Principles of Business Excellence - Case Study Example

Principles of Business Excellence Case Study: Dubai Refreshments P.S.J. C. Name Institutional Affiliation Date Abstract The purpose of this case study is to investigate how the updated version of the EFQM Excellence Model works for a United Arab Emirates Company- Dubai Refreshment P.J.S.C. The EFQM Excellence Model was updated in 2013 and its essence is to encourage organizations to embrace more agile corporate structures that are better suited for survival in the current global economic environment. The current changes on the model focus on the components of fundamental concepts, criteria, and radar logic. This case will look at how this updated model works for Dubai Refreshment PJSC by analyzing the content structure of the model applied in the organization, its principles and structures, and the benefits it has for the case company. Data for the case is accessed from relevant journal articles, books, and the company’s documents. Table of Contents Abstract 2 Table of Contents 3 Introduction 4 Model content structure applied by the organization 4 Excellence scores 5 Integrated quality approach 6 Meeting the needs of customers 6 Brand building and recognition 7 Stimulating innovation 7 Sustainability 8 How the model’s principles and structures work in the organization 8 Fundamental concepts 9 Criteria 9 1.Leadership 10 2.Strategy 11 3.People 11 4.Partnerships and resources 12 5.Processes, products and services 12 6.Customer results 12 7.People results 13 8.Society results 13 9.Business results 14 RADAR 14 Benefits of applying the model to the company 14 Conclusion 16 References: 17 Introduction The business environment keeps changing which leads to companies seeking strategies and ways to remain relevant despite the dynamics of the business environment. In this regard, the EFQM Excellence Model was launched to help companies assess their performances and in the process, be able to identify areas of improvement and become more competitive (EFQM.org). The model is reviewed every three years and a new version was introduced in 2013. The new version urges economic recovery through organizations and their leaders taking responsibility and driving transformation while focusing on among others, sustainability, future talent, as well as applying a more strategic orientation towards risk management (EFQM.org). This version focuses on the components of fundamental concepts, criteria, and radar logic. This essay will focus on how a UAE Company- the Dubai Refreshment (P.J.S.C), a receiver of the 2013 Dubai Quality Appreciation Award (DQAA) (Breitbart, 2013) applies the model. Dubai Refreshments is a sole franchisee, manufacturer and distributor of Pepsi-Cola products in various regions including Dubai, Sharjah, and Northern Emirates. In looking at how the EFQM excellence model applies to Dubai Refreshments, the essay will discuss, first, the content structure of the model that is applied by the organization. Second; how the model’s principles and structures work in the organization; and third, the benefits of applying the model to the company. Model content structure applied by the organization In the UAE, the awards that are based on the EFQM model include the Dubai Quality Award (DQA), the Abu Dhabi’s Sheikh Khalifa Excellence Awards (SKEA), Dubai Service Excellence Scheme (DSES), and Dubai Human Development Award (DHDA) among others (Breitbart, 2013). Dubai Refreshments got the Dubai Quality Award but has also received various recognition awards in relation to excellence. These include the Mohammed Bin Rashad Al Maktoum Business Award 2013 (MRM) in the category of the Most Outstanding Performance Award, as well as Best Business Performance in the manufacturing category. It is also in the recent that the company’s chairman Ahmad Bin Eisa Al Serkal and Vice-Chairman, Ali Bin Humaid Ai Owais received on behalf of the company, the prestigious Dubai Quality Appreciation Award (DQAA) at a special ceremony (Mesbah, 2013). The ceremony was arranged by the Dubai Chamber and took place at the Dubai World Trade Centre where the company was recognized for its unwavering contribution to the national economy of the UAE (Mesbah, 2013). The DQAA was organized by DED (Dubai’s Department of Economic Development) in the 18th Business Excellence Awards. This initiative entails some of the efforts put forth by DED in order to establish quality and excellence concepts as a motivator for robust business expansion and in the long run cement Dubai’s prestige as a favored choice for foreign investments (Mesbah, 2013). Excellence scores There are three different ways that exist which can be used to assess and establish scores. These involve, first, submission of documents by the company and assessment; second, use of internal documentation; and third, through a management workshop note (EFQM.org, 2013). The excellence model has three different excellence levels. The first one is an award winner for each category, and these are the highest in category, best in class companies. The second award is for those recognized for excellence stars rating usually 3, 4, or 5 stars and are companies perceived to be on their way to excellence. The third award usually goes to those companies recognized as committed to excellence, and thus at the beginner’s path in this journey (EFQM.org, 2013). In the UAE, the winners in the DQA (Dubai Quality Awards) were granted honours in three award groups namely DQGA (Dubai Quality Gold Award), DQA (Dubai Quality Award) and DQAA (Dubai Quality Appreciation Award). Winners in the DQGA include the Union National Bank; in the