International Quality Management System - Report Example

International Quality Management System of the of the Table of Contents Introduction 4 Company Background 4 Vision and Mission Statement of Almarai 4 Purpose of the Report 5 Strategic Objectives 5 SWOT Analysis 6 Rationale for Adopting TQM 7 Total Quality Management (TQM) 7 Elements of Total Quality Management 7 Effectiveness of TQM in Achieving Company’s Competitiveness 8 Implementation of ISO 9000 in Relation to TQM 9 Requirements for Improving Quality 10 Mechanisms for Achieving Success 10 Leadership Factors 10 Appropriateness of Culture towards the Quality System 11 Policies to Operate Ethically 11 Policies to Achieve Motivated Workforce 12 Mechanisms to Detect Customer’s Changing Requirements 12 Mechanisms to Build Partnerships 13 Implementation Plan 13 Existing Quality Processes of Almarai 13 Relentless Pursuit 13 Quality Always, Quality First 13 Role of Research and Development (R&D) Department 14 Plan to Improve Quality 14 Conclusion 15 References 17 Introduction Company Background Almarai is a dairy company which was founded in the year 1977. During 1990, the company has gone through reinvestment and restructuring which helps it to transform from decentralized to centralized company (Almarai, 2015a). 2005 brought several developments for this company and it became a publicly listed corporation including approx 70,000 shareholders. Within the food industry, Almarai is considered as the largest dairy company around the world. It was the foremost company to be certified with “ISO 22000”. The company has also obtained ISO 9001-2000, across their entire operating divisions (Almarai, 2015a). Almarai offers range of beverages and food such as natural juices, desserts, long-life and fresh dairy products, cheese and fresh yoghurt (Almarai, 2015b). They have their presence on the social media sites also such as Twitter, YouTube and Facebook to draw more customers as nowadays more percentage of people are engaged on social media sites (Almarai, 2015b). The success of Almarai is driven by several factors. Under the supervision of visionary management and supportive Board, their dedicated team put full effort towards the company’s development and progress. The centralized farms, infrastructure and superior processing plants are accountable for their success. Moreover, the distribution and marketing expertise lead to the innovation in their existing products (Almarai, 2015a). Vision and Mission Statement of Almarai The mission of Almarai is to provide nutritious and quality beverages and food that improve the lives of customers every day (Almarai, 2015c). It can be attained by bringing continuous improvement in their existing product range and also by offering healthy food. Their vision is to become the preferred choice of customers by leading the market with finest quality beverage and food products (Almarai, 2015c). The values offered by Almarai are as follows: Adaptable: They are flexible and agile in their work and confidently make valiant decisions which benefit their stakeholders (Almarai, 2015c). Sharing: They work mutually as a team as well as honestly collaborate and share knowledge and skills to enable the employees to become the best (Almarai, 2015c). Passionate: The Company strives for extraordinary results by providing products of superior quality (Almarai, 2015c). Innovative: Almarai is continuously driven to enhance their business and to exploit the capability of their employees (Almarai, 2015c). Respect: The Company earns respect through embracing integrity, trust and fairness in all their relationships (Almarai, 2015c). Excellence: Almarai is diligent in their work and always deliver the finest quality in all things they do (Almarai, 2015c). Purpose of the Report The purpose of this report is to initially provide strategic objectives of the company and then focusing on its weakness and strengths along with its threats and opportunities. It will then move towards the elements of TQM including its effectiveness in achieving company’s competitiveness. Implementation of TQM concepts in relation to ISO 9000 principles has also been taken into consideration. Further, the report will focus on the various requirements for enhancing quality of products. Finally, it will highlight the existing quality processes of Almarai and then suggest the implementation plan for improving the quality. Strategic Objectives The strategic objectives of Almarai is to further enhance their quality of service and products and through this, they want to attain success. The company has a clear objective of increasing their share of household grocery market (Alrajhi, 2011). Almarai has currently entered new segments of food and revealed a great success in handling such transaction. The company believes that they will further enter into the new categories like bottled water and the fishery products by means of joint ventures and acquisitions. Almarai is planning to enter the Iraq market for further growth (Alrajhi, 2011). Other strategic objective of the company is to comply with pertinent legislations like corporate governance principle. Through this, they want to achieve fairness in their practice. Almarai want to increase profitability as well as operational effectiveness. Their strategic objective is to remain responsive towards the stakeholders’ needs. They want to improve their relationships with the customers by offering enhanced services and products to customers. One of the main strategic objectives of Almarai is to increase their turnover by satisfying the customer’s needs (Alrajhi, 2011). They also wish to create long term value for their customers. All these objectives will help the company to attain growth in their business operations. SWOT Analysis Strengths: Almarai is considered as the largest dairy company around the world. It is the only company offering dairy products within gulf region. They have less percentage of wastage as compared to their competitors, which reflects the