
David H. Maisters article on
consulting draws an analogy
between the consulting firm and
a job shop operation. Three
types of jobs:
1. Brain Surgery: Requiring
innovation and creativity
2. Gray Hair: Requiring a great
deal of experience (little
innovation)
3. Procedures: Requiring
activities similar to other
existing projects (little
innovation or experience)
13-8
When are Operations Consultants Needed
When faced with major
investment decision(s)


When management believes it is
not getting the maximum
effectiveness from the
organizations productive
capability
13-9
Stages in Operations Consulting Process
1. Sales and proposal development
2. Analyze problem
3. Design, develop and test
alternative solutions
4. Develop systematic performance
measures
5. Present final report
6. Implement changes
7. Assure client satisfaction
8. Assemble learnings from the
study
13-10
Operations Consulting Tool Kit: Category 1
Problem Definition
Issue trees
Customer surveys
Gap analysis
Employee surveys
Five forces model
In this scheme we have
five categories of
activities, starting with
Problem Definition, that
consultants perform and
the supporting tools
used to aid the
consultant in
performing that
category
13-11
Operations Consulting Tool Kit: Category 2
Data Gathering
Plant tours/audits
Work sampling
Flow charts
Organizational charts
13-12
Operations Consulting Tool Kit: Category 3
Data Analysis and
Solution Development
Problem analysis (SPC tools)
Bottleneck analysis
Computer simulation
Statistical tools
13-13
Operations Consulting Tool Kit: Category 4
Cost Impact and
Payoff Analysis
Decision trees
Balanced scorecard
Stakeholder analysis
13-14
Operations Consulting Tool Kit: Category 5
Implementation
Responsibility charts
Project management techniques
13-15
Reengineering

Reengineering is defined as the
fundamental rethinking and radical
redesign of business processes to
achieve dramatic improvements in
critical, contemporary measures of
performance such as cost, quality,
service, and speed. As a engineering
discipline, reengineering can be
applied to any process in
manufacturing and service
businesses, education, and the
government.
Business process reengineering
(BPR) is focused on reengineering
business processes.
13-16
Key Words in the
Reengineering Definition
Fundamental
Why do we do what we do
Ignore what is and concentrate on
what should be
Radical
Business reinvention vs. business
improvement
13-17
Key Words in the Reengineering Definition (Continued)
Dramatic
Reengineering should be brought in
when a need exits for heavy
blasting
Companies in deep trouble
Companies that see trouble coming
Companies that are in peak condition
Business Process
a collection of activities that takes
one or more kinds of inputs and
creates an output that is of value to
a customer
13-18
Principles of Reengineering
Organize around outcomes, not
tasks
Have those who use the output of
the process perform the process
Merge information-processing
work into the real work that
produces the information
Treat geographically dispersed
resources as though they were
centralized
13-19
Principles of Reengineering (Continued)
Link parallel activities instead of
integrating their results
Put the decision point where the
work is performed, and build
control into the process
Capture information once and at
the source
13-20
Question Bowl
Reasons for the boom in
consulting include which of
the following?
a. Globalization
b. Very inexpensive
c. Existing managers dont
know what they are doing
d. All of the above
e. None of the above
Answer: a. Globalization
13-21
Question Bowl
In the hierarchy of a typical
consulting firm who are at the
top of the organizational
pyramid?
a. Minders
b. Finders
c. Grinders
d. Binders
e. None of the above
Answer: b. Finders
13-22
Question Bowl
Which of the following are some of
the major strategic and tactical
areas where companies
typically seek operations
consulting?
a. Plant
b. Parts
c. Processes
d. People
e. All of the above
Answer: e. All of the above (The five Ps also
include Planning and control systems.)
13-23
Question Bowl
Using the Stages in the
Operations Consulting
Process, what stage follows
the Implement Changes
stage?
a. Sales and proposal
development
b. Analyze problem
c. Assure client satisfaction
d. Present final report
e. Develop systematic
performance measures
Answer: c. Assure client satisfaction
13-24
Question Bowl
Which of the following are a part
of the Operations Consulting
Tool Kit that apply to the
category of Problem
Definition?
a. Bottleneck scorecard
b. Employee surveys
c. Flowcharts
d. Statistical tools
e. None of the above
Answer: b. Employee surveys
13-25
Question Bowl
Which of the following are a part of
the Operations Consulting
Tool Kit that apply to the
category of Data Gathering?
a. Decision trees
b. Employee surveys
c. Flowcharts
d. Statistical tools
e. None of the above
Answer: c. Flowcharts
13-26
Question Bowl
Which of the following are a part of
the Operations Consulting
Tool Kit that apply to the
category of Implementation?
a. Organization charts
b. Gap analysis
c. Five forces model
d. Computer simulation
e. None of the above
Answer: e. None of the
above (These tools
actually should include
Responsibility Charts
and Project
Management
Techniques.)
13-27
End of Chapter 13
13-28