Sunday, July 24, 2011

Business Process Reengineering


What is reengineering? 

“Reengineering is the  fundamental  rethinking and  radical redesign of business  processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed[4].” The key words in the preceding definition are the italicized ones.  
BPR advocates that enterprises go back to the basics and reexamine their very roots. It doesn’t believe in small improvements. Rather it aims at total reinvention. As for results: BPR is clearly not for companies who want a 10% improvement. It is for the ones that need a ten-fold increase. According to Hammer and Champy [4], the last but the most important of the four key words is the word-‘process.’ BPR focuses on processes and not on tasks, jobs or people. It endeavors to redesign the strategic and value added processes that transcend organizational boundaries. 

Business process reengineering (often referred to by the acronym BPR) is the main way in which organizations become more efficient and modernize. Business process reengineering transforms an organization in ways that directly affect performance.

The Impact Of BPR On Organizational Performance

The two cornerstones of any organization are the people and the processes. If individuals are motivated and working hard, yet the business processes are cumbersome and non-essential activities remain, organizational performance will be poor. Business Process Reengineering is the key to transforming how people work. What appear to be minor changes in processes can have dramatic effects on cash flow, service delivery and customer satisfaction. Even the act of documenting business processes alone will typically improve organizational efficiency by 10%.

How To Implement A BPR Project

The best way to map and improve the organization's procedures is to take a top down approach, and not undertake a project in isolation. That means:

    • Starting with mission statements that define the purpose of the organization and describe what sets it apart from others in its sector or industry.
    •     Producing vision statements which define where the organization is going, to provide a clear picture of the desired future position.
    •     Build these into a clear business strategy thereby deriving the project objectives.
    •     Defining behaviours that will enable the organization to achieve its' aims.
    •     Producing key performance measures to track progress.
    •     Relating efficiency improvements to the culture of the organization
    •     Identifying initiatives that will improve performance.
     
    Consolidated Methodology: 
       A consolidated methodology has been developed from the five methodologies previously presented and an 
    IDEF0 model was developed to provide a structured approach and to facilitate understanding. But for the sake of 
    brevity, we have shown only the major activities in the IDEF0 model in Figure 1. In the ensuing section, we deal 
    with the details of our methodology.



     Activity #1: Prepare for Reengineering: 
    “If you fail to plan, you plan to fail”. Planning and Preparation are vital factors for any activity or event to 
    be successful, and reengineering is no exception. Before attempting reengineering, the question ‘Is BPR necessary?’ 
    should be asked? There should be a significant need for the process to be reengineered. The justification of this need 
    marks the beginning of the Preparation activity[9]. 

    This activity begins with the development of executive consensus on the importance of reengineering and 
    the link between breakthrough business goals and reengineering projects. A mandate for change is produced and a 
    cross-functional team is established with a game plan for the process of reengineering. While forming the crossfunctional team, steps should be taken to ensure that the organization continues to function in the absence of several 
    key players[5]. As typical BPR projects involve cross-functional cooperation and significant changes to the status 
    quo, the planning for organizational changes is difficult to conduct without strategic direction from the top. The 
    impact of the environmental changes that serve as the impetus for the reengineering effort must also be considered 
    in establishing guidelines for the reengineering project. Another important factor to be considered while establishing 
    the strategic goals for the reengineering effort, is to make it your first priority to understand the expectations of your 
    customers and where your existing process falls short of meeting those requirements. Having identified the customer 
    driven objectives, the mission or vision statement is formulated. The vision is what a company believes it wants to 
    achieve when it is done, and a well-defined vision will sustain a company’s resolve through the stress of the 
    reengineering process. It can act as the flag around which to rally the troops when the morale begins to sag and it 
    provides the yard stick for measuring the company’s progress[4, 9]. 

