Organizational change is the procedure of changing the strategies, technologies, culture, processes, structure and regulations of the organization to reorganize the operation of the companies so that a positive shift of environment can be brought about in the organization. Total Quality Management or TQM change tools are defined as the management approach to the long-term success through customer satisfaction. This type of change tool is effective for the change in the service industry. On the other hand, Business process reengineering or BPR tool purely focusses on the perfect analysis and design of the business processes and workflows in the organization. This essay explores the contention that both Total Quality Management or TQM change tools and Business process reengineering are useful for the service industries, but only Business process reengineering is a useful change tool for manufacturing industries.
This essay will be first discussing two important change tools Total Quality Management and Business process reengineering along with their operations. Secondly it will discuss the similarities and differences between the manufacturing and service companies with example and finally analyses the effective application of these two change tools on these two types of industries. This essay will give scope to understand the efficiency of these two change tools in the different sectors of business. However, this essay will not cover the efficacy of these tools in the retail industries or IT industries of the world.
Total Quality Management tools guarantees success of the organizations when all the members of the organizations take part in improving the products, process and services as well as the culture of the organization so that their service to the customers becomes more improved. There are eight primary elements of TQM which includes the customer focuses, total employee involvement, process centralism, integrated system, strategic as well as systematic approach, factual decision making and communications (Murmura et al. 2018). It is a management system especially applicable for the organizations which depend only upon the customers satisfaction. Therefore, this involves all the employees of the organization for this improvement. This uses data, strategies, along with the effective communication among the other stakeholders so that it can integrate quality discipline in the organizational culture as well as its activities. This is the reason why the organizations use this tool for its systematic and participative approach that creates scope for planning ad implementing a constant organizational improvement process (Olivier, Borros and Reyes 2014). TQM also focusses on the exceeding the customer’s expectations, building commitments, identifying problems and promoting an open decision-making process among the employees of the organization.
Business process reengineering or BPR tool analyses and designs the business processes. This involves radical redesigning of the core business process for achieving dramatic improvement in the quality, productivity and cycle times of the firms. Under this technique, the companies being changes from the root situation as they stat from scratch and rethink the existing processes for delivering more value to their customers. This tool helps the companies to restructure their organization by focusing on their ground up design of the business processes. This business process reengineering technologies emphasize a holistic focus on the business objectives as well as how the processes are related to them. This tool encourages a full-scale recreation of the processes rather than iterative optimization of the sub-processes. There are five factors that help the companies to apply Business process reengineering process and gain success. These include team composition, corporate needs analysis, sufficient information technology infrastructure, efficient change management as well as continuous improvement (Park, Park and Yoo 2018). This particular toll has six sequential stages which makes it systematic. These stages include, envision new processes, change of initiative, process diagnosis and redesign, renovation finally process monitoring.
Manufacturing companies like different car manufacturing and garments manufacturing companies in the world use components, raw materials or parts to produce finished goods. These ready products can be then directly sold toe the consumers or to other companies who will make these products to make different products. In most of the manufacturing companies in this business context, the production includes robots, computers, machines, clothes and other things. Manufacturing companies often use assembly line (Balan 2017). It is the process where the products are put together in the order from first work station to the second. This process is used to move the product down the assembly line and finished goods are assembled with less time and less manual labor.
On the contrary the service industries mainly generate income through providing services instead of selling physical products like the manufacturing companies. The service industry provides the customers benefits by performing their works in an expert manner by the teams or individual manner. The offerings of the service business provide intangible products like banking, accounting, consulting, cleaning, education, treatment, insurance and transportations services. There are six aspects in which both manufacturing and service industries work similarly. Both these industries operate in a similar way in the forecasting and capacity planning to march the supply and demand. The process management and managing variations are also similar for both these industries. Both service as well as manufacturing industries monitor and control costs so that they can provide competitive prices to customers but still turn profit. There are similarities in the supply and management for both industries. The local planning, inventory management and scheduling factors are similar for both the industries.
