BPR, TQM, Cross-cultural Aspects and

Models of Excellence

After reading this chapter, you will be able to

understand:
The concept of Business Process Restructuring
(BPR) and its influence on Production and
Operations Management (POM)
Technology and the Influence of Culture on POM
TQM and the Culture of Quality
Cross-cultural Issues of POM Functions
Pro-active and Re-active Culture
Best Practice Models of POM
Six Sigma Practices
Lean, Toyota Production System (TPS) and Quick
Response Manufacturing

Effective POM functions require the systematic restructuring

of organizations through business process restructuring
(BPR), lean management and Toyota Production Systems
(TPS) practices, Six Sigma, total quality management
(TQM), and quick response manufacturing (QRM). These are
the major drivers for organizational transformation.
BPR is essential to enable organizations to keep pace with
global competition. It requires organizations to align with
global change to redefine their missions, and if required,
even refocus their business priorities.
Lean management, TPS, TQM, Six Sigma, QRM, etc. require to
be understood in terms of production and operations
management functions.
Through the process of internationalization POM functions,
globally, companies are now able to emulate best practice
models, both in terms of theories and applications.

Business process is defined as logical tasks which are performed

to achieve some defined business outcome" (Davenport and
Short, 1990).
The two important attributes of a project are: customers (either
internal or external) and the cross-organizational aspect.
Internal customers are the employees of the organization,
while external customers are those who buy products and
services from the companies and other stakeholders.
The three dimensions of processes (Davenport and Short, 1990),
are:
Entities: Processes take place between organizational entities.
They could be inter-organizational, inter-functional or interpersonal.
Objects: Processes result in the manipulation of objects. These
objects could be physical or informational.
Activities: Processes could involve two types of activities
managerial and operational.

Successful business process reengineering considers peoplerelated issues as well. According to Hammer and Champy
(1993), introducing teamwork and empowerment of employees
in any organization would not be possible unless these are done
by addressing the culture of the organization.
Therefore, the restructuring of production and operations through
BPR; particularly when organizations go global, needs to be
thought of in the context of culture. Culture can be an enabler,
inhibitor or an outcome
Realizing the importance of culture-fit in the organizational
restructuring process, Davenport (1993) considered
organizational and human resource issues as being more
important than technological issues in BPR.
Johansson et al (1983) observed three stages of BPR:
Initial or Discover phase: it is important to consider values and
culture.
The Redesign phase: values and issues of culture are ignored, as
it is at this stage that the organization systematizes processes.
The Realize phase: issues of culture come up again. At this
stage of BPR, organizations create a new corporate culture.

Andrews and Stalick (1994) warn that leaders must not use
negative reinforcement, but rather, encourage an
environment which is : reflective, open, problem solving,
communicative, facilitating, packed with ideas, fun,
learning, productive, quality-focused and customer-driven.
Obeng and Crainer (1994) highlighted the idea that cultural
change precedes BPR.
Vidgen et al (1994) see culture, or at least the neglect of
people, as an inhibitor to effective implementation of BPR.
BPR can be defined as the fundamental rethinking and
redesign of the business processes of an organization,
addressing technological, human and internal ways of
functioning of the organization, keeping pace with the
changes, to achieve success in critical performance areas,
like cost, quality, service and delivery.
BPR has now become so synonymous with manpower
redundancy (although it is not), some scholars prefer to
refer to it as Business Process Management (BPM).

To assess the impact of BPR, McKinsey's 7s model is used.

1.
2.
3.
4.
5.
6.
7.

Strategy: to determine the allocation of scarce resources and to commit

the organization to a specific course of action.
Structure:, to determine the number of levels (in a hierarchy) and
authority centres.
Systems: to determine organizational processes, procedures, reports and
routines.
Staff: to determine the key human resource groups in an organization and
describe them demographically.
Style: to determine the manner in which managers should behave to
achieve organizational goals.
Super-ordinate goals (shared vision): to determine the guiding concepts
that an organization needs to instill in its members.
Skills: to determine the abilities of people in an organization.

