Quality in Customer Focussed Operations - Essay Example

QUALITY IN FOCUSED OPERATIONS Quality in Focused Operations Introduction The need to give customized service to a focus customer group is one way that most companies are yearning to become competitive in today’s global market (Ezzamel, 2004). Nepal et al. (2007) however noted that the need to provide focus service alone cannot be enough to achieving competitive advantage if quality is eliminated from this desire. It is for this reason that the current paper looks into ways in which quality can be incorporated into customer focused operations at Tesco. The main reason for choosing Tesco in this report is for the fact that the company is one of the most popular when it comes to the utilization of focus strategic option in the marketing of its products. The company is largely into grocery and general merchandise including future and home electrical. Tesco’s order qualifiers include the fact that the company is largely identified to be customer oriented, and the fact that it is a one-stop point where buyers get almost everything they need to shop for. The order qualifiers of the company includes the need for the company to be more proactive with quality of products, and the need structure its organizational culture more around the customer. Operational Processes at the workplace Following the process mapping framework, Tesco is seen to use three operational processes in the delivery of products and services, which are input resources, transforming activities, and output products. As far as the input resources are concerned, Tesco can be seen to be a company that largely relies on the outsourcing of its products, given the fact that it is a retailer (Ferreira and Otley, 2003). Most of its input resources focus on the outsourcing of products from its main suppliers. Unique about the input component of Tesco’s business process is that the company relies on several suppliers for the provision of the same line of products. In a situation like this, Chatterjee et al. (2013) noted that chances that delays will occur in the stocking of the company’s inventory is less. This is because when one supplier fails, others will be on standby to deliver (Castellano & Lightle, 2005). Feldman and March (2011) also saw the reliance on several suppliers for the input resources as a move that reduces the supplier bargaining power of the company’s suppliers. After the inputs have been made through the keeping of inventory, Tesco has an internal labelling and branding section that caters for the transformation activities of the products. This is where most aspects of the focus strategic option comes in. this is because through the transformation activities of the labelling and branding unit, specific customer segments are identified, based on which specific lines of products are targeted (Crosby, 2009). By so doing, it is possible to align each piece of product to the right customer and thereby creating a customer focused operation. It is not surprising therefore that Tesco operates an open ended cost strategy that ensures that the company is able to serve and have product lines for customers of all social statuses. In effect, it can be said that the major transformation of the company’s operational processes take place through labelling and branding, where by premier is also placed on the rightful sorting and placement of products to suit specific segments of the market. What the customer goes to the Tesco store to see is largely the output product. This is because at this time, all the input and transformation processes have finished taking place and so what may be more of a finished product is offered to the customer (Kets de Vries, 2103). Writing on the operational process, Juran and Gryna (2008) noted that the output component is where a lot is determined for the company’s competitive advantage. Agreeing to this, Kaynak (2003) indicated that the company’s order winners and order qualifiers are largely determined at the output level. This is because the output products are what the customer perceives and thus makes decisions about in terms of whether or not to choose the company’s goods and services. At the same time, the output products gives a line of customer reaction that makes it possible for the company to know its characteristics that must be exhibited to be viable against competitors. For Tesco, its output products have mostly focused on the aesthetic assembling of products which includes groceries, furniture and home electrical. Literature review on TQM The literature review focuses on quality management as a reflection of customer expectations. This means that recent publications about total quality management that set out frameworks that describe quality management from the perspective of customer expectations, ways of applying quality management to meet customer expectations, and the benefits that come with the implementation of quality management with the aim of meeting customer expectations are reviewed. Concept of TQM Dahlguard, Kristensen and Kanji (2009) developed a conceptual framework for TQM based on the implementation of TQM in small and medium scale enterprises (SME). Under this framework, TQM was noted to be a philosophy of workplace management that makes use of organisation-wide initiatives to establish permanent culture for the organisation based on the continual delivery of high-quality products and services. Out of this framework, two major schools of thought about the concept of TQM can be identified. In the first schools of thought, quality management is said to be total when it is implemented at the organisation-wide level (Grojean et al., 2004). Supporting this school of thought, Hart & Sharma (2004) stressed that very often organisational leaders tend to focus on the improvement of quality of very limited areas of their organisations. Such leaders are said to do this because the selected areas are