    Activity #2: Map and Analyze As-Is Process: 
    Before the reengineering team can proceed to redesign the process, they should understand  the existing 
    process. Although some BPR proponents (in particular Hammer and Champy) argue against analyzing the current 
    enterprise, saying that it inhibits the creative process, that might not always hold true[1]. It varies from case to case. 
    While some organizations which are in dire straits might go the Hammer and Champy way (attempt a new process 
    design while totally ignoring the existing processes) most organizations need to map the existing processes first, 
    analyze and improve on it to design new processes. The important aspect of BPR (what makes BPR, BPR) is that the 
    improvement should provide dramatic results. Many people do not understand the value of an As-Is analysis and 
    rather prefer to spend a larger chunk of their valuable time on designing the To-Be model directly. What follows is 
    an illustration that illustrates this fallacy. 
     A large manufacturer spent six million dollars over a period of one year in a bid to develop a parts-tracking 
    system and was all set to go online. Only then did he realize that he had totally overlooked a small piece of 
    a phone call.’ But just because this small yet vital information had not been documented all his efforts added up to 
    information – ‘the mode of transmission of information between the scheduling staff and the shop floor was through 
    naught and the whole system that he had so painstakingly developed had to be scrapped. Alas! He had recognized 
    the need for an As-Is analysis, way too late[1]. 
     The main objective of this phase is to identify disconnects (anything that prevents the process from 
    achieving desired results and in particular information transfer between organizations or people) and value adding 
    processes[9]. This is initiated by first creation and documentation of Activity and Process models making use of the 
    various modeling methods available. Then, the amount of time that each activity takes and the cost that each activity 
    requires in terms of resources is calculated through simulation and activity based costing(ABC). All the groundwork 
    required having been completed, the processes that need to be reengineered are identified. 

    Activity #3: Design To-Be process:
    The objective of this phase is to produce one or more alternatives to the current situation, which satisfy the 
    strategic goals of the enterprise. The first step in this phase is benchmarking. “Benchmarking is the comparing of 
    both the performance of the organization’s processes and the way those processes are conducted with those relevant 
    peer organizations to obtain ideas for improvement[7].” The peer organizations need not be competitors or even 
    from the same industry. Innovative practices can be adopted from anywhere, no matter what their source. 
    Having identified the potential improvements to the existing processes, the development of the To-Be 
    models is done using the various modeling methods available, bearing in mind the principles of process design. 
    Then, similar to the As-Is model, we perform simulation and ABC to analyze factors like the time and cost involved. 
    It should be noted that this activity is an iterative process and cannot be done overnight. The several To-Be models 
    that are finally arrived at are validated. By performing Trade off Analysis the best possible To-Be scenarios are 
    selected for implementation. 

    Activity #4:Implement Reengineered Process: 
    The implementation stage is where reengineering efforts meet the most resistance and hence it is by far the most difficult one[2]. If we expect that the environment would be conducive to the reengineering effort we are sadly mistaken. The question that confronts us would be,’ If BPR promises such breath taking results then why wasn’t it adopted much earlier?’ We could expect to face all kinds of opposition - from blatantly hostile antagonists to passive adversaries: all of them determined to kill the effort. When so much time and effort is spent on analyzing the current processes, redesigning them and planning the migration, it would indeed be prudent to run a culture change program simultaneously with all the planning and preparation. This would enable the organization to undergo a much more facile transition. But whatever may be the juncture in time that the culture change program may be initiated, it 
    should be rooted in our minds that ‘winning the hearts and minds of everyone involved in the BPR effort is most vital for the success of the effort[10]. Once this has been done, the next step is to develop a transition plan from the As-Is to the redesigned process. This plan must align the organizational structure, information systems, and the business policies and procedures with the redesigned processes. “Rapid implementation of the information system that is required to support a reengineered business process is critical to the success of the BPR project. The IDEF models that were created in the As-Is can be mapped to those created during the To-Be and an initial list of change requirements generated. Additional requirements for the construction of the To-Be components can be added and the 
    result organized into a Work Breakdown Structure (WBS). Recent developments in BPR software technologies enable automatic migration of these WBS activity/relationships into a process modeling environment. The benefit here is that we can now define the causal and time sequential relationships between the activities planned[9].” Using prototyping and simulation techniques, the transition plan is validated and it’s pilot versions are designed and demonstrated. Training programs for the workers are initiated and the plan is executed in full scale. 

