OPERATIONS CONSULTING AND REENGINEERING

Review and Discussion Questions

1. Check out the web sites of the consulting companies listed in the chapter outlines. Which ones impressed you most as a potential client and as a potential employee?

Remember that web sites can change at any time. However, a good web site should be technically sound and contain the appropriate information. Technical aspects include the appearance including the choice of colors and fonts, the ability to find material on the site (organization), ability to find the site (is it linked in the various search engine or on professional organization’s web sites?), ability to load easily, as well as the overall user friendliness of the site. Content should include what the company does, what they could do for your, their experience in the area, and their professional training of employees (e.g., degrees held, certifications, etc.).

2. What does it take to be a good consultant? Is this a career for you?

Good consultants generally need good communications skills, good analytical skills plus expertise and experience in the area they wish to consult in. Additionally, in considering a career as a consultant, the student should considered whether they would like to be a consultant.

Operations Consulting and Reengineering

3. Think about the registration process at your university. Develop a flow chart to understand it.

How would you radically redesign this process?

A typical registration process might be:

Obtain registration materials

Use the class list to select courses

Fill out registration form

Obtain an advisor's signature for the registration form

After waiting in line, sit with a registration clerk who enters classes into a computer

Student is assigned to desired class

An alternate course is searched for and selected

A bill is generated

The student pays the bill prior to the semester in question

One means of reengineering this process is to implement a telephone or Internet registration system. This could eliminate several steps in the process.

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4. Have you driven any car lately? Try not to think of the insurance claims settlement process while you drive! How would you reengineer your insurance company’s claims process?

For a simple auto claim not involving injury, the process involves contacting an agent, an adjustor is assigned, the injured party obtains three estimates, the estimates are sent to the adjustor, the job is assigned to a body shop, and the work is eventually performed.

Depending upon the situation, the check is either sent to the body shop or the injured part.

Any of the steps could be combined, reassigned or eliminated. For example, the adjustor could take the vehicle to a preferred body shop and pay the bill immediately.

5. Identify the typical processes in manufacturing firms. Discuss how the new product development process interacts with the traditional functions in the firm.

Traditional processes in a firm are broadly categorized into three areas: planning, organizing, and controlling operations. Planning includes the aggregate planning process, strategic planning, product planning, etc. Organizing includes the processes of process selection, organizing the work force, layout, etc. Control processes include quality control, costs controls, inventory controls, etc.

New product development is changing radically with concurrent engineering. This has forced an integrative, cross-functional approach to product design. The logical extension of this process is to operate cross-functionally while becoming closer to the customer.

6. In discussing characteristics of efficient plants, Goodson, developer of “Rapid Plant Assessments”, suggests that numerous forklifts are a sign of poor space utilization. What do you think is behind this observation?

Forklifts require wide aisles and are expensive to operate. They also increase pollution, and encourage unnecessary movement of materials. “In the best plants, if materials need to be moved a short distance, employees use hand-propelled roll carts; if the materials are too heavy to move by hand, garden tractors pull the carts in linked trains.” Eugene Goodson,

“Read a Plant Fast,” Harvard Business Review, May 2002, p. 109.

Operations Consulting and Reengineering

Problems

Problem Type of Problem Difficulty New

Problem

Modified Problem

Check Figure in Appendix A

Consulting Reengineering

1 Yes Moderate

2 Yes Moderate

3 Yes Moderate

4 Yes Moderate

5 Yes Moderate

6 Yes Moderate

1. Answers will vary. But the proposal should include the following:

a. Situation faced by client.

b. Desired client outcomes

c. Planning premises (including possible complications).

d. Specific problem statement.

e. Initial hypotheses.

f. Work plan, including approach to be followed, client involvement, and data needs from client.

g. Scope of project, identifying specific phases and deliverables.

h. Identification of project team members and support capabilities.

i. Fee structure and payment schedule.

j. Specification of the precise features of a service guarantee (if used).

2. Answers will vary based upon the group. A good solution should follow the hint to develop a good prospectus. Specifically, check to see if the prospectus contains a reasonable target market and do the skills of the team match the target market’s needs.

3. The typical procurement process involves drafting a request for proposal (RFP, possibly involving attorneys), mailing the RFPs to suppliers, receiving bids, evaluating bids, drafting contracts, drafting purchase orders (PO), sending copies of POs to the supplier and accounting, receiving the supplies and a bill, transmitting the bill to accounting, and paying the bill (from accounting.

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The Bose Corporation has adopted an interesting restructuring of purchasing. The concept is termed JIT II. At Bose, suppliers are given authority to write purchase orders thereby eliminating the purchasing department.

Additionally many organizations are using corporate procurement cards (a type of credit card for the company) for small valued purchases to eliminate many of the steps in the procurement process.

Since this process is multi-functional, reengineering is a good approach. It appears that all of the steps can either be combined or eliminated. Losing control of the process is typically cited as a reason for not eliminating some of these steps. Students should be asked to identify organizational and technological enablers that will facilitate the reengineering process.

4. There is a potential for continuous improvement. However, the large number of defects demonstrates the need for reengineering. The Chapter outlines a set of steps for improving this process. These steps include: stating a case for action, evaluating enablers, studying the current process, creating a new process design and implementing the reengineered process.

5. We suggest having teams simply report in class on what they have observed in their plant tour. Goodson notes that he has had teams look at cinema complexes, car dealers, and microbreweries, as well as large and small manufacturing operations. Benefits come even from taking tours during non-business hours. Goodson points out that 30-minute tours of three fire truck manufacturing plants being considered for auction bidding by Oshkosh Truck provided enough information about how costs could be cut that they became high bidders and won. (The surveys indicated that a few million dollars a year could be saved, for example, by eliminating materials handling bottlenecks, consolidating plants, reducing inventories, and running the shop paint shop on one shift instead of three.)

6. Refer to discussion in Question 5.

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