Reengineering

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REENGINEERING

A more radical approach to improving quality is reengineering. Reengineering is the complete redesigning of the core business process in a company. It involves innovation and is often a complete departure from the company’s usual way of doing business. Reengineering is not a fine-tuning of the present process nor is it mere downsizing of a company. Reengineering starts with a blank sheet of paper and an idea about where the company would like to be in the future. Without considering the present limitations or constraints of the company, the reengineering process works backward from where the company wants to be in the future and then attempts to determine what it would take to get there. From this information, the company cuts or ads, reshapes, or redesigns itself to achieve the new goal. In other words, the reengineering approach involves determining what the company would be like if it could start from scratch and then redesigning the process to make it work that way.

Reengineering affects almost every functional area of the company, including information systems, financial reporting systems, the manufacturing environment, suppliers, shipping, and maintenance. Reengineering is usually painful and difficult for a company. Companies that have been most successful in implementing reengineering are those that faced big shifts in the nature of competition and that required major changes to stay in business. Some recommendations to consider in implementing reengineering in a company are to (1) get the strategy straight first, (2) lead from the top, (3) create a sense of urgency, (4) design from the outside in, (5) manage the firm’s consultant, and (6) combine top-down and bottom-up initiatives. Getting the strategy straight is crucial because the strategy drives the changes. The company must determine what business it wants to be in and how to make money in it. The company’s strategy determines its operations. The focus of reengineering is outside...
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