There are five major differences in manufacturing and service industries. First it is associated with the tangibility of the outputs. The products in service industry is intangible but manufacturing companies produce physical good. Secondly, the service firms do not hold inventory like manufacturing companies. They create a service when the clients need but the manufactures stock their products to supply according to the market demands. Thirdly, the service industries do not reduce their services unless the customers require (Mehmann and Teuteberg 2016). However, they design the contents and develop the scopes in advance so that the service can be provided immediately after demand. Fourthly, differences are also present in the labor requirements. The service industry is intensely labor intensive which cannot be automated easily like the manufacturing industry. Service firms produce service designed to the needs of the customers and deliver them shortly after the demand. On the contrary, the manufacturing firms can produce goods without customer order or forecasts of the customer demand. Finally, the service industry is not location bound as creating and delivering of the services can take place anywhere but manufacturing firms must have a perfect physical location for production as well as their stock holding operations.
Application of Total Quality Management to manufacturing industries has various facets. This participle tool is used by the manufacturing companies to improve their internal processes so that they can enhance their customer service, cut operational costs and compete with world class manufacturing companies. As the finished goods of the manufacturing companies are the main process of attracting customers and enhance profit level, therefore, total quality management tool is used to bring changes in the departments. According to Madanhire and Mbohwa (2016), total quality management tool, needs a comprehensive approach which must be recognized and then applied if the positive consequences are to be gained. For the manufacturing industry, the current business situation has become more competitive where the mangers of the care manufacturing companies like Ford, BMW and the manufacturing brands like H&M, Zara, Louis Vuitton, Nike, Gucci and Adidas are compelled to plan strategically so that they can hold the market share and increase them effectively. According to Olivier, Borros and Reyes (2014) there are some disadvantages of using TQM in the manufacturing industry which includes its high cost of time. In this business condition full of uncertainty, the manufacturing companies who require to apply TQM in their organizations, will get the results after a long period of time. Hence it is considered to be a log-term investment.
In the service industry, the companies are more customer demand oriented and this is the base of their competition. The more customers are satisfied, the more the companies will earn profit. In such a context, total quality management helps these industries to improve competitiveness flexibility and effectiveness. According to Park, Park and Yoo (2018) who have mainly focused on the airlines business, stated that this tool emphasizes a set of practices which effectively help the companies to continue improvements, meet customer needs, reduce reworks and long-range thinking process, enhanced, teamwork process and employee attachment, process redesigning, benchmarking and constant measuring of results and closer connection with the suppliers. However, as pointed out by Lau et al. (2016), the labors of the service industry think that they are at risk under the TQM program hence do not support change.
The manufacturing industries as mentioned before, operate in a highly competitive market. Therefore, Business process reengineering therefore helps the companies to fight increasing competition and reach the market faster. To Balan (2017), Business process reengineering has definite process which many focusses on the department of production, customer orders, material management, distribution and logistics, financial management and finally human resource management. All these processes when work under BPR, help the companies to meet specific objectives in one hand and build as well as maintain a good relationship with the suppliers and customers (Esbenshade et al. 2016). In addition to this, the manufacturing industry need to supply their products as early as possible to the customers therefore, they need to stock goods or increase production which is often not possible for the human labors. Business process reengineering helps the manufacturing companies to process automation in the production which can never be applicable to the service industries. To Asika and Awolusi (2013), BPR thus helping the companies to increase their innovation process to build a new information system and thus making the process better. However, to Soni and Kodali (2017) BPR has some common pitfalls such as it does not give the companies the scope to gain immediate competitive advantage. Secondly implementing this process is also not simple and it is also not appraising for all the manufacturing companies.
