REENGINEERING

Reengineering by definition is a drastic change of the process. However, if the process changes, then the job/task regarding that process must be changed as well. This section addresses the approach and method for reengineering only from the process perspective. For more details see Stamatis (1997) and Selected Bibliography. The discussion will focus on drastic changes as well as developmental changes for the process. Evolutionary changes in process are addressed by statistical process control charting and other monitoring methods and are beyond the scope of this volume (Volume IV of this series covers this topic). Both approaches to redesign merge the viewpoints of management and labor, resulting in more job satisfaction and productivity.

Drastic changes are taking place across the corporate world in the areas of communication practices, corporation cultures, and productivity. These changes are the result of increased employee awareness, an advanced level of technology, competition, mergers, greater demand of quality, and in general, increasing business costs.

These changes have forced management to respond in several ways, including asking employees (union and non-union) for their help. This initiative by management has resulted in participative programs such as teamwork and as of late redesigning the actual job or process. As a result of these changes, trust and open communication are cultivated and encouraged. Information sharing, as well as moving responsibility and accountability to employees themselves , is a common occurrence.

This employee participation has generated a need for both job and process redesign so that an organization may be more competitive in the world markets as well as more efficient in producing its product or service.

PROCESS REDESIGN

A process may change in evolutionary form and or in a very drastic approach (Chang, 1994). When a process changes in an evolutionary form, it may be because of statistical process control monitoring or some other kind of monitoring method. Under this condition, the redesign process takes the form of a problem-solving approach. A typical approach is the following:

• Step 1. Reason for improvement ” why is there a need for change?

  • Select appropriate and applicable measures and targets.

  • Determine any gaps.

• Step 2. Define problem ” Whenever possible, stratify the improvement area.

  • Look for root cause rather than symptoms.

• Step 3. Analysis ” Verify root cause.

• Step 4. Solution(s) ” Determine alternatives.

  • Select best solution.

• Step 5. Result(s) ” Verify and evaluate the elimination of the root cause by asking:

  • Are we better off?

  • Are we worse off?

  • Are we the same as before?

• Step 6. Implementation ” Review the control plan. Change it if appropriate and applicable.

  • Standardize the process.

  • Replicate.

THE RESTRUCTURING APPROACH

When a process changes drastically, it may be because of a newly introduced technology or a process reengineering effort. If a process changes because of newly introduced technology, then this process follows a restructuring plan. Process restructuring seeks to break down complexity into manageable pieces. Rather than focusing on a single problem, the process redesigner seeks to understand how whole sets of activities and problems are interrelated. When complexity itself is a problem, restructuring is probably the best path to pursue (Rupp and Russell, 1994). The heart of the restructuring approach consists of six steps. They are:

• Step 1. Need for change ” Reevaluate the process and the technology under consideration.

  • Why is the technology necessary?

  • Are there other alternatives?

• Step 2. Analysis of new technology ” What is the cost?

  • What is the time for implementation?

  • What does the value analysis indicate ?

• Step 3. Evaluate the "new" paradigm(s) ” Look at the alternatives from a wider perspective.

  • Look at as many alternatives as possible.

  • Stretch the alternatives for results.

• Step 4. Design the "new" process ” Define, measure and evaluate all alternatives with the following in mind:

  • Flow

  • Structure

  • Tasks

• Step 5. Build the "new" process ”Verify the process performance and effectiveness.

• Step 6. Implementation ” Develop "new" control plan.

  • Standardize the "new" process

  • Replicate

If, on the other hand, a process changes because of reengineering efforts, then this process is developed in four stages. The four stages are:

• Stage 1. Recognition for change. One of the first things that the team has to recognize is that the status quo is about to change. Once the realization sets in, then a formal analysis of what has to change must be performed and the intentions of that change must be communicated throughout the organization to those who are or will be involved. As part of the communication effort, the context of the change and the operating principles will also be communicated.

