HoneywellBusiness process reengineeringHoneywell (IAC Plant, Phoenix, Arizona)

Case Facts

The Honeywell industrial automation and control (IAC) business unit designs, manufactures, and configures the sophisticated TDC 3000X family of systems. These systems enable its customers (refineries, chemical plants, and paper mills around the world) to achieve world-class process-control capability.

In late 1989, the management team began a three-year world-class manufacturing (WCM) program to examine lagging performance results. WCM established ambitious goals for ,

defect reduction, short-cycle production materials management.Specific goals included reducing defects by a factor of ten (1,000 percent) and cycle time by a factor of five (500 percent).

Business Need for WCMTo achieve this success in Quality a need was felt at Honeywell to provide an environment that was not only encouraged performance but also helped people perform better. With this is mind, the foundation of the WCM program was laid.

It was realized that Honeywell will have to, through the WCM program, provide resources and take a system-wide view of the plant. WCM supported a focused-factory environment that harnesses the potential of teams. A lot of changes took place at three levels. These were,

business plan

structure of the organization

IT infrastructure of the firm

As a part of the new scheme, instead of workers being assigned to a specific area on the factory floor, teams of multi-skilled workers were charged with building entire products or modules from start to finish. WCM provided resources to teams based on the process rather than piecemeal events or tasks. Training took on a system-wide view. However any Change cannot be inititated till the whole organization was one with the proposed scheme of things. Hence in 1990, the entire plant was shut down and everyone was taken to another location for an intensive six-hour session. During the session, the need for radical change was articulated. In addition, management explained what the broad changes would be and how the changes would impact the workers.Given below is a diagrammatic representation of how Honeywell approached its WCM program.

Outcome of the WCM Implementation

As a part of the new philosophy and to support the factory-focused paradigm, the ``all-salaried'' workforce was evaluated on a ``pay for performance'' basis. Factory-focused teams were rewarded for their performance. in a little over three years, teams helped reduce defect rates by 70 percent, customer rejects by 57 percent, cycle time on parts by 72 percent, inventory investment by 46 percent, and customer lead times by over 70 percent.However like any organization Honeywell was able to expose a lot of other problems in the process.

The White Spaces

At Honeywell this was defined as are gaps between different links in the internal-supply chain. Management found out that teams along the value chain for each product line had a tendency to sub-optimize the total supply chain because they were primarily focused on their own areas. To get the teams to think in unison, the Director of Strategic Planning and Organizational Development took the three team managers aside and told them that they were responsible for the whole product line. Performance evaluations would be based on how the entire product line performed.A Measurement of the Organization Readiness

Through the Intuitive Approach or the trial and error method, it was realized that teams needed to have control over things that impact their performance. This was because,

When teams failed, the cause could almost always be attributed to lack of authority to make decisions where the work was actually being done. Also the recent change in work environment was impacting the way these teams were performing. (Recently, manufacturing was moved to a handsomely landscaped site. Besides being a beautiful site, manufacturing facilities were designed to better suit a flow scheme)

Through this feedback it was realized that Honeywell was still,

Organizing around tasks not outcomes

The people who were using the output of the process were not the ones performing it

Information processing was not a part of information generation

Dispersed resources were still not viewed as centralized

Parallel activities were not being linked

The decision point was not a part where the work was perfromed

Impact on the Bottom Line

The flow scheme was designed to facilitate a ``pull'' system that is triggered by customer orders. Conversion to an all-salaried workforce, worker empowerment, compensation for creativity, and a system-view helped IAC vastly improve its quality and performance for its customers. However, IAC management was not satisfied. To complement the WCM program and facilitate a culture of continuous improvement, IAC embraced a solid ISO 9000-certified quality program, a strong supplier alliance program, a globally oriented customer satisfaction organization, and a reconstituted WCM program office.Thus was defined the scale and the scope of the extensive BPR activity that Honeywell engaged itself in. the need of the hour was to go in for process redesign

The Total Plant Program

As a part of their business aspirations, Honeywell used the model given below, to establish its TM program.

Honeywell called their factory-focused program the Total PlantTM. The mission of Total Plant TM was to unify business and control information to enable global customer satisfaction. As a result the plant migrated to fully integrated hardware, software, and services that support plant management, process management, and field management. Total Plant TM business and control information were also used to facilitate planning, implementation, and world-class applications. The Total Plant TM paradigm was not limited to the IAC site. It was intended to support global delivery of its manufactured products, serve the needs of over 40 regional Total Plants and delivery centers worldwide, and align with global suppliers.The Total Plant ParadigmThe paradigm is based on four principles of success process mapping, failsafing,

teamwork, and communication. Each of these principles is critical to

realizing the TotalPlantTM. However, every team member must be educated in

all four of the principles and empowered to use what they have learned to solve

business and manufacturing process problems. The major obstacle to change is

the employee attitude that ``things are OK'', so why change.

Process Mapping Process mapping is a tool that allows one to model the flow of any business process in a graphical form. The process map allows one to see how the process actually works across functional boundaries. It thereby enables all employees to see how the business process actually works and how it can be changed to be more effective. Process mapping also creates a common language for dealing with changes to business processes.The training philosophy at Honeywell focuses on educating employees about the importance of total customer satisfaction and world-class manufacturing. It is important for employees to understand that optimization of the whole system is the goal, not individual departments or subsystems. Three principles underlie the philosophy be non-blaming and nonjudgmental, focus on process and results, and consider the big picture.

Process thinking helps to justify overall results because the people involved understand how and why it is successful. Functional thinking concentrates only on individual performance, not enterprise performance. For process thinking to work, employees must be empowered to do their jobs since they are the ones that actually do the work.Each employee works in his or her own ``box'', that is, they work within a functional area of the organization. Unless they see and understand that their work is part of the much larger enterprise, process sub-optimization will occur. To really improve the business, everyone involved in the process has to understand the whole system. Process mapping is a powerful technique that provides an understandable picture of the entire process and a common language to get and keep everyone on the same page.

Process Mapping at Honeywell

The first step is to select the process. The team lists the products it is responsible for and comes to a consensus. The customers for each product are then identified. Customer satisfaction depends on giving the customers what they expect, so they must be interviewed. Hence, teams are intensively trained in interviewing, data collection, and data analysis techniques.The second step is to identify the boundary. The boundary spans from when the raw product is taken from the supplier (input) to when the finished product is handed to the customer (output). Defining the boundary is simple, but it is important to document them for each product.The third step is to make sure that the team has cross-functional representation from each organization contributing to the process. Inclusion in the team should be based on who is involved in creating the product between the input and output boundaries.The fourth step is to develop the ``as is'' map. The ``as is'' map represents the transformation of inputs into finished products. The map includes both information and product flow through the system. The fifth step is to identify the cycle time for each step in the process. Cycle time is determined by measuring both the distance the product travels through its process and the time required for performing the steps in the process. Time is measured by average and range. Average cycle time is the mean rather than the midpoint between the minimum and maximum time. Range is the difference between the minimum and maximum time.The sixth step is to identify opportunities for improvement that would not add resources (extra costs). Typical opportunities include waiting and storage steps, non-value-added steps, decision points for approval, steps with a wide range of cycle times, sequential operations that could be done in parallel, and information that does not flow to those who do the work. The seventh step is to develop the ``should be'' map. This map includes a ``picture'' of the improved processes and projections of their new cycle times. The ``should be'' map depicts what the process will look like after improvements are made. It provides a graphical picture of what the process team needs to work toward. It should only include improvements that do not require significant new resources. ``A major limitation is that process mapping takes a long time. The eighth step is to develop the process implementation plan, establish confirmation, and implement. The team prioritizes opportunities for improvement based on the impact on cycle time and quality. The team also considers the impact of possible changes on other processes and customers. The team specifies specific changes, responsible parties, and timetables. Cycle time goals are set for each of the process steps. Finally, the team consults with the steering committee for input and confirmation before implementation can begin.

