Honeywell

Business process reengineering

Honeywell (IAC Plant, Phoenix, Arizona)

Case Facts
The Honeywell industrial automation and control (IAC) business unit designs,
manufactures, and configures the sophisticated TDC 3000X family of systems. These
systems enable its customers (refineries, chemical plants, and paper mills around the
world) to achieve world-class process-control capability.
In late 1989, the management team began a three-year world-class manufacturing
(WCM) program to examine lagging performance results. WCM established ambitious
goals for ,
defect reduction,
short-cycle production
materials management.
Specific goals included reducing defects by a factor of ten (1,000 percent) and cycle time
by a factor of five (500 percent).
Business Need for WCM
To achieve this success in Quality a need was felt at Honeywell to provide an
environment that was not only encouraged performance but also helped people perform
better. With this is mind, the foundation of the WCM program was laid.
It was realized that Honeywell will have to, through the WCM program, provide
resources and take a system-wide view of the plant. WCM supported a focused-factory
environment that harnesses the potential of teams. A lot of changes took place at three
levels. These were,
business plan
structure of the organization
IT infrastructure of the firm
As a part of the new scheme, 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. WCM provided resources to teams based on the process
rather than piecemeal events or tasks. Training took on a system-wide view.
However any Change cannot be inititated till the whole organization was one with the
proposed scheme of things. Hence 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 would be and how the changes would impact the workers.
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Given below is a diagrammatic representation of how Honeywell approached its WCM

program.
People and
Capabilities
Structure
Proposed
Business
Architecture

Role

Measurement
and Control
Strategy

Responsibilities

Implementation
Plan

Reward
Structure
Processes
IT Delivery
Plan
IT
Requirements

Change
Management
Plan

Outcome of the WCM Implementation

As a part of the new philosophy and 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 a 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.
However like any organization Honeywell was able to expose a lot of other problems in
the process.

The White Spaces

At Honeywell this was defined as are gaps between different links in the internal-supply
chain. Management found out that teams along the value chain for each product line had
a tendency to sub-optimize the total supply chain because they were primarily focused on
their own areas. To get the teams to think in unison, the Director of Strategic Planning
and Organizational Development took the three team managers aside and told them that
they were responsible for the whole product line. Performance evaluations would be
based on how the entire product line performed.
A Measurement of the Organization Readiness
Through the Intuitive Approach or the trial and error method, it was realized that teams
needed to have control over things that impact their performance. This was because,
When teams failed, the cause could almost always be attributed to lack of
authority to make decisions where the work was actually being done.
Also the recent change in work environment was impacting the way these teams
were performing. (Recently, manufacturing was moved to a handsomely
landscaped site. Besides being a beautiful site, manufacturing facilities were
designed to better suit a flow scheme)
Through this feedback it was realized that Honeywell was still,
Organizing around tasks not outcomes
The people who were using the output of the process were not the ones
performing it
Information processing was not a part of information generation
Dispersed resources were still not viewed as centralized
Parallel activities were not being linked
The decision point was not a part where the work was perfromed

Impact on the Bottom Line

The flow scheme was designed to facilitate a ``pull'' system that is triggered by customer
orders. Conversion to an all-salaried workforce, worker empowerment, compensation for
creativity, and a system-view helped IAC vastly improve its quality and performance for
its customers. However, IAC management was not satisfied. To complement the WCM
program and facilitate a culture of continuous improvement, IAC embraced a solid ISO
9000-certified quality program, a strong supplier alliance program, a globally oriented
customer satisfaction organization, and a reconstituted WCM program office.
Thus was defined the scale and the scope of the extensive BPR activity that Honeywell
engaged itself in. the need of the hour was to go in for process redesign
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Extensive

Functional
Integration

Business
Redefinition

Scale of BPR

Limited

Functional
Redefinement
Narrow

Process
Redesign
Scope of BPR

Broad

The Total Plant Program

As a part of their business aspirations, Honeywell used the model given below, to
establish its TM program.

Vision Definition

Plan Development

Measurement

Business
Analysis

Implementation

Business Redesign

Honeywell called their factory-focused program the Total PlantTM. The mission of Total
Plant TM was to unify business and control information to enable global customer
satisfaction.
As a result the plant migrated to fully integrated hardware, software, and services that
support plant management, process management, and field management. Total Plant TM
business and control information were also used to facilitate planning, implementation,
and world-class applications.
The Total Plant TM paradigm was not limited to the IAC site. It was 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

The paradigm is based on four principles of success process mapping, failsafing,
teamwork, and communication. Each of these principles is critical to
realizing the TotalPlantTM. However, every team member must be educated in
all four of the principles and empowered to use what they have learned to solve
business and manufacturing process problems. The major obstacle to change is
the employee attitude that ``things are OK'', so why change.

Total Plant Paradigm

Process Mapping
Fail Safing
Communication
Team work

Process Mapping
Process mapping is a tool that allows one to model the flow of any business process in a
graphical form. The process map allows one to see how the process actually works across
functional boundaries. It thereby enables all employees to see how the business process
actually works and how it can be changed to be more effective. Process mapping also
creates a common language for dealing with changes to business processes.
The training philosophy at Honeywell focuses on educating employees about the
importance of total customer satisfaction and world-class manufacturing. It is important
for employees to understand that optimization of the whole system is the goal, not
individual departments or subsystems. Three principles underlie the philosophy be nonblaming and nonjudgmental, focus on process and results, and consider the big picture.
Process thinking helps to justify overall results because the people involved understand
how and why it is successful. Functional thinking concentrates only on individual
performance, not enterprise performance. For process thinking to work, employees must
be empowered to do their jobs since they are the ones that actually do the work.

Each employee works in his or her own ``box'', that is, they work within a functional area
of the organization. Unless they see and understand that their work is part of the much
larger enterprise, process sub-optimization will occur. To really improve the business,
everyone involved in the process has to understand the whole system. Process mapping is
a powerful technique that provides an understandable picture of the entire process and a
common language to get and keep everyone on the same page.
Process Mapping at Honeywell

Process Mapping
Select Process
Identify Boundaries
Form Teams
Develop as is Map
Identify Cycle Time
Opportunities for Improvement
Develop should be Map

Implementation Plan

The first step is to select the process. The team lists the products it is responsible for and
comes to a consensus. The customers for each product are then identified. Customer
satisfaction depends on giving the customers what they expect, so they must be
interviewed. Hence, teams are intensively trained in interviewing, data collection, and
data analysis techniques.
The second step is to identify the boundary. The boundary spans from when the raw
product is taken from the supplier (input) to when the finished product is handed to the
customer (output). Defining the boundary is simple, but it is important to document them
for each product.
The third step is to make sure that the team has cross-functional representation from each
organization contributing to the process. Inclusion in the team should be based on who is
involved in creating the product between the input and output boundaries.

The fourth step is to develop the ``as is'' map. The ``as is'' map represents the
transformation of inputs into finished products. The map includes both information and
product flow through the system.
The fifth step is to identify the cycle time for each step in the process. Cycle time is
determined by measuring both the distance the product travels through its process and the
time required for performing the steps in the process. Time is measured by average and
range. Average cycle time is the mean rather than the midpoint between the minimum and
maximum time. Range is the difference between the minimum and maximum time.
The sixth step is to identify opportunities for improvement that would not add resources
(extra costs). Typical opportunities include waiting and storage steps, non-value-added
steps, decision points for approval, steps with a wide range of cycle times, sequential
operations that could be done in parallel, and information that does not flow to those who
do the work.
The seventh step is to develop the ``should be'' map. This map includes a ``picture'' of the
improved processes and projections of their new cycle times. The ``should be'' map
depicts what the process will look like after improvements are made. It provides a
graphical picture of what the process team needs to work toward. It should only include
improvements that do not require significant new resources. ``A major limitation is that
process mapping takes a long time.
The eighth step is to develop the process implementation plan, establish confirmation,
and implement. The team prioritizes opportunities for improvement based on the impact
on cycle time and quality. The team also considers the impact of possible changes on
other processes and customers. The team specifies specific changes, responsible parties,
and timetables. Cycle time goals are set for each of the process steps. Finally, the team
consults with the steering committee for input and confirmation before implementation
can begin.
Fail- safing
Fail-safing is a method to identify a defect, analyze it to understand its root cause, and
then develop a solution that will prevent that defect from occurring again. Fail-safing
guarantees that a process will be defect-free. It is of great importance in a BPR exercise
to ensure that as many defects as possible are identified and their root causes are found
out through comprehensive analysis.
As seen from the case Honeywell encouraged its people to question the status quo and
asked them to use the mechanism of fail-safing to find if there existed any scope of
improvement in the present system. This was crucial in the entire BPR exercise as it
prepared people for change and as well made people to bring about change themselves.
While process mapping diagrams the entire flow of a business process, fail-safing is done
to diagnose a defect within the process. The PDCA (plan, do, check, act) cycle offers a