efficiency of the company in recycling the waste materials. The company has an effectual quality system which is operated and controlled by sales and marketing expertise, incorporated supply chain and by superior technologies in processes, farms and engineering like Q-Pulse (Galizzi & Venturini, 2012). Weaknesses: The company relies on sole brand name i.e. “Almarai”, thus in case of any event or incident, they cannot depend on any alternative brand in order to keep offering their products. Almarai has also limited share especially in gulf region (Galizzi & Venturini, 2012). Opportunities: As the company is planning to enter the Iraq market, so the growing population will have a positive effect on the sales of Almarai. Growing population will stimulate the sales of the company. If in future, the import and export duties will be eliminated or reduced, then it will positively affect the revenues of Almarai. Low rates of interests increase investments especially in their business lines. Increased health awareness among the consumers encourages them to purchase and consume more quantity fruit juices and dairy products. It will offer opportunity to Almarai to augment the sale of its products (Galizzi & Venturini, 2012). Threats: The government funding to this company may discontinue at anytime because of the reliance on their oil revenue’s unpredictability. The company’s expansion to other country may include borrowing and currency risk, insurance, procurement and litigation. The dairy products have limited life mainly of six days. Any disturbance in the shipping process may hamper the quality of their dairy product. This will affect the sale of their product and therefore the revenue of Almarai (Galizzi & Venturini, 2012). Rationale for Adopting TQM Total Quality Management (TQM) TQM is a management approach adopted by companies towards attaining success of long term by means of customer satisfaction. In order to maintain the quality of the product all members of the company participate in recovering or improving services, processes and products and also the culture within which they work. Under TQM process, all employees are engaged in unremitting improvement of products and processes through strategy and effective communication among them (American Society for Quality, 2015). Elements of Total Quality Management Customer-focused: Customers only determine the quality level of any product. It does not matter what the company does in order to foster its quality enhancement i.e. upgrading software, training employees, buying novel measuring tools or integrating the quality into design process; customers decides whether their efforts on processes and products are worthwhile (Sorooshian & Teck, 2014). Total workforce involvement: All workers contribute in functioning towards the common objectives. Involvement of entire workforce leads in the quality improvement of certain product. Self-managed teams of workers are one type of empowerment. Work system of high-performance integrates continuous development efforts with usual business operations (Sorooshian & Teck, 2014). Process-centered: An essential part of total quality management is an emphasis on the process thinking. Normally, a process is described as a sequence of steps which obtain inputs from the external or internal suppliers and converts them into the outputs which are delivered or conveyed to the customers. The steps should be clearly defined as well as the performance measures must be constantly monitored to detect unanticipated variations (Sorooshian & Teck, 2014). Integrated system: Although the company may comprise of several functional specialties frequently organized into the vertically structured branches or departments, it is mainly the horizontal routes/processes which are interrelating the functions (Sorooshian & Teck, 2014). Systematic and strategic approach: An important part of the quality management is to follow the systematic and strategic approach to attain the objectives, vision and mission of the organization. This process is known as strategic management or strategic planning, which includes the creation of the strategic plan. The chief purpose of the strategic plan is to integrate quality with the process (Sorooshian & Teck, 2014). Continual improvement: Incessant improvement in the procedure drives the company to become both creative and analytical in finding means to be more competitive as well as effective at fulfilling stakeholder’s expectations (Sorooshian & Teck, 2014). Decision making: TQM necessitates that a company should continuously collect as well as analyze data to improve the accuracy of decision making, to allow prediction which is based especially on the earlier history and to achieve consensus (Sorooshian & Teck, 2014). Communications: When the company goes through various changes, at that time effectual communication plays significant part in motivation workforce and in maintaining morale at entire levels. Effective communication comprise of timeliness, method and strategies to produce finest quality products (Sorooshian & Teck, 2014). Effectiveness of TQM in Achieving Company’s Competitiveness Almarai can attain competitiveness in several ways by engaging themselves in the quality management practice. They can attain competitiveness by lowering costs through reducing waste, satisfying the requirements of customers with quality services and goods, engaging quality workers and by helping supplier in offering quality products (Kumar et al, 2009). Implementing TQM practice via these approaches will assist Almarai to gain competitive advantage. Reducing costs: Attaining lower costs normally for making or getting products will provide Almarai with immense competitive benefit over their peers or competitors. They can form associations with the suppliers which will help the company to acquire goods at lower price. This will further allow Almarai to offer products to customers at lower price. In this way they can achieve competitiveness as this practice