BPR process in the service industries is effective as this creates value by the capabilities for competitiveness. The managers of healthcare, airlines and other service industries are preferring this particular tool as this can discover the best and most effective processes for performing work and optimize productivity (Jung and Lee 2016). The fundamental rethinking as well as radical redesign of the business process add value to the customer which is the main aim of the service industries. According to Kumar and Rahman (2014), BPR has been known as a type of organizational change which is categorized by strategic transformation of the interrelated organizational subsystems that produces various levels of impacts. This particular organizational change tool recognizes that the BRP is not monolithic notion but continuum of methods to process change in the service industry. However, Safari (2016) has pointed out that many of the service organizations are not able to invest time as well as resources for implementing this radical and clean state approach. These companies are not able to arrange for developed information technology required by significant process improvement. For attaining the best result of this tool, the companies must arrange for training as the people performing each day will need perfect knowledge abiu this process. finally, Most of the BPR tools do not seem to be considering the sudden change of customer needs.
Therefore, it can be concluded that the positive shift of environment can be brought about in the organization through organizational changes. In order to apply changes effectively, the companies need to apply Total Quality Management and Business process reengineering tools. There are huge differences in the manufacturing and service industries starting from the operations, customer base and output. This is the reason why different companies need to apply different tools. However, both Total Quality Management or TQM change tools and Business process reengineering are useful for the service industries, but only Business process reengineering is a useful change tool for manufacturing industries as this apply the core business process of this type of industry and support less to the service industry.
References:
Asika, Nnamdi, and Olawumi Dele Awolusi. 2013. Modelling critical success factors of business process reengineering and business performance of nigerian oil and gas companies. International Journal of Services and Operations Management 15 (1): 28-43.
Balan, Srinivasan. “Using Simulation for Process Reengineering in Refractory Ceramics manufacturing—a Case Study.” The International Journal of Advanced Manufacturing Technology 93, no. 5 (2017): 1761-1770.
Esbenshade, Jill, Matt Vidal, Gina Fascilla, and Mariko Ono. “Customer-Driven Management Models for Choiceless Clientele? Business Process Reengineering in a California Welfare Agency.” Work, Employment & Society 30, no. 1 (2016): 77-96.
Jung, Dong-Ii, and Won-Hee Lee. 2016. Crossing the management fashion border: The adoption of business process reengineering services by management consultants offering total quality management services in the united states, 1992-2004. Journal of Management and Organization 22 (5): 702-19.
Kumar, Arun, and Shams Rahman. 2014. RFID-enabled process reengineering of closed-loop supply chains in the healthcare industry of singapore. Journal of Cleaner Production 85 : 382-94.
Lau, Andrew W. T., Y. S. Li, S. L. Tang, and K. W. Chau. “TQM Application by Engineering Consultants in Hong Kong.” The TQM Journal 28, no. 4 (2016): 561-587.
Madanhire, Ignatio, and Charles Mbohwa. 2016. Application of just in time as a total quality management tool: The case of an aluminium foundry manufacturing. Total Quality Management & Business Excellence 27 (1-2): 184-97.
Mehmann, Jens and Frank Teuteberg. “Process Reengineering by using the 4PL Approach.” Business Process Management Journal 22, no. 4 (2016): 879-902.
Murmura, Federica, Nicola Casolani, Lolita Liberatore, and Assia Vicentini. “An Empirical Analysis of ISO 9001:2008 Application in Italian Services and Manufacturing Companies.” Total Quality Management & Business Excellence 29, no. 7-8 (2018): 786-797.
Olivier, Djamila, Salvador Borros, and Guillermo Reyes. 2014. Application-driven methodology for new additive manufacturing materials development. Rapid Prototyping Journal 20 (1): 50-8.
Park, Min-Je, Jong Woo Park, and Hanjoo Yoo. “Application of Affective Engineering to Service Industries: Feelings from Airlines’ in-Flight Service Elements.” Total Quality Management & Business Excellence 29, no. 9-10 (2018): 1025-1042
Safari, Arsalan. “An Effective Practical Approach for Business Process Modeling and Simulation in Service Industries.” Knowledge and Process Management 23, no. 1 (2016): 31-45.
Soni, Gunjan and Rambabu Kodali. “A Classification Scheme for Representing the Variation in Business and Supply Chain Performance in Indian Manufacturing Industry.” Benchmarking: An International Journal 24, no. 4 (2017): 1013-1036.
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