road map to help teams work together to prevent errors from occurring 100 percent of the
time. PDCA offers a sound method for collecting ``good'' data, but technology is needed
for proper delivery. Honeywell invests heavily in state-of-the-art technology to help
guarantee data delivery.
Fail-safe planning (Plan) has five steps
The first step is to identify the problem (defect). Defect detection involves analyzing data
using a pareto chart. The pareto chart principle proposes that 20 percent of causes create
80 percent of the problems we experience. Once the data is analyzed, a defect description
is logged that describes the defect and its impact on other processes. Similar to process
mapping, a map of the existing process is made with the defect. The map should include
documentation concerning the people involved (team) in the operation as well as where
the defect is discovered. This is a comprehensive exercise and Honeywell made a sincere
attempt to complete the process in an elaborate steps.
The second step is to identify the root cause(s) of the problem. The team identifies places
in the process map where red flag conditions exist. The five step why questioning process
adopted by Honeywell is effective in identifying and validating the probable root causes
for an area of concern.
A root cause has three characteristics:
(1) It is a cause of the defect identified;
(2) It is possible to change the cause; and
(3) If eliminated, the defect will be eliminated or at least reduced.
If the cause satisfies all three characteristics, it is a root cause.
The process of generating solution is started through following acts. The team starts by
selecting one root cause. A recorder and timekeeper are then selected to mediate.
Brainstorming can then begin. Keep in mind that this process may seem simple, but
trained facilitators are needed to ensure that everyone is involved and an open forum for
ideas is maintained. This helped Honeywell to generate more and more alternatives.
The fourth step is to evaluate and choose a solution. Each alternative is considered
against criteria such as time, ease, and cost to implement. Ideas that take too long to
implement are eliminated. Evaluation helps the team choose the best device(s) to fail-safe
the error condition. The successful completion of this step is possible only when the
employees are given the opportunity to think and use their own judgments. Moreover
they must be empowered to act independently then only above mentioned outcomes are
possible.
Finally, an implementation plan is created. Everyone affected by the change is identified.
The team considers customers, suppliers, and support people on the team. The team then
determines how the device will be measured and completes an action register. The
purpose of the register is to create a ``visible'' listing of all the actions required to

implement the device, the people involved, the completion dates, and the status of each
action.
Step six (Do) is to implement the chosen solution. The team now completes each action
item involved in installing the fail-safe device. Everything needs to be recorded so that
the team has a visual memory of the steps involved. Evaluation is also facilitated because
data can be analyzed before and after the fail-safe device is implemented. However
people must be made ready to accept change. It is necessary for the organisation to have a
workforce that is prepared to change along with change in the business needs and
processes.
Step seven (Check) involves checking results. Data is analyzed using the action register,
pareto charts, and histograms. The team also asks themselves if they got the results that
they expected. If not, rework of the device is undertaken.
From the above discussion it is evident that the Fail Safing and subsequent Plan, Do,
Check and Act cycle are the necessary conditions for successful implementation of a
Business reengineering Process but they do not guarantee success of the process. In
reality they are not the stand alone sufficient requirement of a successful BPR
implementation.
Teamwork

There are different roles played in a team:Coordinator

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This person will have a clear view of the team objectives and will be skilled at
inviting the contribution of team members in achieving these, rather than just
pushing his or her own view. The coordinator (or chairperson) is self disciplined
and applies this discipline to the team. They are confident and mature, and will
summarise the view of the group and will be prepared to take a decision on the
basis of this.
Shaper
The shaper is full of drive to make things happen and get things going. In doing
this they are quite happy to push their own views forward, do not mind being
challenged and are always ready to challenge others. The shaper looks for the
pattern in discussions and tries to pull things together into something feasible
which the team can then get to work on.
Plant
This member is the one who is most likely to come out with original ideas and
challenge the traditional way of thinking about things. Sometimes they become so
imaginative and creative that the team cannot see the relevance of what they are
saying. However, without the plant to scatter the seeds of new ideas the team will
often find it difficult to make any headway. The plants strength is in providing
major new insights and ideas for changes in direction and not in contributing to
the detail of what needs to be done.
Resource investigator
The resource investigator is the group member with the strongest contacts and
networks, and is excellent at bringing in information and support from the outside.
This member can be very enthusiastic in pursuit of the teams goals, but cannot
always sustain this enthusiasm.
Implementer
The individual who is a company worker is well organised and effective at turning
big ideas into manageable tasks and plans that can be achieved. Such individuals
are both logical and disciplined in their approach. They are hardworking and
methodical but may have some difficulty in being flexible.
Team worker
The team worker is the one who is most aware of the others in the team, their
needs and their concerns. They are sensitive and supportive of other peoples
efforts, and try to promote harmony and reduce conflict. Team workers are
particularly important when the team is experiencing a stressful or difficult
period.
Completer
As the title suggests, the completer is the one who drives the deadlines and makes
sure they are achieved. The completer usually communicates a sense of urgency
which galvanises other team members into action. They are conscientious and
effective at checking the details, which is a vital contribution, but sometimes get
bogged down in them.

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Monitor evaluator
The monitor evaluator is good at seeing all the options. They have a strategic
perspective and can judge situations accurately. The monitor evaluator can be
overcritical and is not usually good at inspiring and encouraging others.
Specialist
This person provides specialist skills and knowledge and has a dedicated and
single-minded approach. They can adopt a very narrow perspective and
sometimes fail to see the whole picture.
Finisher
A person who sticks to deadline and likes to get on with things. Will probably be
irritated by the more relaxed member of the team.
Teamwork requires special effort, management support, training, and a nurturing
environment to make it work. Special training is needed to familiarize people (including
managers) with what teams are, how they work, and how they will help the company.
After training, workers need to ``feel'' that the work environment is conducive to teams.
The manufacturing vision creates the first step toward a new work environment that
fosters teamwork.
It proposes that the workforce take ownership for the success of the overall business.
Accordingly, all people need to understand their roles and team together to achieve
success. Creativity, risk taking, and innovation are encouraged and viewed as learning
experiences. People are trusted, respected and empowered to execute their duties. Cross
training is endorsed, work is challenging and enjoyable, and everyone is involved in
leadership and doing the ``right things''.
Process mapping and fail-safing are laid out very specifically because their very nature is
systematic and controllable. However, training is ``softer'' because people are at its center.
People are the biggest challenge in dealing with change because they are not predictable,
naturally resist change, and are diverse. Process mapping and fail-safing are proven
techniques that can help people solve problems. They are also set up to be very conducive
to teaming.
Therefore, Honeywell focuses on these techniques to help people focus on real problems
and become familiar with teamwork gradually. People can be trained to effectively map
processes and fail-safe defects in a short time. However, getting a diverse workforce to
work as a team takes time. The key is the environment. Hence, Honeywell rewards
teamwork, expects team ownership and responsibility, empowers teams to solve
problems, and provides training dollars to make teaming a natural part of the work life.

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Effective communication skills

Communication of the TotalPlantTM 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'' (G.J.
Kristof, Manager Worldwide Manufacturing Programs, personal communication, August
16, 1997). Communication of a vision is especially susceptible to conflict because its
message is broad and its audience is the enterprise.
Honeywell provides conflict resolution training to teams to help them deal with conflict
in a positive way. Basic interpersonal communication skills for enriching relationships
with people and effective means for solving problems are also part of the training. One
training module concentrates on listening skills. If people are not willing or able to listen
to other people around them, conflict and misunderstanding is very likely to arise. The
module offers team-based exercises to ``role-play'' conflict and resolution. Another
module focuses on confronting skills. Many times it is difficult (but necessary) to
confront people in a positive way about unacceptable behavior. The goal is to be able to
offer an objective, non-blameful description of the problem.
One of the major difficulties of dealing with conflict and unacceptable behavior is to keep
it from becoming a personal attack on a person's character. The conflict and/or the
behavior are the problem, not the person! People tend to become defensive when their
behavior is questioned. This is a natural reaction. The key is to develop conflict
resolution skills that recognize this tendency and practice these skills in a non-threatening
environment until a certain level of mastery is reached. Just like teaming, effective
communication depends heavily on the work environment. An unlimited training budget
would still be wasted if trainees return to a work environment of ``command and control''.

