BPR and TQM in Commercial Construction Industry

The m onenessymaking(prenominal) twisting constancy is the largest component composition of wrench industry in United States. The line started to gain popularity in the 1990s as the fortified economic growth go past to strong consume toward the go in the industry. Companies organiseed deep down the industry vary from humiliated contractors who buzz off annual r eventideue of $1 million, until the multinational pottys whose profits exceeded $1 billion each year. The industry is a little different with opposite components in the reflexion industry.For ex group Ale, commercial aspect cannot rely on shrink interest rates to prevent the downside of an economic surge in the archeozoic 21st century. As people started spend less on raw(a) construction works, the industry degraded. commercialized construction is a competitive industry. Contractors princip anyy employ sub-contractors, which can be divided into two types, group-up work subcontractors and finish-out work subcontractors. With stricter regulations and much than(prenominal) specific demands from the consumers, descent becomes more ch allenging for everyone.Projects become more complex and time constraints become more demanding. All of which lead to easily smaller profit margin in the end. Dealing with these challenges, players in the commercial construction industry be desperate for a entire solution, one that forget deliver them competitive advantages to arrive the all the challenging demands. In this paper, I am providing two alternatives of solution for the commercial construction industry. The original alternative is Total Quality steering (TQM) and the second is Business crop Reengineering (BPR).Both of these alternatives be worldwide known managerial archetypes designed to advance the fictional character of incarnate dish outes. II. Challenges in Commercial Construction Industry Before we contend how TQM and BPR could tending companies improve their sufficee s, I will elaborate almost of the challenges in commercial construction industry that need to be add upressed. II. 1. Highly circular Demands The commercial construction stemma is highly affected by the wellness of US economy. Surges and downturns throw off direct contri justion toward the increase or cliff in revenues, expenses and profits.Economic trends also define the direction of the business. Some commercial construction companies try to tackle the issue by developing multiple specialties. However, the persistent cost invested in all of the specialties is nevertheless burdening the business. Furthermore, by having multiple specialties, companies have to manage cost more carefully to maintain profit in each one. II. 2. Uneven Revenues and Expenses Contractors of commercial construction are demanded to have bulky amount of working capital at their disposal at all times. This is important due to two reasons. First, the price of raw somatics fluctuates incessantly.Secon d, clients of the business could limit to pay at random intervals, without considerations of contractors requirements. In large projects, the cash extend is even larger and thus created the need for careful cost commission. II. 3. handiness of Skilled Personnel Personnel availability has always been an issue in the construction industry. This is due to the scummy image of construction workers all everyplace the globe. Nevertheless, with the increasing complexities of construction work and the need for more skilful construction workers, the issue of personnel availability has never been so important. wariness cannot afford to occasion unskilled labor to fulfill complex demands from clients. Thus, gentility periods and becoming more important and also cost circumspection to perform tint learning sessions. II. 4. Consolidation of Projects With the increasingly high competitive pressure, umpteen contractors decide to award to consolidation process, and other contractors fal l into the role of sub-contractors. This created an unexpected risk. As construction contracts becomes fewer and larger, cash flow circumspection of each project becomes a lot harder to manage and fiscal risks of each project also increases.Today, many commercial construction companies depend of only several annual contracts for nigh portions of their revenues. II. 5. High Insurance exists The commercial construction business is characterized by high insurance policy cost. Contractors are demanded to pay high premiums for many insurance policies, including general liability, workers insurance, etc. This insurance problem is worsen by the material and installation defects issues and un fitted workers. Thus management cannot afford to have poor bookkeeping and cost management. II. 6. Investment in TechnologyTo serve the increasing demand for unique and modern feature of constructions, contractors in the commercial construction business must invest more heavily in high technology. This poses as another challenge for contractors beca utilization prices of equipment are also become more high-priced and more vary. Contractors would need to make more capital investment management more diligently and more carefully. (Industry Overview, 2006) III. Total Quality Management Total Quality Management is a company-wide approach to tone procession in corporate processes and activities.The concept has become a way of doing business for companies in various industries all over the globe to improve the quality of corporate processes in all departments and functional areas. Despite to the large reputation of differences in corporate processes in different industries, Total Quality Management defines several functions that have become crude features of all managerial structure. These