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1、ReengineeringMarch 19981SFRReengineeringAgenda ObjectivesReengineering IntroductiondefinitionsignificanceBains reengineering practiceReengineering ProcessExampleDefense Co.Exercise2SFRReengineeringObjectives Explain what reengineering is aboutwhat is reengineering and why is it important?Convey Bain
2、s experience and unique approachhow does Bain add value?Overview the process and toolswhat does a reengineering project look like?3SFRReengineeringAgenda ObjectivesReengineering IntroductiondefinitionsignificanceBains reengineering practiceReengineering ProcessExampleDefense Co.Exercise4SFRReenginee
3、ringWhat Is It?“If I were re-creating this business today,given what I know and given current technology,what would it look like?”Reengineering means going back to the beginning and inventing a better way of doing work5SFRReengineeringDefinition Yet another TQM or XYZ projectRepackaged cutbacks/down
4、sizingAutomation of existing inefficient processesReorganization/restructuringReengineering is not.The fundamental rethinking and radical redesign of an entire business system(core processes)Achieving substantive improvement in critical performance measures(cost,customer service,capital,etc.)Enablin
5、g dramatic breakthroughs/full potential byarticulating a vision of improvementtearing down organizational boundariesleveraging use of enabling technologyProviding a holistic approach to building competitive advantage and a framework for future decision makingReengineering is.See Related Topic:Altern
6、ative Process Improvement Approaches6SFRReengineeringReengineering Example:Toll Collection New Process7,500 cars per hour$2.00 toll collected in one directionOld Process5,000 cars per hour$1.00 toll collected in both directions7SFRReengineeringReengineering Example:Auto Assembly New ProcessBody exit
7、s paint shop,begins final assemblyOld ProcessDoor sub-assembly;offline,in sequenceLower quality from scratches and dingsTime lost working around doorsDifficult to insert big items like seats and instrument panelHigher qualityLess wasted effortParallel work flowAssembly workers build inefficiently ar
8、ound doorsFinished car rolls off lineBody exits paint shop,remove doors at start of final assemblyAssembly workers build out car without doorsRe-attach doors in sequence(at end of line)See Additional Example:Taco Bell Example8SFRReengineeringAgenda ObjectivesReengineering Introductiondefinitionsigni
9、ficanceBains reengineering practiceReengineering ProcessExampleDefense Co.Exercise9SFRReengineeringSignificance of Reengineering Levi Strauss&Co.$850 million reengineering program haltedadditional$14 million allocated for a two-year education effort to calm unhappy employeesUnsuccessful Reengineerin
10、g Programs(2/3 of all programs)Pacific Telesis/Pacific Bell$XB saved over Y yearsFederal Expresspackage delivery shortened from 4 days to 1 dayGeneral Electricproductivity doubled in order fulfillmentTexas Instrumentsorder fulfillment went from 25 weeks down to 4 weeksUnited Airlinesplane turnaround
11、 shortened from 40 minutes to 25 minutesSuccessful Reengineering Programs(1/3 of all programs)Reengineering efforts have enormous potential,but are very difficult to implement successfully.Our clients hire us to ensure that their reengineering effort is successfulExamples from Public Sources:10SFRRe
12、engineeringReengineering Success Factors Objective,outsiders perspectiveCreative“out of the box”thinkingExperience in reengineering and corporate transformationCoaching and trainingDedicated team to ensure that process continuesGroup moderating skillsAnalytical horsepowerBain Value-AddedCompelling c
13、ase for actionfact-based analysisvision for the future“Clean slate”options available to redesign teams:challenge the status quoFocus on delivering value to customers:Clear and consistent sense of purposeTop management leadership commitmentThe right process owners/managers:Bridge organizational bound
14、ariesExplicit targets for successCritical Success FactorsBains value-added enables our clients to successfully design and implement reengineering programs.11SFRReengineeringAgenda ObjectivesReengineering IntroductiondefinitionsignificanceBains reengineering practiceReengineering ProcessExampleDefens
15、e Co.Exercise 12SFRReengineeringThe Bain Approach to Reengineering(1 of 2)Bain goes beyond the traditional definition of reengineering to return maximum value.The holistic and radical redesign.of the entire business system/core processesto achieve full potential.in building strategic competitive adv
16、antageBain Approach The radical redesign.of business processesto achieve dramatic improvements.in critical measures of performanceTraditional Reengineering13SFRReengineeringThe Bain Approach to Reengineering(2 of 2)ExperienceBains Approach to Strategic ReengineeringStrategy ResultsBreadth of relevan
17、t experienceacross all functional areasvariety of industriesStrong and proven process management skills in large scale projectsExtensive change management experienceComprehensive,strategic approachlinks reengineering efforts to clients strategic perspectiveUtilizes Bains complete toolkitImplementati
