INTERNATIONAL STRATEGIC MANAGEMENT
TQM (Total Quality management) and CPR (Core process reengineering)
Approaches
to managing at the operations level:
TQM and CPR
TABLE OF
CONTENTS
1.0 ABSTRACT
2.0 INTRODUCTION……………………………………………………………………………………………………...1
3.0 OVERVIEW……………………………………………………………………………………………………………..2
4.0 TRADITIONAL APPROACH TO QUALITY CONTROL.…………………………………………....….2
5.0 TOTAL QUALITY MANAGEMENT (TQM)……………………………………………………………..….4
5.1 Elements ofa Total Quality Management
Program....................................................... 6
5.2 How to measure TQM success? .............................................................................................
9
5.3 A TQM culture.........................................................................................................................................13
5.4 TQM implementation approaches....................................................................................................13
5.5 Strategies to develop TQM..................................................................................................................
14
5.6
Advantages of total quality management......................................................................................14
5.7 Disadvantages of Total Quality Management:
............................................................................14
6.0 CORE PROCESS ENGINEERING (CPR)............................................................................................................
15
6.1 Major Steps in CPR..
................................................................................................................................
16
6.2 Core Process Reengineering Cycle.
...........................................................................................
16
6.3Basic elements of CPR………………………………………………………….………17
6.4 Need for Re-Engineering: When and
Why..............................................................................
19
6.5 Methodology...............................................................................................................................................
20
6.6 How to implement a CPR project………………………………….……………..20
6.7 Problems That Effect CPR.
..................................................................................................................
21
6.8 Alternative techniques to CPR............................................................................................................
23
6.9 Application...................................................................................................................................................25
6.10 Reengineering Recommendations
............................................................................................
27
7.0 CONCLUSION..................................................................................................................................................................
28
1.0 ABSTRACT
TQM (Total Quality management) and CPR (Core process
reengineering) are two widely used complementary approaches to improving firms,
process capabilities. TQM focuses on encouraging a continuous flow of
incremental improvements from the bottom of organization’s hierarchy. CPR,
on the other hand is generally more of atop down approach, aimed at more
radical changes in how processes are designed. The principles of quality
management are well developed and, from a practical standpoint, thoroughly
implemented in the process industries of Japan. Although these principles are
now applied to the U.S. manufacturing industry, and as a result, the steel
industry, they have been largely ignored in the non-ferrous and precious metals
industries. This paper presents the concepts and practical approaches to
implement a total quality management program. Contrary to the beliefs of many
managers, such a program increase yields, recoveries and output while it
decreases unit costs. In fact, quality management incorporating statistical
process control will be an essential ingredient for metallurgical plants to
effectively compete in the future. Total Quality Management or TQM
Management as sometimes it is called, is a very broad continuous improvement
initiatives that many organizations have jumped into the band wagon aimed to
drive their business into sustainable profitability. Many organizations started
the Total Quality Management (TQM) journey with full Leadership commitment
and total Employee involvement. They laid the foundation in continuous
improvement culture and total quality, They provides various TQM Quality
training in the use of TQM Tools, implemented the TQM tools in improvement
projects. However, not many organization are able to sustain its continuous
improvement momentum long enough to create an impact to mold the total quality
culture in his organization. Core Process Reengineering involves changes in
structures and in processes within the business environment. The entire
technological, human, and organizational dimensions may be changed in CPR.
Information Technology plays a major role in Core Process Reengineering as it
provides office automation; it allows the business to be conducted in different
locations, provides flexibility in manufacturing, permits quicker delivery to
customers and supports rapid and paperless transactions. In general it allows
an efficient and effective change in the manner in which work is performed.
2.0 INTRODUCTION
 |
As noted by Deming (1982), in 1950 Japan’s net worth
was negative; it had no significant natural resources and had a reputation for
producing cheap, shoddy consumer goods. Their management, however, was open to
new ideas and they accepted that quality was the only way to turn their economy
around. Forty years later Japan’s manufactured products are the envy of the
world and are of the highest quality. Their approach to management of resources
is completely different from the traditional American approach. Total quality
management (TQM), having been established in the manufacturing industries, has
continued to grow and is now pervasive throughout enterprise in the country.