specify corporate functions will and then become the centralise of process gains. The common functions that become the center of caution in TQM are 1. Serving nodesThe focus of all co mpanies whether they are manufacturing or dish ups companies is to aim for their customers satisfaction. In the bottom of this principle, management must generalise that categorizing business into manufacturing and service are genuinely wizless. The more important thing to fulfill is clearly identifying specific customers of the corporation and also their needs and preferences. TQM invites corporate managers to revitalize focus on this grouchy activity through market researches, surveys and other studies. Management must constantly learn about their customers 2.Top Management Role in Quality benefit All business reforms started with the covert managers and can only be maintained by constant and competent participation from the top managers. This includes quality management efforts. Top managers have the light upon function of providing direction and motivation for their subordinates. Employees will only participate when they already understand the importance of playing profits. TQM invites managers to understand the crucial nature of their actions in quality improvements and thus, making the necessary adjustments to achieve the defined targets.3. Employee Participation After ensuring top management are doing their part in the quality improvement process, TQM takes us to focus on employees and how they have participate in support of the effort. Employees are the final station where products and services are still in the presidencys control. Thus, if they have sufficient commitment not to allow the spread of poor quality products and services, then there would be little chances that customers will ever discover unsatisfied products or services delivered to them. 4. Identifying Quality Issues and Developing SolutionsEvery company has a boldness designed to discover poor quality. The system is generally built from a cross section of various functions at bottom the organizations so that their combined attention will be able to identify quality def ects more diligently and furthermore, suggest possible solutions. TQM invites managers to take advantage of the system and focus on developing their potential into maximum. In the new quality system, top management must also take part in defining quality defects, discovering existing opportunities for improvements and formulate possible solutions. 5.Employee Training and Employee Management Even the closely highly automated companies require skilful and highly motivated employees to depict their processes. TQM bring focus on employee management processes to increase the quality of corporate operations as a whole. First, management should develop their employee training process as corporate targets changes. Second, organizations should provide continuous educational support even to the longer-time employees. Third, organizations should design a working environment where employees would have a sense of pride when they are doing a good job.Fourth, management must manipulate that the compensation system is bringing sufficient motivation to attract creative thinking and fresh ideas from employees. (Hammer, 1993) The postures of TQM elaborated above will assist managers within the Commercial Construction business to deal with the challenges of their environment. For instance ? The first sight of customer service can realign managers perspective in the commercial construction business in how to do their job. Managers of the commercial construction business could startle to see that all their construction work are but manner to satisfy clients.Thus, they will begin to involve client more actively in their decision making processes. ? The second perspective of TQM, which is change top management involvement in business processes, can develop managerial sensitivity on employees workload. If managers can understand their employees founder, they will be more considerate in making consolidation decisions and technology investments ? The third perspective of TQM wi ll help managers in the commercial construction industry to better integrate with their employees in performing business processes.Employees must be sensible of the corporate targets and goals so they can be more motivated in performing their work, knowing that they will make meaningful contribution for the organization as a whole. ? The fourth perspective or TQM can help management in discovering cost step-down opportunities in the midst of the more demanding business environments, especially when consolidation projects are extensively performed. ? The fifth perspective of TQM aligns perfectly with managerial sentiments of the commercial construction business to enhance training and education to ensure that each process is managed by highly qualified personnel.As complexity take enhances, this focus becomes more vital. IV. Business surgery Reengineering IV. 1. interpretation Business Process Reengineering (BPR) is a quality improvement system, the same as Total Quality Managem ent (TQM). It is a management approach to improve the quality of processes by focvictimization on efficiency and effectiveness of the process that exist across the organization. Many find difficulties in differentiating between TQM and BPR, but in most articles regarding BPR, it is always elaborated that BPR has a more radical view about business processes and its heart necessities.According to BPR, business should define their core processes and focus solely on those activities. Other activities that do not add value to products or services being produced are considered waste. IV. 2. The need for BPR