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ples ? Promotion/ Sales ? Revisions ? Prototype ? Initial Fit Tests ? Initial Costing ? Revisions ? Sales Samples ? Orders Placed ? Trial Runs / Tool Up ? Warehouse ? Delivery to Retail ? Production ? Shipping ? Marketing Strategy ? Market Research ? Product Briefs ? Design/ Tech Package ? Warehouse ? Delivery to Retail ? Promotio/ Sales ? Toolup for production ? Production ? Book Orders ? Weekly Production Orders ? Test Market ? Continue Production ? Begin Shipping ? DropShip ? Delivery FMO Redesign 38 SFR Reengineering Automate Example: Hospital Supplies Distribution See Related Topics: Information Technology as an Enabler。 Automate: Applications of Technologies Nurse/doctor hand writes order Supplier Order Entry Department enters order Supplier mainframe Supplier distribution department picks up and delivers order Purchasing Agent batches request Purchasing Agent calls supplier Nurse enters order on installed terminal Supplier mainframe batches orders Supplier distribution department picks up and delivers order Future Mode of Operating Present Mode of Operating FMO Redesign 39 SFR Reengineering Typical Changes from PMO to FMO DecisionMaking Authority: Business Focus: Accountability: Roles, Job Content, Career Path: Before After ?Highest possible level for “consistency” ?Lowest level for customer responsiveness ?“ Provide a product / service” ?“ Build a personal customer relationship” ?Fragmented process ?Lack of performance measures, or measures focused on small parts of the process ?Fewer handoffs and reduced fingerpointing ?Performance measures for all jobs focused on customer value added ?Everyone is a specialist ?Career path up in a functional area ?More generalists with fewer specialists ?Career path up, across, and between functional areas FMO Redesign 40 SFR Reengineering Typical Changes from PMO to FMO Behavior: Organizational: Rules: Before After ?Little or no risktaking ?Parent / child behavior ?Highly motivated, “cando” attitude, proactive ?Creative, risktaking based on sound judgement ?Friendly, personable service ?Learning environment self improvement ?Hierarchical ?Focused on control and administration ?Flatter, team oriented ?Learningbased with emphasis on mentoring / coaching ?Lots of them。 little latitude ?Based on past problems / constraints ?“ Out of the box” thinking ?Continuous improvement ?“Bend” rules See Related Topic: Characteristics of an Improved Process FMO Redesign 41 SFR Reengineering Reengineering Process Definitions PMO = Present Mode of Operation TMO = Transitional Mode of Operation FMO = Future Mode of Operation See Related Topics: What is the TMO? Role of the TMO Example Detailed Opportunity Description Implement and Track Results Diagnose PMO FMO Redesign Quantification of Potential Design TMO, Create Initiatives Identify Critical Processes Initial Prioritization Prioritize SubProcesses for Redesign 42 SFR Reengineering Reengineering Process Definitions PMO = Present Mode of Operation TMO = Transitional Mode of Operation FMO = Future Mode of Operation Implement and Track Results Diagnose PMO FMO Redesign Quantification of Potential Design TMO, Create Initiatives Identify Critical Processes Initial Prioritization Prioritize SubProcesses for Redesign 43 SFR Reengineering Importance of Measurement ?Metrics provide critical feedback as to whether or not positive change is taking place –magnitude and speed of impact –results and analysis of experimentation / pilots ?Metrics municate priorities and align actions ?By tying individual performance measurement to individuals, metrics can help motivate employees to create value A well designed set of metrics is always a key success factor in any change management effort. Implement and Track Results 44 SFR Reengineering Process Improvement Metrics See Related Topics: Metrics for Different Audiences。 Process Measure Data Output Example。 Example Dashboard Elements (1) (2) and (3)。 and Example Process Dashboard. To pletely measure progress, one must look at product, process, and financial metrics. Shareholder Values Value Creation Metrics Product Cost Customer Values Product Quality Process Cost Process Speed Flexibility Revenue Enhancement Profitability Product Metrics Process Metrics Example Metrics: ?ROM ?ROS ?Profit per employee ?Economic Value Added ?Customer perception ?Wait time as a % of process time ?Cycle time ?Number of process steps ?Customer perception ?Time to respond to customerdriven changes ?Customer perception ?Overhead rates ?Rework hours as a % of total ?Inventory turns ?Unit cost ?Valueadded per unit ?Number of parts per unit ?Customer perception ?Defect rate ?Deviations or waivers per unit ?Sales per employee ?Change in backlog ?Percent of customers retained Financial Metrics Implement and Track Results 45 SFR Reengineering Agenda ?Objectives ?Reengineering Introduction –definition –significance –Bain?s reengineering practice ?Reengineering Process ?Example ?Defense Co. ?Exercise 46 SFR Reengineering Old Estimating Process Defense Reengineering Example P r o p o s a l M a n a g e rQ A E s t i m a t o rC h i e f sG r a s s R o o t s E s t i m a t o r sP r o d u c t i o n E s t i m