Relationship Between TQM, Benchmarking, and Business Process Redesign

Abstract

The aim of the present work is to enumerate, analyze and sum up all key strategies in Business Process Redesign. The following strategies have been assessed in the work: Quality Management, Business Process Engineering, Benchmarking, and Performance Measurement. Firstly, the three are defined, and the descriptions of their essence are provided referring to famous Business leading theory researchers. The paper then provides an explanation of the extension of these theories can also be found here. A step-by-step guide for the implementation of any of the named strategies is given. The latest chapters of the work are dedicated to the interrelations of the presented approaches, and to the role of telecommunication technologies in strategy implementation. It has been estimated that certain parallels between these processes of deployment of manufacturing and improvement strategies could be guided. Based on the research conducted, conclusions are derived and future research suggestions are made. (Ishikawa, 1990)

Business Process Redesign Defined

Business Process Redesign is defined as the study and design of workflows and developments within and between organizations (Davenport & Short, 1990). Teng et al. (1996) termed BPR as the important examination and fundamental overhaul of current business processes to accomplish advanced progress in implementation measures.

The keyword for BPR are fundamental’, radical’, dramatic’, change’ and process’. A business process has to experience primary changes to improve output and quality. Radical changes, rather than incremental changes, are made to produce remarkable improvements. (Altinkemer, Chaturvedi, & Kondareddy, 1998)

Reengineering is not about fine-tuning or minor changes. It is for motivated companies that are keen to make significant changes to attain major performance improvements (Altinkemer, Chaturvedi, & Kondareddy, 1998).

Benchmarking Defined

“Benchmarking research” is defined as a process for swiftly learning the fundamental nature of a chosen subject of knowledge with concern in finding its principal advantage.

The principle of benchmarking is to get general circumstances of a field of knowledge, in addition to knowledge of the advanced technology and who is promoting it, and what philosophy directs this problem.

Benchmarking can be executed at the System Level, where complete systems close to the given product would be assessed. Benchmarking may also be applied at the Functional Level, where individual significant functions would be assessed. (Larsen, & Myers, 1999)

The powerful tool of benchmarking is used basically for three reasons:

1. Know where you stand
2. Track relative improvement
3. Achieve viable advantage

The benchmarking process follows a continuous cycle that primarily follows the pattern of Plan-Do-Check-Act in a series of six phases:

1. Select benchmarking object and target
2. Establish data collection method and measure existing performance
3. Collect target data and compare
4. Establish action objectives and plans
5. Execute plans
6. Measure performance, compare and raise the hurdle (Lockamy & Smith, 1997)

From the start of the benchmarking process, one needs to establish what is to be benchmarked. Once this object has been achieved, the benchmarking target has to be selected. This target will start out as purchasing’s own performance objectives, however, will ripple out from there in successive stages to the organization as a whole, the major competitor, and eventually the best in the country. This round is followed by the selection of the data collection method to be used, and the measurement of existing performance levels (Kallio, Saarinen, Tinnila & Vepsalainen, 1999).

Only then will it be useful to identify and contact any benchmarking target outside the purchasing function itself and seek its cooperation. The important rule in benchmarking is to ask only for information that one is keen to share in return. After all, benchmarking is a reciprocal arrangement designed to produce mutual gains in knowledge and performance. Once a benchmarking agreement has been reached, suitable data are collected from the target by means of questionnaires, reports, and personal visits, and are used to assess the appropriateness of one’s own performance. This comparative analysis enables the establishment of action objectives and plans to improve performance. After these plans have been put into operation, a new round of measurement, comparison, and planning for improved performance will happen that will raise the hurdle every time a new performance objective has been reached to ultimately outperform the best in the country and reach best in class status (Roby, 1995).