• Stage 2. Change content definition (formulation). In this stage, a process map is developed, so that the process targets and objectives may be declared. (In some cases, two process maps are developed as needed. One represents the old process and the second represents the new process. This is done for comparison purposes.) This stage begins the process analysis (tasks and jobs required) and determines the process changes and the new owners . Perhaps one of the most important aspects of this stage is the formulation of the baseline production requirements such as capacity, cycle time, productivity, efficiency, and quality requirements. In some cases, this is the stage where a pilot study will be designed.

• Stage 3. Change implementation. This is the stage where most of the tedious work has to occur. Specifically, the controls are designed for the new process, and a systematic analysis is performed to identify potential modification points and to eliminate non-value adding steps. A formal value analysis and FMEA may be performed in this stage to identify areas of opportunity and possible restructuring.

• Stage 4. System maintenance. This is the final stage of the reengineering process. This is where the old system officially is declared obsolete and the new system is installed with all the new structures, modifications, waste reductions, and new targets of production.

This four-stage model of the process redesign identifies the general elements of the change. To complete the discussion, however, we must also address the specific tasks that the team leader (project manager) must perform and how the team members will respond. Table 10.9 summarizes these seven steps to the implementation process.

Table 10.9: Seven-Step Process Redesign Model

Prime Action of Team Leader	Support Action
Introduce the process change; full disclosure about the project to all concerned	Action kick-off by management team who will be responsible to the team and team leader for follow-up
Develop strategy for implementation	Strategy is incorporated into the business plan, and the team leader acts as both changing agent and support member
Perform appropriate and applicable training to the team members	Managers and team leader support the team for the change; they provide encouragement, coaching, and resources as needed
Follow up with both managers and employees to develop team level information, meetings, reports , problem resolution structure, and whatever else is necessary	Managers and team leader define the system of the "change"; they provide the appropriate support as needed.
Follow up on the reports and measurement element of this stage; evaluation of the results is also important	Team leader conducts meetings and improves quality figures; interpretation is an important information through a systematic flow upward
Help managers with problem	Team leader and managers set first set of performance resolution targets
Full integration of process redesign	Team leader reports progress; audit(s) may be conducted in order to verify targets and or modify the process or the targets

THE CONFERENCE METHOD

Another way to redesign a process is the conference method. This method is based on the notion of a cross-functional design team, which has been charted by a steering committee to design a more effective organization (Weisbord, 1987; Wilgus, 1995). Within the charter of the team it is imperative that a four-item analysis be addressed. That analysis should cover the following:

1. External influences and how the organization must change in response to these influences

2. Customer analysis

3. Vision of what the company aspires to become

4. Principles or values that will guide behavior

In this method, there are three basic ways of analysis:

1. The vision conference, which is made up of two elements:

   1. The past and present. Here the team acknowledges practices that should be brought into the future and those that should be dropped.

   2. The future. Here the team reviews the vision statement and identifies the organizational values, which include customer focus, trust, and shared responsibility.

2. The technical conference, which is made up of two elements:

   1. Analysis of current state. Here the core process is studied and evaluated rather than what people do.

   2. Creation of the ideal state. Here the group activity is focused on generating a conducive environment for breakthrough thinking.

3. The social conference. In this stage of the conference the social system of the organization is evaluated. The elements upon which the evaluation is based are structure, skills, style, symbols, and human systems. Each element is influenced by changes in the environment and must be aligned with the organization's vision values and technical system. The goal of this stage is to generate a design that is the "best."

THE OOAD METHOD

Yet another way of redesigning the process is through Object Oriented Analysis and Design (OOAD). Basically, this method is a framework for understanding, developing, organizing, and managing projects. OOAD is the practice of examining any collection of activities (processes, automation situation, and information flow) as a series of interacting objects. As such, this method is applicable across many industries. Historically, OOAD is the result of the interaction of project management tools (PERT, CPM), system design tools (CASE), and analysis tools. As such OOAD has a valued use throughout project and process life cycle activities.