will drive many rivals out of their business. By continuously enhancing the processes which are involved in manufacturing the products, the company can reduce waste and could be become more effective in their business operations. This will facilitate Almarai to manage the quality and to achieve competitiveness over their rivals (Kumar et al, 2009). Helping suppliers: The suppliers and workers of company present the input which determines the quality and cost of the products which are to be made. Almarai can empower their suppliers and workers and could assist them in attaining their objectives. By this, they could have competitive advantage over those organizations which browbeats their suppliers and employees. The first step of providing the people with quality products involves buying those goods from suppliers which will help Almarai to make their own product. A vital aspect of Almarai’s TQM will be to assist the suppliers to present quality goods to their company (Kumar et al, 2009). Quality workers: Quality workers are also required to provide superior products because they are the one who are engaged in the manufacturing process. Almarai could engage in TQM practice by motivating their staff to contribute well in their work. It can be done by providing training and compensation according to their performance. By this, they can maintain the quality of their product and could also satisfy the customers. Satisfying customers: Customers who are satisfied with the services and products received, views them in terms of value-added. They can also refer others to purchase the company’s products. Customers’ satisfaction can only be gained by providing them quality products. Through this, Almarai can gain advantage over the peers (Kumar et al, 2009). Implementation of ISO 9000 in Relation to TQM The ISO 9000 principle is broadly accepted as a standard for the quality system (Hasan, Ali & Lam, 2007). Acquiring certification of ISO 9000 now has become a competitiveness factor among the companies in the global market. The subsequent application of ISO 9000 principle will have a major cost reduction impact on Almarai which will lead to the improvement of performance (Hasan, Ali & Lam, 2007). It comprises of collection of international standards which are required for carrying on business in proper manner. These standards necessitate companies to document or file their activities, plans, procedures and specifications. Using the standard of ISO 9000 is similar to planning the finances as well as keeping the company records or paying taxes and bills (Gotzamani & Tsiotras, 2001; Terziovksi & Power, 2007). TQM is a process of carrying on a business which concentrates on customer satisfaction. For Almarai, its utilization will result in continued business operation. According to ISO 9000, TQM should be initiated after the companies document their activities in a proper way. Besides providing satisfaction to customers, TQM is also concerned with authorizing the employees. In Almarai, the practice of quality management will guarantee that the skills of the workers are effectively utilized and then the workforce will feel that they are also equally accountable for the company’s success. TQM’s final aspect is the utilization of statistics in order to decide on the accurate areas to implement modification and improvements (Kumar et al, 2009). Effective implementation of TQM concepts and ISO 9000 principles/standards will help Almarai to spectacularly improve their customer retention and profits. Implementation of TQM in relation to ISO 9000 will prove beneficial for Almarai. Organizations that have sincerely employed these standards have been confirmed to have fewer difficulties, better running, get repeat business in more numbers, have less amount of waste as well as have increased revenues and profits. By utilizing ISO 9000 first and then the methods of TQM, an organization can remain ahead of their competitors (Singles, Ruel & Water, 2000). Requirements for Improving Quality Mechanisms for Achieving Success Almarai adopts various methods to achieve success in their business operations. One of their means to attain success is to enter into the new categories like bottled water and the fishery products by means of joint ventures and acquisitions. Other method developed by Almarai to attain success is to remain responsive towards the stakeholders’ needs. Through this they can increase profitability as well as operational effectiveness (Alrajhi, 2011). By complying with the corporate governance principle, the company wants to achieve fairness in their practice (Almarai, 2015f). The Company strives for extraordinary results by providing products of superior quality. They have an effectual quality system which is operated and controlled by sales and marketing expertise. All these factors will help the company to achieve success. Leadership Factors The leadership factors which are crucial for Almarai’s success are as follows: Employees are assets: Almarai view their employees as the real assets of the company. Their intellect combined with knowledge, integrity, personality, character and skills create the actual value in the company. The leadership quality of the managers allows them to treat their employees with respect and dignity and this leads to the improved performance of the employees. When the workers are treated well, they focus more on the important matters like quality improvement practice within the products (Oakland, 2003). Trust is important: The product managers perform their work in such a manner that the employees actually trust them. The managers also trust their workforce that they will execute the tasks towards which they are committed. Trust between both the parties helps the company to provide the products to the customers in an efficient way. Decisions determine future: Decisions are made by the leader on regular basis. Successful managers know their market and therefore make careful decisions which are accepted by the workforce