18、on support to ensure realization of full potentialValue-driven attitudeFact-based,data-driven analysisFocused creativityFocus on achieving results14SFRReengineeringBain Experience/Results See Related Topic:Evolution of Bain Reengineering15%reduction in total costs;18%improvement in customer satisfac
19、tionProcess Industry ResultsAir freight express Truck delivery5 times improvement in revenue,11 times improvement in operating earnings,and 10 times increase in share priceComputers DistributionProduct permutations decreased from 1 billion to 40,000;order and edit process shortened from 11 to 0 days
20、,scheduling from 26 to 4 days,time vehicle on lot from 71 to 31 daysAutomobiles Manufacturing and distribution40-65%headcount reduction in finance functionsAerospace Budgeting and forecasting70%reduction in lead time Consumer productsMarketing and advertising71%reduction in manufacturing cycle time
21、Athletic footwear Manufacturing3-day pricing decision reduced to 30 seconds Credit cards Marketing50%reduction in headcount Utility EngineeringBain has worked in a variety of different industries and has delivered significant results for its clients.15SFRReengineering Notes:Percentages are approxima
22、te.Reengineering is a significant portion of Bains business worldwide.Reengineering represents approximately 20%of Bain case workImportance to Bain16SFRReengineeringAgenda ObjectivesReengineering IntroductiondefinitionsignificanceBains reengineering practiceReengineering ProcessExampleDefense Co.Exe
23、rcise 17SFRReengineeringReengineering Process See Related Topic:Reengineering RoadmapImple-ment and Track ResultsPrioritize Sub-Process-es for RedesignDiag-nose PMOFMO Rede-signQuantifi-cation of PotentialDesign TMO,Create Initia-tivesIdentify Critical Pro-cessesInitial Prioriti-zationChange Managem
24、ent ProcessDefinitionsPMO=Present Mode of OperationTMO=Transitional Mode of OperationFMO=Future Mode of Operation18SFRReengineeringReengineering Toolkit See Related Topic:Example Fishbone DiagramImplement and Track ResultsDiagnose PMO&Allocate CostsFMO RedesignQuantification of PotentialDesign TMO,C
25、reate InitiativesIdentify Critical Process-esInitial Prioriti-zationChange Management Process Strategy review Performance gaps,competitive benchmarks Management interviews Client interviews Customer interviews Business definition Process mapping Activity-based costing RAID analysis Cycle-time analys
26、is Fishbone diagrams Prioritization matrix Customer needs BDP analysis Brainstorm Root cause analysis IT opportunity assessment Cost/benefit analysis Cycle time impact Customer surveys service,value impact Initiative ideas surveys Opportunity classification,consolidation Quick hits Product metrics P
27、rocess metrics Financial metricsReengineering projects utilize a number of different Bain tools.Prioritize Sub-Processes for Redesign19SFRReengineeringReengineering Process Imple-ment and Track ResultsDiag-nose PMOFMO Rede-signQuantifi-cation of PotentialDesign TMO,Create Initia-tivesIdentify Critic
28、al Process-esInitial Prioriti-zationDefinitionsPMO=Present Mode of OperationTMO=Transitional Mode of OperationFMO=Future Mode of OperationPrioritize Sub-Process-es for Redesign20SFRReengineeringWhat is a Process?See Related Topic:Examples of Recurring ProcessesSee Example Core Processes:Telecommunic
29、ations Services Company;Defense Company;and Electric Utility.A process is a set of business activities which cross multiple functional boundaries to create value for a customer.Corporate StaffFinanceResearch and DevelopmentManufacturingMarketingOrder FulfillmentProduct DevelopmentCustomer Acquisitio
30、nIntegrated LogisticsVertical Structure Organizations Core Business ProcessesTraditional Organizations Process-Oriented,Horizontal ViewExample Core ProcessesIdentify Critical Processes21SFRReengineeringIdentifying Process Types There are four primary types of business processes:Core Processactivitie
31、s dedicated to the design,production,delivery,and maintenance of products and/or services8essential to satisfying customer needs8e.g.customer acquisition,manufacturingSub-Processan individual process that,when combined,creates a core processSupport Processactivities that support core business proces
32、ses but are not direct contributors to the core value creating process for customers8supports and enables the accomplishment of core processes8e.g.human resources,MISManagement Processactivities that guide the strategic direction,manage stakeholder interests,and make key decisions regarding the allo
33、cation of human and capital resources8e.g.budgeting,strategic planningSee Example Core Processes:Telecommunications Services Company;Defense Company;and Electric UtilityBegin and end with an external customer Begin and end with an internal customerBegin and end with key decision makers and stakehold
