Many companies today are implementing some form of reengineering. Since reengineering is a project-by-project activity, a Project Management Professional (PMP) or otherwise skilled project manager trained in some of these techniques is invaluable to the success of the effort.
Implementation of process reengineering proceeds in a project team format, facilitated by a trained project manager, ideally a PMP. Process reengineering projects go hand-in-hand with the continuous improvement philosophy espoused by most large U.S. companies in response to the Japanese success of the 1970s and ’80s, with one difference. While continuous improvement implies an incremental approach to quality improvement and is a fundamental and necessary way to do business on a day-to-day basis, process reengineering is the radical redesign of some facet of a process, or the entire process, to achieve significant, sustainable improvements. It is what the noted quality consultant Joseph Juran has termed breakthrough.
The first obstacle to reengineering is usually management's perception that “If we have to reengineer it, it must have been designed wrong in the first place.” This is rarely, if ever, the case. Perhaps the business has evolved over time, perhaps in sales and geographic location, but the organization and support processes are functionally as they were the day the company or division was formed. What you have is a business that has outgrown its infrastructure. Or perhaps technology has advanced to give the company's competitors an advantage in efficiency—either the company reengineers or dies. Or perhaps customers are getting more demanding—old specifications just aren't good enough and the process must be changed to achieve the new specs.
Process reengineering is, simply, redefining how work gets done. It can be Reengineering, with a big R (example: creating a new business unit to market a product not thought of before) or reengineering with a little r (example: improving inventory tracking by bar-coding). It is not the result that makes it reengineering, but the process.
The process being examined can be of any size or scope, but must have well-defined boundaries so that raw materials and other inputs, as well as products and downstream customers, can be readily identified. Some examples of processes include corrugated box manufacturing, accounts/receivable, HR benefits processing.
In any case, reengineering typically starts by assembling the team of process owners. This can be a management team, customer service team, or production team—whoever is accountable for operating the process. First, the group's strategy and objectives need to be established so the group will know when it has succeeded; in other words, when its job is done. This is usually expressed in terms of what we call critical success factors. Ask yourself the question: “What am I trying to solve or change?” Sometimes these factors are set by management and are explicit in the group's mandate. This should not stop the team for asking the question, however!
The team next works on defining the “as is” process flow, captured by the facilitator or team leader as a process map or flowchart. Defining what is happening currently is harder than it sounds and can consume quite a bit of the group's time (over several meetings). It is necessary, however, both to give a starting point for determining what to change in the process and to benchmark existing performance so that you will know later if changes made to the process are actually working.
Figure 1. Basic Process Map
A basic process map represents what is done and who does it, as shown in Figure 1. Detail such as cycle times, inventory amounts, or value-added content can be added as information is collected at the various process stages of the reengineering effort.
The team next reviews the “as is” process map to look for issues and opportunities. These can be gathered in a brainstorming format, with each person walking through that part of the process they know the most about, and the facilitator or team leader capturing the comments of the group on a separate page.
The logic in these ideas may not be immediately apparent, but each thought should be captured as it is stated and analyzed at the end of the session. Then, in the way brainstormed ideas are narrowed to a critical few, the issues can be rank-ordered by whatever criteria the team decides are important. Note, however, that the “to be” process can include any number of features the team decides are necessary to achieve the critical success factors.
The next key step in reengineering, and the stage at which most groups get hung up, is the creative stage of envisioning the way the process should work to address the issues and opportunities uncovered by the team. This requires a bold, thinking-outside-the-box approach that is foreign to many in large companies, and most MBAs I know. A trained facilitator is most helpful at this stage to unlock the creative suggestions of the group by staging some exercises or recommending an approach to thinking.
Here is a list useful as an overhead to stimulate thinking, or at least to elicit a reaction:
Initial Management Responses to Good Ideas
“We've always done it this way.”
“We tried that before.”
“Good thought, but impractical.”
“We don't have the authority to do that.”
Etc.
How many times have you heard one of these statements as management's reaction to a new idea? Surely you can come up with a few more!
Design features addressed frequently in reengineering projects are:
- Reducing redundant or non-value-added steps
- Parallel processing
- Centralizing the process workforce
- Cross-training
- Use of technology as an enabler
- Building quality in at the source to reduce inspection and downstream defects.
Figure 2. Process Map After Reengineering
All of these may not be implemented in every process redesign. Whatever is needed for your process is the right answer—no more, no less.
The process previously illustrated might end up looking like Figure 2.
At this point, the team is not done, but they may be nearing exhaustion. What is still needed, is an implementation plan. Now may be the time to bring in some fresh horses on the process team. Management may find, however, that the team has such ownership in the effort thus far that many members may request to stay. Great! Make one or more of them the team leader or facilitator for the new team.
The implementation plan should consider such things as:
- An organizational transition plan
- Facilities migration plan
- Technology requirements
- Training (and cross-training)
- Communications of the changes throughout the organization
- Implementation of performance measures
- Documentation of processes and procedures.
ost importantly, the team must address how the work of the business unit will continue to get done during the transition and startup.
Three very different transition philosophies that have each worked in the right environment and circumstances are pilot, cold-turkey, and phased.
In the pilot transition, a parallel organization is implemented while the existing organization continues unchanged. When the pilot is functioning well the existing organization is eliminated or rolled into the pilot. The cold-turkey transition is just as it sounds—a high-risk, sink-or-swim approach with very little room for error. The phased approach implements the new process(es) and procedures within the existing organization structure and systems, phasing in new design components as fast as is practical.
Ensuring the success of the newly implemented process often hinges upon the implementation of the right performance measures to go with the new process(es). Without them, you really don't know if you've improved and you have no mechanism for sustaining the gains.
Three types of performance measures are operational, leading, and lagging.
Operational measures need to be in the process as it is being completed to ensure satisfactory results. Depending on the value-adding aspects for a given process, these measures may include simplicity, deliverability, quality, flexibility, innovation, error tolerance, level of customer input or involvement, worker capability or motivation level.
A Reengineering Project Checklist
- Validate strategies.
- Assess as-is process.
- Analysis issues and opportunities.
- Design to-be process.
- Develop change plan.
- Develop implementation infrastructure—organization, systems, and facilities.
- Develop performance-based training.
- Review implementation results.
- Throughout the steps above—manage communications, secure commitment to change, build teams, and transfer skills.
- Move on to next process and repeat.
Leading measures measure immediate results of a completed process, including defects, cycle time, throughput, or break-even time.
Lagging measures measure results of completed processes over time, including stockholder value creation (e.g., earnings, cash flow, revenue), customer satisfaction and retention, market-share gain, new product success, or inventory.
Each of the three types of measures should have a place in the system used by management to monitor performance. Training of process owners on the new procedures should be directed at maintaining the level of the critical performance measures, as they are the only objective means of determining the quality of the process outputs.
Some of the above is pretty technical stuff, but no more than a trained PMP is capable of managing. If the manager is not experienced, however, it is smart to bring in a consultant to offer technical advice.
One last thing, and probably the most important—to make reengineering work requires not just technical skills but team building skills. The team needs to be engaged and committed to the objectives and approach and must be empowered to implement change. After all, the common denominator among all improvement methodologies, from JIT to SQC to TQM to reengineering, is change. The future viability of each process and each job associated with it can depend on each team's ability to embrace change and drive it (rather than letting it drive you!) to achieve breakthroughs in the way work happens.
Process reengineering is not a quick fix, but a project-by-project means to harness the forces of change in your business.