and it provide better result to the customers. The decisions taken by the leader or manager lead the employees and also the products of the company to succeed (Oakland, 2003). Appropriateness of Culture towards the Quality System Over the years, the structure of Almarai has developed, moving from inflexible business configuration to simple business structure. The main aim of the company is to stimulate a corporate culture of transparency and honesty (Annual Report, 2014). The company follows an approved set of procedures and standards that are suitable to each employee, that are pertinent to their business environment and that reflect their corporate values. The employees stick to the relevant standards and apply improvements in the quality accordingly. Quality improvement assists them to achieve the desired result in an efficient manner (Annual Report, 2014). Policies to Operate Ethically Almarai is known for its commitment towards keeping up with high standards/principles of corporate governance. They view principles of corporate governance as a vital tool in exploiting shareholder value. They are also consistent with their commitment towards quality in their products and processes (Almarai, 2015f). The structure of corporate governance indicates the distribution of responsibility and authority among various participants within the company. By committing towards the corporate government principles, Almarai remain fair and transparent in all of its business operations. The company makes sure that their shareholders take the benefit of all the rights which are related to the shares. The right of shareholder includes privileges of receiving permitted dividend payments’ share, the privilege to attend the “Shareholders General Assemblies” (Almarai, 2015f) and the privilege of the share disposal (Almarai, 2015f). In order to operate ethically, the company ensure integrity and reliability of their accounting and financial procedures including the methods related to financial reports’ preparation (Almarai, 2015f). They also review the efficiency of internal control method annually. Almarai decide procedures and policies to ascertain their conformity with the regulations and laws and their obligation to reveal the important information to creditors, shareholders as well as other stakeholders (Almarai, 2015f). The social responsibility plan of Almarai focuses especially on encouraging excellence and education, training and enhancing local talent as well as providing focus on the safety and health of all stakeholders (Almarai, 2015g). Policies to Achieve Motivated Workforce Engaging efficient workforce is a major step of Almarai on the way to innovation, productivity as well as business success. The company employs 40 nationalities and promotes multiculturalism by means of teamwork, which assist them to gain better understanding of sensitivities and cultural nuances (Annual Report, 2014). The company has become creative towards fostering team work. Each year during the time of Ramadan, they grant leave to the workforce. They also provide incentives to the workers as per their performance. This motivates them to contribute more towards the success of the company (Annual Report, 2014). Mechanisms to Detect Customer’s Changing Requirements Identifying the altering requirements of customer is very important for company to acquire more customer base and also to attain success through increased revenue and profits. To detect the changing customers’ needs Almarai study the changing trend of the market. They view the global trends prevailing among the customers. Almarai came to know that nowadays customers became more health conscious. Increased health awareness among the consumers encourages them to purchase and consume more quantity fruit juices and dairy products. It provides opportunity to the company to augment the sale of their products (Annual Report, 2014). Mechanisms to Build Partnerships Almarai supports the initiatives especially in the sector of education. In affiliation with the “King Abdulaziz City for Science and Technology” (Almarai, 2015h), the company has instigated the award particularly for the scientific creativity in order to promote the scientific research. In this way, they encourage education. The company is contributing for the betterment of society by sponsoring events which supports the social causes (Almarai, 2015h). Implementation Plan Existing Quality Processes of Almarai The product and quality development department of Almarai is dedicated towards ensuring that the company consistently attains the greatest possible standards or principles of excellence (Almarai, 2015d). Their commitment to product improvement and quality is entrenched into the manner they manage their business. The company has an uncompromising zeal for innovation and quality (Almarai, 2015d). From pretty modest beginnings, the company managed to grow into the largest operator around the world. Synonymous with the high quality dairy products, diversifying into poultry, fruit juice and bakery products has made them a well established food company (Almarai, 2015d). In the previous years, the growth of Almarai was steady but recently the company has achieved growth. Due to continuous improvement in their process, they resulted in sales of 8 billion in 2011 (Almarai, 2015d). Relentless Pursuit The growth of Almarai is propelled by unyielding pursuit of the quality which is supported by distinct infrastructure mix which includes world-class distribution systems, farms and production operations (Almarai, 2015d). Quality Always, Quality First Since 1977, Almarai continue to fulfill the requirements of rapidly growing domestic markets (Almarai, 2015d). The company has made various changes in their business process but one thing has never altered and will never change i.e. their determination to remain faithful to their founding standard by producing the quality the customer can trust. The product and quality development department of Almarai has rooted