tqm vs bpr

American Journal of Scientific Research

ISSN 1450-223X Issue 46 (2012), pp. 47-59

© EuroJournals Publishing, Inc. 2012

http://www.eurojournals.com/ajsr.htm

Total Quality Management, Business Process Reengineering &

Integrating Them for Organizations’ Improvement

Farshad Gouranourimi

Industrial Engineering Department

University of Taras Shevchinko, Kiev, Ukraine

E-mail: [email protected]

Tel: +98-911-1128213

Abstract

In today’s era, management is confronted with new methodologies to provide

competitive solutions. Enterprise engineering focuses on the planning of the future

enterprise, as well as the methods needed to transform the enterprise. The synchronized

implementation of these methods facilitates in achieving the expected benefits.

The paper focuses on two such methods, business process reengineering (BPR) and

total quality management (TQM) providing a critical review for each of the literature

selected and proposing some additional insights.

Keywords: Total Quality Management (TQM), Business Process Reengineering (BPR),

Organizations’ improvement

1. Introduction Quality has been a fascinating buzzword in the organizational world for the last few decades of the

20th century. Quality has been a fascinating buzzword in the organizational world for the last few

decades of the 20th century. In particular, ever since Edward Deming and Joseph Juran introduced and

developed their perspectives of quality, many organizations with their managers and employees have

been focusing on this single concept of quality. Two major models of quality have emerged, total

quality management (TQM) and business process re-engineering (BPR).

Organizations have been continuously experimenting with either one or both models while

grappling with the issue of implementing quality, managing change, improving productivity and

achieving success.

Over the past two decades, total quality management (TQM) has become most widely used

management acronym and is considered as the buzz word in the management practices. It has been

well accepted by managers and quality practitioners as a change management quality approach

(Arumugam et al., 2009). It plays a vital role in the development of management practices (Prajogo

and Sohal, 2003; Hoang et al., 2006). Many researchers asserted TQM as an approach to improve

effectiveness, flexibility, and competitiveness of a business to meet customers’ requirements (Oakland,

1993), as the source of sustainable competitive advantage for business organizations (Terziovski,

2006), as a source of attaining excellence, creating a right first-time attitude, acquiring efficient

business solutions, delighting customers and suppliers etc. (Mohanty and Behera, 1996) and above all

as a source of enhancing organizational performance through continuous improvement in

organization’s activities (Claver-Cortes et al., 2008; Teh et al., 2009). In recent decades, the level of


Integrating Them for Organizations’ Improvement 48

awareness towards TQM has increased drastically and has gone to its peak to become a well-

established field of research (Arumugam et al., 2008; Yusof and Aspinwall, 1999) due to intense

global competition, increasing consumer consciousness of quality, rapid technology transfer, and

towards achieving world-class status.

In response to these challenges and to facilitate the organizations in achieving higher quality

levels, many companies are implementing TQM approach and quality initiatives for achieving

sustainable competitive advantage and enhanced company performance.

Organizations are continuously seeking for innovative ways to operate in order to survive in a

competitive business environment. Management approaches such as Business Process Re-engineering

(BPR) are adopted by many organizations in order to achieve a dramatic increase in performance and

cost reduction. According to Blyth “Business process re-engineering is an approach where processes

are re-structured, re-designed and re-engineered so as to maximize an organization's potential”(Kontio,

2007). “Business process reengineering is the fundamental rethinking and radical redesign of business

processes to achieve dramatic improvements in critical contemporary measures of performance, such

as cost, quality, service, and speed”.

Business process reengineering is one approach for redesigning the way work is done to better

support the organization's mission and reduce costs. Reengineering starts with a high-level assessment

of the organization's mission, strategic goals, and customer needs.

1.1. Analyzing TQM and BPR

TQM, based on many of the ideas of Deming, Juran and Crosby, aims to improve the processes within

an organization by emphasizing organization-wide continuous quality improvement. It focuses on

implementing incremental change with minimal variation to existing processes. These activities

include:

Focusing on customers’ needs and customer satisfaction.

Analyzing business processes to improve customer service as well as organization-wide

efficiency.

Proclaiming the values of teamwork, employee empowerment, and participative decision-

making throughout the organization.

Reasoning based on statistical analyses using factual data.

Training and educating employees and managers in the organization.

