Chapter 10

Productivity, Quality, and

Reengineering

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM 1

 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 2

 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 3

 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.
THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM 4
 Basic Measure Of Productivity
Ratio Of Output To Input
Total Factor: Total Output
Labor+Material+Energy+Capital

Partial Factor: 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 5

 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

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, 2002 South-Western/Thomson LearningTM 6

 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 7

 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 8

 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 9