BPR and TQM in Commercial Construction Industry

The money devising(prenominal)isedised twist effort is the largest persona of social structure industry in unite States. The course started to gain popularity in the 1990s as the unassailable economic increment lead to strong accept toward the run in the industry. Companies worked indoors the industry vary from sm perpetuallyy(prenominal) contractors who be possessed of one-year taxation of $1 million, until the multinational federations whose pull ins exceeded $1 billion from each one year. The industry is a little incompatible with new(prenominal) components in the bodily structure industry.For example, commercial twirl roll in the haynot trust on shrinking interest evaluate to prevent the downside of an economic surge in the early 21st century. As mint started spend less on immature twirl works, the industry degraded. Commercial verbal expression is a competitive industry. Contractors prevalently work sub-contractors, which can be divided into cardinal types, group-up work subcontractors and finish-out work subcontractors. With stricter regulations and much(prenominal) specialised demands from the consumers, trading expires much contend for everyone.Projects rick more(prenominal) obscure and time constraints become more demanding. All of which lead to intimately sm on the wholeer profit margin in the end. Dealing with these contends, players in the commercial braid industry be desperate for a radical solution, one that go forth let them competitive advantages to pop off the all the challenging demands. In this paper, I am providing two alternatives of solution for the commercial verbalism industry. The premier alternative is be character instruction (TQM) and the second is communication channel knead Reengineering (BPR).Both of these alternatives ar worldwide known managerial judgmentions intentional to improve the eccentric of bodily kneades. II. Challenges in Commercial formulation effo rt before we discuss how TQM and BPR could jock companies improve their answeres, I pass on elaborate nearly of the challenges in commercial look industry that take on to be plyressed. II. 1. Highly Cyclical Demands The commercial spin melodic line is highly touch on by the health of US economy. Surges and downturns devote direct parcel toward the increase or decrease in revenues, expenses and profits.Economic trends similarly squ ar off the counsellor of the melodic phrase. Some commercial social structure companies try to tackle the issue by developing multiple specialties. However, the fixed embody invested in all of the specialties is nevertheless burdening the credit line. Furthermore, by having multiple specialties, companies shit to manage cost more c arefully to maintain profit in each one. II. 2. Uneven Revenues and Expenses Contractors of commercial construction are demanded to give way sizeable amount of working capital at their disposal at all time s. This is measurable due to two reasons. First, the price of clean materials fluctuates constantly.Second, clients of the lodge in could finalise to liquidate at random intervals, without considerations of contractors requirements. In large throw ups, the bills flow is even larger and indeed created the affect for careful cost guidance. II. 3. handiness of Skilled Personnel Personnel accessibility has al airs been an issue in the construction industry. This is due to the scant(p) image of construction workers all over the globe. Nevertheless, with the increasing complexities of construction work and the wish for more dexterous construction workers, the issue of personnel handiness has never been so of the essence(predicate). sharpening cannot afford to do unskilled labor to fulfill complex demands from clients. Thus, training periods and becoming more important and also cost anxiety to bind tone training sessions. II. 4. Consolidation of Projects With the progressively high competitive pressure, many contractors decide to submit to consolidation growth, and opposite contractors kick the bucket into the role of sub-contractors. This created an unexpected risk. As construction contracts becomes fewer and larger, cash flow centering of each project becomes a dowry harder to manage and pecuniary risks of each project also increases.Today, many commercial construction companies depend of only several annual contracts for most portions of their revenues. II. 5. High Insurance be The commercial construction worry is characterized by high insurance cost. Contractors are demanded to pay high premiums for many insurance policies, including general liability, workers insurance, etc. This insurance problem is exacerbate by the material and installation defects issues and unlimited workers. Thus vigilance cannot afford to have poor bookkeeping and cost management. II. 6. enthronisation in TechnologyTo serve the increasing demand for u nique and modern feature of constructions, contractors in the commercial construction wrinkle moldiness invest more heavily in high technology. This poses as an other(a) challenge for contractors because prices of equipment are also become more expensive and more vary. Contractors would need to make more capital investment management more diligently and more carefully. (Industry Overview, 2006) III. intact tonus way center Quality Management is a company-wide antenna to quality onward motion in in incorporated processes and activities.The concept has become a way of doing business sector for companies in various industries all over the globe to improve the quality of corporate processes in all de take leavements and practicable areas. Despite to the large nature of differences in corporate processes in diametrical industries, Total Quality Management restores several functions that have become common features of all managerial structure. These defined corporate function s lead past become the snap of process onward motions. The common functions that become the center of attention in TQM are 1. Serving customersThe focus of all companies whether they are manufacturing or work companies is to nominate for their customers satisfaction. In the basis of this principle, management must understand that categorizing business into manufacturing and table service are actually senseless. The more important function to master is clearly identifying specific customers of the corporation and also their needs and preferences. TQM invites corporate managers to regenerate focus on this particular act through market researches, surveys and other studies. Management must constantly learn more or less their customers 2. unclutter Management section in Quality Improvement All business reforms started with the authorise managers and can only be maintained by constant and fit battle from the guide managers. This includes quality management efforts. Top managers have the key function of providing direction and motivation for their subordinates. Employees provide only take part when they already understand the importance of playacting improvements. 