BPR, based primarily on the works of Davenport & Short (1990) and Hammer (1990), focuses

on improving business processes through implementing changes radically and rapidly, including

creating new processes to displace the old ones. This radical change process includes:

Receiving top management commitment and initiating re-engineering change from the top-

down.

Implementation of BPR cross-functional teams.

Detailed study and understanding of existing processes.

Selection of specific processes for re-engineering.

Designing alternatives for new processes and choosing the best one, including developing

prototypes of these new designs.

While TQM and BPR appear to be different approaches, both methods do share some

commonalities (Hammer & Champy, 1993; Krieter, 1996; Zairi & Sinclair, 1995; Lee & Asllani,

1997). These include:

Quality improvement- a study by Lee & Schniederjans (1996) found that a majority of

managers (82%) agreed that BPR activities were directly or indirectly aimed at improving product

quality in the firm. TQM’s basic theme according to Deming (1986) is the concept of quality

improvement.

49 Farshad Gouranourimi

Top management commitment- BPR requires a higher degree of top management commitment

whereas TQM requires an overall commitment for the process.

Process improvement- the basic premise of both TQM and BPR is the process improvement.

The focus is on process rather than function and department mentality.

Customer satisfaction- is the desired outcome that drives both methods. As both TQM and BPR

focus on quality improvement, they both need to be customer oriented.

Teamwork and training- both methods emphasize the need for teamwork and training to

implement their activities. Both TQM and BPR need the cooperation of all the employees, i.e.

organization-wide, and for BPR especially, it is imperative for employees to be trained in the new

techniques and tools that may displace the existing, old ways of doing things in the organization.

Cultural change in the organization- both methods require an overhaul of the organizational

culture. Both need cross-functional approaches to teamwork, employee involvement, and

empowerment and the shift away from the traditional hierarchical control and leadership mechanisms

in the organization. With BPR, the employee involvement and empowerment are led from the top of

the organization whereas with TQM, this is more a bottom-up approach.

However, despite these similarities, TQM and BPR also have some basic differences between

them (Davenport, 1993; Hammer and Champy, 1993; Lee & Asllani, 1997; Pereira & Aspinwall,

1997). These include:

TQM works within the existing processes and attempts to implement continuous but

incremental change improvements. On the other hand, BPR aims at radical change, innovations and

breakthroughs, including displacing the old processes with new ones.

TQM needs overall top management support and, when provided, can continue functioning

without any more daily support from management. It is a bottom-up approach but BPR is an intensive

top-down approach that needs continual top management leadership and support.

TQM emphasizes the automated systems for collecting data and controlling process variation

through statistical analyses. BPR, however, places emphasis on the critical role of information

technology (IT) in the organization.

TQM appears to take a moderate amount of risk by working with existing processes whereas

BPR assumes a high risk in its efforts, including doing away with the existing methods of operation.

TQM focuses on a cultural change within the organization but BPR can go beyond cultural and include

a structural change of the organization.

The TQM scope is typically narrow and within functions whereas the BPR scope is broad and

cross-functional. BPR reinforced the point that business-as-usual, with some incremental, gradual

changes- as TQM emphasizes- is not conducive for success (Brown, 1997); and survival in a dynamic

information age today almost requires a rapid and major overhaul for any organization, which may be

achieved through BPR.

The importance of this research with the aim of integrating TQM and BPR for organizations’

improvement can be defined as below:

1) Guarantee the quality, 2) Decreasing costs, 3) Protecting market share, 4) Having time

schedule, 5) Security increasing, 6) Extending new products, 7) Increasing the quality of organization's

functions (marketing, after sale services, product quality improvement), 8) Effective interchanging

information among different parts of the organization, 9) costumer's satisfaction, 10) Personnel

satisfaction, 13) Continuous improvement, 14) Improving process controlling.

Table 1: The similarities and differences between TQM and BPR

TQM BPR

Description:

Concerned with improving work processes

and methods in order to maximize the quality

of goods and services.

Particular approach concerned with

rethinking current systems and processes.

Type of Change: Planned, continuous Planned, frame-braking



Table 1: The similarities and differences between TQM and BPR - continued

Aim:

Keep existing customers by meeting or

exceeding their expectations concerning

products and services.