Fail- safing

Fail-safing is a method to identify a defect, analyze it to understand its root cause, and then develop a solution that will prevent that defect from occurring again. Fail-safing guarantees that a process will be defect-free. It is of great importance in a BPR exercise to ensure that as many defects as possible are identified and their root causes are found out through comprehensive analysis.

As seen from the case Honeywell encouraged its people to question the status quo and asked them to use the mechanism of fail-safing to find if there existed any scope of improvement in the present system. This was crucial in the entire BPR exercise as it prepared people for change and as well made people to bring about change themselves.

While process mapping diagrams the entire flow of a business process, fail-safing is done to diagnose a defect within the process. The PDCA (plan, do, check, act) cycle offers a road map to help teams work together to prevent errors from occurring 100 percent of the time. PDCA offers a sound method for collecting ``good'' data, but technology is needed for proper delivery. Honeywell invests heavily in state-of-the-art technology to help guarantee data delivery.

Fail-safe planning (Plan) has five steps

The first step is to identify the problem (defect). Defect detection involves analyzing data using a pareto chart. The pareto chart principle proposes that 20 percent of causes create 80 percent of the problems we experience. Once the data is analyzed, a defect description is logged that describes the defect and its impact on other processes. Similar to process mapping, a map of the existing process is made with the defect. The map should include documentation concerning the people involved (team) in the operation as well as where the defect is discovered. This is a comprehensive exercise and Honeywell made a sincere attempt to complete the process in an elaborate steps.

The second step is to identify the root cause(s) of the problem. The team identifies places in the process map where red flag conditions exist. The five step why questioning process adopted by Honeywell is effective in identifying and validating the probable root causes for an area of concern.

A root cause has three characteristics:

(1) It is a cause of the defect identified;

(2) It is possible to change the cause; and

(3) If eliminated, the defect will be eliminated or at least reduced.

If the cause satisfies all three characteristics, it is a root cause.

The process of generating solution is started through following acts. The team starts by selecting one root cause. A recorder and timekeeper are then selected to mediate. Brainstorming can then begin. Keep in mind that this process may seem simple, but trained facilitators are needed to ensure that everyone is involved and an open forum for ideas is maintained. This helped Honeywell to generate more and more alternatives.

The fourth step is to evaluate and choose a solution. Each alternative is considered against criteria such as time, ease, and cost to implement. Ideas that take too long to implement are eliminated. Evaluation helps the team choose the best device(s) to fail-safe the error condition. The successful completion of this step is possible only when the employees are given the opportunity to think and use their own judgments. Moreover they must be empowered to act independently then only above mentioned outcomes are possible.

Finally, an implementation plan is created. Everyone affected by the change is identified. The team considers customers, suppliers, and support people on the team. The team then determines how the device will be measured and completes an action register. The purpose of the register is to create a ``visible'' listing of all the actions required to implement the device, the people involved, the completion dates, and the status of each action.

Step six (Do) is to implement the chosen solution. The team now completes each action item involved in installing the fail-safe device. Everything needs to be recorded so that the team has a visual memory of the steps involved. Evaluation is also facilitated because data can be analyzed before and after the fail-safe device is implemented. However people must be made ready to accept change. It is necessary for the organisation to have a workforce that is prepared to change along with change in the business needs and processes.

Step seven (Check) involves checking results. Data is analyzed using the action register, pareto charts, and histograms. The team also asks themselves if they got the results that they expected. If not, rework of the device is undertaken.

From the above discussion it is evident that the Fail Safing and subsequent Plan, Do, Check and Act cycle are the necessary conditions for successful implementation of a Business reengineering Process but they do not guarantee success of the process. In reality they are not the stand alone sufficient requirement of a successful BPR implementation.

Teamwork

There are different roles played in a team:-

Coordinator

This person will have a clear view of the team objectives and will be skilled at inviting the contribution of team members in achieving these, rather than just pushing his or her own view. The coordinator (or chairperson) is self disciplined and applies this discipline to the team. They are confident and mature, and will summarise the view of the group and will be prepared to take a decision on the basis of this.

Shaper

The shaper is full of drive to make things happen and get things going. In doing this they are quite happy to push their own views forward, do not mind being challenged and are always ready to challenge others. The shaper looks for the pattern in discussions and tries to pull things together into something feasible which the team can then get to work on.

Plant

This member is the one who is most likely to come out with original ideas and challenge the traditional way of thinking about things. Sometimes they become so imaginative and creative that the team cannot see the relevance of what they are saying. However, without the plant to scatter the seeds of new ideas the team will often find it difficult to make any headway. The plants strength is in providing major new insights and ideas for changes in direction and not in contributing to the detail of what needs to be done.

Resource investigator

The resource investigator is the group member with the strongest contacts and networks, and is excellent at bringing in information and support from the outside. This member can be very enthusiastic in pursuit of the teams goals, but cannot always sustain this enthusiasm.

Implementer

The individual who is a company worker is well organised and effective at turning big ideas into manageable tasks and plans that can be achieved. Such individuals are both logical and disciplined in their approach. They are hardworking and methodical but may have some difficulty in being flexible.

Team worker

The team worker is the one who is most aware of the others in the team, their needs and their concerns. They are sensitive and supportive of other peoples efforts, and try to promote harmony and reduce conflict. Team workers are particularly important when the team is experiencing a stressful or difficult period.

Completer

As the title suggests, the completer is the one who drives the deadlines and makes sure they are achieved. The completer usually communicates a sense of urgency which galvanises other team members into action. They are conscientious and effective at checking the details, which is a vital contribution, but sometimes get bogged down in them.

Monitor evaluator

The monitor evaluator is good at seeing all the options. They have a strategic perspective and can judge situations accurately. The monitor evaluator can be overcritical and is not usually good at inspiring and encouraging others.

Specialist

This person provides specialist skills and knowledge and has a dedicated and single-minded approach. They can adopt a very narrow perspective and sometimes fail to see the whole picture.

Finisher

A person who sticks to deadline and likes to get on with things. Will probably be irritated by the more relaxed member of the team.

Teamwork requires special effort, management support, training, and a nurturing environment to make it work. Special training is needed to familiarize people (including managers) with what teams are, how they work, and how they will help the company. After training, workers need to ``feel'' that the work environment is conducive to teams. The manufacturing vision creates the first step toward a new work environment that fosters teamwork.It proposes that the workforce take ownership for the success of the overall business. Accordingly, all people need to understand their roles and team together to achieve success. Creativity, risk taking, and innovation are encouraged and viewed as learning experiences. People are trusted, respected and empowered to execute their duties. Cross training is endorsed, work is challenging and enjoyable, and everyone is involved in leadership and doing the ``right things''.

Process mapping and fail-safing are laid out very specifically because their very nature is systematic and controllable. However, training is ``softer'' because people are at its center. People are the biggest challenge in dealing with change because they are not predictable, naturally resist change, and are diverse. Process mapping and fail-safing are proven techniques that can help people solve problems. They are also set up to be very conducive to teaming.