The 7-S framework suggests that any change in any S factor may result
in an adjustment of other S factors. Recently, the concept of 8-S has
been introduced by adding one more S streaming. Streaming
includes those areas that either indirectly or directly influence or
shape all the 7-Ss.
Peters and Waterman (1982) in their pioneering work, `In search of
Excellence identified some common characteristics of excellent
organizations, which have now become important management
principles and also form the basis for BPR or BPM in organizations.
These are:
A bias for action Excellent firms make things happen.
Closeness to the customer These firms know their customers and
their needs.
Autonomy and entrepreneurship They value these in each employee.
Productivity They achieve this through people, based on trust.
Hands-on, value-driven management They make it mandatory.
Stick to the knitting They always deal from a position of strength.
Simple form, lean staff They develop cost-effective work teams.
Simultaneous loosetight properties They decentralize many
decisions, while at the same time, retaining tight overall control.

BPR

TQM

Essentially a top-down approach

Could be a top-down and a bottom-up

approach

Assumes that the existing system is

redundant and therefore reinvents
the process by reengineering an
organizational restructuring

Does not make the existing process

redundant; rather, it tries to improve
this, and hence, receives support from
employees.

Emphasizes radical changes and

improvements.

Aims at incremental improvements

Believes in total involvement, which

even extends to stakeholders,
including customers and suppliers

Could be even without the

participation of employees,

Involves flexibility, and hence, makes Implementation is ensured through

standardization as low as possible.,
standardization of practices. This
so documentation is not as in TQM
enables employees to achieve a
consistent performance.
Only makes use of information
technology

Makes use of statistical process

control

More like a project, which

emphasizes achieving a time-bound
target

TQM is by nature a cultural issue.

Used when organizations are in deep

TQM is a consolidation approach, and

Effective POM functions require the consideration of crosscultural influences on technology, its selection and
implementation.
We are increasingly getting things done through technology
which, quite universally, shapes culture. On the other hand,
technology is also influenced by our culture. For example, if
modern, remote-controlled blast furnaces replace traditional
blast furnaces in a factory, it changes work culture.
Two basic cultures, specific to technological issues are reactive
technological culture and proactive technological culture.
When the organization monitors the product, we understand
that the culture is reactive in nature. Here, the emphasis is on
finding the defects. In contrast, where the process is
monitored in an organization, we call it a proactive culture,
because such organizations focus on defect prevention, before
the defect arises. A proactive technological culture can only
be developed and sustained in an organization that addresses
people-related issues.

A proactive technological culture focuses on the prevention

of defects before they happen.
Proactive technological cultures never slow down process
improvement efforts.
Process improvement efforts have to be continuous,
considering quality and cycle time improvement as an
unending journey. The focus has to be on sustained human
resource development activities, like
training in process development
statistics
problem solving
project management and
new product design.
These organizations consider customers as being inseparable
from their operations and do their best for customer
integration with their business and operational plans.

Other characteristics of a proactive technological culture are:

It invests in training its operators, supervisors, managers,
engineers and technicians in Statistical Process Control (SPC),
Design of Experiments (DOE), Design for Manufacturability (DFM),
Problem Solving, etc.
Proactive technological culture operation makes use of DOE to
identify and quantify critical operating parameters or critical
success factors (CSF), using statistical tools such as SPC to
monitor the process.
It monitors the process continuously to initiate corrective action.
It monitors the process to prevent defects, and not to find defects
that have already arisen.
Proactive technological culture minimizes non-value added
activity. One such non-value adding activity is process inspection.
It is focused on using timely data to drive continuous
improvement.
A proactive technological culture does not solve the same
problems every day.
A proactive technological culture involves all functions in the
operation to brainstorm, evaluate and implement effective
process improvements.

Technological changes lead

to adjustments at three
levels: individual, social
organization and of the
cultural value system.
Therefore, the technology
must complement the
culture.
Even sociologists consider
technology as being a part
of culture, considering it as
inherited artefacts, goods,
technical processes, ideas,
habits and values.
For example reversed
gripping, demonstrated in
the picture, explains how
cultural issues can
influence technology.

Reversed gripping of share tools

According to Alrusheidat (2006), some of these culture-related
ergonomic aspects are :
Interface design: This relates to the use of human emotion in
product design. It is concerned with factors like colour and
shape. Culture-wise perceptions of colour differ. For example,
red indicates danger in western countries, while it symbolizes
happiness in China.
Control/display compatibility: It indicates spatial
movement of control, and refers to the users expectation of
the stimulusresponse relationship. A compatible system
considers perceptualmotor behaviour, that is, differences in
reading or scanning habits.
Workplace design: Suitable workplace design eliminates
harmful posture and improves user performance; it has to take
into account the users biological needs, preferences and task
requirements. Variations in preferred posture influence machine
and workplace design. Therefore, it deserves improvement in
the operators efficiency and comfort.
Design of protective equipment: There exist both
psychological and physical constraints with regard to wearing
protective clothing. In some cultures, the use of helmets may
be prohibited.

