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Case Study:  Process Re-engineering, Catalogue Marketing

This Case Study illustrates how Gagnon Associates used process-re-engineering to help a client optimize its new-product development and sourcing functions:

The Company

America’s oldest direct-mail catalogue marketing company.

The Problem

Using outside experts, the company conducts an extensive analysis of the way it develops products and manages inventory.  The study concludes that significant reductions in cost of goods sold (COGS) can be realized by revamping the new-product development process while integrating, for the first time, a formal sourcing function.

Impact will be significant.  A population of over sixty people – product development specialists, buyers, inventory control specialists, etc. – will be directly affected.   Job duties and, in some case, even functional roles will change.  Anxiety among affected individuals is high, and effective execution is critical to achieving anticipated results.

The Approach

To ensure that the new process is informed with the expertise of those closest to the work and has their buy-in, management engages Gagnon Associates to facilitate this process re-engineering/change-management effort.  Interviews are conducted among key members of the affected employee population.  Gagnon Associates then designs and facilitates a multiple-day off site conference at which fifteen key employee stakeholders, including a newly-hired sourcing director, define a re-engineered new product development/inventory management process that integrates a formal sourcing function for the first time in the company’s history.   Midway through this session, via a “walkaround,” another fifteen members of the affected population review the new process in draft form and provide comments and input.  They endorse the new draft concept while surfacing a few key issues still to be addressed. These are subsequently incorporated via revisions to the draft.

The Results

By session close, anxiety reduction is obvious to all now that ambiguity about future job duties and roles has been eliminated.   Moreover, the fact that the re-engineered process eliminates some long-standing process “glitches” generates palpable enthusiasm for the new approach.

Since at least half the affected population of sixty has by now “touched” the new process, they quickly serve as “ambassadors” to their remaining colleagues.  Within days, a technical design specialist informs Gagnon Associates “we’ve already begun to change things,” illustrating that immediate buy-in of those closest to the work had already begun to accelerate real, desired change.  In just four months of the current year, the initiative achieves 70% of its cost-reduction target for the next fiscal year.