    Activity #5: Improve Process Continuously: 
     A process cannot be reengineered overnight. A very vital part in the success of every reengineering effort lies in improving the reengineered process continuously. The first step in this activity is monitoring. Two things have to be monitored – the progress of action and the results. The progress of action is measured by seeing how 
    wherein the process is remapped, reanalyzed and redesigned. Thereby continuous improvement of performance is 
    much more informed the people feel, how much more commitment the management shows and how well the change 
    ensured through a performance tracking system and application of problem solving skills. Continuous improvement 
    (TQM) and BPR have always been considered mutually exclusive to each other. But on the contrary, if performed 
    simultaneously they would complement each other wonderfully well. In fact TQM can be used as a tool to handle 
    the various problems encountered during the BPR effort and to continuously improve the process. In corporations 
    that have not adopted the TQM culture as yet, application of TQM to the newly designed processes should be 
    undertaken as a part of the reengineering effort[8]. 
    teams are accepted in the broader perspective of the organization. This can be achieved by conducting attitude 
    surveys and discrete ‘fireside chats’ with those initially not directly involved with the change. As for monitoring the 
    results, the monitoring should include such measures as employee attitudes, customer perceptions, supplier 
    responsiveness etc[12]. Communication is strengthened throughout the organization, ongoing measurement is 
    initiated, team reviewing of performance against clearly defined targets is done and a feedback loop is set up

    Benchmarking


    Definition
    Benchmarking is the process of identifying "best practice" in relation to both products (including) and the processes by which those products are created and delivered. The search for "best practice" can taker place both inside a particular industry, and also in other industries (for example - are there lessons to be learned from other industries?).

    The objective of benchmarking is to understand and evaluate the current position of a business or organisation in relation to "best practice" and to identify areas and means of performance improvement.

    The Benchmarking Process
    Benchmarking involves looking outward (outside a particular business, organisation, industry, region or country) to examine how others achieve their performance levels and to understand the processes they use. In this way benchmarking helps explain the processes behind excellent performance. When the lessons learnt from a benchmarking exercise are applied appropriately, they facilitate improved performance in critical functions within an organisation or in key areas of the business environment.

    Application of benchmarking involves four key steps:

    (1) Understand in detail existing business processes
    (2) Analyse the business processes of others
    (3) Compare own business performance with that of others analysed
    (4) Implement the steps necessary to close the performance gap

    Benchmarking should not be considered a one-off exercise. To be effective, it must become an ongoing, integral part of an ongoing improvement process with the goal of keeping abreast of ever-improving best practice.

    Types of Benchmarking

    There are four types of benchmarking. They are not mutually exclusive and companies can choose any one or a combination to meet their objectives. It is recommended that strategic benchmarking is conducted first to create a context and rationale that will enhance all other benchmarking efforts.

    Strategic Benchmarking

    Concerned with comparing different companies' strategies and assessing the success of those strategies in the marketplace.
    Analyses the strategies with particular reference to:
    • strategic intent
    • core competencies
    • process capability
    • product line
    • strategic alliances
    • technology portfolio
    Should begin with the needs and expectations of the customer. This can be achieved through surveys to measure customer satisfaction and the gaps between a company's performance and its customers' standards.
    Ensures a co-ordinated strategic direction regarding benchmarking and reduces the possibility that one improvement project will cancel out the effect of another. Benchmarking candidates are normally direct competition.
    The main difficulty is persuading the benchmark partner to discuss their strategy. However, there is a great deal of information which can be obtained from customers, common suppliers and public domain information.

    Functional Benchmarking

    • Investigates the performance of core business functions.
    • Does not need to focus on direct competition but, depending on the function to be benchmarked, the benchmark partner may need to be in a similarly characterised industry for useful comparisons to be made.

    Best Practices Benchmarking

    • Applies to business processes.
    • It breaks the function down into discrete areas that are the targets for benchmarking and is therefore a more focused study than functional benchmarking.
    • Some business processes are the same regardless of the type of industry.
    • Attempts to benchmark not only work processes, but also the management practices behind them.

    Product Benchmarking

    • Commonly known as reverse engineering or competitive product analysis.
    • Assesses competitor costs, product concepts, strengths and weaknesses of alternative designs and competitor design trade-offs, by obtaining, stripping down and analysing competitors' products.
    The four different types of benchmarking are evolutionary beginning with product, through to functional, process and strategic. For the purposes of this document and the corresponding document 'Guide to Benchmarking' best practice benchmarking will be used due to its focus on processes. As benchmarking is becoming more widespread and companies are more proficient in its use, best practice benchmarking is becoming increasingly popular. This is also reinforced by the move away from functionality in organisations towards business processes. For further information on the other types of benchmarking, see the references to Watson, Camp and Miller.