To redefine existing work methods and

processes to improve efficiency.

Key Driver:

Increasingly competitive market and the need

to compete for specific customer demands.

May also be driven by specific problems such

as high costs or poor quality.

Competitive pressures and intense need to

cut costs

Change Agent: External or internal External consultant

Learning process: Single or double loop Double loop

Nature of

culturechange: Customer focused values

Values objectivity, control, consistency

and hierarchy

Change to team based

work: Often requires a shift to team based work

Yes. Requires a shift to team based work

because the work is process based rather

than task based.

Table 1 provides an outline of the similarities and differences between each of the three

approaches under investigation. The subsequent paragraphs explain these comparisons.

Developed from: Cummings & Worley 1997; Harvey & Brown 1996; Moosbruker & Loftin

1998; O’Neill & Sohal 1997.

1.2. Evaluating TQM and BPR

A review of the literature on quality reveals conflicting interpretations of the effectiveness of TQM and

BPR. Some authors, such as Burdett (1994) and Sutter (1996) have criticized TQM as being ineffective

and disappointing in terms of results. However, many others have expressed strong support for TQM

(Emrich, 2000; Dooley & Flor, 1998). Similar interpretations of BPR are discussed in various studies.

Jennings (1996) pointed out that the successful BPR case studies by different consulting firms

propelled BPR into a billion-dollar industry in the US. However, BPR has had its critics, too, such as

O’Connor (1994) and Ettlie (1994), who criticized BPR as violating some good management

fundamentals and argued that the process was unnecessary if companies practiced good quality

management.

Further, a Harvard Business Review (1995) article stated that both TQM and BPR appear to

take an operational view of improvement rather than a business strategic perspective. Organizations

seem to focus on improving poorly planned or irrelevant processes, reducing costs, cycle times and

defective rates. In addition, both TQM and BPR do not seem to address how the various business

processes would interact with one another. Moreover, the Harvard Business Review (1995) article

contended that most TQM and BPR efforts deal with improving business processes but not

management processes- processes involving top management communication, decision-making, and

performance measurement, and compensation processes.

It also appears that both methods have their own strengths and weaknesses, and that both TQM

and BPR together rather than separate would be more beneficial to an organization. As Edwards &

Peppard (1994) suggested, BPR often evolved out of a TQM program. In their survey, they found that

84% of all companies involved with BPR were involved with TQM also, and only 6% of the

companies involved with BPR had no TQM background. They also found that change efforts initiated

by TQM and then followed by BPR were more successful for companies. As its champions, Hammer

& Champy (1993) have suggested, TQM should be used to keep a company’s processes tuned up

between the periodic replacements that only BPR can accomplish.’


2. Literature Review Magutu et al. (2011) explain the possible reasons why a company may have succeeded or failed to

attain competitive advantage by implementing BPR. From the research findings, the researcher

recommends that organizations seeking to undertake BPR initiatives should first understand the need

for changing the organization. They will then need to ensure that they adopt the key success factors for

BPR implementation.

Andrea Chiarini, (2011) studied Japanese total quality control, TQM, Deming's system of

profound knowledge, BPR, Lean and Six Sigma. It is found out inside the six systems; nine common

factors have been found and proposed. They are: results and benefits; management style; deployment

of the system; employee management, deployment and participation; voice of the customer; tools,

techniques and IT; optimization of the system; day-by-day check and control of the results and review

of the system.

Valmohammadi (2011) studied the impact of TQM implementation on the organizational

performance of Iranian manufacturing SMEs. This paper’s statistical analysis revealed that a number of

significant relationships between TQM practices and organizational performance of the manufacturing

SMEs. The result found that leadership plays an important role in enhancing organizational

performance of the Iranian manufacturing SMEs; however, these organizations encounter some

obstacles in fully utilizing some TQM criteria, namely tools and techniques and suppliers.

Talib et al. (2010) study the relationship between total quality management and quality

performance in the service industry. This paper is trying to develop a TQM implementation and

evaluation research framework that can be used as a guide in the formulation of an effective TQM

implementation approach to Indian service sector.

Jain et al. (2009) analyzed the evolving role of business process reengineering: a perspective of

employers. Their findings indicate a strong support from the employers for BPR curriculum. Of the 19

BPR topics on which information was collected from the employers, 63 percent were rated as

‘‘extremely important’’ and ‘‘very important’’. The two highest rated areas of BPR were ability to

research and collect process related data (3.8), and ability to use graphical methods to map the current

or reengineered processes (3.5).

