Business Process Reengineering and Manufacturing

Abstract

The ability to link tasks electronically can both reduce costs and increase customer service levels, mainly due to the fact that fewer handoffs are required and the work-in-process moves smoothly through the system. The work-in-process can be a manufactured item or the information that is required to support the physical transformation activities. These information processes are sometimes referred to as administrative processes and may reflect the majority of expenditures for the firm.

As we find the direct costs shrinking to an average of less than 25% of the cost of goods sold in today’s environment, the reduction of costs in administrative processes can often have the largest impact on competitiveness. A number of firms, including Texas Instruments, have also used a process focus to address manufacturing capabilities and technology development over time. Rather than delegate the responsibilities for these important issues to more narrowly focused departments such as “research and development” (R&D) or “manufacturing engineering,” companies are reorganizing and combining personnel from a number of departments, including manufacturing, engineering, R&D and marketing to work in a process mode on these dynamic, long-term issues. Reengineering practices of the following companies are included here: Ford; Taco Bell; Texas Instruments.