Therefore, Honeywell focuses on these techniques to help people focus on real problems and become familiar with teamwork gradually. People can be trained to effectively map processes and fail-safe defects in a short time. However, getting a diverse workforce to work as a team takes time. The key is the environment. Hence, Honeywell rewards teamwork, expects team ownership and responsibility, empowers teams to solve problems, and provides training dollars to make teaming a natural part of the work life.Effective communication skills

Communication of the TotalPlantTM vision is paramount to success. ``The number one problem in most organizations is lack of effective communication. Faulty interactions between people often lead to conflicts, hurt feelings, and damaged relationships'' (G.J. Kristof, Manager Worldwide Manufacturing Programs, personal communication, August 16, 1997). Communication of a vision is especially susceptible to conflict because its message is broad and its audience is the enterprise.Honeywell provides conflict resolution training to teams to help them deal with conflict in a positive way. Basic interpersonal communication skills for enriching relationships with people and effective means for solving problems are also part of the training. One training module concentrates on listening skills. If people are not willing or able to listen to other people around them, conflict and misunderstanding is very likely to arise. The module offers team-based exercises to ``role-play'' conflict and resolution. Another module focuses on confronting skills. Many times it is difficult (but necessary) to confront people in a positive way about unacceptable behavior. The goal is to be able to offer an objective, non-blameful description of the problem.One of the major difficulties of dealing with conflict and unacceptable behavior is to keep it from becoming a personal attack on a person's character. The conflict and/or the behavior are the problem, not the person! People tend to become defensive when their behavior is questioned. This is a natural reaction. The key is to develop conflict resolution skills that recognize this tendency and practice these skills in a non-threatening environment until a certain level of mastery is reached. Just like teaming, effective communication depends heavily on the work environment. An unlimited training budget would still be wasted if trainees return to a work environment of ``command and control''. Therefore, Honeywell communicates the TotalPlantTM paradigm needs to everyone and fosters an environment that rewards teamwork, creativity, and value-added thinking. Management is responsible for team facilitation. Management's job is to nurture and coach the team. Another important role is to help the team set ``stretch'' goals. Stretch goals are lofty objectives that are beyond what people are normally expected to reach. ``Pushing people to achieve beyond their normal expectations causes them to realize that they must change the way they do things. It also creates a healthy level of dissatisfaction. If people are satisfied, they will never try to get better''.Information Technology

Organization development refers to incremental improvements of business processes, whereby the improved processes have to be supported with modern IT. Prior to the approach comes the basic question: what can be improved? The available business processes are principally accepted. The search is only directed towards the ways of how to improve the available processes. Though individual system components are modified, radical changes and discontinuity are avoided.

The BPR, however, aims to change radically the existing processes. The initial question is: what can be changed? Available processes are basically doubted, and new approaches for business processes are looked for. The system as a whole is dramatically altered in order to achieve improvements of significant dimensions. With regard to IT this means that completely different processes have to be supported that was the case in the past.

Between the two extreme points there is an area where-according to traditional approaches-the attempt is made to improve existing processes with modern IT. This area is dangerous, however, since existing, but inefficiently organized business processes will be automated at great cost and effort. Therefore, when developing and procuring (also when changing, though) information systems, management should always take into consideration the factor that organization of the business processes to be supported must still meet present day requirements. According to which approach-"incremental improvements" or "radical changes"- a decision is made depending on the opportunities, and must in each case be decided by management. Within the scope of a far-reaching, continuous improvement program it will not be difficult to imagine that both procedures can be combined. To do so the existing business processes will be looked into and called in question after some prolonged periods. During these intervals the attempt is made, however, to continually optimize the processes by means of an incremental process handling.

Information technology (IT) has historically played an important role in the reengineering concept. It is considered by some as a major enabler for new forms of working and collaborating within an organization and across organizational borders. Therefore, efficiency and effectiveness of corporations and authorities are influenced by the pointed utilization of IT, in particular since requirements of supporting IT systems can be deviated from the business processes.

The generation and procurement of IT systems used for the support of business processes is, therefore, an important and critical factor. Information management of corporations and public authorities ought to give it their special attention in connection with strategies.

Honeywell depends on information technology (IT) automation to keep its plant in operation. It produces automation and control devices that must meet stringent levels of quality because its customers will accept nothing less. Its devices are very sophisticated and require complicated processes to manufacture properly. The role of the worker is that of monitoring the devices to make sure they are performing within strict tolerances. Therefore, information is ``built into'' the systems that build other systems. Information that supports manufacturing is viewable at each production cell through color monitors and other visual devices. Information technology supports office processes that are integrated into the total system. Computer technologists, engineers, and systems analysts keep systems running properly. Every IT system is aligned with manufacturing process.

Managers tap into the system to obtain information about productivity, cycle time, and performance. Many of the business managers have an engineering background that helps them link the business systems with manufacturing.Prior to 1989, the IS department was centralized and ``separate'' from manufacturing. The systems were technically elegant and centralized, but they didn't meet the needs of the business. The IS department was transformed into the IT department to better align with the business of making controls. IT was charged with mapping business processes that supported the products and then transforming systems to match the maps. The IT department has made great strides to align its services with the needs of the business.Role of IT in BPR

IT has a major enabling role in BPR, and many BPR projects contain IT as one of its major components. Use of IT in redesigning the business process involves new structures, which inhibits changes in the future. At Honeywell, IT department was aligned to the business processes.

The benefits accrued due to usage of IT department, at Honeywell, as an enabler in the reengineering process were:

Processes

IT can be utilized in the process of planning the reengineering of various business processes such as process mapping and identifying value-added and non value-added activities using the simulation, modeling and analysis. Data exchanging through relevant business

IT can facilitate data exchanging through businesses. The required information was available with Computer technologists, engineers, and systems analysts.

Internal communication

In companies, internal communication is as important as outside communication. For example, networking the computers in a company enables the communication within the employees and various teams. Information flow

Effective integration of various functional areas requires speeding up information flow in a business environment. The lead time for information flow comes down drastically through the use of advanced IT applications.

Some of the other benefits accrued due to IT based BPR are:

Execution

Honeywell used four mechanisms

Process mapping is a systematic BPR methodology to guide team process improvement efforts along process paths. Fail-safing is a vehicle to help process teams identify and correct defects quickly and permanently. Teaming is encouraged through communication of the vision and rewards based on value-added activities. What separates success from failure is execution. Top management has to dedicate substantial training resources to educate the workforce about the four mechanisms and how they work. Management behaviors have to change from autocratic to facilitative. Teams have to be rewarded for enterprise value-added activities. Finally, the organizational structure has to change to allow an environment conducive to innovation. Execution flows from the corporate vision statement and strategic plan down to management and workers. The vision statement has to reflect the desired outcomes. Moreover, the strategic plan has to incorporate specific steps, policies and standards that will make real change happen. Top management has to live the new paradigm by being active participants in the change process. Top management endorsement is not enough. They have to interact with teams and management to let their people know that change is a priority and that they understand what is being done at the process level to make change happen. Top management therefore has to facilitate the paradigm through resources, executive actions, rewards, and recognition.

At Honeywell, the path toward change is probably much smoother than in most organizations because the organization has embraced change for many years. Honeywell is a pioneer in quality management and has always developed its people through training programs and rewards for value. Hence, execution is easier and resistance is not as big an issue. Problems during execution

Bottleneck

The biggest obstacle to execution was within the middle management ranks. Members of middle management were too used to being experts in a specific area. For instance, one operations manager was the resident expert in materials flow, but he managed technology, engineering, and manufacturing people. He would manage sub-optimally because every problem was solved through materials flow. He could not see the cross-functional or cross-specialization nature of the problem because of his narrow focus on materials flow. He had to ``let go'' of his expertise and let his people solve the problem as a cross-functional team. It may sound like a simple change for this manager, but it took years.

Dealing with ChangeBehavioral change is the most difficult type of change. It takes time and patience. Execution of a major change program therefore requires a lot of time to reap desired benefits.

Cross-functional assignmentsThe employees have to work cross-functionally, rather than being construed to their usual job tasks. These cross-functional assignments requires additional skill development and hence, additional training and resources.

Hence for smooth execution the following four-pronged approach can be chosen:

Learnings

The major learning from the Case is as follows: 1. People are the key enablers of change

Business processes are complex, but process mapping offers a comprehensive blueprint of the existing state. The blueprint enables systematic identification of opportunities for improvement. IT is complex, but vendors, consultants, and system designers can create models of the system. In contrast, people are unpredictable. They cannot be modelled or categorized universally. However, people do the work and therefore must be trained, facilitated, and nurtured.

2. Question everything

Allowing people to question the way things are done is imperative to change. Fail-safing provides a systematic approach to effectively question the status quo. People are encouraged to question the existing state.

