Reengineering Opportunities

What we re-engineer are the processes, and not the departments. Processes may cut across several departments. Sometimes they remain invisible. Processes are that the companies do. Manufacturing process is essentially a procurement-to-dispatching process. Some other recurring process are sales starting from prospecting to ordering, product development, from concept to commissioning, order fulfillment from order to payment and service, from enquiry to satisfactory solution.

A process map is a chart of work flow through the company. A big organization may have just a handful of processes, e.g. strategy development process, product development process, customer support process, manufacturing process, customer communications process. Some processes may not appear on the process map as we expect them but as a sub process e.g. manufacturing can be a sub process of order fulfillment. Sometimes sales may be just a sub-price of order acquisition in the overall order fulfillment process.

Choosing the process to Re-engineer:

From the map, we have to choose one or more processes which are to be re-engineered. Those processes which have become dysfunctional, which leave a major impact on our customers and which are feasible are chosen. A dysfunction process is in trouble e.g. a product development process that takes years to turn a new product. Some of the symptoms of distress in a process are data redundancy, extensive information exchange and re-keying. It shows a fragmented process, Inventories management has a lot uncertainty, which must be removed. Many things do not contribute to added value. There is rework and iteration. Processes become complex over a period of time. Processes are prioritized on the basis of their importance in terms of the impact on outside customers. We can ask the customers what issues they care about strongly which are then correlated to the processes. Feasibility indicates the likelihood that a particular re-engineering effort will succeed.

Understanding the Process:

After deciding which process is to be re-engineered, an attempt is made to understand it as it is carried out now. The intention is to take and the overall view, rather than a detailed analysis. The whole idea is to get insight. Ideally, a process is best understood at the end of the customer. What do our customers want? What do they really need? What they feel about the gap between their need and want? What problems do they face? What do they do with the output? We try to understand the goals and problems of the customers. Just interrogation will not work. The re engineering team must be observant. It must work with the customers. After understanding what the customer requirements are, we should examine what the process. It will indicate the direction for the new process.

Benchmarking is another tool that is available to the re-engineering team. Best is benchmarked in other companies. We have to take off from there. But benchmarking just makes you catch up with others. It is a tool to excel. But it can be a source of ideas. Benchmarking can be from outside our own industry.

Process Redesign:

The first step in the re-engineering is the process redesign using imagination, inductive thinking, and an off bear approach. The conventional is questioned. Belief is suspended. A bold approach is advocated. It is not a step-by-step routine approach.

Though re-design is a creative approach, there are examples to adopt and adapt from other companies. Even in non-traditional processes, there are recurring characteristics and themes. Non-traditional characteristics are not obvious, as they are still not in practice. They are not a part of the collective traditional wisdom.

In passing an accident claim, an insurance company faces claims on two counts – medical and non-medical, say fixing a damaged car. The whole process of claim settlement can be redesigned by allowing an agent to settle claims of some lower amounts outside the company’s administrative office, and by appointing authorized workshops for repair jobs. Process redesign starts by classifying claims into large and small exposures. In re-design steps can be taken to settle claims fast. People like to deal with as few people as possible in the performance of a process. They don’t like to deal with different people. While re-designing, several existing assumptions are questioned. We can harness the power of information technology to rethink the process e.g. check the credit rating of a customer who applies for a personal loan or claim filing history of a customer.

It is not true that re-design is an expert’s job or an insider’s job. Being an outsider, on the contrary helps. Everything is examined from customer’s view point. Redesign is a team effort and can be quite a funny experience.