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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.