Operations Management Concepts

From the late 60's through the mid 80's a radical group known as the Red Brigades held Italy in a state of terror. These anarchists believed that Italy could only be saved through the total destruction of the society. Their core belief was that no amount of tinkering could correct the ills confronting the country. The only recourse was to completely destroy the social and political fabric and then rebuild it from the ashes. No TQM or JIT for the Brigades - it'd take too long and the results wouldn't be satisfactory. Hammer & Champy are the equivalent of the Brigades in the corporate world. (How's that for an attention getter?)

Reengineering became a hot subject during the 90's. Like so many other concepts adopted by business this one was also corrupted in the process of attempting to use it. Basically most companies latched on to the phrase "doing more with less" and used it as a euphemism for staff reductions. What would occur would be an edict to slash headcount by 20%(or some number) and redistribute the workload among those left. Only cursory attempts would be made to examine the work itself and reengineer the process. In other words we saw reengineering being applied in the same fashion as JIT. "We cut inventory (staff) and now we're JIT (reengineered)." Hammer & Champy very early in the book make the point that reengineering is not a reduction in employees. If a reduction occurs it's because the reengineering of the process allowed for them. If you don't remember anything else from this course remember that there is no such thing as a quick fix. Whatever approach you take towards improvement make sure you know the approach in its entirety and you have the patience to implement the entire concept. Shortcuts can be the road to perdition. Shortcuts result in little or no improvement and so discourage the participants that any additional "flavors of the day" are met with skepticism and scorn.

JIT & TQM are both based on continuous improvement - small, incremental steps taken over time to achieve a more efficient, less wasteful organization. Reengineering is the complete dismantling of an organization (or a portion thereof) with an eye to rebuilding it back up in a completely new format. Reengineering is violent whereas TQM & JIT are gentle. Hammer & Champy indicate there are nine basics to consider in the rebuilding process.

1.) Several jobs are combined into one.

2.) Workers make decisions.

3.) The steps in the process are performed in a logical sequence.

4.) Processes have multiple versions (one size doesn't fit all).

5.) Work is performed where it makes the most sense.

6.) Checks and controls are reduced.

7.) Reconciliation is minimized.

8.) A case manager provides a single point of contact.

9.) Hybrid centralized/decentralized operations are prevalent.

Note that the authors indicate that reengineering should not be applied to organizations that are currently very successful. If you're currently making money and maintaining or increasing market share then you're better served by TQM/JIT, keep improving but without violent dislocations as seen in reengineering. Reengineering is for the organization that has nothing to lose by trying an abrupt change in its operations. In medical terms, reengineering is the equivalent of trying radical new treatments for a dying patient. TQM/JIT is using a tested antibiotic to eliminate a lingering infection.

1. H&C emphasize the characteristics seen in companies that have either reengineered or don't need to be. How are these characteristics similar to and/or different from TQM?

2. Goldratt indicates that The Goal is to make money.Is this true or is money the by-product of some other goal?

3. What are the Herbies where you work?

4. How does Goldratt's system for identifying and breaking constraints compare to kaizen?