Mark III is the world’s largest van conversion company (Ocala, FL). The company converts old vans and pickup trucks by stripping them of everything except the engine, body chassis, seats, and air conditioning. Then, a conversion is made into luxury vehicles with plush interiors and high-tech sound systems. The conversion is usually made to a customer’s order. Luxuries may include Playstation games, cocktail bars, vacuum cleaners, and fancy computers. Every day more than 300 vehicles enter the plant. For many years, the data on each arriving car were entered by hand, creating a two-to-three-day paperwork lag before the company even knew a vehicle had entered the conversion parking lot. But today, IT helps change the manner in which business is done.
Using hand-held bar code data-collection equipment, the vehicle identification number, location, date, and time received for each vehicle is inputted. This information is then downloaded into a computer system, which integrates engineering, manufacturing, financial management, and management reporting. This system was designed to support business process reengineering.
Using an expert system, the company quickly produces a customized manufacturing order for each entering van. This allows the company to offer a large number of configurations to its dealers as well as to quickly produce special orders. For example, a German customer gave Mark III seven days to build a special van and put it on a boat bound for Germany. Not only was the company able to fulfill the order because the work started immediately, but also, because it used an integrated client/server architecture with object-oriented programming and graphical user interface, the company was able to design and follow the order on a moment-by-moment basis. Using the bar codes on each van, the company tracks what is going on in each workstation automatically using a wireless radio frequency bar code. These data are entered into a database allowing salespeople instant access to the status of each order. Since most of the components are manufactured in-house, it is critical for Mark III to have complete control of its processes. Using its information systems, the company can solve any logistic, accounting, or technical problem immediately. Using a just-in-time approach, the company assures that all parts, materials, and tools are in place when the vehicle arrives. There are no inventories since there is no need for buffer stocks. The IS integration allows quick and accurate payroll, which includes a productivity incentive pay. It also integrates the production and inventory MRP* systems with a quality-control system.
Finally, the system is used to enhance customers’ service after the vehicles are sold. Using the system, customer service operators can answer the more than 10,000 weekly calls from customers quickly and accurately. Having a file on each vehicle helps in identifying the replacement parts. If a customer needs a replacement part, the service center finds the correct part in seconds and prepares an order to the warehouse, right from the screen. Shipment is made in less than 24 hours compared with three days using the old process.
Dealers are also served better with the new systems. For example, dealers are now reimbursed for parts and labor made under warranties in less than 10 days (it used to take 20-30 days). The result, the company is able to maintain its top-ranked position in the industry, keep profitability at a high level, and increase its production from 70,000 vehicles in 2013 (prior to the reengineering) to over 100,000 vehicles in 2014 (after reengineering).
Questions for Minicase
1- Why are the activities described in this case considered reengineering and not incremental improvements?
2- Identify the various reengineering activities described in this case.
3- Identify the various information technologies used to support the reengineering efforts.
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First of all, the minicase is about the redesign of the whole way how the business flow is modeled by the organization. By comparison, incremental improvement would not assume this, but mainly would be focused on enhancing parts of a system or process. More than this, the two main steps of reengineering can be identified in the minicase: a) application of reverse engineering on the target system and b) forward engineering. The first step was done to understand the needs of the new system (e.g. integration of IS) because a new form of flow representation was necessary. The second step was applied to actually implement and integrate the new requirements introduced by IS. This way the described system from the minicase was born....