where they consider cost centre for the organisations. Based on the first school of thought, TQM cannot be said to be established in such situation because the totality of quality management depends on organisation-wide efforts for quality. In the second school of thought, Dale and Lascelles (2007) explained that quality management is said to be total when the organisation continuously improves its ability to deliver high-quality. From this perspective, it would be said that quality management can be focused on a limited section or department of the organisation but the ultimate outcome of that quality management programme must be the need to see the outcome of high-quality delivery continuously improving. Based on this schools of thought, Khurana (2012) posited that the only way for companies in the SME and multinational business to succeed with TQM is to ensure that there is a metric with which the levels of attainment with quality can be continuously measured to know if the required improvement is being achieved. Nepal et al. (2007) criticised the second perspective of TQM, stating that when one section of the organisation succeeds against others, the failures of the other sections can negatively affect outcomes with the overall organisation. Applications of TQM in the Retail Industry Whiles approaching the implementation of TQM in the retail industry, Greenleaf (2007) advised that one of the most important observations for organisational leaders to make is that the whole implementation process must centre on stakeholder involvement. In support of this, Hamilton & Kashlak (2009) stressed that the intended high-quality products and services, whether will be approached from an organisation-wide perspective or continual improvement perspective must be determined all stakeholders. Absenting stakeholders from the application would therefore create a major loophole with succeeding with the application process. With this point made, the integrative framework for the implementation of TQM is adopted as the most preferred approach to the application of TQM in the retail industry. This is because with the integrative framework, it is possible to directly integrate all stakeholders including customers and shareholders in the implementation process. Under this framework, which sees the application of TQM as a longitudinal process, three major stages are involved and reviewed below. Huang and Lin (2012) explained the first stage of the integrative framework to the application of TQM to be the implementation readiness phase. Because of the integrative nature of the framework, Harvey and Brown (2006) admonished that it is important that it ties together individual, group and organisational level processes and variables. But because these levels of processes and variables may be isolated, it is important to put in place, as part of the application, mechanisms that test the readiness of all people, resources and systems that come together to form of the integrative framework. Ghobadian, Speller and Jones (2004) argued that readiness at the individual level is better implemented when the company focuses on its employees and the fact that each of these will be equipped with the knowledge based needed to deliver quality at all levels of the operational process. The second stage of the integrative framework of application is the implementation of TQM. To do this, several modalities have been recommended. In line with those that root for totality of quality management from a continuous improvement perspective, they recommend the use of the six sigma approach to continuous process improvement (CPI). According to Filppini and Forza (2008) the reason the six sigma has become dominant in achieving continuous improvement is the fact that it allows for systematic evaluation of quality outcome by focusing the five-phase methodology which has come to be known as DMAIC. DMAIC stands for define, measure, analyse, improve and control. This means that whether it is only a small section of the organisation that is focused or the entire organisation, it is important to go through these phase when implementing TQM so as to ensure that quality improves in form (Labovitz, 2005). Those that look at totality of quality management as an organisation-wide phenomenon has however accepted the use of lean production since it seeks to avoid waste within the larger organisation from areas such as waiting, transport, movement, and production of deficit parts (Flynn & Staw, 2004). The last stage of the application of TQM according to the integrative framework is the institutionalisation of TQM on sustainable basis. Martinez-Lorente, Dewhurst and Dale (2009) explained that institutionalisation of TQM ensures that quality management becomes part of the larger organisational behaviour of the company. It also ensures that TQM is approached as a process rather than an event (Kondo, 2007). In effect, after the implementation, it is important to ensure that there are modalities that make TQM part of the daily routines of the organisation. To succeed with this, Dale and Cooper (2003) commented that organisations can incorporate the outputs of high-quality delivery in most of its documented guidelines which define the actions and conducts of internal stakeholders like employees. Example of such documented guidelines can be found to be the code of ethics of the organisation. Rocha-Lona, Garza-Reyes and Vikas (2014) argued that it is only at this stage when TQM has been institutionalised among internal stakeholders that external stakeholders such as customers and shareholders can have their interests represented in quality management because the employees will be made to establish an organisational culture that suits the expectations of the external stakeholders. Benefits of TQM to the Retail Industry Within the retail industry, Ferreira and Otley (2003) noted that the best benefit that any organisation can expect