BPR Case Study Honeywell
Specific goals included reducing defects by a factor often (1,000 percent) and cycle time by a factor of five (500 percent).
WAC was created to provide resources and take system-wide view of the plant. WAC supported a focused-factory environment that harnesses the potential of teams. Instead of workers being assigned to a specific area on the factory floor, teams of multi-skilled workers were charged with building entire products or modules from start to finish. WAC provided resources to teams based on the process rather than piecemeal events or tasks. Training took on a system-wide new.
In 1990, the entire plant was shut down and everyone was taken to another location for an intensive six-hour session.
During the session, the need for radical Change was articulated. In addition, management explained what the broad changes Mould be and how the changes would impact the workers. To support the factory- focused paradigm, the ‘all-salaried” workforce was evaluated on a ‘pay for performance” basis. Factory-focused teams were rewarded for their performance.
In little over three years, teams helped reduce defect rates by 70 percent, customer rejects by 57 percent, cycle time on parts by 72 percent, inventory investment by 46 percent, and customer lead times by over 70 percent. Honeywell IAC observed through trial and error that teams needed to nave control over things that impact their performance.
When teams failed, the cause could almost always be attributed o lack of authority to make decisions where the work was actually being done. Another improvement that helped teams work well together was a change of work environment. Recently, manufacturing was moved to a handsomely landscaped site. Sides being a beautiful site, manufacturing facilities were designed to better suit a flow scheme.
The flow scheme was designed to facilitate a ‘pull” system that is triggered by customer orders. Honeywell calls their factory-focused program the Total Plant. The mission of Total Plant is to unify business and control information to enable global customer satisfaction.
To accomplish this mission, the plant is migrating to fully integrated hardware, software, and services that support plant management, process management, and field management. Total Plant business and control information is also used to facilitate planning, implementation, and world- class applications. The Total Plant paradigm is not limited to the IAC site.
It is Intended to support global delivery of its manufactured products, serve the needs of over 40 regional Total Plants and delivery centers worldwide, and align with global suppliers. The Total Plant – Paradigm he paradigm is based on four principles of success process mapping, failings, teamwork, and communication. Each of these principles is critical to realizing the Total Plant. 1 .
Process Mapping: Process mapping is a tool that allows one to model the flow of any business process in a graphical form. 2.
Fail-saving: Fail-saving is a method to identify a defect, analyze it to understand its root cause, and then develop solution that will prevent that defect from occurring again. A root cause has three characteristics: 11) It is a cause of the defect identified Z) It is possible to change the cause 3) If eliminated, the defect will be eliminated or at least reduced 3. Teamwork: Teamwork does not occur naturally. It is difficult and complex. It takes special effort, management support, training, and a nurturing environment to make it work. 4.
Effective communication skills: Communication of the Total Plant vision is paramount to success.
The number one problem in most organizations is lack of effective communication. Faulty interactions between people often lead to conflicts, hurt feelings, and damaged relationships. Execution Honeywell has four mechanisms in place process mapping, fail-saving, teamwork, and immunization for promotion of an enterprise-wide integrated plant. Process mapping is a systematic BPR methodology to guide team process improvement efforts along process paths. Fail-saving is a vehicle to help process teams identify and correct defects quickly and permanently.
Teaming is encouraged through communication of the vision and rewards based on value-added activities.
These four mechanisms facilitate successful change, but do nothing to guarantee it. At Honeywell, the path toward change is probably much smoother than in most organizations because the organization has embraced change for many years. Honeywell is a pioneer in quality management and has always developed its people through training programs and rewards for value. Hence, execution is easier and resistance is not as big an issue. Behavioral change is the most difficult type of Change.
It takes time and patience. Execution to a major change program therefore requires a lot of time to reap desired benefits. With quick profits and impatience the norm in many organizations, execution will be the biggest hurdle to success.
Adoption of mechanisms, like those used at Honeywell, are therefore worthless Introit a plan for change and proper execution of that plan. Conclusion: Although case studies rate low on generalization, they rate very high on data richness. By researching the Honeywell transformation paradigm, we were able to uncover some very important insights regarding successful change.
Most importantly, we discovered that execution separates Honeywell from other organizations involved in transformation. We were also able to identify nine other Important change lessons. We concluded that the only way this information can be collected is through the case study methodology.
Another major issue is dealing with Change. Change is painful and difficult to implement.
Change of even the simplest sort is hopelessly complex even making the case for change is close to impossible”. However, change is a fundamental aspect of BPR. Organizations should therefore openly deal with change. Top management needs to communicate to its people why the change is necessary and how it will impact everyone’s current Job and future with the company. Top management needs to convey to its people that BPR is not being used to replace workers, but to improve quality, reduce cycle time, and create value for customers. Patience is also needed.
Change takes time.