Reengineering work for dramatic improvements
In the 1990s, many U.S. companies faced obsolescence due to outdated processes, despite restructuring efforts. Michael Hammer’s reengineering approach advocates for a radical redesign of business processes, leveraging information technology to achieve dramatic performance improvements rather than merely automating existing inefficiencies. This paradigm shift requires challenging ingrained assumptions and embracing discontinuous thinking, as exemplified by successful transformations at Ford and Mutual Benefit Life.
Points clés
- Michael Hammer, president of Hammer and Company, an information technology consulting firm, authored the article.
- Ford Motor Company aimed to cut costs in its accounts payable department, which employed over 500 people in North America.
- Ford’s reengineering of accounts payable led to a 75% reduction in headcount, exceeding the initial 20% target.
- Mutual Benefit Life (MBL), the eighteenth-largest life carrier, reengineered its insurance application process.
- MBL’s reengineering efforts reduced application completion time to as little as four hours, with an average turnaround of two to five days.
- MBL eliminated 100 field office positions and case managers now handle more than double the previous volume of new applications.
- Hewlett-Packard (H-P) improved on-time deliveries by 150%, reduced lead times by 50%, and decreased failure rates by 75% through reengineering its purchasing process.
À retenir
So, you’ve been diligently optimizing your “cow paths” for years, thinking you’re a lean, mean, efficiency machine? Think again! This article suggests that merely paving over those old cow paths is a fool’s errand. Instead, you need to obliterate them with a wrecking ball of “discontinuous thinking” and rebuild from scratch. And if you’re not seeing 75% headcount reductions or 150% delivery improvements, you’re clearly not trying hard enough. Remember, it’s not about working smarter; it’s about blowing up your entire operation and starting over. Good luck, you’ll need it!
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