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Write a summary about business process management that is a concept in business management aimed at making businesses more efficient and effective. Start with the words 'Business process management'.
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Business process management is a concept in business management aimed at making businesses more efficient and effective. It is a holistic approach to business which aligns all the different aspect of the organization towards realizing the requirements of consumers. It incorporates critical aspects such as flexibility, innovation, as well as technological integration to achieve growth in business. The main aim is to optimize the business process hence achieving the best results at minimal application of resources.
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Provide an essay based on the summary above.
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#Business Process: Achieving the Best Results at Minimal Resources Report
Business process management is a concept in business management aimed at making businesses more efficient and effective. It is a holistic approach to business which aligns all the different aspect of the organization towards realizing the requirements of consumers. It incorporates critical aspects such as flexibility, innovation, as well as technological integration to achieve growth in business. The main aim is to optimize the business process hence achieving the best results at minimal application of resources.
It is a shift from the traditional functional focused hierarchical management arrangement. The three main methods applied in improving business processes include Total Quality Management (TQM), Six Sigma and Lean Production. This paper examines the three methods explaining how they work as well as origin. It also outlines the merits and demerits for each method and also gives examples of companies utilizing the methods.
Total Quality Management entails a general management approach focused on long-term vision mainly through overall satisfaction of customer expectations. In this effort, the entire organizational members are involved in an overall improvement of processes, culture as well as products offered by the organization.
The method is attributed to quality leaders such as Edwards Deming and Phillip Crosby. Implementation of this method is hinged on a set of practices in management aimed at helping companies raise quality as well as productivity. One important practice is the creation of a constant purpose towards upgrading the organization’s products. This ensures that in the organization is constantly in search of ways to better products to meet the changing customer requirements.
Secondly, there is a deliberate aim for the organization to constantly adopt new philosophies towards the philosophies which support better productivity. The method also discourages reliance of direct inspections towards achieving better quality as well as awarding business based purely on prices. Instead it encourages minimization of total costs through advantages of economies of scale such as dealing with one supplier (Total Quality through Six Sigma, 2010)
Six Sigma is also a long-term approach to management aimed at changing corporations towards better returns through rationalization of operations, better quality and commitment to the elimination of mistakes and errors in all areas of operations. It aims at recreating processes to ensure that mistakes of defects do not occur.
It was first tested by Motorola an American manufacturer faced with stiff competition from Japanese manufactures. It was formulated by Bill smith in the year 1986. It adopts some critical aspects of total quality management such as quality control and others. The method is based in several principles. First and most important is a true and authentic interest to customer satisfaction.
In addition, management is largely based on researched data and facts. It relies heavily on proactively as opposed to reactive measures. It focuses centrally on process management, comprehensive cooperation among all members of the company and an undying strive for perfection. The main stages of the Six Sigma process stages are define, measure, analyze, improve and control (Six Sigma, Lean, TQM and BSC, 2010)
Lean production is a practice in manufacturing which adopts a rather strict way of handling resources in an organization. It considers that any activity with no direct link towards creation of benefits to the customers is wasteful and hence should be considered for elimination (Lean Production, 2010).
Constant focus is on “value for the customer” which is defined as anything that the customer is willing to buy. The method is attributed to the world number one car manufacturer Toyota which developed in the 1990’s. The company is known for its reduction in wastes and improvement of customer value resulting in phenomenon growth. An example of a waste reduction effort is in storage.
Clearly, a customer gets no value from the fact that a car was stored in a factory for a specified period of time. This is so yet the storage costs of a car are part of the final cost. Consequently, lean production principles require that all options be explored towards elimination of such costs. The method applies identification of value and value streams and perfection (Six Sigma, Lean, TQM and BSC, 2010)
Both Six Sigma and TQM share philosophy to a great extent. They have a sharp emphasis on the role of top management in offering leadership and support. They also have a common long-term approach towards improvement of quality and hence success. It is however true that Six Sigma is more popular than TQM. The main difference derives from a management perspective (Problems and advantages of Total Quality Management, 2010)
Notably Six Sigma unlike TQM was developed by corporate CEOs with a quest for both short term and long-term results. Consequently, Six Sigma is more responsive to the demands of business as it achieves a unique mix of both short term as well as long-term results.
TQM is largely focused in the quality of the end products. Six Sigma on the other hand emphasizes on specific strategies and their application to costs and business schedules. Consequently, TQM gives a direction towards making progress but Six Sigma seeks to ensure that specific investments achieve targeted returns.
Both lean production and Six Sigma methods have focus on individual projects and processes. They take more consideration the company strategy. However TQM aims at holistic improvements hence disregarding company strategy. It is implemented within certain departments and has less urgency in terms of time. It however mainly focuses on manufacturing. This leaves other critical areas such as marketing to other management systems.
Six Sigma and Lean production strictly require that experts be employed in implementation while TQM has room for non-expatriates. As mentioned above Six Sigma relies heavily on facts and figures especially financial unlike TQM which often has no specific targets hence minimal application of figures. Lean production is driven by five areas including cost, quality, safety, delivery and morale (Total Quality Management, 2010).
According to experts, application of lean production would help achieve enormous successes in cost controls. In areas of production, overproduction could lead to significant cost increases. This could be through producing more than what customers require or incorporating unnecessary materials in production. Applying lean production could lead to a 50% reduction in cost of production. Another aspect of consideration is waiting time.
This incorporates delays and idle moments when there is no value addition. If addressed through principles of lean production, wastage would be reduced by half. The same applies to costs of inventory handling, transportation and handling of defective units (Problems and advantages of Total Quality Management. 2010)
The most visible benefits of applying TQM method is the fact that in the long-term the organization experiences better morale among workers due to emphasis on teamwork significant decrease in costs and more importantly higher consumer trust. However, this method puts less emphasis on immediate goals of the company. It is also driven by the need to improve internal processes more than meet customer expectations.
As mentioned earlier TQM is mainly applied by companies in Europe while Six Sigma is applied my companies like Motorola in the USA. Lean production on the other hand is best applied by companies in Asia especially Japan’s motor manufacturing giants like Toyota. The success of these methods is immense.
However experts have a higher rating for lean production and Six Sigma methods. This does not in any way mean that TQM method is inefficient, it just implies that both Six sigma and Lean production methods are more improved and better able to motivate employees in organizations towards achievement of measureable and timetable specific goals.
The application of these methods is considered an important step towards realizing competitiveness at the international level. However, the choice of which model to best apply is not necessarily based on the rating of the three different methods. It is more dependent on the ability of the organization to fully and successfully implement the method.
This is because despite the great benefits available, implementation may be a complex undertaking likely to upset the status quo in the organization hence generating unforeseen frictions. It is therefore important that choices are made wisely in regard to the most applicable method in a particular organization in order to minimize risk of failure in implementation. This is because failure in implementation could be worse than not implementing the methods at all.