The New Meaning of Quality - Article Example

The new meaning of Quality Quality-an all pervasive concept The concept associated with quality has evolved into a more truthful and correct meaningin 21st century. Earlier quality used to be limited to the characteristics of the products and services against some standards or specification but presently it has gone beyond this and it is all about personal experience of the customer regarding the product and services he buys, personal preferences are attributes of quality. Quality in 21st century means value enrichment of the customer. Previously quality was the responsibility of only Quality department but it has been well understood that quality is the responsibility of everyone in the organization. Sainsbury’s operations For an organization like J Sainsbury Plc., the leading food retailers in the UK, the key quality attributes are price, timely availability, quality of food etc. If we see the size of operations at Sainsbury’s meting these attributes consistently is a big challenge . There are around 583 supermarkets of Sainsbury’s throughout the UK with employee and customer size being 145,000 and 11 million per week respectively and the number of products offered are more than 30,000. New Complexities addressed by supply chain Over the years the business and organizational environment has increasingly become more and more complex. There has been an explosion in choices, options, opportunities and threats, requirements, data and information through IT systems. Organizations have understood the hidden cost of quality, errors, inventories associated with inefficient supply chain. These factors have led to the emergence of a new discipline of supply chain management. A supply chain is essentially managing the journey of inputs to the outputs along with all the associated activities having impact on cost, speed and quality of the output through the journey. Ganeshan & Harrison in their paper explains how traditionally there has been organizations within organizations, silos of functions / departments, each one having their own characteristic goals, many a time at conflict with the organizational goal, resulting in an inefficient supply chain marked by interface problems. The result of these factors is that there is not a single, integrated plan for the organization. Supply chain addresses these issues effectively. Coordination between the various players in the chain is key in its effective management. Cooper and Ellram [1993] compare supply chain management to a well-balanced and well-practiced relay team. Quality begins and ends with customers For any Quality Management System, customer requirement is the input and customer satisfaction is the desired output. The entire quality movement is based on simple but elegant Deming’s PDCA cycle. First step in the quality journey is capturing customer requirement followed by design / modification of functions/systems for deployment and continuous improvement of the same through repetitive cycles of feedbacks. The customer experience is captured at Sainsbury’s through well-placed mechanisms. Customer Insights group carries out the work of obtaining the true customer requirement by interacting with more than 4000 customers every month which includes obtaining the performance of competitors also in the area of customer satisfaction. Besides the regular channels of obtaining customer perception there is another mechanism to find out customer requirement, which involves trained auditors capturing the customer experiences in the store itself.  The practice of interviewing customers in their homes is yet another valuable source of customer expectation determination. The information captured through these mechanisms form the inputs for the Quality Management systems and other operational instruments for delivering the quality products and services to the customers. Supply Chain Transformation at Sainsbury’s for improving delivery of quality Sainsbury’s had witnessed more than 100 years of successful operations and established itself as market leader in retailing but by middle of 90s it was feeling the pressure on account of fierce competition, customers being ever more demanding and the organization was not able to respond to these challenges in an effective manner, the outdated supply chain being a primary reason. Its supply chain consists of more than 2,000 suppliers, around 35,000 SKU’s, 500 stores, more than 6 million stock points. The total revamp of archaic supply chain management system was done away with a new Manhattan/Sun solution to deliver increased range of fresher products with higher efficiency and reduced costs. Sainsbury’s made a successful transition from custom-built, centralized paper-based legacy environment to a web enabled real time paperless system. The results have been encouraging and it achieved best -in-class cost per case, an in-store availability improvement and reduction in Store consignment inaccuracy. The new technology solution also drastically reduced the IT cost. The bottom line also saw healthy growth. Minimizing the Risk of Quality failures Elaborate and comprehensive Quality Systems are deployed in the organizations to continuously reduce the risk of quality failures. These systems include generic quality management systems like ISO 9001 and industry specific quality management systems. These standards are a product of elaborate research and feedback, which provides a framework for reducing non-conformance. The tools inbuilt in the systems like corrective actions, preventive actions and root cause analysis continuously reduce the errors and failures. Sainsbury’s operates the most comprehensive system for food product safety. This involves safety approval of individual products by experts, inspection of supplier