    Conclusion

    Benchmarking must be a continuous process with the extent and scope of the project being dependent on the resources that the company has available.
    The above key steps to benchmarking are detailed further along with a list of factors to be aware of in the companion document 'Guide to Benchmarking'.

    Key steps to benchmarking

    Based on our research and experience we would recommend the following stages in your Benchmarking projects:
    1. Identify what to benchmark
    2. Ensure management support and involve all stakeholders
    3. Select the benchmarking team
    4. Analysis of internal processes
    5. Identify companies to benchmark
    6. Decide on method(s) of data collection
    7. Collect public domain information
    8. Analyse collected information to establish what other information needs to be collected
    9. Establish contacts with benchmark partners
    10. Plan the actual visits
    11. Conduct the benchmarking visits
    12. Establish whether a performance gap exists
    13. Predict future performance levels
    14. Communicate benchmark findings
    15. Establish targets and action plans
    16. Gain support and ownership for the plans and goals
    17. Implement the action plans, measure performance and communicate progress
    18. Re-calibrate benchmarks
    19. Adopt benchmarking on a company-wide scale

    People CMM

    Do you need to improve your management of people to get full advantage from your software development capability?
    Can you attract, train, deploy, and retain the people you need to develop software in today's competitive market?
    With the help of the Capability Maturity Model Integrated (CMMI), many organizations have made improvements in their software and systems processes and practices. They have also discovered that their continued improvement requires significant changes in the way they manage people.
    The People CMM is a maturity framework that describes the key elements of managing and developing the workforce of an organization. It describes an evolutionary improvement path from an ad hoc approach to managing the work-force, to a mature, disciplined development of the knowledge, skills, and motivation of the people that fuels enhanced business performance.
    Although the formal period for submitting comments about the next version of the People CMM is over, the SEI People CMM Team appreciates change requests and insights shared by members of the community. We welcome your ideas about ways to update the model to reflect the best of current thinking and methods in workforce practice improvements.
    The People CMM helps organizations to
    • characterize the maturity of their human resource practices
    • set priorities for improving the competence of its work-force
    • integrate competence growth with process improvement
    • establish a culture of workforce excellence
    The People CMM publications and training will support incorporating people management capabilities into software improvement programs by communicating a model that complements the Capability Maturity Model Integrated (CMMI), and by making available an appraisal method that can be used alone or integrated with existing process appraisal methods.
    The People CMM is designed to guide organizations in selecting activities for improving their workforce practices based on the current maturity of their workforce practices. By concentrating on a focused set of practices and working aggressively to install them, organizations can steadily improve their level of talent and make continuous and lasting gains in their performance. The People CMM guides an organization through a series of increasingly sophisticated practices and techniques for developing its overall work-force. These practices have been chosen from experience as those that have significant impact on individual, team, and organizational performance.
    The People Capability Maturity Model (People CMM) adapts the maturity framework of the Capability Maturity Model for Software (CMM) [Paulk 95], to managing and developing an organization's work force. The motivation for the People CMM is to radically improve the ability of software organizations to attract, develop, motivate, organize, and retain the talent needed to continuously improve software development capability. The People CMM is designed to allow software organizations to integrate work-force improvement with software process improvement programs guided by the SW-CMM. The People CMM can also be used by any kind of organization as a guide for improving their people-related and work-force practices.
    Based on the best current practices in the fields such as human resources and organizational development, the People CMM provides organizations with guidance on how to gain control of their processes for managing and developing their work force. The People CMM helps organizations to characterize the maturity of their work-force practices, guide a program of continuous work-force development, set priorities for immediate actions, integrate work-force development with process improvement, and establish a culture of software engineering excellence. It describes an evolutionary improvement path from ad hoc, inconsistently performed practices, to a mature, disciplined development of the knowledge, skills, and motivation of the work force, just as the CMM describes an evolutionary improvement path for the software processes within an organization.
    The People CMM consists of five maturity levels that lay successive foundations for continuously improving talent, developing effective teams, and successfully managing the people assets of the organization. Each maturity level is a well-defined evolutionary plateau that institutionalizes a level of capability for developing the talent within the organization.
    Except for Level 1, each maturity level is decomposed into several key process areas that indicate the areas an organization should focus on to improve its workforce capability. Each key process area is described in terms of the key practices that contribute to satisfying its goals. The key practices describe the infrastructure and activities that contribute most to the effective implementation and institutionalization of the key process area.
    The five maturity levels of the People CMM are:
    1) Initial.
    2) Repeatable. The key process areas at Level 2 focus on instilling basic discipline into workforce activities. They are:
    • Work Environment
    • Communications
    • Staffing
    • Performance Management
    • Training
    • Compensation
    3) Defined. The key process areas at Level 3 address issues surrounding the identification of the organization's primary competencies and aligning its people management activities with them. They are:
    • Knowledge and Skills Analysis
    • Workforce Planning
    • Competency Development
    • Career Development
    • Competency-Based Practices
    • Participatory Culture
    4) Managed. The key process areas at Level 4 focus on quantitatively managing organizational growth in people management capabilities and in establishing competency-based teams. They are:
    • Mentoring
    • Team Building
    • Team-Based Practices
    • Organizational Competency Management
    • Organizational
    • Performance Alignment
    5) Optimizing. The key process areas at Level 5 cover the issues that address continuous improvement of methods for developing competency, at both the organizational and the individual level. They are:
    • Personal Competency Development
    • Coaching
    • Continuous Workforce Innovation