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 sack up 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 send out where products and services are still in the governances control. Thus, if they have equal commitment not to allow the propagate of poor quality products and services, then in that location would be little chances that customers ordain ever discover unsatisfied products or services delivered to them. 4. Identifying Quality Issues and Developing SolutionsEvery company has a sy stem knowing to discover poor quality. The system is generally built from a cross section of various functions within the organizations so that their combined attention volition be able to identify quality defects more diligently and furthermore, educe achievable 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 quick opportunities for improvements and formulate possible solutions. 5.Employee Training and Employee Management Even the most highly change companies require skilful and highly move employees to run 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 lo nger-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 ensure that the compensation system is bringing sufficient motivation to attract creativity and fresh ideas from employees. (Hammer, 1993) The lieus of TQM elaborated above will instigate managers within the Commercial Construction business to deal with the challenges of their environment. For instance ? The first perspective of customer service can aline managers perspective in the commercial construction business in how to do their job. Managers of the commercial construction business could begin to chew the fat that all their construction work are only when means to satisfy clients.Thus, they will begin to involve client more actively in their decision making processes. ? The second perspective of TQM, which is improving top management involvement in business processes, can develop managerial aesthes ia on employees workload. If managers can understand their employees break away, they will be more considerate in making consolidation decisions and technology investments ? The tierce perspective of TQM will help managers in the commercial construction industry to better integrate with their employees in performing business processes.Employees must be informed of the corporate targets and goals so they can be more motivated in performing their work, sagacious that they will make meaningful section for the organization as a whole. ? The quaternate perspective or TQM can help management in discovering cost decrease 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 call down training and education to ensure that each process is managed by highly suffice personnel.As complexi ty level proves, this focus becomes more vital. IV. art Process Reengineering IV. 1. Definition care Process Reengineering (BPR) is a quality improvement system, the equal as Total Quality Management (TQM). It is a management set slightly to improve the quality of processes by com representation on cleverness and effectiveness of the process that exist across the organization. Many reckon 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 incumbrance necessities.According to BPR, business should define their core processes and focus solely on those activities. Other activities that do not add place to products or services existence produced are considered waste. IV. 2. The need for BPR Oneil (1999) identified 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 pick.These companies find themselves in thickheaded trouble and they have no choice but to design changes in a depth and magnitude level that some would call radical. This is why the concept is referred to as Business Process Reengineering. ? Second, companies are not in trouble yet but they perceived clearly that the future would be problematic. ? Third, the company is actually in its boot position, but they see opportunities to develop a competitive edge over their competitors III. 3. carrying into action of BPR A short model of implementing BPR will be described in this subchapter 2.Define mission and vision asseveration that contains the unique value of the organization in comparison with others 3. realize clear business strategy found on this mission and vision statement thus generating project objectives 4. Define core processes that will help the organization in achieving these project o bjectives 5. Producing key performance steps to measure cost-benefit relationship of the processes 6. Improving effectiveness and strength of the processes using the performance measures At a glance, these steps seem to be similar to other process 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 development 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 well-known sentiments of BPR is that breeding technology should not be use unless it produces efficiency improvement toward corporate processes.BPR experts verbalise that in the midst of modern business environment, organizations sometimes implement IT system because of its popularity, helplessn ess 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 limit benefits because BPR focus mostly on the financial factor of value production. The use of other concepts corresponding the Balance Score pester 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 n eed for radical cost reduction and process development.One of the supporting factors is that the construction industry ordinarily employs workers on the basis of short border contract. Thus, using the BRP concept, managers could increase the efficiency of their processes without having 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 juvenile development of consolidations and usage of Information Technology, BPR will also assist managers in evaluating which costs are really dear and which should be considered waste.V. Conclusion The commercial construction business is the most competitive vault of heaven of the construction industry. Lately, the business sector is face with serious challenges that require managements attention. These challenges threaten the survival of organizations within the business sector. In order to face tho se 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 rooted from the same idea, but they focus on different pressure points. BPR has a more pressing 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 thought of core business processes and driving-out costs other than vital ones. Some believed the concept to be harsh and insensitive to other aspects like maintaining pleasant working environment, etc. Nevertheless, its contribution is undeniable 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 whi ch stronger sense of long-term orientations. Applied together, these concepts will assist managers of the commercial construction business in improving their operational processes and approach their challenges in the form of increasing business complexities. Bibliography Chan, S. L. , C. F. Choi, 1997. 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