34、ersIdentify Critical Processes22SFRReengineeringReengineering Process Imple-ment and Track ResultsDiag-nose PMOFMO Rede-signQuantifi-cation of PotentialDesign TMO,Create Initia-tivesIdentify Critical Process-esInitial Prioriti-zationDefinitionsPMO=Present Mode of OperationTMO=Transitional Mode of Op
35、erationFMO=Future Mode of OperationPrioritize Sub-Process-es for Redesign23SFRReengineeringObjectives of Present Mode of Operation Analysis See Related Topic:Sample Process ProblemsBuild a baseline of how the current process works(As is)critical decisionsprocess flowsprocess costprocess effectivenes
36、sIdentify major problems/issues and underlying root causeshigh fall-outhigh costslow customer response timemultiple handoffshigh level of re-workmanual translations and paperworketc.Uncover key leverage areas within the processquick hits to improve the process immediatelyinsights for redesignpriorit
37、ies(sub-processes)for redesignDiagnose PMO24SFRReengineeringProcess Mapping See Related Topics:Alternative Forms of Process Mapping;Process Mapping Tactics;and Michael Hammers PerspectiveAllows a diverse group to create a clear,explicit picture of a complex business processa common languageeasy to u
38、nderstand(visual display)Serves as a starting point to re-design the systemProcess mapping is a critical tool for business reengineering.Building Blocks:Objectives:Basic activity steps always begin with an action verbNesting detailDecisions regarding flowStart or end of process or“Go To”another sect
39、ion or pageRework loopsInformation systemStorageMovement/transportationnoyesDiagnose PMO25SFRReengineeringExample Process Map:AC Slide Design Process Slide CompletedFill-out SlideSchedule GraphicsPerform Research/Run ModelWalk to GraphicsManager Approval?no-minor modificationno-radical redesignGraph
40、ics Produces SlideQuestios/Issues?noyesWalk to GraphicsSubmit SlideWizard Crashes?noyesErrors?yesnoConsultant Approval?noyesProof SlideCorrect SlideBlank Slide CreatedGraphics Calls to ClarifySwear ProfuselyDiagnose PMO26SFRReengineeringActivity-Based Costing See Related Topics:Defining Costs to be
41、Assigned;and Gathering FTE Headcount DataAccurately allocate costs within an organization in order to:highlight leveraged areas for redesignestablish a baseline from which FMO savings can be estimatedActivity-based costing provides a data-driven view of the key leverage points for a reengineering pr
42、ogram.Process:Objectives:Summarize and Test DataCreate Database of CostsGet Data and Assign CostsDefine Costs to be AssignedDefine Functions to CostUse PMO process mapsSelect the appropriate level of detail to enable intended analysisLabortypically the main focusMaterialsServicesFixed cost allocatio
43、netc.Assign to each functionAlso assign to product,etc.as appropriateCut(as needed)by:activityjob titleproductcustomeretc.Diagnose PMO27SFRReengineering Negotiating/Contracting100%80%60%40%20%0%Percent of SegmentPercent of Total81 1,834 651 4,706 8,757 1,133 1,677Strategic PlanningBudgetingFinancial
44、sSchedulesConfigurationNew Business DevelopmentProposalsAnalyze RequirementsDefining SolutionsDescribing ProductsTestingProcureBuildDeliverIntegrate Create Manuals Deliver ManualsTrainingHRSystemsSecurityFacilities Office ServicesGovernancePlanning and ControllingCustomer AcquisitionDesign Build Ser
45、vice SupportManagement ProcessesCore Value Creating Processes Support ProcessesEquipReview and Integrate Diagnose PMOExample Activity-Based Costing OutputDefense Co.PMO Headcount by Core Process28SFRReengineeringDecision-Making MatrixClearly show key decisions and current decision-making responsibil
46、ityinput versus authority versus approvalcross-functional scope of decisionsHighlight major issues/concerns with current decision-making processtoo many people involvedfinal accountability(or lack thereof)appropriateness of decision-making authorityIdentify redesign options,e.g.,match decisions with
47、 capabilities,knowledge and position within processA decision-making matrix can highlight problems with the current decision-making process.Process:Objectives:Clarify DiscrepanciesConsolidate ResultsCollect Information from All Levels of ManagementDefine MatrixIdentify key decisions from process map
48、sIdentify functions involved in decisionsLevels of involvement:R:ReviewA:ApproveI:Input8e.g.prepare information,recommendD:DecideMake sure process is actual,not officialConsolidate in a 2-dimensional matrixdecisions listed verticallyfunctions and management listed horizontallyRe-interview management
49、 as necessaryDiagnose PMO29SFRReengineeringExample Decision Making MatrixAAARRAAAAAARAIAAAAAAAAAAAAIADDDIDDDDDDDDDDDDDDIDDDDDDDDDDDD D DI I DDAAAAARAAI I ID D DI I DR DD A D ID A DI I DD A DD A DD R DA D IA D IA D I D DIID DIDIIIDDDDD DIDAAAAAAAAAAAADIIIDDIIIIDRIRIIII IIIIIDIIIIIIIIIIIDIIIIIIIIIIDDD
50、II IDD I DI R I IIII I IDI Account planningPreliminary customer needs assessmentBusiness case developmentPrioritization and resource allocationFinalized customer needs assessmentProject strategyInfluence customerBudgetary quoteCompetitive advantages/strategySystem designService/SI planRisk managemen