Quality Management Defined

Quality improvement is crucial to the management of a business competently. To take responsibility for the quality process through the ranks of the organization, one should assess individual contributions to the quality process as part of every employee’s frequent assessment

A quality management principle is a wide-ranging and fundamental rule/belief, for directing and running an organization, directed constantly enhancement of functioning over the long term by focusing on customers at the same time as managing the needs of all other stakeholders. (Ishikawa, 1990)

The eight principles are as follows:

1. Customer-Focused Organization
2. Leadership
3. Involvement of People
4. Process Approach
5. System Approach to Management
6. Constant upgrading
7. Pragmatic Approach to management and
8. Mutually beneficial Supplier relations (Ishikawa, 1990)

BPR & IS Renovation

The main modus operandi of connecting the difficulties of the business enterprises is the perception of the Business Process Reengineering (BPR). This is a new method of enhancement of the operation and thus the efficiency of organizations. It means studying and changing the Business processes of the organization simultaneously. For a comprehensive and well-organized reengineering project, the companies should first see the specific conditions meet before starting such a project. Primarily, the organization should reject all the outdated rules and processes that have been used so far. Besides they should cast off other deficient managerial and production standards. Then, the design of a modified and refurbished organization should start (Hipkin & De Cock, 2000).

BPR was at first initiated in a study program at MIT in the 1990s. It was used in the description of Davenport and Short’s 1990 research project. The authors found out that the apprehension of contemporary IT in organizations means not only computerization of managerial and production undertakings however also have a huge and immediate effect on the means and value of the work done.

BPR vis-à-vis TQM

Teng et al. (1996) remark that the bigger focus on business processes is mainly as a result of the Total Quality Movement. The authors are of the view that Total Quality Management and Business Process Engineering share a cross-functional path. Davenport remarked that quality professionals have a tendency to concentrate on extra variation and long-term enhancement of processes, at the same time as supporters of reengineering often look for fundamental overhaul and comprehensive improvement of processes.

Davenport (1993) observes that quality management, commonly mentioned as total quality management (TQM) or constant improvement point toward programs and projects that lay emphasis on incremental improvement in work processes and outputs over an open-ended period of time. On the contrary, Reengineering, also well-known as business process redesign or process improvement, signify distinct programs that are aimed at achieving fundamentally revamped and enhanced work processes in a limited time frame.

Relationship between BPR Systems, TQM & Benchmarking

BPR is an ordered methodology to study and continuously develop major activities namely production, promotion, communications, and other key elements of a company’s business (Elzinga et al, 1995). Wright and Yu (1998) defined the factors to be considered before definite BPR starts and developed a model for identifying the tools for BPR. Childe et al. (1994) have introduced frameworks for BPR that concentrate upon the series of activities that form business processes. They tried to develop a framework for understanding BPR and to account for the relationship between BPR and TQM, TBC, and IT. BPR should enable firms to model and analyze the processes that support products and services, underscore opportunities for both radical and incremental business improvements through the identification and removal of waste and inadequacy, and employ improvements through a combination of IT and good working practices.

BPR needs organizational restructuring and changes in employees’ behavior namely training, education, job enrichment, job enlargement, and employee empowerment with a view to accommodating and facilitating fundamental changes for realizing remarkable improvements in business performance. IT, such as the Internet, E-Commerce, CAD/CAM, CIM, MRP, Multimedia, ERP and WWW, EDI and EFT, would help to streamline an organization and help changes with acceptance from employees on any fundamental changes in the company. The reengineering of a business process will result in improved process delivery systems and thus a better customer service level.

Organizational reorganization by standardization and simplification eliminates impediments for an efficient flow of information and materials along the supply chains. The easy flow of information can be assisted by the use of different ITs to improve the integration of different functional areas. The basic aim of BPR is to provide quality goods at reasonable prices in a judicious manner. As a result, a manufacturing system in addition to a business organization should be customized underlining coordination of the basic business processes in the chain, from suppliers to customers, in place of the existing complex structures of the functional hierarchies. The behavioral changes should lead to reengineering. Thus, issues such as training and education, employee empowerment, teamwork, and incentive schemes should be given priority in BPR.