American industry continues to lose ground in world markets at the expense of Japanese
companies. Belatedly, some American manufacturing companies, notably Ford Motor
Company, have begun to implement the types of quality management approaches
used in the transformation of Japan’s industry. These manufacturing companies
are demanding that their suppliers use these same management approaches.
Therefore, there is a tendency for the quality concepts to move
"upstream" in the supplier chain. This has mostly occurred in the
steel industry, with some influence in base metals supplied to the steel
industry. Unfortunately, the influence of quality management concepts has not been
felt in most American companies in the base metals and precious metals
industries. A large majority of senior management personnel in these industries
is unfamiliar with essential quality management concepts such as statistical
process control (SPC). Based on the thrashing American manufactured products
have taken in world markets, one must expect that products from the chemical
and metals process industries will be next unless the change to "Total
Quality Management" is made soon. Core Processes are simply a set of activities
that transform a set of inputs into a set of outputs (goods or services)
for another person or process using people and tools. We all do them, and at
one time or another play the role of customer or supplier. You may see
Core Processes pictured as a set of triangles as shown below. The purpose of
this model is to define the supplier and process inputs, your process, and the
customer and associated outputs. Also shown is the feedback loop from
customers. Core Process reengineering (CPR) is a management approach
aiming at improvements by means of elevating efficiency and effectiveness
of the processes that exist within and across organizations. The key to CPR
is for organizations to look at their Core Processes from a "clean slate"
perspective and determine how they can best construct these processes to
improve how they conduct business. Core Process reengineering is also known as
CPR, Core Process Redesign, Business Transformation, or Core Process
ChangeManagement.CPR relies on a different school of thought than continuous
process improvement. In the extreme, reengineering assumes the current process
is irrelevant - it doesn't work, it's broke, forget it. Start over. Such a
clean slate perspective enables the designers of Core Processes to disassociate
themselves from today's process, and focus on a new process. In a manner of
speaking, it is like projecting yourself into the future and asking yourself:
what should the process look like? What do my customers want it to look like?
What do other employees want it to look like? How do best-in-class companies do
it? What might we be able to do with new technology?
Such an approach is pictured below. It begins with
defining the scope and objectives of your reengineering project, then going
through a learning process (with your customers, your employees, your competitors
and non-competitors, and with new technology). Given this knowledge base, you
can create a vision for the future and design new Core Processes. Given the
definition of the "to be" state, you can then create a plan of action
based on the gap between your current processes, technologies and structures,
and where you want to go. It is then a matter of implementing your solution. In
summary, the extreme contrast between continuous process improvement and Core
Process reengineering lies in where we start (with today's process, or with a
clean slate), with the magnitude and rate of resulting changes.
3.0 OVERVIEW
This assignment provides a description of Total
Quality Management (TQM) and Core process reengineering (CPR) which are both
usually managed as broad-based, multifaceted improvement efforts that entail a
variety of initiatives and activities. Initially we depict the picture of
TQM and then CPR and find their similarities and differences on approaches to process
improvement.
4.0 TRADITIONAL APPROACH TO QUALITY CONTROL
Quality control has been an important function in
organizations producing goods for sale where product specifications are
important. Quality control has generally not been an important function where product
specifications are not important at the point of sale. This is many times the
case for commodities early in the production chain, for example, the shipment
of concentrates. The approach to quality control has usually followed this
sequence:
Produce the product with major
emphasis on cost and quantity. Measure the product after it is
produced to determine whether it meets product specifications. Ship products meeting
specifications and reject products not meeting the specifications.
This sequence is almost universally followed by
arguments between the production department and quality control department over
the amount of product rejected. In operations where quality is not a concern at
the point of sale, the sequence generally skips step numbers two and three in
the list above. In the traditional management approach, quality control is
generally thought to result in higher marginal costs of production. Tighter
control requires more scrutiny, which requires more inspectors. Tighter controls
also result in additional production costs because productivity is decreased as
a result of additional controls in the production process. Where quality
control is not practiced, costs would be the least since these controls would
not be required. For this reason, operating managers, quite naturally, are most
interested in avoiding additional emphasis on quality. This is particularly
true when there is no requirement for quality control at the point of sale. As
was initially postulated by American quality pioneers, such as Walter A.
Stewart and W. Edwards Deming, and amply proved in practice by Japanese heavy
industry, the traditional American approach to quality management is almost
entirely wrong.