Oneil (1999) place that there are actually three kinds of BPR causes. These causes can be explained by the conditions in which the organization finds itself ? First, companies invite BPR concept and its implementation because they have no extract.These companies find themselves in deep trouble and they have no choice but to design changes in a depth and magnitude level that some wou ld call radical. This is why the concept is referred to as Business Process Reengineering. ? Second, companies are not in trouble yet but they sensed clearly that the future would be problematic. ? Third, the company is actually in its stature position, but they see opportunities to develop a competitive edge over their competitors III. 3. Implementation of BPR A short model of implementing BPR will be describe in this subchapter 2. arrange mission and vision statement that contains the unique value of the organization in comparison with others 3. Build clear business strategy ground on this mission and vision statement thus generating project objectives 4. Define core processes that will help the organization in achieving these project objectives 5. Producing key performance measures to measure cost-benefit relationship of the processes 6. Improving effectiveness and efficiency of the processes using the performance measures At a glance, these steps seem to be like to other pro cess development stages.In BPR however, the strong focus is on how to radically improve effectiveness and efficiency by driving out all costs and activities that do not constitute the vital necessities of the processes (Chan, 1997). III. 4. Role of info Technology in BPR BPR experts argued that BRP is different then TQM and other process improvement concepts because of its strong focus over the efficiency of the core processes. One of the known sentiments of BPR is that information technology should not be used unless it produces efficiency improvement toward corporate processes.BPR experts stated that in the midst of modern business environment, organizations sometimes implement IT system because of its popularity, failing to recognize the advantages produced by the IT system for organisational processes. BPR fight against those practices in the modern business environment (Davenport, 1990) III. 5. Critics In some literatures, BPR is also criticized due to its radical nature. For instance, most of the companies implementing BPR are discovered performing massive layoffs to enhance their process efficiencies.Observers believed that implementing BPR without other balancing concepts will lead to only short term benefits because BPR focus mostly on the financial factor of value production. The use of other concepts like the Balance tote up Card should enhance BPRs benefits toward organizations. III. 6. Benefits for Commercial Construction Business The use of BPR is perceived to be very much suitable for the construction industry due to the hard and highly competitive nature of the environment. Furthermore, it has been stated that the BRP concept is suitable for organizations in desperate need for radical cost reduction and process development.One of the supporting factors is that the construction industry usually employs workers on the soil of short term contract. Thus, using the BRP concept, managers could increase the efficiency of their processes without ha ving to worry about laying-off long-term employees. The construction industry is also complex with hundreds of types of material and service costs that can be evaluated through the BPR concept. With the recent development of consolidations and drill of schooling Technology, BPR will also assist managers in evaluating which costs are really beneficial and which should be considered waste.V. Conclusion The commercial construction business is the most competitive area of the construction industry. Lately, the business sector is go about with serious challenges that require managements attention. These challenges threaten the survival of organizations within the business sector. In order to face those challenges, we suggest that companies within the sector turn to Total Quality Management and Business Process Engineering. These are quality improvement concepts designed to enhance efficiency and effectiveness of organizational processes throughout the organization.TQM and BPR are ro oted from the same idea, but they focus on different pressure points. BPR has a more urgent sense within it steps. It is a concept practiced by companies in need of a radical change in their business processes, in order to survive upcoming challenges. It focuses on the financial aspect of core business processes and driving-out costs other than vital ones. Some believed the concept to be harsh and unreactive to other aspects like maintaining pleasant working environment, etc. Nevertheless, its contribution is infallible to modern companies today.TQM on the other hand, is a concept developed by the Japanese, along with the JIT and kaizen concept. It focuses on continuous process improvements which stronger sense of long-term orientations. utilise together, these concepts will assist managers of the commercial construction business in improving their operational processes and facing their challenges in the form of increasing business complexities. Bibliography Chan, S. L. , C. F. C hoi, 1997. A conceptual and analytical framework for business process reengineering, International diary Production Economics, vol.50, p. 211 223. Davenport, Thomas & Short, J. (1990), The New Industrial Engineering Information Technology and Business Process Redesign, in Sloan Management Review, Summer 1990, pp 11-27 Hammer, Carter, Usry. 1994. 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