3. People need a systematic methodology to map processes

Process mapping is the mechanism used to map and understand complex business processes. The systematic nature of the process mapping methodology keeps people focused and acts as a rallying point. Moreover, process mapping provides a common language for everyone involved in the project.

4. Create team ownership and a culture of dissatisfaction

Once a team perceives that they ``own'' a project, they tend to want to make it work. It becomes ``their'' project. In addition, management should encourage people to be dissatisfied with the way things are currently done. However, punishing people for complaining about ineffective work processes is an effective way to promote the status quo.

5. Management attitude and behaviour can squash projects

If the managerial attitude remains that of ``command and control'' and/or their behaviour does not change, transformation will most likely fail. Success depends on facilitative management and visible and continuous support from the top. When Honeywell got its new president in 1996, the attitude toward criticism changed dramatically. The new president was not as accepting of casual criticism. Criticism of the status quo had to be based on well-thought-out ideas and presented with the logic behind their thinking. This drastically reduced the complaints about existing processes without justification. 6. Bottom-up or empowered implementation

While support from the top is critical, actual implementation should be carried out from the bottom-up. The idea of empowerment is to push decisions down to where the work is actually done. Process mapping and fail-safing are two systematic and proven methodologies that help support empowered teams.

7. BPR must be business-driven and continuous

Process improvements should be aligned with business objectives. Process mapping, fail-safing, and teaming should be based on what the business needs to change to become more successful. In this case, effective communication of ideas from top management throughout the enterprise is imperative. In addition, organizations should be wary of the ``I've arrived'' syndrome. Change is continuous and is never over.

8. IT is a necessary, but not a sufficient, enabler IT is not a panacea.

IT enables BPR by automating redesigned processes. However, information is for people. People work with people to produce products for other people. In addition, people need quick and easy access to quality information to help them make good decisions. Therefore, IT needs to be designed to support the business and the production of products to be effective.

9. Set stretch goals

Goals should be set a little higher than what the team believes they can accomplish. Since teams have little experience with the new paradigm, goal setting will tend to be based on the past. Project managers should work with the team to help them develop stretch goals.

10. Execution is the real difference between success and failure

The Honeywell case introduces four powerful mechanisms to facilitate enterprise change. However, real change will not happen without a plan for change and aggressive execution of that plan. We believe this is where most organizations fail. We believe that execution fails in many cases because organizations are not willing to dedicate resources, time, and energy to the effort.LINKING THE CASE WITH THE VARIOUS CONCEPTS STUDIED IN BUSINESS PROCESS REENGINEERING

Introduction

Many early BPR initiatives failed to achieve predicted success (Davenport and Short, 1990; Hammer, 1990; Kotter, 1995). However, some organizations were able to achieve dramatic results from BPR. For instance, Caterpillar, Inc. reported cost savings between $10 and $20 million over a five-year period from BPR initiatives (Paper and Dickinson, 1997). Caterpillar tied much of its success to its BPR methodology. Its methodology was systematic as it provided a disciplined problem-solving approach and acted as a rallying point for everyone involved along the process path. It also had in place an organizational structure conducive to cross-functional teamwork and a management structure designed for facilitation of empowered workers. There are few examples of in-depth studies of BPR in the literature (Fuglseth and Gronhaug, 1997). Caron et al. (1994) examined BPR initiatives at CIGNA for over five years. They offered a set of general guidelines, but failed to mention the importance of a systematic BPR methodology. Davenport and Stoddard (1994) addressed various myths associated with BPR based on detailed case study analysis of many companies. They concluded that successful BPR is not an IT initiative, but a business initiative with the goal of rethinking business practices to satisfy the needs of its customers and other constituents. Kotter (1995) synthesized information and knowledge gained from observations of more than 100 companies into a set of eight steps to facilitate organizational transformation. Paper and Dickinson (1997) examined BPR initiatives at Caterpillar. They found that BPR is driven by a business need and requires support from top management, a systematic methodology, and an organizational structure that supports and rewards process thinking.

Text Reading 1 Introduction to BPR

The ultimate objective of any company or organization is achieving radical improvement in business performance that would otherwise be unattainable. Reengineering, rebuilding, remaking and redesigning are the words used to refer to this process all of which represent a language of change and a desire of organizations to increase their productivity and global competitiveness.

BPR is a redesign and reorganization of business activities that result form questioning the status quo. It seeks to fulfill specific objectives and can lead to breakthrough improvement. It is often associated with significant cultural and technological changes.

There are five elements of this working definition that need to be stressed :

1. focus on business processes

2. questioning of status quo

3. specific objectives

4. breakthrough achievement

5. significant cultural change

A business process can be defined as a set of interrelated activities characterized by specific inputs and value added tasks that produce specific customer focused outputs. Value creation is then a function of how work is integrated across each core group.

BPR requires a questioning of the status quoTodays practices automatically become tomorrows unquestioned truths and remain in effect forever. That is how redundant work activities develop and add to a firms overhead.

The Honeywell industrial automation and control (IAC) business unit designs, manufactures, and configures the sophisticated TDC 3000X family of systems. These systems enable its customers (refineries, chemical plants, and paper mills around the world) to achieve world-class process-control capability. In late 1989, the management team began a three-year world-class manufacturing (WCM) program to examine lagging performance results. WCM established ambitious goals for defect reduction, short-cycle production, and materials management. Specific goals included reducing defects by a factor of ten (1,000 percent) and cycle time by a factor of five (500 percent).

A framework for Business Reengineering

BPR focuses on specific objectives WCM was created to provide resources and take a system-wide view of the plant. WCM supported a focused-factory environment that harnesses the potential of teams. Instead of workers being assigned to a specific area on the factory floor, teams of multi-skilled workers were charged with building entire products or modules from start to finish. WCM provided resources to teams based on the process rather than piecemeal events or tasks. Training took on a system-wide view. In 1990, the entire plant was shut down and everyone was taken to another location for an intensive six-hour session. During the session, the need for radical change was articulated. In addition, management explained what the broad changes would be and how the changes would impact the workers.BPR focuses on significant cultural changesTo support the factory-focused paradigm, the ``all-salaried'' workforce was evaluated on a ``pay for performance'' basis. Factory-focused teams were rewarded for their performance. In a little over three years, teams helped reduce defect rates by 70 percent, customer rejects by 57 percent, cycle time on parts by 72 percent, inventory investment by 46 percent, and customer lead times by over 70 percent. Improvements did not come without struggle. One problem was management of ``white spaces''. White spaces are gaps between different links in the internal-supply chain. Management found out that teams along the value chain for each product line had a tendency to sub-optimize the total supply chain because they were primarily focused on their own areas. To get the teams to think in unison, the Director of Strategic Planning and Organizational Development took the three team managers aside and told them that they were responsible for the whole product line. Performance evaluations would be based on how the entire product line performed. Honeywell IAC observed through trial and error that teams needed to have control over things that impact their performance. When teams failed, the cause could almost always be attributed to lack of authority to make decisions where the work was actually being done. Another improvement that helped teams work well together was a change of work environment. Recently, manufacturing was moved to a handsomely landscaped site. Besides being a beautiful site, manufacturing facilities were designed to better suit a flow scheme. The flow scheme was designed to facilitate a ``pull'' system that is triggered by customer orders.Reengineering practice represents a move towards organizational simplicity. The rationale for reengineering is that organizations can best be structured along service delivery lines. This allows an organization to deliver a complete, well defined service to a specific market a process which encourages common integrated systems and the more efficient management of these systems.Text Reading 3 Towards a definition of Corporate TransformationA consensus on what transformation is will not emerge until it is better defined and given a framework so that firms facing similar issues and circumstances can make meaningful comparisons. Many efforts to improve performance are not transformational. To qualify as a corporate transformation, a majority of individuals must change their behavior.