    Six Sigma


    What is Six Sigma?


    First, what it is not. It is not a secret society, a slogan or a cliché. Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services.

    Why ”Sigma“? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many “defects” you have in a process, you can systematically figure out how to eliminate them and get as close to “zero defects” as possible. Six Sigma has changed the DNA of GE — it is now the way we work — in everything we do and in every product we design.


    GE’s Evolution Towards Quality 
    GE began moving towards a focus on quality in the late ‘80s. Work-Out®, the start of our journey, opened our culture to ideas from everyone, everywhere, decimated the bureaucracy and made boundaryless behavior a reflexive, natural part of our culture, thereby creating the learning environment that led to Six Sigma. Now, Six Sigma, in turn, is embedding quality thinking — process thinking — across every level and in every operation of our Company around the globe.

    Work-Out® in the 1980s defined how we behave. Today, Six Sigma is defining how we work and has set the stage for making our customers feel Six Sigma.




    Sigma A term used in statistics to represent standard deviation, an indicator of the degree of variation in a set of measurements or a process.


    Six sigma A statistical concept that measures a process in terms of defects—at the six sigma level, there are only 3.4 defects per million opportunities. Six Sigma is also a philosophy of managing that focuses on eliminating defects through practices that emphasize understanding, measuring, and improving processes.



    Essentials of the Six Sigma Methodology


    The Six Sigma methodology uses statistical tools to identify the vital few factors, the factors that matter most for improving the quality of processes and generating bottom-line results. It consists of four or five phases:


    • Define the projects, the goals, and the deliverables to customers (internal and external).
    • Measure the current performance of the process.
    • Analyze and determine the root cause(s) of the defects.
    • Improve the process to eliminate defects.
    • Control the performance of the process.




    The Six Sigma Strategy

    To achieve Six Sigma quality, a process must produce no more than 3.4 defects per million opportunities. 


    An “opportunity” is defined as a chance for nonconformance, or not meeting the required specifications. This means we need to be nearly flawless in executing our key processes. Six Sigma is a vision we strive toward and a philosophy that is part of our business culture.


    Key Concepts of Six Sigma


    At its core, Six Sigma revolves around a few key concepts.


    Critical to Quality: Attributes most important to the customer
    Defect: Failing to deliver what the customer wants
    Process Capability: What your process can deliver
    Variation: What the customer sees and feels
    Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels
    Design for Six Sigma: Designing to meet customer needs and process capability






    Total Quality Management


    What is Total Quality Management?


    TQM is a management philosophy, a paradigm, a continuous improvement approach to doing
    business through a new management model. 
    The TQM philosophy evolved from the continuous improvement philosophy with a focus on quality as the main dimension of business. Under TQM, emphasizing the quality of the product or service predominates. TQM expands beyond statistical process control to embrace a wider scope of management activities of how we manage people and organizations by focusing on the entire process, not just simple measurements.