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Therefore, Honeywell communicates the TotalPlantTM paradigm needs to everyone and

fosters an environment that rewards teamwork, creativity, and value-added thinking.
Management is responsible for team facilitation. Management's job is to nurture and
coach the team. Another important role is to help the team set ``stretch'' goals. Stretch
goals are lofty objectives that are beyond what people are normally expected to reach.
``Pushing people to achieve beyond their normal expectations causes them to realize that
they must change the way they do things. It also creates a healthy level of dissatisfaction.
If people are satisfied, they will never try to get better''.
Information Technology
Organization development refers to incremental improvements of business processes,
whereby the improved processes have to be supported with modern IT. Prior to the
approach comes the basic question: what can be improved? The available business
processes are principally accepted. The search is only directed towards the ways of how
to improve the available processes. Though individual system components are modified,
radical changes and discontinuity are avoided.
The BPR, however, aims to change radically the existing processes. The initial question
is: what can be changed? Available processes are basically doubted, and new approaches
for business processes are looked for. The system as a whole is dramatically altered in
order to achieve improvements of significant dimensions. With regard to IT this means
that completely different processes have to be supported that was the case in the past.

Between the two extreme points there is an area where-according to traditional

approaches-the attempt is made to improve existing processes with modern IT. This area
is dangerous, however, since existing, but inefficiently organized business processes will
be automated at great cost and effort. Therefore, when developing and procuring (also
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when changing, though) information systems, management should always take into
consideration the factor that organization of the business processes to be supported must
still meet present day requirements. According to which approach-"incremental
improvements" or "radical changes"- a decision is made depending on the opportunities,
and must in each case be decided by management. Within the scope of a far-reaching,
continuous improvement program it will not be difficult to imagine that both procedures
can be combined. To do so the existing business processes will be looked into and called
in question after some prolonged periods. During these intervals the attempt is made,
however, to continually optimize the processes by means of an incremental process
handling.
Information technology (IT) has historically played an important role in the reengineering
concept. It is considered by some as a major enabler for new forms of working and
collaborating within an organization and across organizational borders. Therefore,
efficiency and effectiveness of corporations and authorities are influenced by the pointed
utilization of IT, in particular since requirements of supporting IT systems can be
deviated from the business processes.

The generation and procurement of IT systems used for the support of business processes
is, therefore, an important and critical factor. Information management of corporations
and public authorities ought to give it their special attention in connection with strategies.
Honeywell depends on information technology (IT) automation to keep its plant in
operation. It produces automation and control devices that must meet stringent levels of
quality because its customers will accept nothing less. Its devices are very sophisticated
and require complicated processes to manufacture properly. The role of the worker is that
of monitoring the devices to make sure they are performing within strict tolerances.

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Therefore, information is ``built into'' the systems that build other systems. Information
that supports manufacturing is viewable at each production cell through color monitors
and other visual devices. Information technology supports office processes that are
integrated into the total system. Computer technologists, engineers, and systems analysts
keep systems running properly. Every IT system is aligned with manufacturing process.

Managers tap into the system to obtain information about productivity, cycle time, and
performance. Many of the business managers have an engineering background that helps
them link the business systems with manufacturing.
Prior to 1989, the IS department was centralized and ``separate'' from manufacturing. The
systems were technically elegant and centralized, but they didn't meet the needs of the
business. The IS department was transformed into the IT department to better align with
the business of making controls. IT was charged with mapping business processes that
supported the products and then transforming systems to match the maps. The IT
department has made great strides to align its services with the needs of the business.

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Role of IT in BPR
IT has a major enabling role in BPR, and many BPR projects contain IT as one of its
major components. Use of IT in redesigning the business process involves new structures,
which inhibits changes in the future. At Honeywell, IT department was aligned to the
business processes.
The benefits accrued due to usage of IT department, at Honeywell, as an enabler in the
reengineering process were:

Processes
IT can be utilized in the process of planning the reengineering of various business
processes such as process mapping and identifying value-added and non
value-added activities using the simulation, modeling and analysis.
Data exchanging through relevant business
IT can facilitate data exchanging through businesses. The required information
was available with Computer technologists, engineers, and systems analysts.
Internal communication
In companies, internal communication is as important as outside communication.
For example, networking the computers in a company enables the communication
within the employees and various teams.
Information flow
Effective integration of various functional areas requires speeding up information
flow in a business environment. The lead time for information flow comes
down drastically through the use of advanced IT applications.

Some of the other benefits accrued due to IT based BPR are:

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Execution
Honeywell used four mechanisms
Process mapping

Teamwork

Fail-safing

Communication

Process mapping is a systematic BPR methodology to guide team process improvement

efforts along process paths. Fail-safing 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. What separates success from
failure is execution.
Top management has to dedicate substantial training resources to educate the workforce
about the four mechanisms and how they work. Management behaviors have to change
from autocratic to facilitative. Teams have to be rewarded for enterprise value-added
activities. Finally, the organizational structure has to change to allow an environment
conducive to innovation. Execution flows from the corporate vision statement and
strategic plan down to management and workers. The vision statement has to reflect the
desired outcomes.
Moreover, the strategic plan has to incorporate specific steps, policies and standards that
will make real change happen. Top management has to live the new paradigm by being
active participants in the change process. Top management endorsement is not enough.
They have to interact with teams and management to let their people know that change is
a priority and that they understand what is being done at the process level to make change
happen. Top management therefore has to facilitate the paradigm through resources,
executive actions, rewards, and recognition.

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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.
Problems during execution
Bottleneck
The biggest obstacle to execution was within the middle management ranks. Members of
middle management were too used to being experts in a specific area. For instance, one
operations manager was the resident expert in materials flow, but he managed technology,
engineering, and manufacturing people. He would manage sub-optimally because every
problem was solved through materials flow. He could not see the cross-functional or
cross-specialization nature of the problem because of his narrow focus on materials flow.
He had to ``let go'' of his expertise and let his people solve the problem as a crossfunctional team. It may sound like a simple change for this manager, but it took years.
Dealing with Change
Behavioral change is the most difficult type of change. It takes time and patience.
Execution of a major change program therefore requires a lot of time to reap desired
benefits.
Cross-functional assignments
The employees have to work cross-functionally, rather than being construed to their usual
job tasks. These cross-functional assignments requires additional skill development and
hence, additional training and resources.
Hence for smooth execution the following four-pronged approach can be chosen:

Learnings
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The major learning from the Case is as follows:

1. People are the key enablers of change
Business processes are complex, but process mapping offers a comprehensive blueprint
of the existing state. The blueprint enables systematic identification of opportunities for
improvement. IT is complex, but vendors, consultants, and system designers can create
models of the system. In contrast, people are unpredictable. They cannot be modelled or
categorized universally. However, people do the work and therefore must be trained,
facilitated, and nurtured.
2. Question everything
Allowing people to question the way things are done is imperative to change. Fail-safing
provides a systematic approach to effectively question the status quo. People are
encouraged to question the existing state.
3. People need a systematic methodology to map processes
Process mapping is the mechanism used to map and understand complex business
processes. The systematic nature of the process mapping methodology keeps people
focused and acts as a rallying point. Moreover, process mapping provides a common
language for everyone involved in the project.

4. Create team ownership and a culture of dissatisfaction

Once a team perceives that they ``own'' a project, they tend to want to make it work. It
becomes ``their'' project. In addition, management should encourage people to be
dissatisfied with the way things are currently done. However, punishing people for
complaining about ineffective work processes is an effective way to promote the status
quo.
5. Management attitude and behaviour can squash projects
If the managerial attitude remains that of ``command and control'' and/or their behaviour
does not change, transformation will most likely fail. Success depends on facilitative
management and visible and continuous support from the top. When Honeywell got its
new president in 1996, the attitude toward criticism changed dramatically. The new
president was not as accepting of casual criticism. Criticism of the status quo had to be
based on well-thought-out ideas and presented with the logic behind their thinking. This
drastically reduced the complaints about existing processes without justification.
6. Bottom-up or empowered implementation

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While support from the top is critical, actual implementation should be carried out from
the bottom-up. The idea of empowerment is to push decisions down to where the work is
actually done. Process mapping and fail-safing are two systematic and proven
methodologies that help support empowered teams.
7. BPR must be business-driven and continuous
Process improvements should be aligned with business objectives. Process mapping, failsafing, and teaming should be based on what the business needs to change to become
more successful. In this case, effective communication of ideas from top management
throughout the enterprise is imperative. In addition, organizations should be wary of the
``I've arrived'' syndrome. Change is continuous and is never over.
8. IT is a necessary, but not a sufficient, enabler IT is not a panacea.
IT enables BPR by automating redesigned processes. However, information is for people.
People work with people to produce products for other people. In addition, people need
quick and easy access to quality information to help them make good decisions.
Therefore, IT needs to be designed to support the business and the production of products
to be effective.
9. Set stretch goals
Goals should be set a little higher than what the team believes they can accomplish. Since
teams have little experience with the new paradigm, goal setting will tend to be based on
the past. Project managers should work with the team to help them develop stretch goals.
10. Execution is the real difference between success and failure
The Honeywell case introduces four powerful mechanisms to facilitate enterprise change.
However, real change will not happen without a plan for change and aggressive execution
of that plan. We believe this is where most organizations fail. We believe that execution
fails in many cases because organizations are not willing to dedicate resources, time, and
energy to the effort.

