Total Quality Management, Business Process Reengineering and Organisational Processes.

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Khoa Nguyen

Total Quality Management, Business Process Reengineering and Organisational Processes

Organisations all contain some sort of organisational processes. They also all strive to maintain high levels of profit.  History has come up with a number of innovative methods to maintain high performance levels. Most place this emphasis on the processes involved in the organisation. The more efficient the processes are in the organisation - the less work that has to be done down the track. One popular method revolves around improving processes is “Total Quality Management” (TQM).

“TQM is management and control activities based on the leadership of top management and based on the involvement of all employees and all departments from planning and development to sales and service. These management and control activities focus on quality assurance by which those qualities which satisfy the customer are built into products and services during the above processes and then offered to consumers.” (Mazur, 2002)

There are many arguments for TQM. From the article “Old wine in new bottles taste better: A case study of TQM implementation in the IRS” it discusses how they dealt with their fall behind in processing 180 million tax returns using TQM. (Mani, 1995, p1) One of the key arguments that the article raises for TQM is that it reduces rework. It stated that when the service provided is consumer/taxpayer driven is prompt and courteous then they “will be more likely to comply than one who does not”. (Mani, 1995, p6) This will lead to less “rework” that has to be done down the track as tax return forms would be filled out correctly the first time round. With the implementation of TQM, saw a reduction in “labor cost [in] processing these returns, fewer telephone calls from these tax payers, and a decrease in the volume notices to taxpayers who filed these returns”. (Mani, 1995, p6)

There are also great monetary benefits in adopting TQM in your organization as Mani suggests in the article. Quality Improvement Project (QPI) teams as the name suggests were introduced by the IRS as part of their TQM, to check the quality of processes involved in obtaining taxpayers’ tax returns. In doing so a total savings of $12 million was achieved in 1989 through numerous process flaws. (Mani, 1995, p7) This cost cutting flowed through to subsequent processing areas and generated additional savings. According to analysis carried out, even though there were “no statistically significant difference when one compares productivity before and after TQM implementation” (Mani, 1995, p12) at the IRS, this was seen to be the resultant cost to implementing and training employees about TQM.

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Mani also raised the argument that, TQM also helps maintain productivity gains. For example “two years after instituting a continuous improvement process, the Yokogowa Hewlett-Packard plant measured a consistent 50 percent improvement rate each 5.1 months and a tenfold reduction in scrap.” (Mani, 1995, p10) After believing that the problem was solved, the company abandoned TQM. As a result gains were not held and profit margins decreased. Mani also claims that projected figures for the future suggest that savings will continue to grow if TQM remain as business practice.

The article regarding air conditioners manufacturers in Japan and ...

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