5.0 TOTAL QUALITY MANAGEMENT (TQM)
To maximize quality, variation must be minimized.
Variation is sometimes called the fundamental cause of poor quality (Evans,
1989).Variation can also be called the fundamental cause of high unit costs. For instance, low cyanide concentration in a
leach circuit will result in lower recoveries. High cyanide concentration will
result in excessive cyanide consumption. In either case, unit production costs
are increased. Examples of the impact of variation on unit production costs are
endless. Whether one talks about the flux control in smelting, reagent control
in flotation, or density control in grinding, variation from design parameters
will increase unit production costs; the more the variation the higher the
costs. The total quality management approach concentrates on reducing variation
in the production process. To the degree this is successful it improves quality
and unit costs at the same time. Therefore, the total quality management
approach is essential not only to improve quality, but to optimize production
costs. To survive in the increasingly competitive world market these approaches
are essential whether or not the quality control of product is important in the
traditional sense.
Variation
There are two types of variation: random and
non-random. Random variation results from inherent characteristics of the
production process. A reagent metering feeder will vary the quantity of reagent
metered per unit time around some mean value. The amount of the random
variation will be a function of the type of feeder, clearances in its
construction, stability of the control loop, type of variable speed drive, etc.
Non-random variation results from influences from outside the process system,
which are generally under the operator’s control. Such non-random variation
might result from equipment disrepair, changes in feed characteristic without
appropriate adjustment to the system by the operator, or other influences on
the process. The first requirement for improving quality (and costs) is an
understanding of the nature of variation, and the means to determine the degree
of random and non-random variation in the production process. The second
requirement is to take appropriate action to reduce non-random variation. The
third requirement is to take appropriate action to reduce the random variation.
Actions effective in minimizing non-random variation are useless and counterproductive
when used to reduce random variation.
5.1 ELEMENTS OF A TOTAL QUALITY MANAGEMENT
PROGRAM
The following elements are essential in any successful
quality management program:
Management commitment to total
quality management. Training in simple statistical
techniques, the nature of samples, collecting data, variation and the program
to be implemented. Organization structure
emphasizing work group authority and accountability for results. Statistical process Control (SPC)
system to monitor and control process variable variation. Formal performance reports based
on output from the SPC system. Systemized team approach to
problem solving. Continuing emphasis on reducing
variation in the product process.
Management commitment
To be effective the total quality management program
must be executed by front line shift personnel. For this to work, however, top
management must be totally committed to the program. There have been many
instances where senior managers gave lip service to implementing quality
programs simply to keep customers happy, or where managers wanted to go with
the latest management fad. In these cases the program is doomed to failure. The
system, when implemented, will cause problems to surface. Many of these
problems will require decisions and actions by senior management. If such
actions are not forthcoming, employees quickly become disillusioned with the
program. We recommend that a quality management manual is produced with the
company’s commitment to quality spelled out in the introduction and signed by
the senior site executive. This commitment must include sufficient
participation and training for site personnel to ensure their understanding of
the program.
Training and
participation
Statistical process control will require operators,
using charts prepared by engineering personnel, to compute means and ranges
based on measurements of groups of data. These data will then be plotted on control
charts and used to assess variation in the process. The plotted data will
indicate the degree of random and non-random variation. Following initial
training in using the SPC approach, work teams consisting of operators,
foreman, and metallurgists, working together as a team, establish the control
methods for each plant area.
Organization structure
While the traditional organization must remain
intact, the quality management system will be driven from the bottom up. The
primary responsibility of foremen will be to train operators, provide technical
advice on data collected, and ensure non-random variation is acted upon
immediately and to work with more senior management personnel in the continuing
effort to reduce random variation. The primary responsibility of more
senior managers will be to provide employees with a process control system and
necessary training in its use. Senior management is also responsible to
participate in problem solving teams and to make improvements to the process, where
necessary, to reduce random variation. Accountability for results will be
pushed to the lowest possible level. Control charts will be used by the
operators to assess performance over the short term. Summary performance
reports prepared from the statistical process control system will be used to
assess performance over the longer term. Operators must be given the necessary
authority and latitude to make required adjustments to reduce non-random variation
indicated by the control charts. Operators, close to the work, are also likely
to have good suggestions for process system modifications necessary to reduce
random variation.