21

LINKING THE CASE WITH THE VARIOUS

CONCEPTS STUDIED IN BUSINESS PROCESS
REENGINEERING

Introduction
22

Many early BPR initiatives failed to achieve predicted success (Davenport and Short,
1990; Hammer, 1990; Kotter, 1995). However, some organizations were able to achieve
dramatic results from BPR. For instance, Caterpillar, Inc. reported cost savings between
$10 and $20 million over a five-year period from BPR initiatives (Paper and Dickinson,
1997). Caterpillar tied much of its success to its BPR methodology. Its methodology was
systematic as it provided a disciplined problem-solving approach and acted as a rallying
point for everyone involved along the process path. It also had in place an organizational
structure conducive to cross-functional teamwork and a management structure designed
for facilitation of empowered workers.
There are few examples of in-depth studies of BPR in the literature (Fuglseth and
Gronhaug, 1997). Caron et al. (1994) examined BPR initiatives at CIGNA for over five
years. They offered a set of general guidelines, but failed to mention the importance of a
systematic BPR methodology. Davenport and Stoddard (1994) addressed various myths
associated with BPR based on detailed case study analysis of many companies. They
concluded that successful BPR is not an IT initiative, but a business initiative with the
goal of rethinking business practices to satisfy the needs of its customers and other
constituents. Kotter (1995) synthesized information and knowledge gained from
observations of more than 100 companies into a set of eight steps to facilitate
organizational transformation. Paper and Dickinson (1997) examined BPR initiatives at
Caterpillar. They found that BPR is driven by a business need and requires support from
top management, a systematic methodology, and an organizational structure that supports
and rewards process thinking.

Text Reading 1 Introduction to BPR

23

The ultimate objective of any company or organization is achieving radical improvement

in business performance that would otherwise be unattainable. Reengineering, rebuilding,
remaking and redesigning are the words used to refer to this process all of which
represent a language of change and a desire of organizations to increase their productivity
and global competitiveness.
BPR is a redesign and reorganization of business activities that result form questioning
the status quo. It seeks to fulfill specific objectives and can lead to breakthrough
improvement. It is often associated with significant cultural and technological changes.
There are five elements of this working definition that need to be stressed :
1.
2.
3.
4.
5.

focus on business processes

questioning of status quo
specific objectives
breakthrough achievement
significant cultural change

A business process can be defined as a set of interrelated activities characterized by

specific inputs and value added tasks that produce specific customer focused outputs.
Value creation is then a function of how work is integrated across each core group.
BPR requires a questioning of the status quo
Todays practices automatically become tomorrows unquestioned truths and remain in
effect forever. That is how redundant work activities develop and add to a firms
overhead.
The Honeywell industrial automation and control (IAC) business unit designs,
manufactures, and configures the sophisticated TDC 3000X family of systems. These
systems enable its customers (refineries, chemical plants, and paper mills around the
world) to achieve world-class process-control capability. In late 1989, the management
team began a three-year world-class manufacturing (WCM) program to examine lagging
performance results. WCM established ambitious goals for defect reduction, short-cycle
production, and materials management. Specific goals included reducing defects by a
factor of ten (1,000 percent) and cycle time by a factor of five (500 percent).

A framework for Business Reengineering

24

Reengineering
Facilitators

Business Drivers

Business Reengineering Process

Competitive
Environment

Strategic Intent

Reengineering End
Product

Core Competencies
Recent Internal
Changes

Process Definition

IT Infrastructure

Activity Analysis
Root Cause Analysis
Process Refinement

BPR focuses on specific objectives

WCM was created to provide resources and take a system-wide view of the plant. WCM
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.
WCM provided resources to teams based on the process rather than piecemeal events or
tasks. Training took on a system-wide view. 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 would be and how the changes would impact the workers.
BPR focuses on significant cultural changes
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 a 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. Improvements did not come
without struggle. One problem was management of ``white spaces''. White spaces are
gaps between different links in the internal-supply chain. Management found out that

25

teams along the value chain for each product line had a tendency to sub-optimize the total
supply chain because they were primarily focused on their own areas. To get the teams to
think in unison, the Director of Strategic Planning and Organizational Development took
the three team managers aside and told them that they were responsible for the whole
product line. Performance evaluations would be based on how the entire product line
performed. Honeywell IAC observed through trial and error that teams needed to have
control over things that impact their performance. When teams failed, the cause could
almost always be attributed to 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. Besides 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.
Reengineering practice represents a move towards organizational simplicity. The
rationale for reengineering is that organizations can best be structured along service
delivery lines. This allows an organization to deliver a complete, well defined service to a
specific market a process which encourages common integrated systems and the more
efficient management of these systems.
Text Reading 3 Towards a definition of Corporate Transformation
A consensus on what transformation is will not emerge until it is better defined and given
a framework so that firms facing similar issues and circumstances can make meaningful
comparisons. Many efforts to improve performance are not transformational. To qualify
as a corporate transformation, a majority of individuals must change their behavior.
There are three types of transformations:
1. Improving operations
2. Strategic transformation
3. Corporate self renewal
Improving operations
The goal of the change process to improve operations is to achieve a quantum
improvement in the firms efficiency, often by reducing costs, improving quality and
service, and reducing development time.
Process mapping is a tool that allows one to model the flow of any business process in a
graphical form. The process map allows one to see how the process actually works across
functional boundaries. It thereby enables all employees to see how the business process
actually works and how it can be changed to be more effective. Process mapping also
creates a common language for dealing with changes to business processes. An
experienced facilitator conducts process mapping training. The role of the facilitator is to
encourage interaction and creative input from everyone by throwing questions back to the

26

group. The idea is to facilitate learning by discovery and inquiry, not by being told what
to do.
The training philosophy at Honeywell focuses on educating employees about the
importance of total customer satisfaction and world-class manufacturing. It is important
for employees to understand that optimization of the whole system is the goal, not
individual departments or subsystems. Three principles underlie the philosophy be nonblaming and nonjudgmental, focus on process and results, and consider the big picture.
Many times organizations focus on individual and/or subsystem results to the detriment
of the whole system. Results are important, but how they are achieved is equally
important. A focus on process helps to rationalize enterprise-wide results over functional
ones. If the process is not understood or is misunderstood, it is more difficult to justify
sub-optimal results in an individual area. The only important result is total customer
satisfaction.
Process thinking helps to justify overall results because the people involved understand
how and why it is successful. Functional thinking concentrates only on individual
performance, not enterprise performance. For process thinking to work, employees must
be empowered to do their jobs since they are the ones that actually do the work.
At Honeywell, process mapping consists of eight steps select process, identify
boundaries, form teams, develop ``as is'' map, identify cycle times, identify opportunities
for improvement, develop ``should be'' map, and develop the implementation plan
Fail-safing is a method to identify a defect, analyze it to understand its root cause, and
then develop a solution that will prevent that defect from occurring again. Fail-safing
guarantees that a process will be defect-free. While process mapping diagrams the entire
flow of a business process, fail-safing is done to diagnose a defect within the process. The
PDCA (plan, do, check, act) cycle offers a road map to help teams work together to
prevent errors from occurring 100 percent of the time. PDCA offers a sound method for
collecting ``good'' data, but technology is needed for proper delivery. Honeywell invests
heavily in state-of-the-art technology to help guarantee data delivery.
Strategic transformation
The process of changing strategy seeks to regain a sustainable competitive advantage by
redefining business objectives, creating new competencies, and harnessing these
capabilities to meet market opportunities.
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. Special
training is needed to familiarize people (including managers) with what teams are, how
they work, and how they will help the company. After training, workers need to ``feel''
that the work environment is conducive to teams.