    TQM is a comprehensive management system which:


    ♦ Focuses on meeting owners’/customers’ needs by providing quality services at a cost that
    provides value to the owners/customers
    ♦ Is driven by the quest for continuous improvement in all operations
    ♦ Recognizes that everyone in the organization has owners/customers who are either internal
    or external
    ♦ Views an organization as an internal system with a common aim rather than as individual
    departments acting to maximize their own performances
    ♦ Focuses on the way tasks are accomplished rather than simply what tasks are accomplished
    ♦ Emphasizes teamwork and a high level of participation by all employees


    TQM beliefs: Presented here are universal total quality management beliefs.

    ♦ Owner/customer satisfaction is the measure of quality
    ♦ Everyone has owners/customers; everyone is an owner/customer
    ♦ Quality improvement must be continuous
    ♦ Analyzing the processes used to create products and services is key to quality improvement
    ♦ Measurement, a skilled use of analytical tools, and employee involvement are critical
    sources of quality improvement ideas and innovations
    ♦ Sustained total quality management is not possible without active, visible, consistent, and
    enabling leadership by managers at all levels
    ♦ If we do not continuously improve the quality of products and services that we provide our
    owners/customers, someone else will


    Deming’s Fourteen Points: 


    Presented below are Deming’s fourteen points for total quality management.


    ⇒ Create constancy of purpose for improvement of product and service. (Plan to stay in business.)
    ⇒ Adopt the new philosophy. (Stop tolerating poor quality.)
    ⇒ Cease dependence on inspection to achieve quality. (Improve the process.)
    ⇒ End the practice of awarding business on the basis of price tag alone. (Seek longer-term supplier relationships; reduce the number of suppliers.)
    ⇒ Improve constantly and forever every process in the system of planning, production, and service.
    ⇒ Institute modern training (for everybody!).
    ⇒ Institute modern methods of supervision. (The responsibility of foremen must be changed from sheer numbers to QUALITY.)
    ⇒ Drive out fear. (Encourage employees to speak up.)
    ⇒ Break down barriers between departments.
    ⇒ Eliminate slogans, exhortations, and targets for the work force.
    ⇒ Eliminate work standards that prescribe numerical quotas.
    ⇒ Remove barriers to pride in workmanship. (Poor supervisors, poor materials, inadequate equipment, lack of training, etc.)
    ⇒ Institute a vigorous program of education and self-improvement for everyone.
    ⇒ Place everybody in the company to work to accomplish the transformation and create a structure in top management that will push every day on the above points.



    Characteristics of Successful TQM Companies


    The construction industry has arrived late to TQM, probably due to the tendency to easily brush aside anything in management that is new, or to dismiss TQM as a fad.

    Continuous improvement is not a fad but a necessary part of management’s obligation to properly run its company. Gone are the boom days when quality did not matter due to the volume of work available and the ease of obtaining work. The attitude of construction managers and contractors was simply to add it to the bill, because the owner will pay for it. In other words, in those boom days Cost plus Profit equaled Price. Now, however, the new attitude is Price minus Cost equals Profit. Owners are now demanding higher quality work, and at a lower cost. In attempting to keep pace with the new attitude, a quality management system that helps
    keep costs down is well worth implementing.

    The characteristics that are common to companies that successfully implement TQM in their daily operations are listed here.


    ♦ Strive for owner/customer satisfaction and employee satisfaction
    ♦ Strive for accident-free jobsites
    ♦ Recognize that the owner/customer provides the revenue while the employees are
    responsible for the profit
    ♦ Recognize the need for measurement and fact-based decision making
    ♦ Arrange for employees to become involved in helping the company improve
    ♦ Train extensively
    ♦ Work hard at improving communication inside and outside the company
    ♦ Use teams of employees to improve processes
    ♦ Place a strong emphasis on the right kind of leadership, and provide supervisors with a
    significant amount of leadership training
    ♦ Involve subcontractors and suppliers, requiring them to adopt TQM
    ♦ Strive for continuous improvement



    Quality principles that successful TQM companies recognize


    The quality principles that successful TQM companies recognize and attempt to continually incorporate into their actions are the following:

    ♦ People will produce quality goods and services when the meaning of quality is expressed
    daily in their relations with their work, colleagues, and organization.
    ♦ Inspection of the process is as important as inspection of the product. Quality improvement
    can be achieved by the workers closest to the process.
    ♦ Each system with a certain degree of complexity has a probability of variation, which can
    be understood by scientific methods.
    ♦ Workers work in the system to improve the system; managers work on the system to
    improve the system.
    ♦ Total quality management is a strategic choice made by top management, and must be
    consistently translated into guidelines provided to the whole organization.
    ♦ Envision what you desire to be as an organization, but start working from where you
    actually are.
    ♦ Studies have indicated that people like working on a quality-managed jobsite especially due
    to the cleaner site and safer place to work.
    ♦ Accept the responsibility for quality. Establish datums for measurement.
    ♦ Use the principle of get it right, the first time, every time.
    ♦ Understand that quality is a journey, not a destination. It consists of steps that form a
    process that is continuous.