Statistical process
control (SPC)
The objective of SPC is to identify non-random
variation in a critical process variable as soon after it occurs as possible.
It also allows for identifying the degree of random variation that is an
inherent part of the process itself.
The following steps are used to construct an SPC
program:
Divide the
production operation into major process areas. A major process area usually has
the following characteristics:
A major
function with measurable output,
Contains
equipment dedicated to a single task, and
Has an
assigned regular work crew. Examples might include a grinding circuit, smelting
furnace or flotation circuit. Identify each unit
operation in the process control area. A unit operation normally has the
following characteristics:
A specific
operation performed in the process area, and
Usually
results in a physical or chemical change to the feed or product material.
Examples might include a ball mill, cyclone or filter. Identify the
critical process variables for each unit operation. A critical process variable
usually has the following characteristics:
A parameter
significantly affecting the performance of the unit operation, and
A measurable and controllable quantity for
which someone can be held accountable. Examples of process variables might include
temperature, density, size, or flow rate.
A process control chart illustrating the process areas,
unit operation sand variables are included in the quality management manual. Accountabilities
are also shown for control of each unit operation.
A control standard is then developed for each
process variable. The control standard establishes the method and
accountability for control. The format for a control standard can be
flexible, but might include the following:
Variable to be controlled Accountability Definitions Process Standard Reason for Control Measurement Reporting Control Chart Operating Procedure Corrective Action Disposition of non-compliant
product
The control standard is included in the quality
management manual. Ideally, the control standards would be a part of an overall
set of manuals for the plant which would also include a process
description, safe job procedures, etc.
5.2 HOW TO MEASURE TQM SUCCESS?
Implementing TQM is an initiative many organizations
wanted to embark on. Assuming that you are a leader of this organization, a common
question you probably asked would be: “How do I know whether my organization is
successful in implementing TQM?” TQM implementation has been in my mind
for a long time and I wondered how to measure the success of TQM implementation
in an organization. If we take organizations who are winners of the Baldrige Award,
then my question is whether taking an assessment based on Baldrige Criteria an
appropriate measure to gage the success of TQM in an organization. There
is no doubt that measuring TQM implementation is success rate is of interest
with all if not most leaders. Otherwise, how would you as a leader know the
effort put into implementing TQM is really worthwhile, more so when a lot of
resources such a money, man power etc are deployed to support the
implementation of a TQM initiative. So, would you ask a similar question before
the TQM initiative is started? Or you would ask half way during its
implementation? How would you like to measure the success of the TQM
implementation? Do you accept the opinion of your management comment alone or
you rather based on some form of evaluation result? One of the ways to evaluate
the TQM success is to adopt a holistic approach of assessing your organization.
One of the examples of such a holistic approach is the Malcolm Baldrige
National Quality Award assessment approach. This is a national level award
system in the United States to recognize organizations for achieving an
excellent in their respective business. To prepare for an assessment, you
need to understand the Baldrige criteria which are used a reference for the
assessment. Once you have understood the Baldrige Criteria, you would start to
conduct an assessment based on these criteria. You may perform a self
assessment guided by the Baldrige Self Assessment criteria to ascertain your
level of performance with reference to the Baldrige Criteria. For a self
assessment, it takes must lesser time. Alternatively, you can go for a full
scale assessment. This mode of assessment maybe conducted by your management
team or a 3rd party Baldrige Assessors. To help you to adopt the Baldrige
Criteria, there are eleven core values and concepts used by the Baldrige
Criteria. To jump start your assessment effort, perhaps you start with the
understanding of these core values and concepts.
Customer-driven quality
TQM has a customer-first orientation. The customer,
not internal activities and constraints, comes first. Customer satisfaction is
seen as the company's highest priority. The company believes it will only be successful
if customers are satisfied. The TQM Company is sensitive to customer
requirements and responds rapidly to them. In the TQM context, `being sensitive
to customer requirements' goes beyond defect and error reduction, and merely
meeting specifications or reducing customer complaints. The concept of
requirements is expanded to take in not only product and service attributes
that meet basic requirements, but also those that enhance and differentiate
them for competitive advantage. Each part of the company is involved in Total
Quality, operating as a customer to some functions and as a supplier to others.