27

The manufacturing vision creates the first step toward a new work environment that
fosters teamwork. It proposes that the workforce take ownership for the success of the
overall business. Accordingly, all people need to understand their roles and team together
to achieve success. Creativity, risktaking, and innovation are encouraged and viewed as
learning experiences. People are trusted, respected and empowered to execute their
duties. Crosstraining is endorsed, work is challenging and enjoyable, and everyone is
involved in leadership and doing the ``right things''.
Therefore, Honeywell focuses on these techniques to help people focus on real problems
and become familiar with teamwork gradually. People can be trained to effectively map
processes and fail-safe defects in a short time. However, getting a diverse workforce to
work as a team takes time. The key is the environment. Hence, Honeywell rewards
teamwork, expects team ownership and responsibility, empowers teams to solve
problems, and provides training dollars to make teaming a natural part of the work life.
Text Reading 5 Reengineering work : Dont automate, obliterate
Speeding up of any process cannot address its fundamental deficiency. The watchword of
the new decade are innovation and speed, service and quality. We should reengineer our
businesses: use the power of modern information technology to radically redesign our
business processes in order to achieve dramatic improvement in their performance.
Reengineering strives to break away from the old rules about how the work is organized
and business is conducted. It involves recognizing and rejecting some of them and then
finding imaginative new ways to accomplish work.
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 a 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 have control over
things that impact their performance. When teams failed, the cause could almost always
be attributed to 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.
Besides 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.
Conversion to an all-salaried workforce, worker empowerment, compensation for
creativity, and a system-view helped IAC vastly improve its quality and performance for
its customers. However, IAC management was not satisfied. To complement the WCM
program and facilitate a culture of continuous improvement, IAC embraced a solid ISO
9000-certified quality program, a strong supplier alliance program, a globally oriented
customer satisfaction organization, and a reconstituted WCM program office.

28

At the heart of reengineering is the notion of discontinuous thinking of recognizing and

breaking away from the outdated rules and fundamental assumptions that underlie
operations. We can not achieve breakthroughs in performance by cutting fat or
automating existing processes. Rather, we must challenge old assumptions and shed the
old rules that made the business under perform.
Text Reading 6 A Methodology for Reengineering Business

Set
Direct
ion

Baseli
ne

Earl
y
Wins

Create
the
vision

Design
Improv
ements

Embed
Continuo
us
Improve
ment

Proble
m
Solvin
g
Implement Change

Set direction and create vision - The Honeywell industrial automation and control
(IAC) business unit designs, manufactures, and configures the sophisticated TDC 3000X
family of systems. These systems enable its customers (refineries, chemical plants, and
paper mills around the world) to achieve world-class process-control capability.
In late 1989, the management team began a three-year world-class manufacturing
(WCM) program to examine lagging performance results. WCM established ambitious
goals for defect reduction, short-cycle production, and materials management. Specific
goals included reducing defects by a factor of ten (1,000 percent) and cycle time by a
factor of five (500 percent).
Design improvements - WCM was created to provide resources and take a system-wide
view of the plant. WCM supported a focused-factory environment that harnesses the

29

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. WCM provided resources to teams based on the process
rather than piecemeal events or tasks. Training took on a system-wide view. 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 would 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 a 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.
Text Reading 9 Business Reengineering-A Strategy- Driven Approach
Business reengineering is an approach to achieving radical improvements in customer
service and business efficiency. The central is to rethink and streamline the business
processes and supporting architecture through which the organisation creates and delivers
value.
The key internal benefits of BPR includes

Stronger alignment of core processes to business strategy

The creation of customer value becomes a driver for all business activity
The business architecture is optimized to efficient cross functional performance
Benchmarking is used to efficient cross-functional performance
Enhanced capability and performance lead to increased ambition and conviction

30

Shareholder value

Customer Service and

Retention
Efficient operations
Cross-Functional Processes
and Cross-Organizational
Activities
First Principles Review and redesign
of Business/Key Processes

Strategic
Alignment

Value
Creation

Optimized
Architecture

External
Benchmarks

Capability,
Performance,
Ambition

As seen from above the Business Process Reengineering Approach involves a strategy
driven, top down reappraisal and redesign of total business. Such initiative needs to be
driven by the active participation and support of the top management. The more wide
ranging and fundamental the rethink, the greater the impact on cross-functional activities,
working practices, management systems, organisation structures, motivation and reward
systems and staff training and development.
Hammers principles common to most initiatives of BPR are

Organize around outcomes not tastes

Have those who use the outcome of the process perform the process
Subsume information processing work in to the real work that produces the
information
Treat geographically dispersed resources as though they were centralized
Link parallel activities instead of integrating their tasks
Put the decision point where the work is performed and build control of the
process

31

The Six steps for Business Reengineering at Honeywell will include

Vision definition: The BPR exercise was adopted keeping in mind the vision of
the organisation. Honeywell believed in optimization of whole system and not
function in silos

Plan development: The quality of plan development is ensured by the detailed

principles of process mapping, fail safing, teamwork and communication.

Business Analysis: It involved analyzing customer requirements, organizational

issues, modeling target processes etc.

Business Redesign: This is the most difficult part of the entire project as the
objective is to create and cost the design of the reengineered business

Implementation: Here the organization addressed the the three key issues of1. Changes affecting the current part of the structure that will remain largely
unchanged
2. Putting in place those elements of the structure that have undergone
substantial changes
3. Identifying the changes to be made in the future rounds of reengineering

Measurement: Performance gains through an BPR exercise can be found out

through proper identification and sharing of learning on what worked and what
could have been improved

Text Reading 10 The Matrix of Change

The matrix of change system consists of three matrices and a set of stakeholder
evaluations. The matrices represent the following The current organizational practices
The target practices
A transitional change that bridges these two practices
The entire matrix construction proceeds in four steps. These are enumerated below1. Identify Critical Processes: It is necessary for Honeywell to to first list their their
existing goals, business practices and ways of creating value for consumers and
then break current practices in to constituent processes. This is something done in
the Process Mapping activity.
2. Identify System Integrations: After describing the current practices a horizontal
triangular matrix is created to identify the complementary and competing
practices. The complementary practices reinforce each other where as the

32

competing practices work at cross purposes. The higher the number of

complementary practices the better it is for the organisation where as higher
number competing practices indicate that a smooth transition will be difficult to
achieve.
3. Identify transition Interactions: The transition Matrix is a square matrix
combining the horizontal and vertical matrices that helps determine the degree of
difficulty in shifting from existing to target practices. It shows the interactions
involved in moving from existing to target practices.
4. Survey Stakeholders: It will be necessary for Honeywell to determine how the
various stakeholders felt about retaining the existing practices and implementing
the target practices. It essential to listen to the views of the stakeholder to build a
better process. The communication mechanism that exists in Honeywell would
help to determine the various stakeholder responses.
Interpretation and using the matrix: The matrix is useful for answering the following type
questions:
Feasibility: Does the target set of practices constitute a coherent, stable
system? Are the current practices coherent and stable? Is the transition
likely to be a smooth one?
Sequence of execution: Where should the change begin? How does the
sequence of change affect success? Are there reasonable stopping points?
Location: Are we better off instituting the system in a new site or can we
reorganize the existing location at a reasonable cost.
Pace and Nature of changes: Should the changes be slow or fast,
incremental or radical? Which blocks of practice, if any, must be changed
at the same time?
Stakeholder Evaluations: Honeywell needs to see whether to consider the
insights from all stakeholders or not? Have they overlooked any important
practice or interactions? What are the greatest sources of value?
Text Reading 11- Process Reengineering: The strategic dimensions
There are important strategic dimensions to process reengineering that address doing the
right things as well as doing them right. These strategic aspects are discussed in detail
below

Developing and prioritizing objectives: Process reengineering may be guided by a

series of business objectives such as market share enhancement, cost reduction ,
decreased cycle time, decreased inventory holding period, which, if prioritized,
can provide valuable guidance to the reengineering team as in the case of
Honeywell .
Defining the Process Structure and the Assumptions: The manner in which the
enterprises process structure is defined is of strategic importance to how effective
reengineering can be. Even if a model of business processes exists, it is built on
certain assumptions which need to be questioned. Other assumptions as basic as
those related to physical facilities can limit the reengineering process.
33

Assumptions based on what once were thought to be eternal truths must be

demonstrated to be potentially invalid if truly creative ways of doing business are
to be created.
Identifying Trade-Offs Between Processes: Just as there are tradeoffs between
objectives, there may be trade-offs between processes to consider. The over all
reengineering effort should be organized and operated so that people are willing
to suggest such trade-offs. In the process mapping stage at Honeywell it will be
necessary to identify such trade offs.
Identifying New Product and Market Opportunities: Identification new business
opportunity has not been a major goal of Business Process Reengineering yet it
should be kept in mind and considered as a potential byproduct of the
Reengineering exercise. A BPR is such a detailed exercise and involves so many
alternatives that there cannot be a more intense analysis of a business
Coordinating the Reengineering Effort: The reengineering process involves
mechanisms like Reengineering executive committee which is useful for
recycling ideas and provides insight among reengineering teams that are focusing
on individual processes.
Developing a Human resource Strategy: As apparent in the exercise at Honeywell,
the most important aspect of reengineering is to encourage people to be creative
for changing and improving their jobs. A full blown motivational program for
employee transition program is necessary to ensure that the employees are not
adverse to the reengineering effort for loosing their job.