DQA includes Emirates Gas LLC, and UAE Exchange Centre, while the DQAA went to various others including Carea Air Conditioning Services, World Security, ENOC Lubricants & Grease Manufacturing Plant LLC, and the case under study-Dubai Refreshments PJSC (Mesbah, 2013). The model content structure as applied by Dubai Refreshments is visible in the following areas: Integrated quality approach Dubai Refreshments applies a strategic concept guided by values that enable it to deliver quality in the highest standards possible and in the same time consider the inclinations of its customers and catering to their needs (Dubai Refreshments P.S.C, 2007). This involves using the right tools, resources and solid systems to ensure delivery of quality products and services. The company has a vast network for distribution that guarantees accessibility and availability of products to the customers and the markets it serves. Meeting the needs of customers Dubai Refreshments has been operating in the country for at least five decades while maintaining its position as the number one choice beverage and soft drink Company in the UAE region. This has been enabled through studying gaps in the market, for instance, it is the first company to distribute the soft beverages of its kind in the region, and filling it by creating products that are embraced by the customers (Dubai Refreshments P.S.C, 2007). Brand building and recognition Through its commitment to provide better products and services in a consistent manner, Dubai Refreshments has remained recognized as a leader in the refreshments industry in UAE, and is persistent in its expansions through big investments in advanced technologies for bottling, as well as observing strict Quality Management processes (Dubai Refreshments P.S.C, 2007). The products from Pepsi Beverages International have wide brand recognition as Pepsi is a renowned corporate player in the soft drink industry at the world level. In the Emirates, Dubai Refreshments, which distributes Pepsi’s brands, is recognized as the first in manufacturing soft drinks, and this has assisted the company to not only establish, but also carry on with the company’s reputation as the most favoured provider for soft drinks and beverages despite the stiff competition (Dubai Refreshments P.S.C., 2007). Stimulating innovation Dubai Refreshments is exemplary of companies that seek to grow and compete through innovative ideas for their products and services. Some of the initiatives that have led to the company’s success include introduction of the three-litre bottle in 2012 (El Ajou, 2013) which not only caters for a new customer segment, but also shows consistency in meeting the needs of the current customers. The company also uses an innovative bottling technology with most advanced PET/non-returnable bottle (Dubai Refreshments P.S.C, 2007). Sustainability DR applies sustainability in improving its growth and this is mostly exemplified in its support of the Dubai government’s initiatives which has helped to strongly implant the Emirates as a destination worth looking forward to among the world’s destinations (Dubai Refreshments P.S.C, 2007). The organization integrates an overly active role as through corporate social responsibility and offers its unwavering support to charities, cultural bodies and initiatives focused on the environment. The firm has both benefitted and added to the robust economic growth of the nation. Dubai Refreshments sponsors a variety of cultural events at both local community and international levels and these include the Dubai Shopping Festival, and the Pepsi Sports Fiesta. It has also involved in other events including the Dubai Little League Baseball, International Tennis Tournaments, and the Dubai World Cup Horse Races. It also involves in providing support and assistance to the players and organizations for various football tournaments as well as sponsorship involvement in concerts of high profile concerts conducted in Dubai featuring Grade A and B classified world music artists (Dubai Refreshments P.S.C, 2007). How the model’s principles and structures work in the organization Dubai Refreshments integrates the business excellence model in order to ensure continual improvement of performance and business transformation for a more competitive edge. Organizations go for the Business Excellence model because of its wide integrated quality approach, easiness in comprehension, brand-building recognition, and impressive to customers, suppliers, and other stakeholders. In this way, most companies have shown significantly greater financial performance and stock price as compared to those not applying the model (Hendricks & Singhal, 1996). The EFQM business excellence model is a quality model with a holistic management framework which strongly focuses on delivering important results, triggering innovation, ensuring sustainability, and satisfying the expectations of stakeholders (Hendricks & Singhal, 1996). After the review of the model, the integrated components now include the basic or fundamental concepts of excellence, criteria for organizations, and RADAR, which is a powerful measurement tool (Hendricks & Singhal, 1996). Fundamental concepts The model allows people to comprehend the cause and effect relationships between the actions of their organization, the enablers, and the results achieved. Criteria The criteria component has five enablers and four results. Each criterion for example leadership, products, or services areas possesses several sub-criteria. Figure 1 showing the fundamental concepts and criteria of the EFQM Business Excellence Model Source: D&D Excellence Limited (2013). 