Loukis et al. (2009) are seeking to empirically investigate and compare the moderating effects

of the two basic business process change paradigms – business process reengineering (BPR) and total

quality management (TQM) – on the business value generated for firms by their information and

communication technologies (ICT) investment. They concluded that both BPR and TQM have

considerable positive moderating effects of a similar magnitude on the relationship between ICT

investment and firm value added. Also, different BPR and TQM activities have different moderating

effects on ICT business value; process simplification, process improvement and the creation of a

horizontal interdepartmental process are the BPR activities with the largest moderating effects, while

measurement of employee satisfaction and simplification of work methods for quality improvement are

the TQM activities with the largest moderating effects.

Kakkar and. Narag (2007) recommended a TQM model for Indian organizations. The result of

factor analysis shows the existence of clusters of large correlation coefficients between subsets of these

variables. This suggests that these variables could be measuring aspects of the same underlying

dimensions. These underlying dimensions, or extracted factors, are four in number and are related to,

respectively, efficiency, customer, people, and teambuilding. This shows that all the 20 TQM variables

in India can be summarized into these four dimensions, which are taken as the four pillars of the

suggested TQM model for Indian organizations. The proposed model is named TQMEF (TQM-

efficiency model).



3. Methodology 3.1. Research Hypotheses

3.1.1. Main Hypotheses

1) Coordination between 2 methods of total quality management & process business

reengineering is the best mechanism for the comparative advantages.

2) Finding a solution to increase the quality is the main issue of Today's organizations thoughts.

3.1.2. Secondary Hypotheses

1) In Today’s Markets, a customer is a guarantee for existence.

2) In total quality controlling, all employees should take part in improvement.

3) Organizations which act to implement 2 Techniques TQM & BPR have united & coordinated

internal process of organization

This paper’s data is collected via standard questionnaires which distributed among managers &

higher level manager & operational supervisors in several organizations, scientific centers, private &

governmental companies such as committee of building engineering in Mazandaran , engineer's

committee of babol , Amol, sary , ghaemshar , feridonkenar, Tonekabon, payamenoor scientific centers

of mazandaran & Azad university. To determine the effect of each element in the present study which

is inquired in the questionnaire, LIKERT spectrum is utilized.

3.2. Validity

Content and face validity were established by a group of experts consisting of management and under

study organizations management experts.

3.3. Reliability

A reliability coefficient indicates the proportion of measured variance that is a true score, as opposed to

random error. Cronbach’s alpha was used to assess instrument reliability. An alpha value of 0.70 or

higher was considered as acceptable reliability for group. The reliability coefficient was 0.87 which is

acceptable.

3.4. Research Methodology

To determine the effect of each factor which is presented in the questionnaire, we utilized Likert

measurement. The importance of each factor is declared in each question and each question’s score is

determined according to the next score. The questionnaire consists of 60 questions with 4 alternatives.

19 questionnaires of 20 were answered.

Scoring method is as follows; No answer: 0, No: 1, To some extent: 3, Yes: 4. After the

frequency distributing tables, likert table was prepared which starts from those questions having the

highest average & scores to the lowest ones. Averages started from 3/736 decreased to 1/947.

Then, the questions of each hypothesis were distinguished & each question’s score was

specified & finally the average of each hypothesis’ questions was determined. The following tables are

formed for accepting or rejecting the hypothesis:

As an example question number one (according Likert): No answer: 0 0 = 0*0

No: 5 5 = 5 * 1

Lower: 5 10 = 5 * 2

To some extent: 6 18 = 6 * 3

Yes: 3 12 = 3 * 4

Total = 45 (Average: 45 * 19 = 2/368)


According to the obtained averages from questions, average above 3 proves the hypothesis of

the related question. For all 60 questions of the questionnaire, tables of frequency distribution are

drawn, in this phase we have a general table of 45 questions which is ranked according Likert and the

questions are arranged according to the highest to the lowest average. The highest average is for

question number 42 which is related to the second hypothesis and lowest one is for question number 29

which is related to the 4th

hypothesis. In the following, tables of questions about each hypothesis are

presented and average of averages is determined. According to Likert system and processing of

averages, the averages which are more than 3 are acceptable.