Text Reading 16 Reengineering for Revenue

In late 1989, the management team at Honeywell began a three-year world-class
manufacturing (WCM) program to examine lagging performance results. WCM
established ambitious goals for defect reduction, short-cycle production, and materials
management. Specific goals included reducing defects by a factor of ten (1,000 percent)
and cycle time by a factor of five (500 percent). WCM was created to provide resources
and take a system-wide view of the plant.
This Reengineering for value differed from past reengineering efforts, which focused
primarily on paring bloated organizations and eliminating unnecessary costs. This may
often leave employees worrying about their jobs. Thus they will be less focused on
developing revenue streams.
By reengineering for revenue, Honeywell could not only provide better customer service
but re understood its customer profile. The three step strategy by which it achieved this
was,
1) making sure that the right products , customers, distributing system was in place
2) aiming for organizational effectiveness
3) it re looked at how the organization was using technologies

34

WCM 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 multiskilled workers were charged with building entire products or modules from start to
finish. WCM provided resources to teams based on the process rather than piecemeal
events or tasks. Training took on a system-wide view. 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 would 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 a 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. Improvements did not come without
struggle
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.
Conversion to an all-salaried workforce, worker empowerment, compensation for
creativity, and a system-view helped IAC vastly improve its quality and performance for
its customers.
However, IAC management was not satisfied. To complement the WCM program and
facilitate a culture of continuous improvement, IAC embraced a solid ISO 9000-certified
quality program, a strong supplier alliance program, a globally oriented customer
satisfaction organization, and a reconstituted WCM program office.
Text Reading 14 - Redesign Your Organization For Time Based Management
There are two kinds of organization, a Time based and a Traditional one. A Time based
one focuses what deliverables a customer wants and what organization and work
processes inside the firm can provide it with this. With this in hand, it shapes its
organization
The Honeywell industrial automation and control (IAC) business unit designed,
manufactured, and configured the sophisticated TDC 3000X family of systems. These
systems enable its customers (refineries, chemical plants, and paper mills around the
world) to achieve world-class process-control capability. The mission of TotalPlantTM
was to unify business and control information to enable global customer satisfaction. To
accomplish this mission, the plant migrated to fully integrated hardware, software, and
services that support plant management, process management, and field management.
Thus the Total Plant TM concept pushed Honeywell from being a traditional to a time
based organization. It sought to re examine itself under three heads. These are,

35

1) How work was structured

2) How information was created and shared
3) How performance was measured
The TotalPlantTM Paradigm
Based on these criteria Honeywell designed its TM policy. The paradigm was based on
four principles of success process mapping, failsafing, teamwork, and communication.
Each of these principles was critical to realizing the TotalPlantTM.
TotalPlantTM developed a need for people to change. It created a level of dissatisfaction.
Honeywell sent key people to benchmark HP (Hewlett-Packard) to see what was
happening. The paradigm gave them a foundation to work with
Structuring of Work
The two core concepts which Honeywell followed for this were, organizing work around
the main sequence and other a continuous work flow. Through benchmarking its work
with its closest and biggest competitor in the industry i.e HP, Honeywell came up with
the following facts
Traditional Honeywell
Improve function by function
Work in department batches
De- bottleneck to speed work
Invest to reduce cost

Time Based HP
Focus on the whole system and its main
sequence
Generate a continuous flow of work
Change upstream practice to relieve
downstream symptom
Invest to reduce time

The Main Sequence

Hence Honeywell decided to define the main sequence of its work. It comprised of those
activities that directly added value in real time. Everything else done was an offline
activity that could have been done any time. By achieving the main sequence Honeywell
could move preparation and offline work out of the way so that all essential direct work
in delivering a product or service to customer could be done without wasting any real
time. It also highlighted the critical connection between different parts of the company
that add direct value, making it possible to design policies and procedures that made the
work flow faster and better.
Continuous Flow
By smoothing the work flow in a continuous sequence Honeywell could decrease its
cycle time and increase its capacity thereby. The key to understanding the company
functions to work together more efficiently lies first in the overall system and

36

organization design. Time based companies focus on where to place the responsibility for
results and how to reposition people to close the distance that big companies could create.
Honeywell thought of balancing the work and its flow, both upstream and downstream,
making allowances for its employees.
Text Reading 17 Beyond Reengineering: The Three Phases of Business
Transformation
Business Process Reengineering efforts encompassing a wide scope of activities can drive
radical changes in business performance. When linked to integrated infrastructure
development and long term business vision, reengineering can trigger a three phase
process of business transformation reaching far beyond the immediate objectives of
operational excellence. The alignment of infrastructure development programs and long
term business planning is central to realization of the full potential of business
transformation

P
E
R
F
O
R
M
A
N
C
E
F
O
C
U
S

New Core
Competency
Value Added
Processes and
Services

Phase 3
Redifinition
Phase 2
Enhancement

Excellence
Efficiency

Phase 1
Automation
Internal Operations

Transition Barriers

Customer and
Supplier
Interface

New
Business
Units

ORGANIZATION FOCUS

The Three Phases of Business Transformation

Honeywell had four mechanisms in place process mapping, fail-safing, teamwork, and
communication for promotion of an enterprise-wide integrated plant. Process mapping
was a systematic BPR methodology used to guide team process improvement efforts
along process paths. Fail-safing was a vehicle to help process teams identify and correct

37

defects quickly and permanently. Teaming was encouraged through communication of the
vision and rewards based on value-added activities. These four mechanisms facilitate
successful change, but did nothing to guarantee it.
Finally, the organizational structure has to change to allow an environment conducive to
innovation. Execution flows from the corporate vision statement and strategic plan down
to management and workers. Top management therefore has to facilitate the paradigm
through resources, executive actions, rewards, and recognition.
Behavioral change is the most difficult type of change. It takes time and patience.
Execution of 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
would be the biggest hurdle to success. Adoption of mechanisms, like those used at
Honeywell, are therefore worthless without a plan for change and proper execution of
that plan.
1) Operating Excellence
The first phase of the transformation cycle at Honeywell focused on achieving operating
excellence by using five dimensions
Operating Performance Parameter
Productivity
Velocity
Quality
Business Precision
Customer Service

Selected Metrics
Output per unit of labour and capital
Cycle time
Defect rate
Yield
Life cycle cost
Articulated costing and pricing activity
Customer satisfaction

2) Enhancement
The focus shifted explicitly on enhancing transactions and relations with customers. this
typically appeared in the value added activities in order entry, tracking, delivery and
customer service function.
3) Redefinition
A change agenda was set in place. However this part has not been detailed in the case
study
Honeywells Journey from Reengineering to Transformation
The manner in which Honeywell achieved this transformation has been discussed below

38

Parameter
Objective
Timeframe
Leadership
Infrastructure
Performance Focus
Focus
Scale
Projects
Scope

Micro
Optimization
Short
Local
Diverse
Financial
Single Process
Small
Multiple
Phase 1

Macro
Transformation
Long
Seniorship
Integrated
Multiple Benefit Plans
Enterprise
Massive
Single Focus
Phase 1,2,3

All this was achieved through Vision of the leadership and TM plans Strategic alignment
with the overall customer satisfaction
Transition Barriers and Tactics
Barriers
Conceptual
Financial Justifictaion
Functional Structures
Inertia
Critical Mass
Human Resources
Technical Feasibility
Customer Acceptance
Legal and Regulatory

