Take a clean sheet of paper

Instead of learning from past mistakes and triumphs, say the proponents of "business process re-engineering", managers should forget everything they know about how their companies operate, and re-invent their business from scratch. The reward? Leaps in productivity and competitiveness.

Despite its ugly terminology and grandiose claims, re-engineering has been embraced publicly by scores of companies, including AT&T, Texas Instruments, Ford, Citicorp, Aetna Life and IBM. Many firms began "re-engineering" parts of their businesses before the term was first popularised by Michael Hammer, an American management consultant. Hundreds more are now planning to do the same…

One of Mr. Hammer's favourite examples is Ford redesign of the procedures it uses to pay its thousands of suppliers. This operation once employed 500 people shuffling purchase orders and invoices among themselves. Ford managers asked whether any of these bits of paper were necessary. Now 125 people do the same job faster. The clerk at the receiving dock, using a computer to reconcile deliveries with orders instantly, accepts goods on his own authority and issues payment. Most of the successful efforts cited by re-engineering advocates are such nuts-and-bolts examples…

There may be big rewards in eliminating a company's existing methods, but there are also big obstacles. Paradoxically, one of the biggest, says Thomas Davenport, a management consultant with Ernst & Young and one of the earliest advocates of re-engineering, is a company's existing computer system, which can be so complex that it is too expensive and too risky to scrap entirely. One American telephone company, he says, admits that its computer billing system is a disaster, producing errors on 70% of orders for new telephones. But the firm's managers cannot face the "nightmare" of replacing its vast computer system and related software with something new and untested.

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Mr. Davenport worries that re-engineering is passing from a fad to a cliché. America's Chrysler, he points out, claims to have an incredible 150 re-engineering efforts going on at once. One of its clients boasted of a decision to provide employees with milk instead of cream in their coffee as "re-engineering". "At this level, the term loses all meaning," complains Mr. Davenport. The backlash begins.

Give your own explanations to the following notions:

Backlash; to embrace; from scratch; proponent; score; to scrap

Say whether the following statements are true or false and explain your point of view:

1. The author of the article is an advocate of BPR.

2. Many firms are re-engineering their business.

3. Ford's example proves that BPR has no impact on the firm's success.

4. One of the biggest impediments on the way of BPR is existing computer systems.

5. Providing employees with milk instead of cream in their coffee is a good example of BPR.

DISCUSSION

1. What does improved productivity involve?

1. Do you think the scheme proposed by Mr. Scott will work? Why (not)?

2. What else could a firm do to increase productivity? Do you believe robots could help?

3. What do you think of the idea of re-engineering? Could you give any examples of re-engineering in the firms you know?

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