The Engineering Department is a supplier to downstream functions such as Manufacturing
and Field Service, and has to treat these internal customers with the same
sensitivity and responsiveness as it would external customers.
TQM leadership from top
management
TQM is a way of life for a company. It has to be
introduced and led by top management. This is a key point. Attempts to
implement TQM often fail because top management doesn't lead and get committed
-instead it delegates and pays lip service. Commitment and personal involvement
is required from top management in creating and deploying clear quality values
and goals consistent with the objectives of the company, and in creating and
deploying well defined systems, methods and performance measures for achieving
those goals. These systems and methods guide all quality activities and
encourage participation by all employees. The development and use of performance
indicators is linked, directly or indirectly, to customer requirements and
satisfaction, and to management and employee remuneration.
Continuous improvement
Continuous improvement of all operations and
activities is at the heart of TQM. Once it is recognized that customer
satisfaction can only be obtained by providing a high-quality product,
continuous improvement of the quality of the product is seen as the only way to
maintain a high level of customer satisfaction. As well as recognizing the link
between product quality and customer satisfaction, TQM also recognizes that product
quality is the result of process quality. As a result, there is a focus on
continuous improvement of the company's processes. This will lead to an
improvement in process quality. In turn this will lead to an improvement in
product quality, and to an increase in customer satisfaction. Improvement
cycles are encouraged for all the company's activities such as product
development, use of EDM/PDM, and the way customer relationships are managed.
This implies that all activities include measurement and monitoring of cycle
time and responsiveness as a basis for seeking opportunities for improvement. Elimination
of waste is a major component of the continuous improvement approach. There is
also a strong emphasis on prevention rather than detection, and an emphasis on
quality at the design stage. The customer-driven approach helps to prevent
errors and achieve defect-free production. When problems do occur within the
product development process, they are generally discovered and resolved before
they can get to the next internal customer.
Customer-driven quality
TQM has a customer-first orientation. The customer,
not internal activities and constraints, comes first. Customer satisfaction is
seen as the company's highest priority. The company believes it will only be successful
if customers are satisfied. The TQM Company is sensitive to customer
requirements and responds rapidly to them. In the TQM context, `being sensitive
to customer requirements' goes beyond defect and error reduction, and merely
meeting specifications or reducing customer complaints. The concept of
requirements is expanded to take in not only product and service attributes
that meet basic requirements, but also those that enhance and differentiate
them for competitive advantage. Each part of the company is involved in Total
Quality, operating as a customer to some functions and as a supplier to others.
The Engineering Department is a supplier to downstream functions such as Manufacturing
and Field Service, and has to treat these internal customers with the same
sensitivity and responsiveness as it would external customers.
TQM leadership from top
management
TQM is a way of life for a company. It has to be
introduced and led by top management. This is a key point. Attempts to
implement TQM often fail because top management doesn't lead and get committed
-instead it delegates and pays lip service. Commitment and personal involvement
is required from top management in creating and deploying clear quality values
and goals consistent with the objectives of the company, and in creating and
deploying well defined systems, methods and performance measures for achieving
those goals. These systems and methods guide all quality activities and
encourage participation by all employees. The development and use of performance
indicators is linked, directly or indirectly, to customer requirements and
satisfaction, and to management and employee remuneration.
Continuous improvement
Continuous improvement of all operations and
activities is at the heart of TQM. Once it is recognized that customer
satisfaction can only be obtained by providing a high-quality product,
continuous improvement of the quality of the product is seen as the only way to
maintain a high level of customer satisfaction. As well as recognizing the link
between product quality and customer satisfaction, TQM also recognizes that product
quality is the result of process quality. As a result, there is a focus on
continuous improvement of the company's processes. This will lead to an
improvement in process quality. In turn this will lead to an improvement in
product quality, and to an increase in customer satisfaction. Improvement
cycles are encouraged for all the company's activities such as product
development, use of EDM/PDM, and the way customer relationships are managed.
This implies that all activities include measurement and monitoring of cycle
time and responsiveness as a basis for seeking opportunities for improvement. Elimination
of waste is a major component of the continuous improvement approach. There is
also a strong emphasis on prevention rather than detection, and an emphasis on
quality at the design stage. The customer-driven approach helps to prevent
errors and achieve defect-free production. When problems do occur within the
product development process, they are generally discovered and resolved before
they can get to the next internal customer.