Technology is a science, it is the outcome of R&D initiatives by

firms. Chris Floyd in his `Managing technology for corporate
success (1970), defined technology as `the practical application of
scientific or engineering knowledge to the conception,
development or application of products or offerings, processes or
operations.
Technology is important for two critical reasons:
(1) to achieve success in business, sustaining competitive position,
and
(2) to promote the culture of innovation through technology for longterm sustainability.
Using technology as a driver for organizational change, both for longterm and short-term objectives, is now more a strategic than just a
technical issue.
The advanced technologies, which particularly affect the areas of
organizational operations, are:
designs and engineering
processing fabrication and assembly
automated material handling
Inspection
integration and control
network communication

How technology exerts an influence on the organization as a

whole, including its design, can be understood in the context
of the Thompsons model and Woodwards technologies.
Thompsons model: James Thompson (1967) developed
three classifications for technology:
(1) Intensive technology: is developed, keeping in view, a high
level of uncertainty. It helps to produce the desired
outcomes, even in uncertain situations by avoiding
technological obsolescence. It also makes workers
interdependent and creative and they become capable of
solving their work-related problems through mutual
coordination
(2) Mediating technology: brings together individuals and/or
groups to seek a mutually beneficial exchange of values.
This form of technological environment is more applicable in
service industries, like banks, financial institutions
(3) Long-linked technology: is appropriate for mass-production
processes, like an automobile assembly line.
Thompsons Model argues that each type of technology has
specific bearings on the design and structure of
organizations.

Woodwards Technologies:
Joan Woodward (1965) with her team of researchers studied
about 100 organizations in England in the 1960s, to establish
the linkage between the size and the structure of organizations.
However, they could not establish any such relationships. In
their follow-up study, they could find some relationships
between the structure and three basic forms of technology:
Small batch production technology: which is suitable for the
production of a few varieties of products, to meet the specific
requirements of customers.
Large batch or mass-production technology: which is used for
producing a large volume of standardized products to cater to
the demand of a large market.
Continuous process production technology: which is a
completely mechanized production process, where machines
undertake all the jobs, making people focus on quality
inspection and adjustment, and monitoring.
Woodward and her associates referred to such differences in
these three production technologies as technical complexity.

EFQM Excellence Model: introduced in early 1992, as the

framework for assessing applications for The European Quality
Award, it is the most widely-used organizational effectiveness
framework in Europe and has become the basis for most
national and regional Quality Awards.
It helps the organization to understand whether it is on the path
of excellence, duly identifying gaps and then stimulating
solutions. The fundamental concepts are:

Result Orientation

Customer Focus

Leadership and Constancy of Purpose

Management by Processes and Facts

People Development and Involvement

Continuous Learning, Innovation and Improvement

Partnership Development

Corporate Social Responsibility

The model is based on nine criteria. Five of these are enablers
and four are results. The enabler criteria cover what an
organization does. The results criteria cover what an
organization achieves. Results are caused by enablers and
feedback from results help to improve the enablers
1.

Shingo Prize Model of

Organizational Excellence
It is named after the Japanese
industrial engineer, Shigeo
Shingo, an engineering genius
who helped create the
revolutionary manufacturing
practices which comprise the
renowned Toyota Production
System.
The Shingo Prize philosophy is that
world-class business performance
may be achieved through focused
improvements in core
manufacturing and business
processes.
The Prize was established in 1988 to
promote awareness of Lean
manufacturing concepts and
recognize companies in the
United States, Canada and Mexico
that achieve world-class
manufacturing status.
The Shingo Prize Model includes 11
key elements of world-class
manufacturing. These elements
are grouped into five categories,
signifying that it is necessary to
integrate them into a complete
system to achieve world-class
results.
2.

