This paper analyzes the keys to successful implementation of a Total Quality Management (TQM) effort in a major oil service company over a 13-year period. A formal Quality Improvement Process began in 1982 with an initial focus upon error cause removal, employee involvement, and cross-functional corrective action teams. During the 1980's the program targeted manufacturing processes: statistical process control, just-in-time manufacturing, process capability studies, vendor partnering, and industry QA standards such as ISO 9000. Cost of quality plummeted from over 30% of sales to less than 5% during this period. In 1993 all change efforts were brought under the TQM umbrella and the focus shifted to reengineering the key business processes of the company. This paper will describe in detail how the TQM program evolved from a softer, quality awareness, people involvement process to a very results driven, radical change effort focused upon reengineering the activities, processes and structures of our businesses to reduce cycle times of all business processes, reduce costs, and improve quality and customer satisfaction. We will discuss the change imperative facing our industry and the basic concepts and principles of Business Process Reengineering and Supply Chain Cost Management. This will include a discussion of the benefits of customer/vendor alliances and partnerships and how to eliminate non-value-added activities throughout the supply chain to radically decrease cost and cycle time and improve quality. We will look specifically at two major reengineering efforts underway to dramatically improve the performance of the order fulfillment process and the goods acquisition process. We will conclude that the key to quality improvement and cost reduction in the Age of Systems of the 1990's is to simplify business processes and reduce cycle time. This paper will describe how to use the TQM umbrella to effect this change.

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