Reengineering The WorkForce does not concern business processes, but the workforce. The fact that the mentality of people is formed by the way they do their work is acknowledged early on already by economists like Karl Marx and Adam Smith. Psychology is driven by production. This insight remains important. People will change as a result of the jobs that change, which in turn is caused by the workplace that is changing.
Laborers and craftsmen clustered from farms and workshops throughout the Industrial Revolution, participating in the flourishing group of people working in factories. Basically, wage labor was swapped for uncertainty and risk. Simultaneously, dependency on employers was exchanged with their autonomy. Work nowadays is again – and constantly – changing, resulting in an ongoing recalibration.
The traditional industrial worker and its industrial job is being replaced by a process centered approach, where focus lies on processes and customers. The previous job can no longer be fulfilled by this traditional worker as it is changing into a process centered one. This requires a professional type of worker. This new type of worker is taking back the autonomy that was once present with the pre industrial worker. The environment in which this takes place is market centered and has a focus on entrepreneurial skills. The different style of working has far reaching implications.
As soon as processes begin to get the deserved attention, it is important to understand what exactly is happening to processes in order to be able to understand the dynamics of the change to a professional worker. Any shortcomings processes might have will become visible whenever the organization places focus on them. It is best to use specific vocabulary which describes each process in core elements, in order to comprehend these shortcomings.
The following three classifications can be used to described the work activities:
- Work that any customer values such that he is willing to pay for, we call Value Adding Work;
- Supporting activities which a customer would not want to pay, but which are required to complete the activities that do create value, are called Non Value Adding Work;
- Finally, all work that does not belong to either two mentioned earlier is called Waste.
Value Adding Work vs Waste
When looking at the business processes, it is not that hard to identify the value adding work. Basically all services and goods that a customer really wants are produced by the value adding activities. Value adding activities for filling a customer order include the allocation of inventory, handling (i.e. picking the order and packing it), and shipping it according to a preplanned route. In general, any activity that cannot be eliminated (note that it can be improved) from a process is considered value adding work.
Any work that is not noticed in any way by a customer if it were to be left out of the process is waste work. Examples of these are checking activities which are redundant, writing all kinds of reports that nobody will ever read, or any work that is done in error and consequently needs to be done over. Clearly the waste activities are best to get rid of all together.
The Typical Situation
Over the years most organizations have managed to become good at two types of work. Productive work has evolved to a high level of efficiency after many years of industrial reengineering, mechanization, time and motion studies and automation. Waste activities have also pretty much been eliminated mainly because of many years of quality improvements endeavors. It is however the non value adding work activities that have been left untouched.
In the traditional processes, these activities tend to hold together the important value adding activities. Good examples of these non value work activities are liaising, reviewing, controlling and supervising, checking and reporting. In short the administrative overhead. Although these activities are important (however not essential) and facilitate the processes that are required, they introduce rigidity and less flexibility, delay and ultimately errors. Processes are made more complex and expensive by them, which in turn makes them difficult to understand or change, and susceptible to errors.
It is not uncommon to see in many organizations that the non value adding work has exceeded the all important value adding work activities. Typically, less than 15% of all activities being undertaken in a process are really value adding; which sadly means that the remaining chunk is overhead and as such can be classified as non value adding. However, this does not simply mean it can be removed.
Processes would fail if the non value adding activities were to be taken out. Rather, these non value adding activities are best designed into better and new processes which are more efficient. It has been proven that the overhead or the non value adding work becomes noticeable and evident as soon as the corporation places the processes at its center of attention. This then leads to redesign efforts in order to eliminate the inefficiencies. Many times the term reengineering is used to describe those efforts. And not only the business processes are being addressed.
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