So as to re-engineer a business process, both internal and external process capabilities, such as product development, production, distribution, suppliers and markets, and inter-organizational relationships, particularly in a global manufacturing environment, need to be integrated. The reengineering process helps to realize small production through the incorporation of production activities into autonomous units along with the production flow. IT is an important element in such integration. Wyatt and Kletke (1997) introduced an explanatory model to exemplify the impact of telecommunication technology on BPR. The techniques, such as time-based analysis, systems reengineering tools, and Information Technology can be employed in supply chain management as well as the customer administration cycle, product design cycle, human resource development cycle, and almost every other process within an organization. The proper management of the human motivational reactions to change is undeniably as vital in the successful initiation of fundamentally new methods as are the technological factors of process design (Gunasekaran & Nath, 1997). Al-Essa et al (1996) discuss the important roles of IT in the development and operations stages in BPR. Mahapatra and Lai (1996) dealt with the similarities between IT-enabled BPR and the competitive use of IT and maintained that BPR extends the viable use of IT to all levels in an organization.

Collins and Reynolds (1995) showed the example of Microsoft Ireland’s reengineering program and described how to resolve account predicaments professionally. Kenlaw (1995) gave details on how IBM’s Sales Force Transformation (SFT) unit provides provisional services to Fortune 2000 customers seeking to computerize sales and marketing functions. Increasingly, sales managers are looking for an integrated system that links front-end departments to manufacturing resource planning and enterprise resource planning systems. Through time-based selling, IBM has built up a system to do away with paper or and avoid duplication of order-entry procedures with the objective of increasing the accuracy of those orders and simplifying contract writing and signing. Altinkemer et al. (1998) worked out how BPR would help to improve efficiency and consequently organizational merit. In a survey of 37 companies in 17 different industries, it was concluded that the primary reasons for BPR are increased efficiency (internal) and improved customer service (external), (Chan & Peel, 1998). All these examples imply that BPR has the scope for applications in manufacturing/service organizations and that IT is an essential part of BPR.

As said by Self (1995), there are three entities a manufacturing company needs to do to be able to vie efficiently: (i) offer a competent and well-programmed mechanized system that is competent of giving the company an advantage; (ii) provide a coordinated way of getting the order winning factor; and (iii) reengineer the company’s process that the product meets order winning factor and take advantage of profit. This area has the prospective for future research and applications. Many consider that technology transfer, in the form of automation, is the sole answer to business problems. However, automation does get some jobs done faster, although no remarkable improvement in performance results without primary or radical process changes. Thus, drastic improvements through factory innovation have more to do with a company’s ability to change its processes than merely automating (Hammer & Champy, 1993, Veasey 1994). BPR entails changing of company’s in-house procedures and practices, which is a critical requirement to successful innovation and development. More often, a change in the industrial culture and infrastructure should be needed before investing in the new plant can take effect.

According to Ardhaldinjain and Fahner (2004), “BPR is a top-down, process-driven approach managed by senior executives, which aims to improve the performance by radical changes in the system over the short term” (p. 61). Companies generally have to meet three important objectives to realize efficiency: (i) a process, not product perception, (ii) cross-functional coordination or integration, and (iii) uniformity between objectives and improvement plans (Wickens, 1995, Jones et al. 1997, Lockamy & Smith 1997). Information Technology helps the BPR, and any reengineering program must consider the great advantage offered by technologies for example document image processing and expert systems (Childe et al, 1994; Morris & Brandon, 1993).