3. Malcolm Baldrige Model for Organizational

Excellence
This Prize was started in 1987 to recognize U.S. companies for
their achievements in quality and business performance.
Three awards may be given annually in each of these
categories manufacturing, services, small business, and,
starting in 1999, education and healthcare.
The Baldrige performance excellence criteria are a framework,
and any organization wanting to improve its overall
performance can use such criteria as their basic guideline.
There are seven categories that make up the award criteria:
1. Leadership: examines how senior executives guide the
company and how the company addresses its responsibilities
to the public and practices good corporate citizenship.
2. Strategic planning: examines how the company sets its
strategic directions and how it determines key action plans.
3. Customer and market focus: It examines how the
company determines the requirements and expectations of
customers and markets.

4. Information and analysis: examines the management, effective use,

and analysis of data and information to support key company processes
and the companys performance management system.
5. Human resource focus: examines how the company enables its
workforce to develop its full potential and how the workforce is aligned
with the companys objectives.
6. Process management: examines aspects of how key
production/delivery and support processes are designed, managed and
improved.
7. Business results: examines the companys performance and
improvement in its key business areas:
a) customer satisfaction
b) financial and marketplace performance
c) human resources
d) supplier and partner performance and
e) operational performance.

Sigma is a letter in the Greek alphabet and is used to denote the

standard deviation of a process.
First developed by Motorola from the mid-1980s and adopted by
many major manufacturing organizations including General
Electric. GE Capital, the world's first service transaction-based
company introduced this in 1996.
It is the statistical application of Total Quality Management.
Sigma quality level describes the output of a process.
It emphasizes business process improvement in general, which
includes cost reduction, cycle-time improvement and increased
customer satisfaction.
It implies a whole culture of strategies, tools and statistical
methodologies to improve the bottom line of companies.
Higher sigma values indicate better quality products and lower
sigma values represent less quality products. At six sigma level,
products are virtually defect-free, that is, it allows for 3.4
defects per million Opportunities (DPMO) only.
Six Sigma has been discussed in detail in Chapter 10

Lean practices are characterized by world class performance (key

measures), world class practices (methods and processes) and the
culture of relentless continuous improvement (environment).
Originally developed at Toyota, it is now embraced as a necessity for
organizations to survive, particularly in a volatile market situation.
Through lean practices, Toyotas Production System achieved a 50%
70% improvement in productivity, floor space, working capital, quality
and safety within a 23 year time frame.
The transformation of an organization through lean practices starts with
the value stream which the sequence of steps which an organization
needs to perform to optimize its capital, material and labour costs to
satisfy customer needs; to eliminate unnecessary activities that cause
delays, add value and enhance customer satisfaction.
Lean practices require the creation of cells and the determination of flow
within the cells. The idea behind a cell is that there should have been
hardly any work-in-process, which might otherwise deter the valueadding steps. Work-in-process within a cell is controlled via pull
systems like kanbans, and production is managed through simple
scheduling/replenishment systems. Pull systems are continuously
developed to improve the value stream.

Quick Response Manufacturing (QRM) is a culture-centric

organizational strategy, which helps reduce the lead times in all
activities of the organizations. It identifies `white spaces
within and between processes, and accordingly, eliminates
those to shorten the time-to-market on products, and engineerto-order product solutions.
Toyota Production System (TPS)
TPS was developed in Japan by Toyota Corporation, led by Taiichi
Ohno. It was based on two primary concepts the
manufacturing production system of Henry Ford and the Ford
Motor Company, and the supermarket operations in the United
States.
Ohno visited the U.S.A. in 1956, and closely observed the
functioning of the supermarket, where the supply of
merchandise on every shelf was continuous, to ensure the
availability of the merchandise to the customers.
Emulating this, TPS incorporated the Just-In-Time (JIT) production
and Jidoka techniques to optimize time and human assets in the
manufacturing environment. TPS later became the basis for
lean production and the lean enterprise movements
beginning in the early 1990s.

JIT system of production manufactures and delivers

the required quantity just when it is needed.
Jidoka practices ensure availability of machines
and operators. Jidoka can detect the abnormal
condition in the production systems and can stop
it immediately. It ensures in-built quality in each
process and can separate men and machines to
achieve better work efficiency.
Kaizen ensures continuous improvement of the
entire value stream or an individual process,
adding more value with less waste. System or
flow kaizen focuses on the overall value stream,
and process kaizen focuses on individual process.
Both levels of kaizen benefit the organization,
achieving efficiency.