Workers Make Decisions
Decision making becomes a part of every person job eliminate the need for the traditional and costly hierarchical organizational structure I have Th it. many layer of management. This i-, referred to as vertical work companion. benefits include faster customer lower overhead co-t-. and increasing worker empowerment.
Several Jobs Are Combined into One
Assembly lines are no longer used because of their inherent fragmentation of work. Specialists are replaced with "case worker ho have the responsibility) for overseeing the entire process. This is referred to as horizontal~1 work compression. By combining tasks and jobs under one person, errors that. information from one individual to another are eliminated in addition the Cycle time is significantly reduced because only one person ha responsibility.
Characteristics of a Reengineered Process
Based on their man) years of experience with companies that have successfully reengineered
then procev cv to better meet the needs of the marketplace. Michael Hammer and James Campy have identified several character tics of reengineered process which are described below, that they have observed on a recurring basis.
Reengineering Defined
This process of rethinking and restructuring an organization is often referred to as reengineering. Reengineering means literally starting from the beginning with a clean sheet of paper in terms of how we design our organizations to bender serve our customers. It focuses on processes. not individuals performing individual tasks. A key element of reengineering is the notion of "discontinuous thinking't=-identifying and discarding antiquated rules and assumptions that are often the foundation for current business operations, and that continue to exist when only small, incremental changes are made. A cornerstone of reengineering is the use of computer technology. With advances in database management, speed of processing, and networking capabilities. today's computers should be used to formulate new approach that are based on the computer's strengths. Instead. many companies simply transfer existing manual systems onto the computers and wonder why their problems still exist e\ en though they have "automated" their s~ stems. An example of recngineering is shown with Ford's desire to reduce it!">accounts payable department in the early 1980s. Initially. through traditional methods. management determined that the 500-person department should be reduced by 100 people (a 20 percent reduction in that workforce). However. investigation revealed that Mazda's accounts payable department consisted of only five people. Even though Mazda was smaller than Ford. this didn't explain the tremendous difference in department sizes. Subsequently, Ford decided to completely rethink its accounts payable department.
Business Process Reengineering 7
For many years, dating well back into the 19th century companies were organized and structured both to maximize efficiency and also to control growth. However, with the emergence of a single world economy and increased competition from comers of the globe today's competitive priorities for success have shifted from efficiency to innovation, speed,
service, and quality To increase efficiency in the factory, job design was dominated by the division of labor concept in which the work to be done was subdivided into a series of tasks that could be performed by less-skilled individuals. However, this approach, while increasing productivity among lower-skilled workers, had its disadvantages. With each individual focusing primarily on his or her assigned task. no one assumed overall responsibility for the process itself. The result was that these conventional process structures were fragmented and piecemeal. and consequently lacked the integration necessary to support the current competitive priorities, for example, quality and service. This shift in priorities has forced managers to rethink how their firms operate, and to focus on redesigning their core business processes. This is the goal of reengineering. To accomplish this, we need to "get back to the basics," by applying some of the concepts presented in this chapter that allow us to better understand these processes.