Roby (1995) was of the view that the advantageous execution of BPR for a fundamental change in manufacturing strategy needs a change in attitude and the critical involvement of devoted individuals and teams. Smith (1995) points out that a main aspect of BPR is the human factor. Thus, companies should make sure that their employees are properly motivated and the technology required for training is available, particularly for fundamental change for BPR. In earlier studies, Hall et al. (1994) named three important factors of useful BPR projects. Maull et al. (1995) performed a study of 25 UK companies so as to establish the critical success factors for BPR. Teng (1996) developed a model for strategic prospects on BPR to enable organizational changes including process changes. Guimaraes et al. (1997) analyzed eight Expert Systems (ES) success factors in terms of their significance to BPR. Paper (1997) presented a case study performed in Caterpillar where he follows an efficient methodology and insists on ingenuity training, process simplification, and improvement. Yoon et al. (1998) presented eight success factors for expert systems used in BPR. Larsen and Myers (1999) discussed a BPR project in a financial service firm that involves the execution of ERP software and they defined the success of a BPR project as a moving target since initial success in the case turned into failure in the long term. The concepts of time-based competition (TBC) and lean production (LP) are of substantial consequence to BPR. TBC is process-based and tries to cut drastically the time needed for the whole process. The corresponding benefits may include increased efficiency, price competitiveness, moderate risks, and improved market share. In the 1980s, Total Quality Management (TQM) helped incremental process improvements in manufacturing/service organizations, however in the 1990s it was replaced by BPR using complex IT. This implies a role for IT and BPR in improving the usefulness of organizations (Childe et al, 1994; Steinberger, 1994).

Jones (1995) explained how benchmarking facilitate order and eliminates superfluous extra work. It is an established method that a company can use to evaluate its performance with other good-performing companies in related industries. The combination of benchmarking and reengineering guarantees that the good processes are in use and helps a firm seek out and do away with steps that waste resources. Soliman and Youssef (1998) discussed the consequences of TQM and learning organization on BPR. Their study tried to establish the minimum BPR costs by seeking the optimal process mapping (PM). Radical changes required by BPR can be realized by an information system that has to be rationalized to support process reengineering. The reorganization of an information system should support functional integration to improve supply chain management and consequently improve output and quality.

Crowe et al. (1997), after studying five US electronics firms, argued that selecting the right BPR project reduces the risk of failure. Two-thirds of BPR projects fail as a result of a lack of bad planning. Kallio et al. (1999) investigated 32 BPR projects and found that most projects were focused on reorganizing current business processes; at the same time as only in a few cases were business processes fundamentally overhauled. Founded on the results, they developed a framework to help managers select the most suitable BPR strategies. Hipkin and De Cock (2000) studied four hypotheses regarding the execution of new maintenance systems in four organizations and tried to establish a set of vital success factors in Reliability Centre Maintenance (RCM) and Total Productive Maintenance (TPM) implementation, and to provide some strategies for their adoption. Humphreys et al. (2000) applied Maister’s Professional Service Firm Model in an operational manner with the aim of ascertaining the roles and responsibilities of the purchasing function within an aerospace company and concluded that staff development must be an essential theme for the success of BPR.

Conclusions

To enhance organizational performance by means of the efficient use of production capacity and expertise, operations tactics namely Quality Management, Business Process Engineering, Benchmarking, Performance Measurement, and many others are generally employed (Ahmed & Montagno, 1996). Prominent in the literature are TQM and BPR approaches. Total Quality Management is founded on the theory of constant advancement of products and processes focused on constantly fulfilling customer prospects as regards excellence, cost, delivery, and service (Ishikawa, 1990).

Both Total Quality Management and Business Process Reengineering are quite similar in many ways. They have some shared fundamentals that are an application on the improvement of the supplier-customer interaction at all stages and the obligation of accountability. The same set of tools and techniques are used to reinforce and sustain change. Nevertheless, in Total Quality Management, each person or action is considered as a part of a line. Flaws and wrongs are eliminated at each phase, consequently helping the customer at the end of the line. In Business Process Reengineering, the entire makeup of the procedure is reassessed to study its purpose and design and to identify efficiency savings. Total Quality Management lays emphasis on steady and constant improvement. On the other hand, Business Process re-engineering calls for fundamental changes.

Thus there is an obvious correlation between the process of deployment of manufacturing strategies and improvement strategies in the significance that if they are to be used as part of the business strategy for adding and keeping viable lead, development projects must be supported by taking into account the company functioning levels with regard to challenges on product and operational factors.

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