According to this analysis, 2nd

and 5th

hypotheses in comparison with others are in the 1st and

2nd

levels which infer that increasing quality is the most important issues for each organization.

According to hypothesis number 5, the organizations which use 2 techniques of TQM & BPR, have

consolidated and coordinated inter-organizational process. This hypothesis shows that the combination

of these techniques is one of the best and important methods for coordination and consolidation of

organizations which leads to efficiency, productivity and quality improvement. Here, we present the

score, average and rank of questions of each hypothesis.

Table 1: The score, average and rank of questions of the first hypothesis

Average Score Question of fist hypothesis Rank

3/421 65 question 31 1

1/463 62 question 32 2

3/210 61 question 57 3

3/263 62 question 32 4

3/105 59 question 30 5

3/052 58 question 45 6

3/000 57 question 7 7

2/894 55 question 38 8

2/894 55 question 56 9

2/842 54 question 2 10

2/842 54 question 11 11

2/842 54 question 48 12

2/842 54 question 18 13

2/736 52 question 50 14

2/684 51 question 6 15

2/648 51 question 55 16

2/421 46 question 36 17

2/263 43 question 20 18

2/210 42 question 49 19

2/105 40 question 34 20

2/828 Average of question

Table 2: The score, average and rank of the questions of the second hypothesis

Average Score Questions of 2

nd

hypothesis Rank

3/736 71 question 42 1

3/315 63 question 19 2

3/315 63 question 58 3

3/263 62 question 23 4

2/736 52 question 25 5




Table 3: The score, average and rank of the questions of the third hypothesis


rd

hypothesis Rank

3/263 62 question 21 1

3/157 60 question 43 2

2/842 54 question 8 3

2/789 53 question 53 4

2/368 45 question 1 5

2/315 44 question 46 6

2/263 43 question 26 7


Table 4: The score, average and rank of the questions of the forth hypothesis


th hypothesis Rank

3/210 61 question 22 1

3/105 59 question 35 2

2/789 53 question 16 3

2/684 51 question 59 4

2/473 47 question 4 5

2/473 47 question 47 6

2/315 44 question 28 7

2/120 42 question 10 8

2/210 42 question 33 9

2/157 41 question 5 10

1/947 37 question 29 11


Table 5: The score, average and rank of the questions of the fifth hypothesis


th hypothesis Rank

3/421 65 question 52 1

3/315 63 question 13 2

3/150 59 question 24 3


The result of Fisher Tests:

( )!( )!( )!( )! 1

! ! ! ! !

a b a b b c c dp

n x b a d

+ + + += ∑

p=0/004 ⇒ 2P=0/008

0/05 ≥ P, 0/05 ≥ 0/008

Hence, H0 is rejected and there is a significant relationship between two alternatives.

Table 6: The analysis of the second hypothesis

X F XF X X-X

X1=4 15 6 3/8 4-3/8=0/2

X2=3 3 9 3/8 3-3/8=-0/8

X3=2 1 2 3/8 2-3/8=-1/8

X4=1 0 0 3/8 1-3/8=-2/8

19 71


For analyzing this question, it can be said that quality accompanied with better production

procedure is better than final quality investigation of goods which is accepted by most of the managers.

713 / 8

19

XX

F

Σ= = =

Table 7: The result of Fisher test about question N.19

X F XF X X-X

X1=4 11 44 3/3 4-3/3=0/7

X2=3 5 15 3/3 3-3/3=-0/3

X3=2 1 2 3/3 2-3/3=-1/3

X4=1 2 2 3/3 1-3/3=-2/3

19 63

In analyzing this question, it can be said that a product gains competitive power just when the

quality of that product is competitive.


X F XF X X-X

X1=4 9 36 3/3 4-3/3=0/7

X2=3 7 21 3/3 3-3/3=-0/3

X3=2 3 6 3/3 2-3/3=--1/3

X4=1 0 0 3/3 1-3/3=--2/3

19 63

In analyzing this question, the meaning of quality in today's world is quality for all

organization’s goods, methods, communicating with costumer and speed of delivery not just the

quality of final product.


