Need for re-engineering
Re-engineering is the redesign of an organization or a business process. (Wikipedia.com) If management wants company that is responsive, competitive, efficient and profitable there might not be a so many companies that are clumsy, noncompetitive, inefficient and loosing money.
Many companies set a goal of filling customer orders quickly, but goal is providing a good quality service. Often efficiency of the company’s parts comes at the expense of the efficiency of its whole. For example if a plane belonging to a major airline was grounded due to some technical issues in airport X. Unfortunately the nearest mechanic qualified to repair the was in airport Y. The manager of airport Y refused to send the mechanic to the airport X that afternoon, because after completing the repairs the mechanic would have to stay overnight at a hotel and hotel bill would come to managers Y’s budget. Instead, the mechanic was dispatched to airport X early in the following morning and enables him to fix the plane and returns on the same day by evening. A multimillion dollar aircraft sat idle, and airline lost thousands of dollars in revenue, but managers Y’s budget wasn’t big enough to hit a $100 hotel bill. Manager Y’s was either foolish or careless. He was doing exactly what he was supposed to be doing that is controlling and minimizing his expenses.
Sometimes work requires cooperation and coordination of several departments within a company and it is often a source of trouble. When retailers return a source of goods for credit to a consumer products, manufacturer there are several departments that are involved in receiving and accepting a goods. The departments like the inventory management, promotions, sales, general accounting updates, adjustments and so on departments come into play. Yet no one is responsible of handling returns. Returned goods end up missing in the storage in the warehouse.
The worst part is unhappy retailers are less likely to promote the manufacturer’s new products. They also delay in paying the bills and often pay only what they owe after deducting the value of the returns. This leads the manufactures accounts into web that is never there, since the customers check doesn’t match the manufactures invoice.
If managers can’t decide what their companies are in trouble, neither do they agree on what to do about it. Some people think companies would bounce back if only they had the right products and services for the times. “It is not the products but the processes that create products that bring companies long-term success” (Champy. J).
Some people think that automation is the answer to business problems. True computers can speed up the work and in the twenty to 40 years companies have spend billions of dollars to automate the tasks that people once did by hand. Automation does get some jobs done faster, but ultimately same jobs are being done.
The word re-engineering has earned a bad name in the economy as people tend to spend more money on the name of saving money or due to performing the re-engineering activities in the adverse conditions.
Conclusion: The problem is that companies are doing business in the twenty-first century with companies desined during the nineteenth century to work well in the twentieth century. There is high need of a system which is something entirely different.
References:
Strassmann. P.A (1995-2006) Strassmann Inc, retrieved on November 31, 2007 from website http://www.strassmann.com/pubs/reengineering.html
Reengineering (2007), retrieved from http://en.wikipedia.org/wiki/Reengineering
Champy.J and Hammer M (2005) Reengineering the corporation, the crisis that will never go away, harpercollins publishers