There are three types of transformations:

1. Improving operations

2. Strategic transformation

3. Corporate self renewal

Improving operationsThe goal of the change process to improve operations is to achieve a quantum improvement in the firms efficiency, often by reducing costs, improving quality and service, and reducing development time.Process mapping is a tool that allows one to model the flow of any business process in a graphical form. The process map allows one to see how the process actually works across functional boundaries. It thereby enables all employees to see how the business process actually works and how it can be changed to be more effective. Process mapping also creates a common language for dealing with changes to business processes. An experienced facilitator conducts process mapping training. The role of the facilitator is to encourage interaction and creative input from everyone by throwing questions back to the group. The idea is to facilitate learning by discovery and inquiry, not by being told what to do.

The training philosophy at Honeywell focuses on educating employees about the importance of total customer satisfaction and world-class manufacturing. It is important for employees to understand that optimization of the whole system is the goal, not individual departments or subsystems. Three principles underlie the philosophy be non-blaming and nonjudgmental, focus on process and results, and consider the big picture.

Many times organizations focus on individual and/or subsystem results to the detriment of the whole system. Results are important, but how they are achieved is equally important. A focus on process helps to rationalize enterprise-wide results over functional ones. If the process is not understood or is misunderstood, it is more difficult to justify sub-optimal results in an individual area. The only important result is total customer satisfaction.

Process thinking helps to justify overall results because the people involved understand how and why it is successful. Functional thinking concentrates only on individual performance, not enterprise performance. For process thinking to work, employees must be empowered to do their jobs since they are the ones that actually do the work.

At Honeywell, process mapping consists of eight steps select process, identify boundaries, form teams, develop ``as is'' map, identify cycle times, identify opportunities for improvement, develop ``should be'' map, and develop the implementation plan

Fail-safing is a method to identify a defect, analyze it to understand its root cause, and then develop a solution that will prevent that defect from occurring again. Fail-safing guarantees that a process will be defect-free. While process mapping diagrams the entire flow of a business process, fail-safing is done to diagnose a defect within the process. The PDCA (plan, do, check, act) cycle offers a road map to help teams work together to prevent errors from occurring 100 percent of the time. PDCA offers a sound method for collecting ``good'' data, but technology is needed for proper delivery. Honeywell invests heavily in state-of-the-art technology to help guarantee data delivery.Strategic transformation The process of changing strategy seeks to regain a sustainable competitive advantage by redefining business objectives, creating new competencies, and harnessing these capabilities to meet market opportunities.

Teamwork does not occur naturally. It is difficult and complex. It takes special effort, management support, training, and a nurturing environment to make it work. Special training is needed to familiarize people (including managers) with what teams are, how they work, and how they will help the company. After training, workers need to ``feel'' that the work environment is conducive to teams.

The manufacturing vision creates the first step toward a new work environment that fosters teamwork. It proposes that the workforce take ownership for the success of the overall business. Accordingly, all people need to understand their roles and team together to achieve success. Creativity, risktaking, and innovation are encouraged and viewed as learning experiences. People are trusted, respected and empowered to execute their duties. Crosstraining is endorsed, work is challenging and enjoyable, and everyone is involved in leadership and doing the ``right things''.

Therefore, Honeywell focuses on these techniques to help people focus on real problems and become familiar with teamwork gradually. People can be trained to effectively map processes and fail-safe defects in a short time. However, getting a diverse workforce to work as a team takes time. The key is the environment. Hence, Honeywell rewards teamwork, expects team ownership and responsibility, empowers teams to solve problems, and provides training dollars to make teaming a natural part of the work life.Text Reading 5 Reengineering work : Dont automate, obliterateSpeeding up of any process cannot address its fundamental deficiency. The watchword of the new decade are innovation and speed, service and quality. We should reengineer our businesses: use the power of modern information technology to radically redesign our business processes in order to achieve dramatic improvement in their performance. Reengineering strives to break away from the old rules about how the work is organized and business is conducted. It involves recognizing and rejecting some of them and then finding imaginative new ways to accomplish work.To support the factory-focused paradigm, the ``all-salaried'' workforce was evaluated on a ``pay for performance'' basis. Factory-focused teams were rewarded for their performance. In a little over three years, teams helped reduce defect rates by 70 percent, customer rejects by 57 percent, cycle time on parts by 72 percent, inventory investment by 46 percent, and customer lead times by over 70 percent.

Honeywell IAC observed through trial and error that teams needed to have control over things that impact their performance. When teams failed, the cause could almost always be attributed to lack of authority to make decisions where the work was actually being done. Another improvement that helped teams work well together was a change of work environment. Recently, manufacturing was moved to a handsomely landscaped site. Besides being a beautiful site, manufacturing facilities were designed to better suit a flow

scheme. The flow scheme was designed to facilitate a ``pull'' system that is triggered by customer orders.

Conversion to an all-salaried workforce, worker empowerment, compensation for creativity, and a system-view helped IAC vastly improve its quality and performance for its customers. However, IAC management was not satisfied. To complement the WCM program and facilitate a culture of continuous improvement, IAC embraced a solid ISO 9000-certified quality program, a strong supplier alliance program, a globally oriented customer satisfaction organization, and a reconstituted WCM program office.At the heart of reengineering is the notion of discontinuous thinking of recognizing and breaking away from the outdated rules and fundamental assumptions that underlie operations. We can not achieve breakthroughs in performance by cutting fat or automating existing processes. Rather, we must challenge old assumptions and shed the old rules that made the business under perform.

Text Reading 6 A Methodology for Reengineering Business

Set direction and create vision - The Honeywell industrial automation and control (IAC) business unit designs, manufactures, and configures the sophisticated TDC 3000X family of systems. These systems enable its customers (refineries, chemical plants, and paper mills around the world) to achieve world-class process-control capability.

In late 1989, the management team began a three-year world-class manufacturing (WCM) program to examine lagging performance results. WCM established ambitious goals for defect reduction, short-cycle production, and materials management. Specific goals included reducing defects by a factor of ten (1,000 percent) and cycle time by a factor of five (500 percent).Design improvements - WCM was created to provide resources and take a system-wide view of the plant. WCM supported a focused-factory environment that harnesses the potential of teams. Instead of workers being assigned to a specific area on the factory floor, teams of multi-skilled workers were charged with building entire products or modules from start to finish. WCM provided resources to teams based on the process rather than piecemeal events or tasks. Training took on a system-wide view. In 1990, the entire plant was shut down and everyone was taken to another location for an intensive six-hour session. During the session, the need for radical change was articulated. In addition, management explained what the broad changes would be and how the changes would impact the workers.To support the factory-focused paradigm, the ``all-salaried'' workforce was evaluated on a ``pay for performance'' basis. Factory-focused teams were rewarded for their performance. In a little over three years, teams helped reduce defect rates by 70 percent, customer rejects by 57 percent, cycle time on parts by 72 percent, inventory investment by 46 percent, and customer lead times by over 70 percent.Text Reading 9 Business Reengineering-A Strategy- Driven Approach

Business reengineering is an approach to achieving radical improvements in customer service and business efficiency. The central is to rethink and streamline the business processes and supporting architecture through which the organisation creates and delivers value.The key internal benefits of BPR includes

Stronger alignment of core processes to business strategy

The creation of customer value becomes a driver for all business activity

The business architecture is optimized to efficient cross functional performance

Benchmarking is used to efficient cross-functional performance

Enhanced capability and performance lead to increased ambition and conviction

Shareholder value

As seen from above the Business Process Reengineering Approach involves a strategy driven, top down reappraisal and redesign of total business. Such initiative needs to be driven by the active participation and support of the top management. The more wide ranging and fundamental the rethink, the greater the impact on cross-functional activities, working practices, management systems, organisation structures, motivation and reward systems and staff training and development.Hammers principles common to most initiatives of BPR are-

Organize around outcomes not tastes Have those who use the outcome of the process perform the process

Subsume information processing work in to the real work that produces the information

Treat geographically dispersed resources as though they were centralized

Link parallel activities instead of integrating their tasks

Put the decision point where the work is performed and build control of the process

The Six steps for Business Reengineering at Honeywell will include-

Vision definition: The BPR exercise was adopted keeping in mind the vision of the organisation. Honeywell believed in optimization of whole system and not function in silos Plan development: The quality of plan development is ensured by the detailed principles of process mapping, fail safing, teamwork and communication. Business Analysis: It involved analyzing customer requirements, organizational issues, modeling target processes etc.