X F XF X X-X

X1=4 10 40 3/2 4-3/2=0/6

X2=3 5 15 3/2 3-3/2=-1/2

X3=2 3 6 3/2 2-3/2=--1/2

X4=1 1 1 3/2 1-3/2=--2/2

19 62

In analyzing this question, it can be understood that improvement of product quality is accepted

as a duty of organization by managers.


X F XF X X-X

X1=4 6 24 2/7 4-3/3=1/3

X2=3 5 15 2/7 3-3/3=-0/3

X3=2 5 10 2/7 2-3/3=--0/7

X4=1 3 3 2/7 1-3/3=-1/7

19 52

For analyzing this question, it should be said that process-orientation against result-orientation

is a good method for quality improvement.




X F XF X X-X

X1=4 11 24 3/4 4-3/4=0/6

X2=3 6 18 .3/4 3-3/4=-06

X3=2 1 2 3/4 2-3/4=-1/4

X4=1 1 1 3/4 1-3/4=-2/4

19 65

In analyzing this question it should be said if an organization has ability to encounter with

growing changes, work conditions (employees’ relationship with upper level authorities, health and

safety condition and organizational relations) will be improved.


X F XF X X-X

X1=4 11 44 3/3 4-3/3=0/7

X2=3 4 12 3/3 3-3/3=0/7

X3=2 4 6 3/3 2-3/3=-1/3

X4=1 1 1 3/3 1-3/3=-2/3

19 63

Analyzing this question, it should be said that using higher levels of communicational

technology and in consequence, higher speed of informing process brings about consolidation in

organizations.


X F XF X X-X

X1=4 7 28 3/1 4-3/1=0/9

X2=3 7 21 3/1 3-3/1=-0/1

X3=2 5 10 3/1 2-3/1=--0/1

X4=1 0 0 3/1 1-3/1=-1/1

19 59

Analyze this question, it cab be said that trying to develop and improve an organization requires

coordinated strategies.

4. Finding Analysis and Recommendations In this research by evaluating the similarities and differences of TQM and BPR methods, these results

are concluded:

1) Finding a solution to increase quality is the most thought of these organizations.

2) The organizations which utilize TQM & BPR are enjoying coordinated and consolidated

organizational activities.

3) Managers should improve their management quality to effect quality management positively.

4) Paying more attention to internal and external costumers.

5) Paying attention to the concepts such as infra-industrial era, information explosion and

communicating revolution are urgent for knowledgeable managers.

6) An active quality system should be consisted of continuous developmental element to meet

increasingly continuous market and costumers’ needs.


7) Gaining more profit by cutting additional costs and improving productivity which brings

about competitive advantages.

8) Globalization and communication expanding are necessary factors for being successful in

today’s struggling world.

5. Conclusion Total Quality Management and BPR share a cross-functional relationship. Quality specialists tend to

focus on incremental change and gradual improvement of processes, while proponents of reengineering

often seek radical redesign and drastic improvement of processes. Quality management often referred

to as TQM or continuous improvement, means programs and initiatives which emphasize incremental

improvement in work processes, and outputs over an open-ended period of time. In contrast,

reengineering, also known as business process redesign or process innovation, refers to prudent

initiatives intended to achieve radically redesigned and improved work processes in a specific time

frame. In contrast to continuous improvement, BPR relies on a different school of thought. The

extreme difference between continuous process improvement and business process reengineering lies

in where you start from and also the magnitude and rate of resulting changes. In course of time, many

derivatives of radical, breakthrough improvement and continuous improvement have emerged to

address the difficulties of implementing major changes in corporations. Leadership is really important

for effective BPR deployment, and successful leaders use leadership styles to suit the particular

situation and perform their tasks, giving due importance to both people and work. Business process is

essentially value engineering applied to the system to bring forth, and sustain the product with an

emphasis on information flow. By mapping the functions of the business process, low value functions

can be identified and eliminated, thus reducing cost. Alternatively, a new and less costly process,

which implements the function of the current process, can be developed to replace the present one.

The role of executive leadership or top management in business process reengineering cannot

be disregarded. They should provide the needed resources to the team demonstrate their active support

for the project, set the stage for reengineering by determining core business processes, and by defining

the project scope and objectives. The management should also take care to provide adequate funding,

set new standards as well as encourage others to be open to innovative approaches.

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