OOAD does not require special computing, CASE tools, or computer programs. The four basic tools or templates basic to doing enterprise and plant OOAD are the opportunity framework, the activity object diagram, the integrated object template, and the system requirements template. From a reengineering perspective of a particular process, the OOAD has the following minimum requirements:

1. Motivate people and keep them involved.

2. Get people to recognize that quality is their responsibility.

3. Recognize other initiatives and coordinate with their activities.

4. Get all interacting groups involved in the project (operations, automation, safety, logistics, finance, and so on).

5. Get the information to the place and people where it is needed in a timely manner.

6. Translate the engineering, operations, and support views into the overall organization's view.

7. Include the effects of "real world" practices in the design.

8. Ensure that the technology is acquired by the client.

Once the minimum requirements are established, then the reengineering team is ready to implement the method for change. The success of the OOAD will depend upon the implementation of the following ten steps:

1. Establish the program scope and focus.

   Define and publish OOAD.

   Agree on primary focus ” the core process to be reengineered.

2. Set high level goals and objectives.

   Derive from current business strategies.

   Identify critical processes, activities, and metrics.

3. Establish the appropriate time horizon for planning.

   Incorporate technology forecasts.

   Balance tactical with strategic intent.

4. Adopt the specific methodology for executing the plans.

   Provide a plan for planning.

   Separate work plans from techniques.

5. Organize teams and participants .

   Involve the right people.

   Allocate adequate time and training.

6. Provide education and training.

   Internal

   External missions

7. Define the procedure to approve plans.

   Process priority

   High level (top management) commitment

8. Promote technology transfer.

   Project organization

   Education/training

9. Communicate plans and progress.

   Conferences and presentations

   Recognition and rewards

10. Screen outside assistance.

    Timetable and expertise

REENGINEERING AND DFSS

Reengineering may play a major role in the DFSS because it will focus the process of improvement by

• Positioning six sigma in a process management framework

• Achieving breakthrough improvements in quality, cost, and cycle time

• Leveraging six sigma with reengineering and vice versa

• Using the right tool for the right problem

• Avoiding the traps of six sigma implementation

• Turning process management and improvement into a way of life

Many executives who so enthusiastically embrace six sigma do not really know what they are getting into, and that is a guarantee of trouble downstream. For many, six sigma methodology has become a corporate panacea, a silver bullet of sorts, and that spells unrealistic expectations and eventual disillusionment . More importantly, many companies are discovering that there is a large gap between learning the techniques of six sigma and realizing its benefits. Some are falling prey to six sigmaitis, symptomized by a vast number of uncoordinated projects that do not support critical corporate goals or customer functionality. If these problems are not addressed quickly, six sigma will become just another corporate fad, companies will not benefit from its power, and institutional cynicism will get yet another boost. We have been down this road before, and we do not need to go down it again.

Executives of these companies need a better understanding of what six sigma is and what it is not, what it can do and what it cannot. With six sigma's focus on problem identification and resolution, can it create breakthrough process designs? Does it have the power to address so-called "big P" (big picture) processes that cross functional boundaries? Is its popularity at least in part a reflection of the fact that six sigma does not shake up an organization, which might make it easier to swallow but limits its impact? Might six sigma actually reinforce , rather than knock down, the silos that impede improved performance? We need realistic answers to these essential questions.

We suggest that process management and reengineering are necessary complements to six sigma ” especially in the DFSS phase. Six sigma is part of the answer, but it is not the whole answer. Six sigma veterans have learned they need to leverage their six sigma efforts with other improvement techniques ” process management, reengineering, and lean thinking. Six sigma is a methodology that uses many tools, is not a religion, and business results are more important than ideological purity. The real winners at DFSS do not limit their arsenal to just one weapon but employ all appropriate techniques, combining them in an integrated program of process redesign and improvement. After all, we already know that over 90% of our problems are systems (process) problems. It would be ludicrous to look the other way when we have a chance to fix them in the design stage.

In addition, most of the six sigma projects, discussions, and experts emphasize the manufacturing end of potential improvements. But let us remember that in services, the cost of quality is in the 60 to 70% range of sales. That is an incredible potential of improvement, and reengineering is a perfect tool not only to evaluate but also to help the six sigma initiatives reformulate the processes in such a way that improvements will occur as a matter of course and on an ongoing basis. In this respect, one may even say that the goal of DFSS and reengineering is to create a process in which all its components are managed, measured, and improved from two distinct, yet the same perspectives:

1. Organizational profitability

2. Satisfaction of customer functionality