Business Redesign: This is the most difficult part of the entire project as the objective is to create and cost the design of the reengineered business

Implementation: Here the organization addressed the the three key issues of-1. Changes affecting the current part of the structure that will remain largely unchanged

2. Putting in place those elements of the structure that have undergone substantial changes

3. Identifying the changes to be made in the future rounds of reengineering

Measurement: Performance gains through an BPR exercise can be found out through proper identification and sharing of learning on what worked and what could have been improvedText Reading 10 The Matrix of ChangeThe matrix of change system consists of three matrices and a set of stakeholder evaluations. The matrices represent the following-

The current organizational practices

The target practices

A transitional change that bridges these two practices

The entire matrix construction proceeds in four steps. These are enumerated below-

1. Identify Critical Processes: It is necessary for Honeywell to to first list their their existing goals, business practices and ways of creating value for consumers and then break current practices in to constituent processes. This is something done in the Process Mapping activity.2. Identify System Integrations: After describing the current practices a horizontal triangular matrix is created to identify the complementary and competing practices. The complementary practices reinforce each other where as the competing practices work at cross purposes. The higher the number of complementary practices the better it is for the organisation where as higher number competing practices indicate that a smooth transition will be difficult to achieve.3. Identify transition Interactions: The transition Matrix is a square matrix combining the horizontal and vertical matrices that helps determine the degree of difficulty in shifting from existing to target practices. It shows the interactions involved in moving from existing to target practices.

4. Survey Stakeholders: It will be necessary for Honeywell to determine how the various stakeholders felt about retaining the existing practices and implementing the target practices. It essential to listen to the views of the stakeholder to build a better process. The communication mechanism that exists in Honeywell would help to determine the various stakeholder responses.Interpretation and using the matrix: The matrix is useful for answering the following type questions:

Feasibility: Does the target set of practices constitute a coherent, stable system? Are the current practices coherent and stable? Is the transition likely to be a smooth one?

Sequence of execution: Where should the change begin? How does the sequence of change affect success? Are there reasonable stopping points? Location: Are we better off instituting the system in a new site or can we reorganize the existing location at a reasonable cost.

Pace and Nature of changes: Should the changes be slow or fast, incremental or radical? Which blocks of practice, if any, must be changed at the same time?

Stakeholder Evaluations: Honeywell needs to see whether to consider the insights from all stakeholders or not? Have they overlooked any important practice or interactions? What are the greatest sources of value? Text Reading 11- Process Reengineering: The strategic dimensionsThere are important strategic dimensions to process reengineering that address doing the right things as well as doing them right. These strategic aspects are discussed in detail below-

Developing and prioritizing objectives: Process reengineering may be guided by a series of business objectives such as market share enhancement, cost reduction , decreased cycle time, decreased inventory holding period, which, if prioritized, can provide valuable guidance to the reengineering team as in the case of Honeywell .

Defining the Process Structure and the Assumptions: The manner in which the enterprises process structure is defined is of strategic importance to how effective reengineering can be. Even if a model of business processes exists, it is built on certain assumptions which need to be questioned. Other assumptions as basic as those related to physical facilities can limit the reengineering process. Assumptions based on what once were thought to be eternal truths must be demonstrated to be potentially invalid if truly creative ways of doing business are to be created.

Identifying Trade-Offs Between Processes: Just as there are tradeoffs between objectives, there may be trade-offs between processes to consider. The over all reengineering effort should be organized and operated so that people are willing to suggest such trade-offs. In the process mapping stage at Honeywell it will be necessary to identify such trade offs. Identifying New Product and Market Opportunities: Identification new business opportunity has not been a major goal of Business Process Reengineering yet it should be kept in mind and considered as a potential byproduct of the Reengineering exercise. A BPR is such a detailed exercise and involves so many alternatives that there cannot be a more intense analysis of a business

Coordinating the Reengineering Effort: The reengineering process involves mechanisms like Reengineering executive committee which is useful for recycling ideas and provides insight among reengineering teams that are focusing on individual processes.

Developing a Human resource Strategy: As apparent in the exercise at Honeywell, the most important aspect of reengineering is to encourage people to be creative for changing and improving their jobs. A full blown motivational program for employee transition program is necessary to ensure that the employees are not adverse to the reengineering effort for loosing their job.Text Reading 16 Reengineering for Revenue

In late 1989, the management team at Honeywell began a three-year world-class manufacturing (WCM) program to examine lagging performance results. WCM established ambitious goals for defect reduction, short-cycle production, and materials management. Specific goals included reducing defects by a factor of ten (1,000 percent) and cycle time by a factor of five (500 percent). WCM was created to provide resources and take a system-wide view of the plant. This Reengineering for value differed from past reengineering efforts, which focused primarily on paring bloated organizations and eliminating unnecessary costs. This may often leave employees worrying about their jobs. Thus they will be less focused on developing revenue streams. By reengineering for revenue, Honeywell could not only provide better customer service but re understood its customer profile. The three step strategy by which it achieved this was,

1) making sure that the right products , customers, distributing system was in place

2) aiming for organizational effectiveness

3) it re looked at how the organization was using technologiesWCM supported a focused-factory environment that harnesses the potential of teams. Instead of workers being assigned to a specific area on the factory floor, teams of multi-skilled workers were charged with building entire products or modules from start to finish. WCM provided resources to teams based on the process rather than piecemeal events or tasks. Training took on a system-wide view. In 1990, the entire plant was shut down and everyone was taken to another location for an intensive six-hour session. During the session, the need for radical change was articulated. In addition, management explained what the broad changes would be and how the changes would impact the workers. To support the factory-focused paradigm, the ``all-salaried'' workforce was

evaluated on a ``pay for performance'' basis. Factory-focused teams were rewarded for their performance. In a little over three years, teams helped reduce defect rates by 70 percent, customer rejects by 57 percent, cycle time on parts by 72 percent, inventory investment by 46 percent, and customer lead times by over 70 percent. Improvements did not come without struggleManufacturing facilities were designed to better suit a flow scheme. The flow scheme was designed to facilitate a ``pull'' system that is triggered by customer orders. Conversion to an all-salaried workforce, worker empowerment, compensation for creativity, and a system-view helped IAC vastly improve its quality and performance for its customers.However, IAC management was not satisfied. To complement the WCM program and facilitate a culture of continuous improvement, IAC embraced a solid ISO 9000-certified quality program, a strong supplier alliance program, a globally oriented customer satisfaction organization, and a reconstituted WCM program office. Text Reading 14 - Redesign Your Organization For Time Based Management

There are two kinds of organization, a Time based and a Traditional one. A Time based one focuses what deliverables a customer wants and what organization and work processes inside the firm can provide it with this. With this in hand, it shapes its organization

The Honeywell industrial automation and control (IAC) business unit designed, manufactured, and configured the sophisticated TDC 3000X family of systems. These systems enable its customers (refineries, chemical plants, and paper mills around the world) to achieve world-class process-control capability. The mission of TotalPlantTM was to unify business and control information to enable global customer satisfaction. To accomplish this mission, the plant migrated to fully integrated hardware, software, and services that support plant management, process management, and field management. Thus the Total Plant TM concept pushed Honeywell from being a traditional to a time based organization. It sought to re examine itself under three heads. These are,

1) How work was structured

2) How information was created and shared

3) How performance was measuredThe TotalPlantTM ParadigmBased on these criteria Honeywell designed its TM policy. The paradigm was based on four principles of success process mapping, failsafing, teamwork, and communication. Each of these principles was critical to realizing the TotalPlantTM. TotalPlantTM developed a need for people to change. It created a level of dissatisfaction. Honeywell sent key people to benchmark HP (Hewlett-Packard) to see what was happening. The paradigm gave them a foundation to work with Structuring of Work

The two core concepts which Honeywell followed for this were, organizing work around the main sequence and other a continuous work flow. Through benchmarking its work with its closest and biggest competitor in the industry i.e HP, Honeywell came up with the following facts

Traditional HoneywellTime Based HP

Improve function by functionFocus on the whole system and its main sequence

Work in department batchesGenerate a continuous flow of work

De- bottleneck to speed workChange upstream practice to relieve downstream symptom

Invest to reduce costInvest to reduce time

The Main Sequence

Hence Honeywell decided to define the main sequence of its work. It comprised of those activities that directly added value in real time. Everything else done was an offline activity that could have been done any time. By achieving the main sequence Honeywell could move preparation and offline work out of the way so that all essential direct work in delivering a product or service to customer could be done without wasting any real time. It also highlighted the critical connection between different parts of the company that add direct value, making it possible to design policies and procedures that made the work flow faster and better.

