Over the past several years, total quality management (TQM) has been one of the key management philosophies to improve quality as well as customer satisfactions. However, the advent of business process reengineering (BPR) has had an immense impact on management philosophy as an alternative to TQM. The purpose of this paper is to analyze the concept of TQM and how it can be applied to organizations by comparing with BPR. The following analysis starts from the definition of TQM and it is extended to the implementation using Monsanto Chemical Group as a case study. Finally, a conclusion based on the analysis is presented.
Total
quality management means different things to different organizations and
individuals. Many textbooks even
disagree as to whether it should be referred to as total quality management,
total quality, or simply TQM. Essentially, TQM is conducting business in a way that
seeks continuous improvement in all areas of operation. These areas include products, services,
employees, procedures, and working environments. The ultimate goal of Total Quality Management is always customer satisfaction.
There are several key elements to TQM. At the center is customer focus. All decisions must be made with the customer as the driving force. The organization must be obsessed with meeting or exceeding the quality demands of its internal and external customers. It is also necessary that the organization functions as a team and works together to reach their goals.
TQM can not be viewed as a quick fix for quality problems. It is about small improvements adding up to great gains and therefore requires a long-term commitment.
To understand what it means to continuously strive for higher quality in all areas of operations it is necessary to recognize the true meaning of quality. Quality comes down to the perception of the consumer of any given item. When an organizations product fails to deliver what the customer expects it has failed to deliver quality. In TQM, supervisors must realize that their employees are their customers and they too must deliver ever-improving quality to them. This can be done through better training, safer working environments, and higher wages.
The predecessor of TQM was
quality control. It is believed that
quality control first came about in the early factories of the Industrial
Revolution, sometime in the late 1800s.
At this time products were made with equipment, materials, and
production methods of varying quality.
The end result, of course, was a wide range in the quality of the
finished product.
Around 1900, Fred Taylor began to develop the theory of scientific management. Taylors time and motion studies focused on the single most efficient way to perform a task. This meant the demise of skilled craftsman and the beginning of the division of labor. The idea was to focus on turning out larger quantities of identical products even if it meant sacrificing quality. Workers were basically just equipment used to carry out some routine task and not give any input on how to improve the product. Quality control personnel were employed at the end of the assembly line to inspect the final product and send back unsatisfactory product for rework. This method of production dominated in America until the end of World War II.
After the war, producers raced to catch up with demand for consumer goods. In the haste to get products out to consumers, product quality dropped off considerably. In response many people began to work on new ways to improve quality in manufacturing. The innovators included W. Edwards Deming, Joseph M. Juran, Armand V. Feigbaum, and Philip Crosby.
Joseph Juran was one of the first to employ statistical methods such as control charts and statistical process charts to manufacturing in the late 1940s. Even today these are key elements of total quality.
Shortly after, reliability engineering came into prominence. The idea was to move quality control from the end of the assembly line and implement it throughout the production process. By cutting out bad parts before they became part of the final product, a great deal of time and money was saved. Reliability engineering was the main method of quality control used in the United States throughout the fifties and sixties.
Meanwhile, in Japan, companies identified quality as the key to success in the global marketplace and began to do something about it. While United States companies were focusing on how to produces goods cheaper, Japanese firms were developing corporate cultures based around quality. Quality was a major factor in decisions on training, building facilities, and infrastructure. By the seventies, Japan had a clear advantage in quality in a number of industries, including automotive, and electronics.
Ironically, the leaders of the Japanese quality movement were two Americans, Deming and Juran. Deming brought his principles for quality control to Japan in the early fifties. Demings contributions included a system of statistical quality control and his universal fourteen points for management. He taught companies that ninety-six percent of defects are the result of common causes and by focusing on these causes quality can be improved dramatically. He argued that improving quality would cause a chain reaction. Better quality would result in lower costs and greater productivity. Leading to a greater market share and ensuring long-term success. Instead of setting quantifiable goals for workers, Deming believed it was more important to stress the workers pride and satisfaction. A happy worker would in turn be more productive.
Juran arrived in Japan a few years after Deming. Unlike Deming, Juran believed that a top down approach was necessary to improve quality. Juran felt everything was measurable and top management should set quantifiable goals for improvement. Both however believed that poor management and poor systems, and not the worker, were the cause of poor quality.
When American firms realized they needed to address the gap in quality they faced compared to Japan, they began to look toward TQM. Crosby realized that for American managers to understand the importance of quality it had to be measurable. He estimated that poor quality cost the average U.S. firm about twenty percent of revenues. He reiterated many of Demings principles such as achieving quality through prevention not inspection and defining quality as "conformance to standards" In addition, he stressed that the goal was always zero defects or total quality. Crosby taught firms that "quality is free" since the cost of prevention was considerably less than the cost of defects.
