Reengineering Strategies are strategies aimed at rethinking and redesigning the business processes and managerial practices to improve performance in the areas of cost, service, speed or output in an effort to achieve a new higher level of competitive advantage.
Reengineering efforts have gone under many banners in modern management study: total quality management, business process reengineering, right sizing, restructuring, cultural transformation, and turnaround, to name a few.
Regardless of what you call it, the goal is to build competitive advantage to either respond to environmental, competitive or other changes or, in the case of more visionary companies, to proactively take your firm to the next level.
When UPS introduced the hand scanner for their drivers and label making software for their customers, they did so primarily for efficiently purposes but the reengineering effort also gave them a competitive advantage opportunity over the U.S. Postal service.
Customers could now track their packages online. This gave the customers a sense of control and a better means knowing that their package would arrive one time. The U.S. Postal system didn’t offer this capability.
Customers dropped their packages off to the mailman and “hoped” it would get there. Did this reengineering effort increase sales? Yep.
Unfortunately, most reengineering efforts fail. Of those that succeed, they take a great deal of time and effort to accomplish. So why do it? Because that is how you leap-frog your company in the market and is the best way to build lasting long-term improvements in service, cost reduction, and profitability.
Reengineering to build competitive advantage often requires that you eliminate the obstacles that hinder growth. It means that you must do things differently than you have for years. We suggest you apply the value ratio (benefits over costs). If the benefits outweigh the costs, do it. Start with easy to implement projects first to build momentum behind the changes.
Some ideas include utilizing the Internet to better communicate, integrating the entire company through a digital network system, or installing more sophisticated customer services systems. Look at everything. Map out all your systems. Determine which ones add value and which ones cause bottlenecks and problems.
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