The Big Difference Between Business Process Reengineering and Continuous Improvement

question 60

Multiple Choice

The big difference between business process reengineering and continuous improvement programs like TQM or Six Sigma is that

• A) reengineering is a tool for installing process organization whereas TQM/Six Sigma concern defect-free production methods and delivering world-class customer service.
• B) reengineering helps create core competencies whereas TQM/Six Sigma are tools for making a core competence stronger and more efficient.
• C) reengineering is a tool for achieving one-time quantum improvement whereas TQM and Six Sigma programs aim at incremental improvement (striving for inch-by-inch gains again and again in a never-ending stream).
• D) business process reengineering requires benchmarking whereas TQM and Six Sigma do not.
• E) reengineering represents an effort to totally revamp a firm's value chain whereas TQM looks at incrementally improving the performance of two or three targeted value-chain activities and Six Sigma is primarily for reducing manufacturing defects.

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Definitions:

Ending Inventory Overstatement

This occurs when the reported amount of inventory at the end of a period is higher than its actual value, which can distort financial statements.

Cost Basis

The original value or purchase price of an asset or investment for tax purposes, adjusted for dividends, splits, and returns of capital.

Lower-of-Cost-or-Market

An accounting principle requiring inventory to be recorded at either its cost or its market value, whichever is lower.

FIFO

A method of inventory valuation where goods first purchased or produced are assumed to be sold or used first, standing for "First In, First Out".