It wasnt until the late 1980s that TQM became widely accepted in the U.S. It gained popularity due to three main trends: increased globalization, an increased need for better-networked organizations, and TQMs successful use in several service organizations.
While the principles of total quality have been widely adopted, results have been mixed.
Business process reengineering (BPR) was developed in the late 1980s as a way of radically changing the business processes and operations across the organization. By successfully implementing BPR, organizations can achieve and appreciate the dramatic improvement in critical measures of performance, such as cost, service and speed as well as quality. Before BPR was introduced, massive investments in IT had been the dominant management strategy in the 1970s and TQM had been the primary management philosophy in the 1980s to achieve and maintain a competitive advantage. However, many organizations became frustrated by their slight increases in productivity, in IT investment or by the concepts and disappointing results of TQM. Therefore, the late 1980s presented the perfect opportunity to introduce BPR as a radical way to overcome the limitations of TQM (Pereira, Aspinwall). Although, BPR was first introduced in the US, the approach has quickly spread around the world and has been applied in the public and private sectors, in both manufacturing and service industries. By 1996, BPR had become a $51 billion industry in the US alone through the activities of a variety of consulting firms (Jarrar, Aspinwall).
In order to implement BPR successfully and utilize the potential of BPR fully, several things must be considered. The creation of organizational culture is the most crucial factors and is also one of the most difficult factors to achieve. This organizational culture should include employee involvement and empowerment, new reward and recognition system, employeesEas well as managements understanding of the vision of BPR and customer focus. These cultural elements derive the next factor that is associated with the organizational structure. Deep management commitment is necessary in organizational structure, moreover, continuous and comprehensive communication is key, enhanced by cross-functional teams and teamwork. In terms of process factor, constant training is essential to further improve BPR. Other process factors are assigning the right people in the right place, involving outside consultants, conducting a top-down approach, and benchmarking. Finally, one other fundamental factor that plays an important role is the effective use of IT combined with advanced telecommunication technology. In spite of the fact that IT cannot be BPR itself, IT is a key enabler to accomplish a certain high level of BPR (Jarrar, Aspinwall).
- Similarities
between BPR and TQM -
While TQM is based on a broad organizational commitment to make continuous quality enhancements in products and services for customers over a long term, BPR allows for radical changes in organizational processes intended to make dramatic leaps in performance. In light of this, TQM and BPR seem to be two completely opposite management approaches, but actually they share some features with each other, which are the following:
Quality Improvement
BPR efforts are directly or indirectly aimed at enhancing product or service quality in organizations, while TQM aims for nothing but quality improvement as the primary purpose (Lee, Asllani).
Support and Commitment
Both TQM and BPR must have commitment and support of employees and top management. Based on TQMs strategic goal that is customer satisfaction with high quality products or services, management must set the tone to create the right environment for change and motivate employees to get them involved to pursue the higher organizational goal. In order to withstand the political and cultural upheavals that inevitably occur after BPR is conducted, top management commitment is more needed in BPR. On the other hand, it can be said that an overall commitment from top management to employees is needed in TQM (Lee, Asllani).
Process Improvement
The starting point of both TQM and BPR is process improvement. Collecting information about the process and identifying each step to redesign and improve the process. These steps apply well to both TQM and BPR to generate potential solutions and to further accelerate the process improvement (Lee, Asllani).
Customer Satisfaction
The ultimate goal of both TQM and BPR is customer satisfaction. Both approaches begin by defining what customer requirements are and maintain a customer focus throughout the entire process, which in tern drives organization to higher prosperous stage (Lee, Asllani).
Teamwork and Training
Both approaches cannot be completed without teamwork and training. Of obvious importance here is training everyone in the organization, teaching them new technologies, tools and processes and letting them know how important teamwork is in every process stage (Jarrar, Aspinwall).
Cultural Change
TQM and BPR require a certain level of organizational culture change as they change what the organization has been doing (Jarrar, Aspinwall). This cultural change is further discussed in the implementation section of this paper.
TQM and BPR are two different management approaches designed to improve organizational performance and quality. There are significant differences between TQM and BPR.
Different Improvement
TQM is considered as incremental improvement and revolution.
BPR is considered as breakthrough improvement via a step change in performance. BPR requires a high level of information technology awareness among the entire re-engineering team prior to the definition of process changes or improvements. Some technologies can provide substantial opportunities for the redesign of BPR (Guimaraes, Tor).
