Tutorial Week 3-Case studies
There are companies who have registered success stories by adopting Total quality management and Business process engineering principles.
Form a group of four members and identify, discuss and highlight in the TQM, BPR and Technology Driven business improvements principles adopted by the following organisations:
Case Study #1 — IBM Credit Corporation
IBM Credit financed the computers, software and services sold by IBM Corporation. Processing a finance application used to take between six days and two weeks as the application wound its way from the credit department to the pricing department to an administrator who wrote out a formal quote letter.
When IBM Credit realized that processing an application actually took only about 90-minutes and the rest of the normal processing time was spent with the application sitting on a pile on a specialist’s desk waiting to be looked at, they decided to reengineer the entire process.
Here’s what IBM Credit did:
- The four specialists who previously processed the application were replaced by a generalist — called the deal structurer — who processed the application from start to end using templates on a new computer system which provided all the data and tools each specialist commonly used.
- For unusual cases, the deal structurer can still call on the specialists to provide additional expertise. The specialist and the deal structurer then team up to develop a customized package as required. This happens only rarely, however.
The results of the reengineering program were:
- Turnaround time was reduced from a typical 7-days to 4-hours.
- Without any increase in staff numbers, IBM Credit achieved a hundred fold improvement in productivity — it handles 100 times the number of credit applications handles before reengineering was undertaken.
Case Study #2 — Ford Motor Company
In the early 1980s, Ford looked at its 500-person accounts payable department closely.
It was soon realized that the majority of each employee’s time was spent tracking down discrepancies between purchase orders, shipping receipts and invoices. Ford decided to reengineer the entire parts procurement process.
Therefore, the steps Ford took were:
- An online database was created of purchase orders.
- Whenever a buyer issued a purchase order, it was entered into the database.
- As goods are received at the receiving dock, someone checks the database. If the shipment matches a purchase order, it is received. If the shipment does not, it is not accepted. Therefore, there are no possible discrepancies between what was ordered and what was physically received.
- As soon as the shipment is received, the database is updated and a check is automatically generated and issued to the vendor at the appropriate time.
The results of Ford’s reengineering program were:
- Head count in Ford’s purchasing department fell from 500-people to 125-people at the same time efficiency improved dramatically.
Case Study #3 – Aldi
Please read through the following link