Statistical Thinking: Improving Business Performance, Second Edition

APPENDIX H

Process Design (Reengineering)

Reengineering a company’s business processes ultimately changes practically everything about the company.

—Michael Hammer and James Champy

WHY DESIGN?

The most common application of statistical thinking is to an existing process that needs improvement. In some cases, however, designing a completely new process is required. For example, an organization may wish to offer a new service, such as web page design. Rather than improving an existing marketing process, we have to design a completely new one. In other cases, we may need to scrap an existing process and start over again, rather than improve the current one. For example, a financial system may be running on several old “legacy” computer systems and needs to be modernized to run on an Internet-based system. In such cases, we do not spend a lot of time studying the old process, because we plan to create a completely new one. We just need to understand what about the old system is limiting it, and what needs to be continued in the new system.

The term reengineering refers to situations wherein the old system is scrapped and we start with a “clean sheet of paper” in designing the new one. A very popular reengineering initiative swept through U.S. business in the 1990s, largely as a result of Michael Hammer and James Champy’s Reengineering the Corporation.1 (This general business initiative was discussed briefly in Chapter 1.) Some of the principles discussed in this appendix are based ...