Different Pace
TQM strategy focuses on gradual and adaptive changes, which are a very important characteristic for attaining a competitive advantage. Competitive benefits can accrue through relatively small but important continuous improvements in ordinary business processes.
BPR looks for radical improvements. This type of change aims to introduce a product, service or technique that ensures a sustainable competitive advantage. A sustainable competitive advantage is achieved when competitors cannot easily duplicate the innovation that has been introduced (Lee, Sang M.).
Different Involvement
Under the TQM process, the whole organization should be involved.
BPR needs to be implemented step by step in a process that gives the most competitive advantage to the organization.
Different Goal
TQM attempts to improve only a specific selected process.
BPR attempts to improve not only this selected process, but also other processes that require redesign in order to provide new values to the customers.
Different Time Requirement
TQM involves a long-term commitment to quality improvement. Thus, TQM requires creating the appropriate culture and having long-term quality goals.
BPR itself typically involves a short time duration (Lee, Sang M.).
Different Initiative
Improving quality can begin anywhere, at the bottom, middle, or top of an organization. Under TQM, every area of business contributes to quality and customer perception. As such, the efforts to identify problems and potential problem areas to improve quality come from the participation of employees as a bottom-up approach.
BPR usually involves a top-down orientation. BPR is known to be associated with lay-offs and a need for a retrained and highly qualified workforce. As a result, initiatives for a BPR program are not expected to come from the lower levels of the organization. Top management support is crucial for a successful BPR program (Pollalis, Yannis A.).
Different focus.
TQM is focused on continuous improvement and incremental performance improvements.
BPR was founded on the premises that significant corporate performance improvement requires discontinuous improvement-breaking away from the outdated rules and fundamental assumptions that underlie operations (Boaden, Ruth J.).
A number of studies have indicated the high failure rate of business process re-engineering (BPR) within the organizational context. Here are the factors that cause the BPR to fail (Nwabueze, Uche):
Re-engineering where it cannot fit;
Spending too much time analyzing existing processed;
Lack of leadership;
Timidity in redesign;
From new process design to implementation;
Re-engineering slowly;
Place some aspects of the business off limits;
Adoption of conventional implementation style and
Ignoring the concerns of employees.
In contrast, the reasons organizations fail at TQM include (Kline, Matthew):
Lack of leadership at various levels;
Lack of reward and/or recognition system, or one that is incompatible with continuous improvement goals;
A hierarchical and individual-based organizational structure, instead of lean and team-based;
Incompatible management styles;
Poor planning and lack of specific, measurable, communicated goals, baseline data, and feedback system;
Lack of adequate resources, trainers, and training procedures;
Neglect of supervisors throughout the change process, and consequent supervisor resistance;
Lack of a business process improvement foundation, process orientation, and clear understanding of customer needs and expectations;
Lack of standardization of best practices;
Lack of statistical thinking;
Poor measurement systems;
Lack of plant floor follow-up and support;
Lack of corrective action procedures;
Bad mindsets and
Discouragement of organizational and individual learning.
Implementation
- Initial Stage -
Despite the potential benefit of TQM and lots of success stories, many organizations have abandoned or reduced their efforts of TQM program, mainly due to the poor and lower-than-expected results. The high failure rates of around 60 to 70 percent have also contributed to cease the movement of organizations to further develop the TQM program. Even though there are many critics of TQM, a large number of organizations have demonstrated improvement in achieving high quality, more satisfied customers, expanding market share and increasing employee morale. Hence, it is generally accepted that the reason why TQM failed was not because TQM has a flaw in its fundamental concept, but because an effective system or implementation was not conducted by organizations (Shin et al.).
In order to implement TQM successfully, meaningfully and effectively, organizations need to pay dedicated attention to several things, depending on which stage organizations are in. At the very beginning stage of TQM implementation, organizations should examine their core values and beliefs to identify what TQM means to each organization. Since there is no single approach that fits to all organization situations and cultures, each organization should have own tailor-made TQM approaches (Shin et al.). It enables organization to describe and define their vision or mission of TQM approaches, which have to be understood by all employees. Here, it is critical for senior management to create a vision or mission that incorporates quality as integral to the business. Having defined missions or goals, organization should take into account customer desires and needs when they actually develop the process improvement. Organizations should focus on the customer throughout process improvement as well as the entire TQM program, since exceeding the needs of both external and internal customer expectation is the ultimate goal of any TQM program (Tata, Prasad). Overall, the early stage of TQM implementation is led by senior management commitment to initiate the long TQM journey across the organization. One thing is worth mentioning here that management should lead employees to become partners rather direct and control entirely.