Continuous Flow

By smoothing the work flow in a continuous sequence Honeywell could decrease its cycle time and increase its capacity thereby. The key to understanding the company functions to work together more efficiently lies first in the overall system and organization design. Time based companies focus on where to place the responsibility for results and how to reposition people to close the distance that big companies could create. Honeywell thought of balancing the work and its flow, both upstream and downstream, making allowances for its employees. Text Reading 17 Beyond Reengineering: The Three Phases of Business Transformation

Business Process Reengineering efforts encompassing a wide scope of activities can drive radical changes in business performance. When linked to integrated infrastructure development and long term business vision, reengineering can trigger a three phase process of business transformation reaching far beyond the immediate objectives of operational excellence. The alignment of infrastructure development programs and long term business planning is central to realization of the full potential of business transformation

Internal Operations Customer and New

Supplier Business

Interface Units

The Three Phases of Business TransformationHoneywell had four mechanisms in place process mapping, fail-safing, teamwork, and communication for promotion of an enterprise-wide integrated plant. Process mapping was a systematic BPR methodology used to guide team process improvement efforts along process paths. Fail-safing was a vehicle to help process teams identify and correct defects quickly and permanently. Teaming was encouraged through communication of the vision and rewards based on value-added activities. These four mechanisms facilitate successful change, but did nothing to guarantee it.

Finally, the organizational structure has to change to allow an environment conducive to innovation. Execution flows from the corporate vision statement and strategic plan down to management and workers. Top management therefore has to facilitate the paradigm through resources, executive actions, rewards, and recognition.

Behavioral change is the most difficult type of change. It takes time and patience. Execution of a major change program therefore requires a lot of time to reap desired benefits. With quick profits and impatience the norm in many organizations, execution would be the biggest hurdle to success. Adoption of mechanisms, like those used at Honeywell, are therefore worthless without a plan for change and proper execution of that plan.1) Operating Excellence

The first phase of the transformation cycle at Honeywell focused on achieving operating excellence by using five dimensions

Operating Performance ParameterSelected Metrics

ProductivityOutput per unit of labour and capital

VelocityCycle time

QualityDefect rate

Yield

Life cycle cost

Business PrecisionArticulated costing and pricing activity

Customer ServiceCustomer satisfaction

2) Enhancement

The focus shifted explicitly on enhancing transactions and relations with customers. this typically appeared in the value added activities in order entry, tracking, delivery and customer service function.

3) Redefinition

A change agenda was set in place. However this part has not been detailed in the case study Honeywells Journey from Reengineering to TransformationThe manner in which Honeywell achieved this transformation has been discussed belowParameterMicroMacro

ObjectiveOptimizationTransformation

TimeframeShortLong

LeadershipLocalSeniorship

InfrastructureDiverseIntegrated

Performance FocusFinancialMultiple Benefit Plans

FocusSingle ProcessEnterprise

ScaleSmallMassive

ProjectsMultipleSingle Focus

ScopePhase 1Phase 1,2,3

All this was achieved through Vision of the leadership and TM plans Strategic alignment

with the overall customer satisfaction

Transition Barriers and Tactics

BarriersTactics

ConceptualComprehensive business case

Financial JustifictaionCommunication and challenge

Functional StructuresTeam building

InertiaBenchmarking

Critical MassAlignment

Human ResourcesCareer paths and training

Technical FeasibilityPhased platforms

Customer AcceptanceCo developments

Legal and RegulatoryProactive participation

Communication of the TotalPlantTM vision was paramount to success. Through tactics given in the table Honeywell communicated the TotalPlantTM paradigm needs to everyone and fostered an environment that rewarded teamwork, creativity, and value-added thinking. Thus efforts to improve operations through a series of discrete local initiatives, utilizing independent technology infrastructures, may limit a companys ability to realize the full potential of transformation. Aligning such discrete initiatives with broad programs of large potential was an issue Honeywell could achieve completely

Text Reading 19 Reengineering Methodologies and Tools, A Prescription for Enhancing Success

Companies can achieve BPR through two kinds of approaches, Method or Intuition. At Honeywell they used the Method approach based on the following three criteria,

1) Learning

2) Integration

3) CostIt ensure that people could learn the new rules, that work could be integrated at all levels and the cost to achieve this could be justified trough beating competition

Tools used for BPR

1) Coordination

2) Modeling

3) Business Process Analysis

4) Human Resource Analysis and Design

5) Systems Development

The training philosophy at Honeywell focuses on educating employees about the importance of total customer satisfaction and world-class manufacturing. It is important for employees to understand that optimization of the whole system is the goal, not individual departments or subsystems.

Process thinking helped to justify overall results because the people involved understand how and why it is successful. Honeywell, process mapping consists of eight steps select process, identify boundaries, form teams, develop ``as is'' map, identify cycle times, identify opportunities for improvement, develop ``should be'' map, and develop the implementation plan (receive confirmation before implementation). A symbolic representation of the same has been given on the next page.

BPR Methodology at Honeywell

Text Reading 20 Creating Robust Work Processes

A work process is a series of activities performed by people to transform materials and information into an output to be used by an individual or a group. Work processes typically involve people, equipment, procedures, and information. It is also influenced by the work environment

Improvements did not come without struggle. One problem at Honeywell was management of ``white spaces''. White spaces are gaps between different links in the internal-supply chain. Management found out that teams along the value chain for each product line had a tendency to sub-optimize the total supply chain because they were primarily focused on their own areas. To get the teams to think in unison, the Director of Strategic Planning and Organizational Development took the three team managers aside and told them that they were responsible for the whole product line. Performance evaluations would be based on how the entire product line performed.Honeywell IAC observed through trial and error that teams needed to have control over things that impact their performance. Another improvement that helped teams work well together was a change of work environment. Recently, manufacturing was moved to a handsomely landscaped site. Besides being a beautiful site, manufacturing facilities were designed to better suit a flow scheme. The flow scheme was designed to facilitate a ``pull'' system that is triggered by customer orders.