    What are the Benefits of TQM?



    For Management 
    ♦ Provides an invaluable problem-solving tool for managers and supervisors to use
    ♦ Dispels negative attitudes 
    ♦ Management becomes more aware of problems that affect the individual’s work environment
    ♦ Employees gain a sense of participation
    ♦ Increases efficiency and productivity
    ♦ Reduces turnover rate, tardiness, costs, errors, and scrap & rework
    ♦ Improves communications within and among all departments
    ♦ Develops management skills that were never taught, or are long forgotten due to lack of application
    ♦ Develops overall company awareness and company unity
    ♦ Rearranges priorities which once seemed locked in place
    ♦ Builds loyalty to the company
    ♦ Reveals training requirements in all departments
    ♦ Lessens the number of defects received from suppliers when they are encouraged to train in quality management.


    For Employee
    Provides opportunity for personal growth and development (as a result of team training activities) and the opportunity to develop and present recommendations
    ♦ Increases innovation (through a greater variety of approaches and perspectives) for solving problems, removing fear of failure
    ♦ Employees use their knowledge and skills to generate data-driven recommendations that will lead to well-informed decision making
    ♦ Encourages decision-making at the most appropriate level
    ♦ Increases motivation and acceptance of new ideas
    ♦ Increases job satisfaction (as a result of the opportunity to participate in and have influence over work)
    ♦ Recognizes employees for their knowledge, skills, and contribution toward improvement
    ♦ Develops mutual respect among employees, management and customers
    ♦ Promotes teamwork

    The Pitfalls Successful TQM Companies Must Avoid
    The transformation to quality is not without its pitfalls. Many companies have started on the road to quality but failed to achieve success due to several factors:


    ♦ Lack of top management support.
    ♦ Lack of middle management support.
    ♦ Commitment in only one department.
    ♦ Short-term commitment - failure to stay on course.
    ♦ Haphazard approach - a little of this and that with no meaningful change in the system.
    ♦ Failure to acquire the services of a competent statistician or to provide statistical training for employees.
    ♦ Measure success and guide program on the basis of short-term profits.
    ♦ Failure to solicit worker input.
    ♦ Over dependence on computerized quality control.
    ♦ Funding failure - lack of funds to make meaningful changes in the system (i.e., new machinery, training, improved raw materials).
    ♦ No market research. Not knowing what the requirements are.
    ♦ no testing of incoming materials - garbage in - garbage out.
    ♦ Overselling hourly workers - expecting instant pudding.
    ♦ Adversarial management (management by fear).


    Implementing TQM

      • 1
        Assess the overall health of the company as it currently operates. If conditions such as lack of management skills and poor employee morale currently exist, you must address those problems first for a better chance of success in implementing Total Quality Management.
      • 2
        Study the history of the company in relation to change. If the company has a good track record of responding favorably to changes in the marketplace and making necessary modifications to business practices along the way, it is probably a good candidate to implement Total Quality Management.
      • 3
        Introduce the concept of Total Quality Management to senior level executives. Implementing Total Quality Management can't be delegated, it must be driven by senior management in order to succeed.
      • 4
        Enlist the services of Total Quality Management consultants. They can help you to audit the company in its current state, suggest areas of improvement and provide training to key employees who can then pass along that information to other employees.
      • 5
        Empower the employees to identify needed changes, with the knowledge that management values their ideas. Systems of reward for measurable improvements should be considered. Employees at all levels of the organization must feel that what they do contributes to the customer's satisfaction.
      • 6
        Realize that implementing Total Quality Management is a long process and doesn't happen overnight. But with management commitment, consistent training of employees and an eye on the ultimate goal of retaining satisfied customers, Total Quality Management can be achieved.





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