Chapter 10

Productivity, Quality, and Reengineering

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

productivity and Quality

The misconception exist that productivity and cost must be sacrificed if quality is to be improved, but it seems to be the view of those who rank production ahead of quality as the top priority.

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

The Leverage of Productivity and Quality

the leverage is even more dramatic if a smaller and more realistic return on sale is used. There are also potential additional companion benefits that can be achieved in quality.

Management System VS. Technology

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Measuring Productivity
Carl G. Thor principle of measurement for productivity and Quality: Meet the customer need Feedback Measure what is important Measure should be controllable and understandable Base measures on available data.
4

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Basic Measure Of Productivity Ratio Of Output To Input

Total Factor:
Partial Factor:

Total Output
Labor+Material+Energy+Capital

Total Output Labor Input Functional Department Measure Individual Measure Industry and competitive Measure
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

White-Collar Productivity
Causes of wasted time include: Poor Scheduling Slack start and quit times Lack of communication Between function Information overload Poor staffing Inadequate communication of assignments Unproductive meetings and telephone conversations
6

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

Five ways to increase Productivity

Reduce cost Manage growth Work smarter Pare down Work effectively

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

REDUCED COST
you must sit down with a team and go over the steps of TQM and decide if they are right for your company. Then, you can list out your goals and begin implementing the program. In order to be successful, customer feedback is a must! TQM is about changing the way you do business. The program is designed to improve quality of products and services while increasing profits. It does take some time to implement the process and see it work, but it will not be long before you begin to see results. Communication is a key tool to having a successful TQM process. Communication encourages everyone to improve in specific areas and it shows commitment from each member working on the process. TQM is definitely about the customer. TQM puts the customer at the center of every activity and considers the whole process as customer driven.
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

MANAGED GROWTH
What do employees do that contributes value to the company's services, or advances its mission? Conversely, what do the employees do that does not contribute value? If the organization was working in the most efficient and effective manner, how would they be organized and how would the activity be performed? What inhibits the organization from working in the most efficient and effective manner?

How else can the activity be provided?

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

PARE DOWN
Decrease gradually or bit by bit

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

10

Reengineering
It has been suggested that in order to reinvent their companies, manager need to abandon the organizatioanl and operational principles and procedures they are now using and create entirely new ones. These new ones can be combined into an emerging idea called business reengineering.

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

11

Principle of Reengineering
Organize around outcomes not tasks. Have those who use the output of the process perform the process. Subsume information processing work into the real work that produces the information. Treat geographical dispersed resources as though they were centralized. Link parallel activities instead of integrating their result Put the decision point where the work is performed Capture information once and at the source.
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM

12