Characteristics of Work Processes at Honeywell

1) invisible and complex

2) intangible and unique

3) heavy paperwork generated

4) not well documented

5) similar activities are performed differently

6) work is viewed as an event , not process

7) no measurement

8) no ownership for processReducing Process Variation

Ways to Reduce Variation at Honeywell

In order to achieve the BPR, the management at Honeywell,

1) simplified the work process

2) mistake proof the process to make eliminate human error

3) recognized the need of training employees

4) clearly communicated to employees

5) recognized new external forces

6) identified alternative uses of output

7) used computers and automation

Honeywell depended on information technology (IT) automation to keep its plant in operation. It produces automation and control devices that met stringent levels of quality because its customers would accept nothing less. Computer technologists, engineers, and systems analysts keep systems running properly. Every IT system was aligned with manufacturing. Managers tapped into the system to obtain information about productivity, cycle time, and performance. Understanding RobustnessRobustness is defined in terms of the performance of the process or product and how uncontrollable factors affect that performance

1) a process is robust if performance is insensitive to uncontrollable variations in process inputs, transformations and external factors

2) a process output or product is robust if its performance is insensitive to uncontrollable variations in conditions of manufacture, distribution, use and disposalFail-safing was used to identify a defect, analyze it to understand its root cause, and then develop a solution that would prevent that defect from occurring again. Product Robustness at Honeywell

PDCA offers a sound method for collecting ``good'' data, but technology was needed for proper delivery. Honeywell invested heavily in state-of-the-art technology to help guarantee data delivery.Process Robustness at Honeywell

Management Process Robustness at HoneywellTeamwork does not occur naturally. It is difficult and complex. It takes special effort, management support, training, and a nurturing environment to make it work. However, getting a diverse workforce to work as a team takes time. The key is the environment. Hence, Honeywell rewarded teamwork, expected team ownership and responsibility, empowered teams to solve problems, and provided training dollars to make teaming a natural part of the work life.

Lack of Robustness at Honeywell

Had Honeywell not undertaken this exercise, it would have resulted in three potential problems, when process mapping optimizing part of the process while sub-optimizing the process as a whole, making the map so far removed (too broad) from the actual process that it is not useful as a tool for change, and making the map too specific without involving those who must live with the changes.Analysis of Work Process Robustness

A robust work process looks like the one given below,

Fail-safe planning involved 8 steps. The first step was to identify the problem (defect). Defect detection involves analyzing data using a pareto chart. The pareto chart principle proposes that 20 percent of causes create 80 percent of the problems we experience. Once the data was analyzed, a defect description was logged that described the defect and its impact on other processes. Finally, an implementation plan is created. Everyone affected by the change is identified. The team considers customers, suppliers, and support people on the team. The team then determines how the device will be measured and completes an action register. The purpose of the register is to create a ``visible'' listing of all the actions required to implement the device, the people involved, the completion dates, and the status of each action.Step six (Do) meant implementing the chosen solution.Step seven (Check) involved checking results.Step eight (Act) was to determine the next steps for continuous improvement. The team asks itself what can be improved and then begins the cycle again. Fail-safing was a continuous processText Reading 31-

Whats was wrong in the pervious execution of the Work Processes

Employees were more focussed on their individual area and related functions. So the scope for the process improvement was narrow until or unless everybody is involved and made known to cross functional work processes.

One problem was management of ``white spaces''. White spaces are gaps between different links in the internal-supply chain. Management found out that teams along the value chain for each product line had a tendency to sub-optimize the total supply chain because they were primarily focused on their own areas. Lack of training and empowerment was the key reason for underperformance. Honeywell was lacking focus on educating employees about the importance of total customer satisfaction and world-class manufacturing.

The middle management was resisting change and was unable to communicate the lower manager and workers, what exactly is expected of them at the work.Text Reading 33 - Need radical innovation and continuous improvement

Creating a Portfolio of Processes: It is created by identifying those processes which immediately needs attention, mapped and to be changed. This is done both at the narrow and broad level. In case of Honeywell, following processes has been identified as can be seen from the diagram.

.

These are the processes which are identified to do process value analysis to do focussed improvements.

An Approach for the Operational Change:

Process Value Analysis: It is the focussed improvement processes.

Process value analysis is a qualitative analysis procedure that can quickly and significantly improve your processes. It allows an improvement team to identify specific process steps that may not be adding value, with the goal of saving time and resources. It also involved weeding out the non value added activities. Its more of a tactical change.

After a process is documented using the S-I-P-O-C and process mapping tools, Honeywell quickly analyzed the value of each step of the process from the perspective of people who are served. Three categories are used to describe types of value that a process step may have:

Value added to people served: steps that directly impact the satisfaction of the people served i.e customer.

Value added to operations: steps that support the ability to deliver services to the people served

Non-value-added steps that could be eliminated or changed without harming service levels or the organization like Waiting, storage, non-value-added steps are just waste.

1. In order to assess whether the steps in your process have value to the people that company serve, following questions were asked:

Is this step required by the people served by the process?

Are those served willing to pay for this activity?

An activity can be described as adding value for the people served only if:

the people served recognize the value

the activity specifically impacts the service requirements of those served

the step is necessary to meet the timelines and expectations of those served

2. In order to assess whether the steps in your process add operational value, following questions were asked:

Could this activity be eliminated if some preceding activity were done differently?

Is there a risk if this activity is eliminated?

Could any existing technology eliminate this activity?

Could this activity be eliminated without impacting the quality of our product or service?

Does this activity fulfill an external regulatory requirement?

Could this step be made more efficient? Is it done right the first time or does it need to be repeated?

An activity adds operational value if it is not a customer value-added activity and is required to:

sustain the ability to perform value-added activities for the people served

meet contractual, legal, or other regulatory criteria

meet health, safety, environmental, or personnel development criteria

3. In order to assess whether the steps in process are non-value-added, question asked were:

Does this activity add value for the people served or operations?

An activity is non-value-add if it does NOT add value for either the people served or for operations. Designating a step as non-value-added means that it warrants further analysis to determine whether it should stay the same.

Result of the Process Value Analysis: In a little over three years, teams helped reduce defect rates by 70 percent, customer rejects by 57 percent, cycle time on parts by 72 percent, inventory investment by 46 percent, and customer lead times by over 70 percent.

Role of IT in Reengineering at Honeywell:

Information technology has played a critical factor in the success of the process reengineering. Its role can be broken in two phases where firstly IT contributed to designing (before manufacturing) of automation and control devices that must meet stringent levels of quality because its customers will accept nothing less. In second phase it played an important role in implementation like Managers tap into the system to obtain information about productivity, cycle time, and performance. Many of the business managers have an engineering background that helps them link the business systems with manufacturing. Workers monitors the devices to make sure they are performing within strict tolerances. Therefore, information is ``built into'' the systems that build other systems.

Text Reading 41 - Preconditions for BPR Success and how to Prevent Failures

Business reengineering has become senior managements choice for achieving strategic goals. Some surveys show that as many as 88 percent of large corporations are involved in business processes reengineering (BPR), and many others plan to begin projects soon.

But the excitement and the potential of reengineering obscure its darker side. Although there have been no systematic studies on this point, but certain surveys indicate that as many as 77 percent of BPR projects fail. The failure rate is high due to the various obstacles that organizations face. The biggest obstacle that reengineering projects face are:

Lack of sustained commitment and leadership

Unrealistic scope and expectations

Resistance to change.

Positive preconditions relating to BPR

In case of Honeywell, the positive preconditions related to the obstacles identified earlier are:

Senior Management Commitment and SponsorshipThe senior management was very particular about the program. Management took a six hour intensive session for the workers in which they explained the broad changes essential for the program and how these changes would impact the workers.Realistic ExpectationsWCM (World Class Manufacturing) established ambitious goals for defect reduction, short-cycle production, and materials management. Specific goals included reducing defects by a factor of ten (1,000 percent) and cycle time by a factor of five (500 percent).

WCM supported a focused-factory environment that harnesses the products or modules from start to finish. Empowered and Collaborative WorkersWCM provided resources to teams based on the process rather than piecemeal events or tasks. Training took on a system-wide view. To support the factory-focused paradigm, the ``all-salaried'' workforce was evaluated on a ``pay for performance'' basis. Factory-focused teams were rewarded for their performance. Performance evaluations were based on how the entire product line performed. The manufacturing facilities were designed to better suit a flow scheme. Conversion to an all-salaried workforce, worker empowerment, compensation for creativity, and a system-view helped IAC vastly improve its quality and performance for its customers

Shared Vision

The shared vision creates the first step toward a new work environment that fosters teamwork. It proposes that the workforce take ownership for the success of the overall business. Accordingly, all people need to understand their roles and team together to achieve success. Creativity, risk-taking, and innovation are encouraged and viewed as learning experiences.

The