standards of operation, safety during transportation, surveillance of products and elaborate communication to customers. The philosophy of food product safety practiced at the Sainsbury’s is “Safety from concept to customer”. Innovative IT tools have further lowered the chances of error and associated risks. One of the tools is INSTORE-EDGE, a real time control mechanism for receipt of customer order, storage and compilation. Customer orders are routed automatically to pickers based on predetermined performance factors to efficient order processing. It also directs the storage activity so that right products are stored at right places. Another such tool is Alerts and Resolution Management System (ARM) an IT tool to manage the information related to all the products and it triggers alarms if something is not in place or a potential problem. The triggers are of two types, individual information and group information based on the nature of problem or information need. The group alerts are basically on the issues requiring involvement of groups to resolve certain types of problems.   "If availability, for example, falls below a certain level, the Sainsburys buyer and the Supplier are informed why theres a problem and where it stems from. So if theres a problem Sainsburys can work through” (www.eqos.com) Collaboration and Partnership to achieve superior quality The modern organizations have clearly identified three different stages where value enrichment is done to the final quality of the product. These are supplier value management, process value management and customer value management. It essentially involves the entire gamut of activities right from supplier to the process and to customer through collaboration with suppliers and customers. At Sainsbury’s the supply chain management has been improved through Supplier Value Management. Suppliers have access to a range of performance data, which are used to improve the performance in a partnership approach. Supplier collaboration is a part of an overall business strategy at Sainsburys.  Sainsbury’s has involved both the stakeholders i.e. Customers and suppliers in its operation by giving them access to the web based information system. The easy availability of information to stake holders has automatically led to various inputs getting embedded in the operation itself thus reducing the chances of errors in a significant manner. Beyond Compliance Compliance to quality standards are not adequate in these times where the entire globe is available for customers to choose their products and services. There is an increasing trend to move beyond compliance and deploy innovative and important ideas in businesses to ensure continuously improving quality. With the increasing inclination for organic foods, Sainsbury’s have given a novel facility to their organic food customers; they can track the food to its source through the Internet. This is an outcome of research in customer behavior and preferences, which has shown that British consumers are increasingly interested in the source of food and the desire to forge a supporting relationship with the local farmers. Besides giving various facilities to customers of organic foods, the company supports various events to promote organic farming. It includes recognition of supplier based on their performance in the areas of innovation and environmental Consideration. Sainsbury’s has a strong commitment to Corporate Social Responsibility and has taken many significant steps to achieve the holistic quality goals i.e. delivering quality products in a sustainable manner in a way, which minimizes adverse impact on environment and meets the expectations of all the stakeholders. The company says “At Sainsburys we recognize that we need to act responsibly in managing our impact on a range of stakeholders – customers, colleagues, communities, investors, suppliers and the environment. Corporate responsibility goes beyond our commercial performance but is not separate from it. It is integral to our business and to what we stand for”. Ytterhus, Arnestad and Lothe point out that “the first example of an integrated supply chain for perishable products comes form the UK, J. Sainsbury’s plc., the largest retailer of fruit and vegetables in the UK, has established a "Partnership in Produce" agreement with the English Fruit company. The English Fruit Companys farmers have to produce apples and pears based on Sainsbury’s policy on integrated crop management systems (ICMS), i.e. a mutually agreed system to control and formalize environmentally responsible farming practice”. Conclusion  The systematic methods of defining the quality, measuring the performance of quality, creating transparent systems, involving customers and suppliers in operations, deployment of quality management standards go a long way in continuously meeting the quality requirements of the customers, Sainsbury’s have all the above extensively deployed. The most significant aspect is its values and principles, which are customer centric and it will continue to add value to its customers on a continuous basis. . Bibliography 1. www.sainsburys.co.uk 2. www.manufacturing.net/scm/article/  (How Sainsburys Transformed Its Supply Chain 3. www.eqos.com 4. http://www.campden.co.uk/ccfra/ccframenu.htm 5. Cooper, M. C., and L. M. Ellram. 1993. Characteristics of Supply Chain Management and the Implications for Purchasing and Logistics Strategy. The International Journal of Logistics Management, 4, 2, 13-24. 6. Ram Ganeshan Terry P. Harrison Department of Management Science and Information Systems, Penn State University An Introduction to Supply Chain Management 7. Bjarne E. Ytterhus, Petter Arnestad and Solveig Lothe Norwegian School of Management - Environmental Initiatives in the RetailingSector Read More