The Limits

Process Reengineering –

At the heart of the lean manufacturing paradigm is the concept of continuous improvement. Even though the operating system that it results in may be vastly different from that embodying the older mass production paradigm the process of getting from the latter to the former generally requires a myriad of incremental improvements each resulting in less waste, greater speed /responsiveness, and fewer potential problems to deal with in the future. In direct contrast to this approach, the idea of business process reengineering (BPR) swept through US industry during the early 1990s. Hundreds of companies that had been impressed by the performance improvements achieved through the introduction of cellular manufacturing were persuaded by the writings and proselytizing of various consulting firms to pursue major breakthroughs in their operating performance by totally reconceptualising and restructuring their business processes.

At the most basic level, BPR involved transforming processes that had been organized by process stages into direct line flows. This required that narrow jobs carried out under close supervision in a hierarchical organization be replaced by broader jobs performed by teams of multi-skilled people in a more horizontal organization. The resulting structure bore great resemblance to the lean manufacturing ideal, but the approach to getting there was totally different.   Rather than a continuous series of small steps, initiated by people at all levels of the organization over a long period of time, reengineering was driven from the top, often with outsiders bearing major responsibility. In the words of one of its foremost proponents, business reengineering means starting all over, starting all over, starting from search.

Unfortunately studies of the effectiveness of process reengineering efforts have revealed a lack of success similar of that of NAO implementations. A number of possible explanations have been proposed. Most of the criticism directed at the process of reengineering has focused on the radical and often dictatorial nature of the change process itself. Receiving less attention but bearing in our view at least equal responsibility for engineering’s many dramatic failures is its basic goal; to restructure processes along product flow lines. Yet as one observes the way processes are organized in most businesses whether they make products or deliver services one is struck by the prevalence of the supposedly discredited process stage organization.

The answers of course are that there are compelling reasons for employing a process organization in many situations. Business processes reengineered along product flow lines, like manufacturing processes organized into straight flow cells; work well in certain environments and poorly in others.  They generally require different kinds of equipment and skills as well as an overall increase in equipment capacity (and therefore in investment). They often are more difficult to expand or contract, except in large steps.  They tend to constrain the development of markedly different new products and services. Finally, they provide less opportunity for special expertise or exceptionally capable workers.  It is ironic that many of the academics who trumpet the virtues of cellular manufacturing, continuous product flows, and companies organized along business rather than functional lines themselves operate out of traditional functional academic organizations – and fiercely resist the use of cross functional teams in teaching courses or conducting research.


Why has the success rate of the programs to implement these NAOs, despite their great promise, been so low? The standard explanation is that unsuccessful programs suffered from a lack of commitment on the part of top management, which is accused of not providing sufficient resources or moral support as its attention shifted from cutting costs and improving quality to exploiting the myriad market opportunities that arose out of the long economic boom of the 1990s. Just as important, in our view, is a lack of enthusiasm and poor implementation by lower-level managers and workers.

Sometimes people at the operating level simply do not understand the basic philosophies of different operating approaches, how their various components mesh, or how they would strengthen the company’s competitiveness. Indeed, these NAOs often were selected and forced on an organization, even though the improvements promised by them were incompatible with its traditional strategic priorities. A related problem is that such initiatives often turned out to be in conflict with one another either because they adopted inconsistent goals or methods, or because they fought for common resources. For example, both just-in-time production scheduling and total quality management programs (which emphasize the importance of identifying, through experimentation, the best way to operate a process, and then documenting and diffusing such best practices throughout the organization) reduce worker autonomy  which is directly contrary to the goals of employee empowerment. Moreover, some “enlightened” practices, such as worker flexibility, were found to have deleterious side effects that were not recognized initially.

Finally, serious questions can be raised about some of the basic premises underlying these new approaches. It has become clear that no NAO is appropriate in every situation. This is not necessarily because of basic flaws, but rather that there are certain types of people, or it contains inherent and initially unappreciated limits, beyond which its effectiveness is diminished.

“What? Gaming in the workplace? No way!” This is something that we hear from Corporate
Closely tied to the question of how much capacity should be provided to meet forecasted
The notion of focus naturally, almost inevitably from the concept of fit. Just as a
At its heart a capacity strategy suggests how the amount and timing of capacity changes
However, as with most strategic decisions, the issue is more complex than it first appears.