Tactics
Comprehensive business case
Communication and challenge
Team building
Benchmarking
Alignment
Career paths and training
Phased platforms
Co developments
Proactive participation

Communication of the TotalPlantTM vision was paramount to success. Through tactics

given in the table Honeywell communicated the TotalPlantTM paradigm needs to
everyone and fostered an environment that rewarded teamwork, creativity, and valueadded thinking.
Thus efforts to improve operations through a series of discrete local initiatives, utilizing
independent technology infrastructures, may limit a companys ability to realize the full
potential of transformation. Aligning such discrete initiatives with broad programs of
large potential was an issue Honeywell could achieve completely
Text Reading 19 Reengineering Methodologies and Tools, A Prescription for
Enhancing Success
Companies can achieve BPR through two kinds of approaches, Method or Intuition. At
Honeywell they used the Method approach based on the following three criteria,

39

1) Learning
2) Integration
3) Cost
It ensure that people could learn the new rules, that work could be integrated at all levels
and the cost to achieve this could be justified trough beating competition
Tools used for BPR
1)
2)
3)
4)
5)

Coordination
Modeling
Business Process Analysis
Human Resource Analysis and Design
Systems Development

The training philosophy at Honeywell focuses on educating employees about the

importance of total customer satisfaction and world-class manufacturing. It is important
for employees to understand that optimization of the whole system is the goal, not
individual departments or subsystems.
Process thinking helped to justify overall results because the people involved understand
how and why it is successful. Honeywell, process mapping consists of eight steps select
process, identify boundaries, form teams, develop ``as is'' map, identify cycle times,
identify opportunities for improvement, develop ``should be'' map, and develop the
implementation plan (receive confirmation before implementation).
A symbolic representation of the same has been given on the next page.

40

BPR Methodology at Honeywell

1. Preparation
Recognizing
Need
Executive
Workshop
Train Team
Plan Change

2. Identification
Define and
Measure
Performance
Define Entities
Model Process
Extend Process
Model
Map
Organization
Map Resources
Prioritize
Processes

3. Vision
Understanding
Process
Structure
Understand
Process Flow
Identity
Identify Value
Adding
Activities
Benchmark
Performance
Determine
Performance
Drivers
Estimate
Opportunity
Envision the
Ideal External
Envision the
Ideal External
Integrate
Visions
Define
Subdivisions

4. Solution Technical Design

Model Entity
Relationships
Reexamine Process
Linkages
Instrument and Informate
Consolidate Interfaces and
Information
Redefine Alternatives
Relocate Controls
Modularize
Deployment
Apply Technology
Plan Implementation

4. Solution Social Design

Empower Personnel
Identify Job Characteristic
Clusters
Define Jobs
Define Teams
Provide Training
Specify Management
Structure
Redraw Organization
Boundaries
Define Transitional
Organization
Plan Implementation
Design Incentives

5. Transformation
Complete
Business
System
Design
Perform
Technical
Design
Develop Test
and Rollout
Plans
Evaluate
Personnel
Construct
System
Train Staff
Pilot New
Process
Refine the
Transition
Continuous
Improvement

Text Reading 20 Creating Robust Work Processes

A work process is a series of activities performed by people to transform materials and
information into an output to be used by an individual or a group. Work processes
typically involve people, equipment, procedures, and information. It is also influenced by
the work environment
Improvements did not come without struggle. One problem at Honeywell was
management of ``white spaces''. White spaces are gaps between different links in the
internal-supply chain. Management found out that teams along the value chain for each
product line had a tendency to sub-optimize the total supply chain because they were
primarily focused on their own areas. To get the teams to think in unison, the Director of
Strategic Planning and Organizational Development took the three team managers aside

41

and told them that they were responsible for the whole product line. Performance
evaluations would be based on how the entire product line performed.
Honeywell IAC observed through trial and error that teams needed to have control over
things that impact their performance. Another improvement that helped teams work well
together was a change of work environment. Recently, manufacturing was moved to a
handsomely landscaped site. Besides 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.
Characteristics of Work Processes at Honeywell
1)
2)
3)
4)
5)
6)
7)
8)

invisible and complex

intangible and unique
heavy paperwork generated
not well documented
similar activities are performed differently
work is viewed as an event , not process
no measurement
no ownership for process

Reducing Process Variation

Supplier

Input

Process

Output

User

External Forces
Ways to Reduce Variation at Honeywell
In order to achieve the BPR, the management at Honeywell,
1)
2)
3)
4)
5)
6)

simplified the work process

mistake proof the process to make eliminate human error
recognized the need of training employees
clearly communicated to employees
recognized new external forces
identified alternative uses of output

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7) used computers and automation

Control the Process
Eliminate SpecialCause Variation

Improve the System

Reduce the Common
Cause Variation

Quality
Improvement

Anticipate Variation
Create Robust Processes and
Products
Honeywell depended on information technology (IT) automation to keep its plant in
operation. It produces automation and control devices that met stringent levels of quality
because its customers would accept nothing less. Computer technologists, engineers, and
systems analysts keep systems running properly. Every IT system was aligned with
manufacturing. Managers tapped into the system to obtain information about
productivity, cycle time, and performance.
Understanding Robustness
Robustness is defined in terms of the performance of the process or product and how
uncontrollable factors affect that performance
1) a process is robust if performance is insensitive to uncontrollable variations in
process inputs, transformations and external factors
2) a process output or product is robust if its performance is insensitive to
uncontrollable variations in conditions of manufacture, distribution, use and
disposal
Fail-safing was used to identify a defect, analyze it to understand its root cause, and then
develop a solution that would prevent that defect from occurring again.

43

Product Robustness at Honeywell

PDCA offers a sound method for collecting ``good'' data, but technology was needed for
proper delivery. Honeywell invested heavily in state-of-the-art technology to help
guarantee data delivery.
Process Robustness at Honeywell

Management Process Robustness at Honeywell

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. However,
getting a diverse workforce to work as a team takes time. The key is the environment.
Hence, Honeywell rewarded teamwork, expected team ownership and responsibility,
empowered teams to solve problems, and provided training dollars to make teaming a
natural part of the work life.
Lack of Robustness at Honeywell
Had Honeywell not undertaken this exercise, it would have resulted in three potential
problems, when process mapping optimizing part of the process while sub-optimizing
the process as a whole, making the map so far removed (too broad) from the actual
process that it is not useful as a tool for change, and making the map too specific without
involving those who must live with the changes.

44

Analysis of Work Process Robustness

A robust work process looks like the one given below,

1. Flowchart Work Process

2. Identify Uncontrollable Factors
Robustness Planning
3. Prioritize Effect of Uncontrollable Factors
4. Identify Work Process Challeges
5. Select Best Alternatives
DO
CHECK
ACT

6. Implement Changes
7. Monitor New Work Processes
8. Standardize- hold the gains

Fail-safe planning involved 8 steps. The first step was to identify the problem (defect).
Defect detection involves analyzing data using a pareto chart. The pareto chart principle
proposes that 20 percent of causes create 80 percent of the problems we experience. Once
the data was analyzed, a defect description was logged that described the defect and its
impact on other processes. Finally, an implementation plan is created. Everyone affected
by the change is identified. The team considers customers, suppliers, and support people
on the team. The team then determines how the device will be measured and completes
an action register. The purpose of the register is to create a ``visible'' listing of all the
actions required to implement the device, the people involved, the completion dates, and
the status of each action.
Step six (Do) meant implementing the chosen solution.Step seven (Check) involved
checking results.Step eight (Act) was to determine the next steps for continuous
improvement. The team asks itself what can be improved and then begins the cycle again.
Fail-safing was a continuous process
Text Reading 31Whats was wrong in the pervious execution of the Work Processes

45

 Employees were more focussed on their individual area and related functions.
So the scope for the process improvement was narrow until or unless everybody is
involved and made known to cross functional work processes.
One problem was management of ``white spaces''. White spaces are gaps
between different links in the internal-supply chain. Management found out that
teams along the value chain for each product line had a tendency to sub-optimize
the total supply chain because they were primarily focused on their own areas.
Lack of training and empowerment was the key reason for underperformance.
Honeywell was lacking focus on educating employees about the importance of
total customer satisfaction and world-class manufacturing.
The middle management was resisting change and was unable to communicate
the lower manager and workers, what exactly is expected of them at the work.
Text Reading 33 - Need radical innovation and continuous improvement
Creating a Portfolio of Processes:
It is created by identifying those processes which immediately needs attention, mapped
and to be changed. This is done both at the narrow and broad level. In case of Honeywell,
following processes has been identified as can be seen from the diagram.
.