1. Leadership Dubai Refreshments top management include the Managing Director Mr Mana Al Mulla, General Manager Mr. Tarek El Sakka, Chief Financial Officer Neeraj Vohra, and Sales Manager Mr. Mohamed Khattab. Tarek El Sakka, the General Manager asserted that the company has had a very successful five decades in its operation in the UAE, and that the brands handled by the company have a close affinity with the citizens of the UAE nation. The manager added that the firm is proud of its achievements in sales and is committed to continue providing outstanding customer services and great products in order to assist in growing the leadership position further (El Ajou, 2013). 2. Strategy Dubai Refreshment’s vision is to be the leading beverage company in the lower Gulf, led to its goal by top calibre people having the efficient and effective tools and systems (Dubai Refreshments P.S.C, 2007). The values that DRC P.S.C has set to achieve its vision include the ability to foster excellent relationships through teamwork to enable teams to assist each other to achieve results. It is also through leadership in which appropriate interpersonal styles and methods are used to inspire and guide the workforce towards achieving of goals. This entails the ability to provide team direction and focus, as well as motivate them to reach goals. Service excellence is also the company’s value which brings the ability to determine the needs and manage the expectations of clients as well as deliver products and services in the best way to meet those needs and a focus on customers. The company’s commitment value is shown through the ability to determine and manage customers’ expectations as well as deliver products and services while displaying emotional maturity even in situations of pressure. The company also treasures the ability of effectiveness through being able to do things in the right way from the first time. It also values respect to its stakeholders and the company itself, integrity, a winning attitude, being result oriented, and taking note of the staff well-being (Dubai Refreshments P.S.C, 2007). 3. People Dubai Refreshment Company is in the manufacturing sector and has over 1000 employees that work under the leadership of managers in the departments of sales, finance, operations, human resources, procurement and outsourcing, facilities, administration, and government relations (Dubai Refreshments P.S.C, 2007). 4. Partnerships and resources Dubai Refreshments operates as a bottling and canning company because of its collaborations with stakeholders from Pepsi, Aquafina, and 7UP (EMIS, 2013). It has a substantial fleet with a distribution capability that caters to the numerous outlets selling the soft drinks in Dubai and Northern Emirates. Dubai Refreshments also owns a good number of vending machines, post mix machines, and coolers which it hires to its customers located in almost every area of the distributing regions. Dubai Refreshments is also in exclusive contracts with some of the largest catering organizations in the UAE (Dubai Refreshments, PSC, 2007). 5. Processes, products and services Dubai Refreshments is a UAE based-company involved in bottling, canning, trading and distribution of soft drinks and other related beverage products (EMIS, 2013). Primarily, it is involved in the bottling and distribution of Pepsi Cola International, Aquafina, and 7UP. The company’s product range is categorized into three divisions namely Carbonated soft drinks such as Pepsi, Mirinda Citrus, Pepsi Diet, 7UP Free, Mountain Dew, Evervess, and Shani; Non-carbonated drinks such as Lipton Ice Tea-Lemon and Ice Tea-Peach, and Aquafina drinking water. The main production facility is placed in Dubai, while two warehouses are operated in Sharjah and Ras Al Khaimah (Dubai Refreshments P.J.S.C, 2007). 6. Customer results The main market served by Dubai Refreshments is the Mid East and has explored export market in Gulf Countries, Africa, and Central Asia. The UAE in particular is seen to be a potential growth market for DRC because of the high youth population emerging in this region (Dubai Refreshments P.S.C, 2007). The youth are indeed a great customer segment for the company as they are more likely to consume bottled soft drinks while in various occasions such as hiking, sports, and travelling among others. The soft drink market in the region has been predicted to accelerate in the future. DR and Pepsi are thinking of investing in a great manner to widen the distribution capacity, expand the portfolio of products, and establish an intense market scheme for the sake of building an unshaken unity with its customers, especially the youth, and realize the growth potential for its business in the region (Dubai Refreshments P.S.C, 2007). 7. People results DR enjoys a lot of support from people including those in the internal who work to ensure a consistency delivery of its products and services, and those in the outside, that support the activities and products that the firm has brought to the community. The competition is intense but the company enjoys a leading market share (Mesbah, 2013). DR’s commitment to excellence has been recognized through various awards and recognitions awarded by Pepsi Cola international on numerous occasions. It has also won the best quality award amongst more than 700 bottlers from around the globe twice. The company has a culture associated with a consideration of the Emirati culture, which makes it likeable among the people (Dubai Refreshments P.S.C, 2007). 