this principle of maintaining quality decisively into their business operation (Almarai, 2015d). The department is dedicated towards ascertaining that the complexity and growing size of their business will never compromise of the product quality or their talent especially for innovation. The department also ensure that the company always keep their quality promise through shaping first-class processes of product development that produce finest products (Almarai, 2015d). Role of Research and Development (R&D) Department The vision of the research and growth/development department of Almarai is to provide high quality healthy products which involve nutrition value to the customers. The R&D department of the company is engaged in the continuous analyses of the demands of customers and is also involved in the study of their potential choices (Almarai, 2015e). To implement or apply its vision, they rely on the innovation in order to develop novel products by means of scientific methods aiming at augmenting the total number of launches of new products. In 2009, they have created an initiative named as “Almarai for Innovation Management” (Almarai, 2015e) which focuses on the innovation activities of the company on all its product categories. During 2013, they have launched 22 novel products under their various brands along with finest quality. Key innovation plans were initiated across all their product categories in 2013 (Almarai, 2015e). Plan to Improve Quality Meet weekly: The quality issue should be discussed weekly and the company should get to the main cause of the issue. The company should inspect the deficiency with intelligence by making use of inspection plans and flexible sampling method which could be attuned to the particulars of the manufacturing process, production line and product (Fotopoulos & Psomas, 2009). Quality inspection: Almarai should perform quality inspection to do further modification in the quality of the product. It is recommended that they should embed their quality procedure within warehouse, receiving, production process. This approach necessitates real-time control and visibility over the processes and material flows, and most probably just-in-time deliveries in order to carry out these processes in an efficient manner. Almarai is required to inspect the defect in the early stage of the manufacturing process (Fotopoulos & Psomas, 2009). Investment in training and growth: It is suggested that Almarai should invest in the training and growth as well as research and growth department to further enhance the product quality. Hiring experts for proving training to the workforce in the way of improving quality may prove beneficial for the company in achieving customer loyalty and satisfaction (Fotopoulos & Psomas, 2009). Organize the quality circles: Almarai should organize the quality circles to enhance their product quality. Quality circles are generally the group of workers who are provided with the responsibility and authority for making the business better. They are encouraged to evaluate processes as well as recommend improvements, with an objective of promoting productivity, quality and efficiency. By organizing quality circles, the company can actually satisfy customers in a better way (Fotopoulos & Psomas, 2009). Conclusion The main aim of this report is to focus on the concept of quality management within the company. It includes how TQM helps the company in their way of achieving competitiveness. Almarai can attain competitiveness in several ways by engaging themselves in the quality management practice. By continuously enhancing the processes which are involved in manufacturing the products, Almarai can reduce waste and could be become more effective in their business operations. Implementation of TQM concepts in relation to ISO 9000 principles has also been explained. Effective implementation of TQM concepts and ISO 9000 principles will help Almarai to spectacularly improve their customer retention and profits. One of the means of Almarai to attain success is to enter into the new categories like bottled water and the fishery products by means of joint ventures and acquisitions. The Company strives for extraordinary results by providing products of superior quality. The main aim of the company is to stimulate a corporate culture of transparency and honesty. Engaging efficient workforce is a major step of Almarai on the way to innovation, productivity as well as business success. Almarai’s commitment to product improvement and quality is entrenched into the manner they manage their business. Various implementation plans such as quality detection, investment in training and growth and organizing the quality circles have been suggested to further enhance their product quality. References Almarai. (2015a). Almarai: History. Retrieved from http://www.almarai.com/en/about/history. Almarai. (2015b). Almarai: Our Products. Retrieved from http://www.almarai.com/en/. Almarai. (2015c). Almarai: Mission, Vision & Values. Retrieved from http://www.almarai.com/en/about/vision-mission. Almarai. (2015d). Almarai: Quality Policy. Retrieved from http://www.almarai.com/en/about/quality-policy. Almarai. (2015e). Almarai: Research & Development. Retrieved from http://www.almarai.com/en/about/research-development. Almarai. (2015f). Almarai Corporate Governance Code. Retrieved from http://www.almarai.com/en/investors/corporate-governance. Almarai. (2015g). Almarai CSR. Retrieved from http://www.almarai.com/en/community/csr. Almarai. (2015h). Almarai in the Community. Retrieved from http://www.almarai.com/en/community/almarai-in-the-community. Alrajhi. (2011). Almarai: Big picture is more bright. Retrieved from http://www.alrajhi- capital.com/en/research/Almarai/Almarai-1Feb2011.pdf. American Society for Quality. (2015). Total Quality Management (TQM). Retrieved from http://asq.org/learn-about-quality/total-quality-management/overview/overview.html. Annual Report. (2014). 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