Reengineering Work: Don't Automation, Obliterate By Michael ...

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1

Reengineering Work:

Don't Automat
e
,
Obliterate


Michael Hammer

Harvard Business Review, July
-
August, 1990, pp. 104
-
112

授課
老師
:

林娟娟

教授

報告學生
:
黃俊銘




: 99756011




2010/10/18

2

Outline


Introduction


Background


Two successful r
eengineering


The essence of reengineering


Seven p
rinciples of reengineering


Conclusion
s



3


Hammer said, “It is time to stop paving the
cow paths. Instead of embedding outdated
processes

in silicon and software, we should
obliterate them and start over. We should use the
power of modern information technology to
radically

redesign our business processes in
order to achieve
dramatic

improvements in their
performance.”


Introduction

4

Background


Method for boosting performance


-

P
rocess rationalization and automation haven't


yield the dramatic improvements company needs


Information technology


-

H
eavy investments in IT have delivered


disappointing results


-

Leave
exist processes intact and use computers simply


to speed them up


The watchwords of the new decade are


-

I
nnovation
,
speed,

service and quality

5

Two successful reengineering


Ford Motor Company


-

Accounts payable processes


Mutual Benefit Life (MBL) Insurance


-

Processing of insurance applications




6

Ford

-

accounts

payable processes


Search for ways to cut costs


-

Ford’s North American accounts payable department
employed more than 500 people


-

R
ationaliz
ing

processes and install
ing

new computer

systems

could reduce the head count by 20%


Look at

Mazda


-

Only
5 people


New goal


-

80%
reduction in head count
(100
people
)




7

















Ford Motor Company

Ford's
old

processes

Purchasing

d
ep
artment

Material con
t
rol

department

Accounts payable


department


















Vender

invoice

goods

payment

Old rule


We paid when we received invoice”

Purchase

order

receiving

document

Purchase order

Accounts pay

8

















Ford Motor Company

Ford's

new

processes

Purchasing

Dep
artment

Material conrol

Dep
artment

Accounts payable


Dep
artment


















Vender

goods

payment

New rule “We pay when we receive the goods”


Database

info.

check

a
ccept

transaction

if okay

Purchase order

r
eturn

order

if

not

okay


9

Ford's
dramatic
improvement


75% reduction in head count

(to 125 clerks)


No discrepancies between the financial record
and the physical record, material control is
simpler and financial information is more
accurate.


10

MBL

-

insurance application



Decision situation


-

The long, multi step process involved


-

Applications go through
30 discrete steps, 5



department
s,

involv
ed

19 people


-

Turnaround time:
24hrs
(best),

5~25days(typical)


-

Actual work done: 17 mins


Goal


-

I
mprove customer service


-

D
emand a 60% improvement in productivity


11


















MBL's
old processes


Old rule


sequential processes

Customers


people

department

12


















MBL's
new processes



















Case managers with powerful PC
-
based workstations


Database
s

Computer

network

Mainframe

&

shared databases


Case managers

Case

manager

Case

manager

Customers

Case
manager

+

Workstations

13

MBL
's
dramatic
improvement


Complete an application in 4 hrs


Average turnaround time : 2
~
5 days


Eliminate 100 field office positions


Handle 2 times volume of new applications



14

The
e
ssence of
r
eengineering


Strive for dramatic levels of improvement


Break away from conventional wisdom and
the constraints of organizational boundaries


Be broad and cross
-
functional


Use information technology not to automate
an existing process but to enable a new one




15

Seven p
rinciples of reengineering
-
1


Organize around outcomes, not tasks






































people

task

An example of reengineering principle 1

Reengineer
Product/

Service

Product/

Service

16

Seven p
rinciples of reengineering
-
2


Have those who use the output of the
process

perform the process






































An example of reengineering principle 2

Reengineer
Vender

Vender

computer
-
based data

&

expertise


Database
s
17

Seven p
rinciples of reengineering
-
3


Subsume information
-
processing work into the
real work that produces the information





















Purchasing

Dep.

Material conrol

Dep.

Accounts payable


Dep.


















Vender

goods

payment


Database

check

a
ccept

transaction

Purchase order

An example of reengineering principle 3
-

Ford

r
eturn

order

if

not

okay


18

Seven p
rinciples of reengineering
-
4


Treat geographically dispersed resources as
though they were centralized






































Dep.

An example of reengineering principle 4

Reengineer
Vender

Vender

Unit

centralized

resources


Database
s
dispersed
resources

19

Seven p
rinciples of reengineering
-
5


Link parallel activities instead of integrating
their result






































An example of reengineering principle 4

Reengineer
Product/

Service

Product/

Service

integrated

result


parallel

activities

Database
s
20


















Seven p
rinciples of reengineering
-
6


Put the decision point where the work is
performed, and build control into the process





















An example of reengineering principle 6

Reengineer
Database
s
Manager

Supervisor

Worker

Expert


systems

21

Seven p
rinciples of reengineering
-
7


Capture information once and at the source






































An example of reengineering principle 7

DB
Reengineer
Info.

22

Conclusion
s


Think big



Many area of the organization


Executive leadership with real vision


Commitment, consistency


Information technology offers many options


If managers have the vision, reengineering
will provide a way

23

Reengineering Formally Defined



Reengineering
,” properly, is the
fundamental

rethinking and
radical

redesign of business
processes

to archive
dramatic

improvements in
critical, contemporary measure of
performance, such as cost, quality, service, and
speed.



M
ichael Hammer

& James Champy,


Reengineering the Corporation: A Manifesto for Business Revolution



(UK: Harper Collins, 2004), 35











24

Thank You!