8. Society results The company has a strong loyalty to the Dubai government and has sponsored various events under the Pepsi flagship including the Dubai Shopping Festival. It has also sponsored local sporting and cultural occasions from grassroots activities to high profile international events. It has also given back to charity and other course organizations. People perceive Dubai Refreshments as having an unshaken reputation as locally owned company with deep roots in the UAE community and the region. The company has expressed corporate social responsibility in health programs such as blood donation awareness (Dubai Refreshments P.S.C, 2007). 9. Business results Dubai Refreshments distributes for Pepsi, the second largest soft drink company in the world, and has been able to maintain a position one status among the Dubai and Northern Emirates soft drink suppliers. The company’s business results are reflected in its earnings. DR announced a net profit for the first half of the year 2012 to be AED 89 million, which was a 45 percent increase from the previous financial period (Zughaibi & Kabbani, 2013). RADAR RADAR stands for Results desired, plan and develop Approaches, Deploy Approaches, Assess and Review and for the model, it is a scoring matrix for enablers and results matrices (EFQM.org, 1996). Best scoring companies score between 500 and 700 out of 1000.The next in category score between 300 and 500. The excellence score is based on grounding whether the performance results are because of carefully thought out and planned action by management or simply by luck, and the extent, and sustainability of the performance. Benefits of applying the model to the company It is beneficial to apply the EFQM model of excellence regardless of the size, structure, and sector of the organization (Hendricks & Singhal, 1996). The model is designed to help any organization be driven towards being more competitive as it urges them to put into use appropriate management systems that can help them become more successful. The model is a practical tool that helps organizations that use them in assessing their current position as they tread on the business excellence path. By using the model, the organizations are able to understand the gaps in their strategies and operations, and this stimulates the coming up with solutions. There are four basic ways in which the EFQM-2013 business excellence model can be used in the organization for benefits. First, is can assist to determine where the organization is on their journey towards business excellence (Collins, 2009). The Dubai Refreshments Company was able to mark and compare its current position in the excellence model, and found that the year 2012 was the most rewarding in its five decades of existence. Dubai Refreshments crossed the Dhs 1 billion sales mark in 2012 (El Ajou, 2013). The company received the award for companies showing commitment to excellence, and this should be a motivation to progress and become a recipient of the ‘best class company’ award. Second, it provides a common language to enable the exchange of ideas and information both internally and outside the organization (Collins, 2009). Through the model’s underlying principles, Dubai Refreshments can get an ideal framework from which to build recommendations and actions by looking at performances in various levels of the value chain. This also provides the base for establishing a shared vocabulary for improvement across the organization. Third, it helps to integrate existing and planned activities, while improving organization efficiency and effectiveness (Collins, 2009). The excellence model can help managers to comprehend the process and its use as part of the entire organization’s planning process. This realization can be applied as an effective tool for culture change where individuals, teams, and groups can measure the outcomes of their actions, understand challenges, and feel empowered to take actions to improve the effectiveness and efficiency of their work. Fourth, it provides a basic structure for the management system of the organization (Collins, 2009). Organizations can use the model to self-assess which in turn can give the management team a holistic overview of the entire organization. The achievements from self critique can be used as excerpts in the business planning progression, and the model can be used as the support for both project and operational reviews. Conclusion This has been a case analysis of the EFQM Business Excellence Model 2013 and how its structure and principles have been applied to the Dubai Refreshments P.J.S.C. the company won the Dubai Quality Award as a company committed to excellence in the third category dubbed as Dubai Quality Appreciation Award. The case has shown the areas in which the model has been applied in the organization, and through further integration of the model, the company can progress to a best class company. Many benefits are associated with the excellence model and any organization that is keen in applying the model has a chance to overcome various challenges affecting the current business environment, which is volatile. The organizations will be in position to position their brands effectively and in the process attain a competitive advantage in the dynamic market. References: Breitbart. (2013). “Winners of business excellence awards honoured”, Breitbart.com. 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(2013). “Dubai refreshments receives DQAA Excellence Award”, AmeInfo.com. Zughaibi, K., & Kabbani, Z. (2013). “Dubai Refreshments Co: Corporate announcements”, GulfBase, Retrieved May 17, 2013 from www.gulfbase.com/news-announcements- dubai-refreshments-co-drc-637-4-39-2013?view Read More