Total Quality Management

September 12, 2008

Productivity, Quality and Business Process Reengineering

Some questions about relationship of quality and productivity

Are productivity and quality related?
Are they two sides of the coin?
Can you have both?

The answer is YES

The productivity has come to mean more output for the same or less cost. Productivity has become a tactical short-term approach associated with the cost reduction, greater efficiency, better use of resources, and organizational restructuring.

Some misconceptions about relations of productivity and quality

Despite a growing body of evidence that indicates a positive correlation, the misconception exists that productivity and cost must be sacrificed if quality is to improve.

There may be some justification for the belief that increased quality means decreased productivity, but it seems to be the view of those who rank production ahead of quality as a top priority.

It is argued that a program to improve quality causes disruptions and delay result in reduced output

Reengineering/Business Process Reengineering

According to the authors of the book, “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.

Reengineering is done by analyzing and redesigning of workflow within and between enterprises.  engineering reached its heyday in the early 1990’s when Michael Hammer and James Champy published their best-selling book, “Reengineering the Corporation”

The authors promoted the idea that sometimes radical redesign and reorganization of an enterprise (wiping the slate clean) was necessary to lower costs and increase quality of service.Key steps involved in Business Process Reengineering

1. Defining the purpose and goal of the BPR project;

2. Defining the scope of the project so as to include (or exclude) activities; A flowchart of the activities can assist to define the scope of the project

3. Identifying the requirements that will meet the needs of the clients

4. Assess the environment – the position of competitors, prospective changes in technology, legislation or socio-economic factors

5. Redesign the business processes and activities in light of the above

6. Implement the redesigned processes

7. Monitor the success/ failure of the redesign.

Criticism on BPR

By the mid-1990’s, Reengineering gained the reputation of being a nice way of saying “downsizing”

Hammer defended by stating that, “The work I’ve done never has been about downsizing. Some re-engineering does lead to reductions in force, but that’s not the point. Re-engineering is about improving performance, most often by speeding things up—speed is the critical issue because customers are more demanding”

He further said, “At a lot of organizations, if they hadn’t re-engineered, they simply would have gone out of business and then everybody loses their job”

Hammer & Champy’s Reasons for Reengineering Failure

1. Trying to fix a process instead of changing it
2. Not focusing on business processes
3. Ignoring everything except process redesign (e.g. reorganisation, reward system, labour relationships, redefinition of responsibility and authority)
4. Neglecting people’s values and beliefs (need to reward behaviour that exhibits new values and behaviour)
5. Be willing to settle for minor results
6. Quitting too early
7. Placing prior constraints on the definition of the problem and the scope for re-engineering effort.
8. Allowing existing corporate cultures and management attitudes to prevent Reengineering from getting started. (e.g. consensus, short termism, bias against conflict)
9. Trying to make Reengineering happen from the bottom up
10.Assigning someone who doesn’t understand Reengineering to lead the effort.
11.Skimping on the resources to Reengineer
12.Burying Reengineering in the middle of the corporate agenda.
13.Dissipating energy across a great many Reengineering projects.
14.Attempting to Reengineer when the CEO is 2 years from retirement
15.Failing to distinguish Reengineering from other business improvement programs (e.g. quality improvement, strategic alignment, right-sizing, customer-supplier partnerships, innovation, empowerment, etc.)
16.Concentrating exclusively on design (forgetting implementation)
17.Trying to make Reengineering happen without making anyone unhappy.
18.Pulling back when people resist making Reengineering changes
19.Dragging the effort out (1 year is long enough)



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