- Middle Stage -
At the middle stage of TQM implementation, organizationsEfocuses move to deep employee involvement, teamwork and training. After the initial TQM implementation ignited by senior management, it soon comes to the point that deep employee involvement and commitment are required to further facilitate quality improvement (Gurnani). All employees throughout the organization have to know how they can contribute to quality improvement and devote themselves to the quality process with solid aspirations to satisfy the customer, which in turn will enable them to achieve higher career paths. As organizations progress their performance gradually, the importance of effective teamwork becomes the essential enabler for organizations to seize the higher quality level of performance. This teamwork should be established and based on flow of work process across functional areas. Accordingly, organizations that have flat structures, not traditional hierarchical structures, are much more suitable to establish teamwork both efficiently and effectively (Tata, Prasad). With regard to training, this should be conducted constantly to sharpen employeesEskills, techniques and new technologies to profoundly understand the process. Furthermore, training provides a common language and common set of tools to be used in the organization (Gurnani).
- Final Stage -
At the final stage of TQM implementation, organizations should concentrate on employee empowerment. Correct problem identification and rectification, which leads to continuous improvement, can only be achieved through effective employee empowerment (Gunasekaran). After wide employee involvement and training has spread throughout the organization in the middle stage, problems can be solved at the place where they occurred immediately and appropriately by empowering employees in the organization. This empowerment has a conflict with traditional hierarchical organizations that tend to have relatively high vertical top-down order and direction from senior management. Even though those hierarchical organizations have lots of advantages, they seem to reach the limitation to adjust and survive in the current highly competitive business world. According to Deborah Anconna et al., organizations are becoming more networked, flat, flexible, diverse and global (3-12). These elements are well suitable to TQM implementation, in the middle and final stages. This indicates that a certain high-level of cultural change with the objective of creating a positive atmosphere is needed to the enhancement of TQM program. The cultural change has been one of the most difficult and time-consuming obstacles, however, organizations have to overcome it to fully appreciate the benefit of TQM.
Monsanto is a large producer of a wide variety of chemical related products, including Lustran plastics, thermoplastic elastometers, and Wear-Dated fabric fibers. Monsanto was pushed into TQM by the American auto industry. When firms in the American auto industry, including Ford and Goodyear began loosing market share to the Japanese they knew they must improve quality to survive. As these firms began to adopt TQM they asked (told) their suppliers to join in the effort to increase quality. Monsanto knew that if they didnt comply they would lose valuable customers. As if they needed any further convincing when Monsanto began to talk to quality experts it was revealed that over twenty percent of revenues were being lost as a direct result of the firms inefficiencies. Furthermore, the experts predicted a snowball effect. As inefficiencies were eliminated, moral would rise resulting in even greater productivity.
Monsantos first step was to define quality as "consistency in meeting agreed upon requirements with goods and services that add value." To achieve quality Monsanto set three guiding principles: 1. Focus on the customer; 2. Make perfection the goal in everything we do; 3. Involve everyone in the process.
Monsanto launched their TQM plan in 1986. From the beginning they believed training would be the key to success. Every employee was, and still is, required to attend a one-day training course on the basics of quality improvement. In the training courses employees are taught the importance of being customer focused, taught the value of teamwork, and finally empowered to make a difference. Empowering an employee means giving them the knowledge and authority to make decisions that are in the best interest of the customer.
After the initial training was complete Monsanto set out to develop various teams to ensure employee involvement. Teams were assembled to work on a variety of concerns, such as safety and production.
Empowering workers at one of the machine shops resulted in several innovations. Workers with years of experience that had never felt free to voice their suggestions began to come forward with ideas. Improvements included, redesign of several key machines and finding new uses for parts previously thought expendable. Net saving in the first five years amounted to nearly $2 million.
Since adopting TQM, Monsanto has been recognized with a number of quality awards. They have also seen improvements in safety, community relations, and a reduction in chemical waste that has made environmentalists happy. More importantly, profitability is on the rise. One plant alone has seen a $3 million a year improvement as a result of increased production and reduced waste.
Now that TQM has been in place for some time the culture at Monsanto has changed. New ideas are coming in from hourly employees on a daily basis. To encourage this trend to continue Monsanto believes in employee recognition. Recognition ranges from informal pats on the back from supervisors to formal presentations at the companies "Conference of Champions." Monsanto believes that through ongoing training and recognizing employees achievements they will remain a leader in the chemical industry for years to come.
Conclusion
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