Defect
Reduction

Short - cycle
Production

Materials
Management

These are the processes which are identified to do process value analysis to do focussed
improvements.
An Approach for the Operational Change:
Process Value Analysis: It is the focussed improvement processes.
Tactical Move by
the Organization

Process Value Analysis

Focussed Process
Improvements
(Quality, Time, Cost)

46

Process value analysis is a qualitative analysis procedure that can quickly and
significantly improve your processes. It allows an improvement team to identify specific
process steps that may not be adding value, with the goal of saving time and resources. It
also involved weeding out the non value added activities. Its more of a tactical change.
After a process is documented using the S-I-P-O-C and process mapping tools,
Honeywell quickly analyzed the value of each step of the process from the perspective of
people who are served. Three categories are used to describe types of value that a process
step may have:
Value added to people served: steps that directly impact the satisfaction of the
people served i.e customer.
Value added to operations: steps that support the ability to deliver services to the
people served
Non-value-added steps that could be eliminated or changed without harming
service levels or the organization like Waiting, storage, non-value-added steps are
just waste.
1. In order to assess whether the steps in your process have value to the people that
company serve, following questions were asked:
Is this step required by the people served by the process?
Are those served willing to pay for this activity?
An activity can be described as adding value for the people served only if:
o the people served recognize the value
o the activity specifically impacts the service requirements of those served
o the step is necessary to meet the timelines and expectations of those served
2. In order to assess whether the steps in your process add operational value,
following questions were asked:
Could this activity be eliminated if some preceding activity were done differently?
Is there a risk if this activity is eliminated?
Could any existing technology eliminate this activity?
Could this activity be eliminated without impacting the quality of our product or
service?
Does this activity fulfill an external regulatory requirement?
Could this step be made more efficient? Is it done right the first time or does it
need to be repeated?
An activity adds operational value if it is not a customer value-added activity and is
required to:
o
o

sustain the ability to perform value-added activities for the people served
meet contractual, legal, or other regulatory criteria
47

meet health, safety, environmental, or personnel development criteria

3. In order to assess whether the steps in process are non-value-added, question

asked were:
Does this activity add value for the people served or operations?
An activity is non-value-add if it does NOT add value for either the people served or for
operations. Designating a step as non-value-added means that it warrants further
analysis to determine whether it should stay the same.
Result of the Process Value Analysis:
In a 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.
Role of IT in Reengineering at Honeywell:
Information technology has played a critical factor in the success of the process
reengineering. Its role can be broken in two phases where firstly IT contributed to
designing (before manufacturing) of automation and control devices that must meet
stringent levels of quality because its customers will accept nothing less. In second phase
it played an important role in implementation like Managers tap into the system to obtain
information about productivity, cycle time, and performance. Many of the business
managers have an engineering background that helps them link the business systems with
manufacturing. Workers monitors the devices to make sure they are performing within
strict tolerances. Therefore, information is ``built into'' the systems that build other
systems.
Text Reading 41 - Preconditions for BPR Success and how to Prevent Failures
Business reengineering has become senior managements choice for achieving strategic
goals. Some surveys show that as many as 88 percent of large corporations are involved
in business processes reengineering (BPR), and many others plan to begin projects soon.
But the excitement and the potential of reengineering obscure its darker side. Although
there have been no systematic studies on this point, but certain surveys indicate that as
many as 77 percent of BPR projects fail. The failure rate is high due to the various
obstacles that organizations face. The biggest obstacle that reengineering projects face
are:
Lack of sustained commitment and leadership
Unrealistic scope and expectations
Resistance to change.
Positive preconditions relating to BPR
48

In case of Honeywell, the positive preconditions related to the obstacles identified earlier
are:
Senior Management Commitment and Sponsorship
The senior management was very particular about the program. Management took a six
hour intensive session for the workers in which they explained the broad changes
essential for the program and how these changes would impact the workers.
Realistic Expectations
WCM (World Class Manufacturing) established ambitious goals for defect reduction,
short-cycle production, and materials management. Specific goals included reducing
defects by a factor of ten (1,000 percent) and cycle time by a factor of five (500 percent).
WCM supported a focused-factory environment that harnesses the products or modules
from start to finish.
Empowered and Collaborative Workers
WCM provided resources to teams based on the process rather than piecemeal events or
tasks. Training took on a system-wide view. To support the factory-focused paradigm, the
``all-salaried'' workforce was evaluated on a ``pay for performance'' basis. Factoryfocused teams were rewarded for their performance. Performance evaluations were based
on how the entire product line performed. The manufacturing facilities were designed to
better suit a flow scheme. Conversion to an all-salaried workforce, worker empowerment,
compensation for creativity, and a system-view helped IAC vastly improve its quality and
performance for its customers
Shared Vision
The shared vision creates the first step toward a new work environment that fosters
teamwork. It proposes that the workforce take ownership for the success of the overall
business. Accordingly, all people need to understand their roles and team together to
achieve success. Creativity, risk-taking, and innovation are encouraged and viewed as
learning experiences.
The Director of Strategic Planning and Organizational Development told managers that
they were responsible for the whole product line to get the teams think in unison.
Honeywell called their factory-focused program the TotalPlantTM. The mission of
TotalPlantTM was to unify business and control information to enable global customer
satisfaction.
Negative preconditions relating to BPR
Narrow Focus of teams

49

The teams along the value chain for each product line had the tendency to sub-optimize
the total supply chain because they were primarily focused on their own areas. White
spaces were these gaps between different links in the internal-supply chain. These white
gaps were cause of concern for the management.
Lack of authority
The teams performing actual work were not given full authority over the work. That
resulted in teams failure at the workplace. Another area of concern for management was
the work environment for various teams.
Steps to turn around the negative preconditions
Team building
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. Special
training is needed to familiarize people (including managers) with what teams are, how
they work, and how they will help the company.
To get the teams to think in unison, the Director of Strategic Planning and Organizational
Development took the three team managers aside and told them that they were
responsible for the whole product line. Performance evaluations would be based on how
the entire product line performed. In a 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.
Proper work environment
The teams were given new work environment. The manufacturing was moved to a
handsomely landscaped site. Besides giving a beautiful site, manufacturing facilities were
designed to better suit a flow scheme.
Text Reading 43 - Leveraging Management Improvement Techniques
Organizations face the challenge of choosing from a plethora of methods that claim to
effectively and efficiently reduce costs and improve service and value to customers. The
revolution can be brought in using reengineering, total quality management, activitybased costing, benchmarking, lean manufacturing, economic value analysis, or
broadbanding.
Any improvement method has four major components:
A particular perspective that define its approach and objective.
A special language or jargon.
Analytical tools and techniques.

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Change tools and techniques.

Perspective or Frame of reference

The perspective of improvement method can be thought of as an observation platform
that allows a manager to focus on the objective and see the rout for getting there.
For instance, to enrich customer satisfaction at Honeywell, the flow scheme was designed
to facilitate a ``pull'' system that is triggered by customer orders. IAC embraced a solid
ISO 9000-certified quality program, a strong supplier alliance program, a globally
oriented customer satisfaction organization, and a reconstituted WCM program office.
The mission of TotalPlantTM was to unify business and control information to enable
global customer satisfaction.
Language
Special language or jargons provide a mean to communicate and make other understand
the opportunity. At Honeywell, no specific language was designed, though the different
professional groups, like operational managers, accounting department, shop floor
workers, communicated in their language only.
Analytical Tools and Techniques
Each improvement method uses specific tools to make the existing environments
problems more visible and help managers decide on a specific action.

Some of the analytical tools and techniques used at Honeywell are:

Improvement Method

Analytical Tools and Techniques

Used

Benchmarking

Process Maps

Employee Empowerment

Team building
Group Performance Appraisals
Fail-safing
Training and Guidance

Concurrent Engineering

Cross-Functional Teams
Ownership of whole product line

Change Tools and Techniques

51

Many improvement methods fail because managers ignore change tools and techniques.
Although improvement methods give widely varying emphases to implementation, they
all employ the necessity of change.
The most basic tool for implementation is plan, which specifies what the issue is, what
actions to take, expected costs and benefits of those actions, who is responsible for
specific actions, and expected completion dates. The plan can be used as both a guide and
a score-card to take progress.

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