with the implementation of TQM is the fact that it boosts the urge for competitive advantage. What this means is that for quality strategic models the company is using to gain competitive advantage, TQM can help in improving the workability of the strategic model. In line with this, Flynn & Staw (2004) explained that companies in the retail sector today cannot pretend that their very competitive advantage models are not being contested by competitors. This is because apart from the fact that companies learn from each other, the forms of strategic models used by companies in gaining competitive advantage are almost the same among several other companies. In effect, what is being used by one company may also be used by another. Once there is this form of crash, Lockwood, Baker and Ghillyer (2006) admonished the use of TQM in adding value to whatever competitive advantage a company may be working with. For companies that use the cost leadership strategic option, Gilbert and Wong (2003) warned that this is fast becoming the commonly used competitive advantage model, which has led to increases in expectations among customers for something more from the same set of companies all of which are offering low prices of products. This caution is a clear indication of how a company that has applied TQM and is using cost leadership can set itself apart from others by creating competitive advantage within a competitive advantage. For those that use focus strategic option like Tesco, Huang and Lin (2012) cautioned that their customers are fast becoming descending with what constitutes quality and what is an ordinary form of customisation. To succeed with this strategic option therefore, it is important to use TQM to add value to the customised products and services offered. Lastly, using TQM with differentiation strategic option has been noted to improve the standard of value that the companies measure and thus enhance value added products and services (Fink, 2005). Gaps between customer expectations and operational delivery Cross and Leonard (2004) noted that today’s customer is one of the most informed, who knows what to expect from producers and service providers, as well as how to demand for what is expected. This has indeed raised customer expectations for most companies very high. Tesco is no exception of such companies who are faced with high expectations and demands from customers, particularly when it comes to the company’s operational delivery. As stated earlier, Tesco is only into retail and so have very little directly authority on what goes into the manufacturing and production of the products it puts up for sale. This limitation creates a very huge gap between the input resources component of operational delivery and customer expectation on quality. Even though Tesco cannot be said to be company that sells less quality or inferior products, there have been recent questioning on the company’s ability to provide tailored quality products. For example in January 2013, there were reports of 29.1% horse meat being found in the value range burger sold at Tesco (Meikle and McDonald, 2013). Ahead of this, there had been questions as to whether or not Tesco may not be intentionally outsourcing from manufacturers that produce less quality products at lower wholesale prices so that the company could be making a lot of profits (Meikle and McDonald, 2013). Even though the company may have very little authority on its suppliers, it is still possible for the company to live up to the expectations of customers when it comes to the provision of quality products. As part of recommended plan of action to resolving the problem, Tesco with the calibre of global image it has can push for more representation at the production sites of its outsourcers. This should be possible to do as the company is a major stakeholder for its manufacturers. Again, the company ought to put in much work at the transformation level of its operational process. More specifically, it is time to shift from overly concentrating on labelling and branding at this level and put in much work into quality control and quality assurance (Hellsten and Klefsjö, 2010). Once such commitment to quality is showed at the internal level of the company, further efforts should be made to educate the public on quality and safety issues at the company. At the beginning of all this, some challenges may be faced, particularly in terms of the allocation of additional resources and fund to catering for the new roles that will be undertaken as part of quality control, quality assurance and media publicity. Conclusion The important role that quality plays in the provision of customer focused operations have clearly been outlined. Up to this point, it would be clearly appreciated that effects made by companies to focus on the customer in terms of the provision of customized products and services may be commendable. However, this alone cannot be enough to bring about the expected competitive advantage when the element of quality is excluded (ISO, 2006). Throughout this paper, the important role the modern customer plays as an integral stakeholder who sees quality as a responsibility of the company, and at the same time a right that must be given to the customer has been established. With this said, customer of Tesco may welcome the company’s several initiatives and ideas to focus products and services on them but it is important that quality will be embraced in a more elaborate manner. By embracing quality in a more elaborate manner, a call is being made for the company to become extra focused on the implementation of the principles of TQM as has been reviewed in the paper. References Castellano, J. F., & Lightle, S. S. (2005). Using cultural audits to assess tone at the top. The CPA Journal, Vol. 75 No. 2, 6– 10. Chatterjee, S., Wiseman, R. M., Fiegenbaum, A., & Devers, D. E. (2013). 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