Total Quality Management (TQM) in Coca-Cola Turkey - Essay Example

Conclusion Because of the globalization and internationalization which have made markets intensely competitive, attaining Total Quality Management (TQM) has become of great importance. Companies are making necessary changes including changes in their corporate culture to adopt the principles of TQM. The purpose of the study was laid out in the First Chapter along with the research questions. Three research objectives were laid out in the introduction and all three have been addressed in the research. To get an international perspective and to understand how a multinational would approach TQM, Coca-Cola Icecek, Turkey (CCI) was chosen. CCI claims to be implementing TQM. Sufficient volume of literature was available on the subject of TQM, its principles and the tools to implement TQM. After review of the literature interviews were taken. The second chapter concentrates on TQM – history, principles, approach and application. Through the literature review it has been demonstrated that TQM is a process where responsibility has to be shared by all departments. Since the process of achieving TQM involves changes in the culture, there is a correlation between TQM principles and culture. The history of TQM has been discussed at length. It has been found that TQM is based on the human element in any organization and hence the principles would be the same in any country even though the culture and the behavioural patterns would differ. The definition of quality has been discussed and it has been established that TQM involves satisfaction of both the internal and the external customer. Attaining TQM also involves team work because all departments have to be in unison. To achieve TQM a quality system has to be developed and this requires understanding the needs of the customer. A proper system also enables the organization to use its resources efficiently. Empowerment is the most important technique of TQM. To study the extent to which Coca-Cola’s applies the principles of TQM the methodology adopted was to examine its mission, vision, and values, which the company claims reflects in its actions. The third chapter deals with the research that was undertaken based on the assumption that a company of the magnitude of Coca-Cola could not be wrong in their claims. The study was focused on their unit in Turkey. Secondary data was collected through books, academic journal and internet articles and publications. Primary data was collected through interview of seven officials at their Turkey unit – CCI. Since there was nothing to be quantified, the qualitative approach to the study was adopted. Unstructured interviews allowed for in-depth investigations even though preliminary questions were formed. These were changed as the interview evolved. The justification for the approach has been specified in chapter III. The findings in the fourth chapter revealed that most firms in Turkey are merged with or are in joint venture with Japanese or US firms and hence they use the TQM methods of those parent firms. Most Turkish firms have not achieved quality improvement because of lack of initiative and the basic understanding of the concept of TQM. Research revealed the Coca-Cola does not have much competition in Turkey except for Pepsi, which too in Turkey does not hold a strong position, but CCI has never slacked in its efforts to maintain global standards. All the three research questions laid out in chapter I have been dealt with. The first question was to determine the importance and the concept of TQM in organizations. This has been dealt with in great depth and it has been found that TQM leads to customer delight and continuous improvement. Team work is considered very significant. People and process management have to be handled by the use of latest technology. Communication and information system has to be in place. TQM is a measurement and if the gap or the problem can be identified through the results of the measurement, the solution becomes easy. The second objective was to determine how organizations can make the necessary changes parallel to the TQM concept to adapt themselves to the changes in the environment and in the demands of the customers. The study found that this could be done through thorough planning. Long-term goals have to be in alignment with the corporate vision and mission. Cross-functional teams are essential to manage targets which are the shirt-term goals but essential to achieve the long-term goals. The quality plans that would give customer delight have to be determined. All the plans have to be finally integrated and acted upon and this requires the development of a quality system. The study found that to satisfy the needs of the customer and to achieve total quality management, the sources of the organization, the structure of the organization, the subdivisions and the relations between them have to be defined and organized. The system thus developed should be able to move the managerial system from quality control to quality assurance, which would result in zero defect rate and thereby TQM. To achieve this, TQM techniques like JIT, outsourcing, empowerment, forming quality circles and continuous improvement have to be implemented. The third objective was to determine how critical it is in a rapidly developing world for the Coca-Cola Company’s future to maintain total quality management. The study found that Turkish companies relied on ISO 9000 and did not think it necessary to adopt TQM. ISO 9000 are generic in nature whereas TQM is specific for each company and hence needs to be developed individually. To understand how CCI is handling the issue, general questions were prepared and seven officials were interviewed in Turkey to find out what their stand on TQM issues were. Through the interviews it was revealed that the company focuses on product quality, the environment, and the health and safety of its workers through their corporate standards The Coca-Cola Quality System Evolution (TCCQSE), which is globally accepted by all their units. Along with this, they have an annual audit system that helps them achieve TQM. Even though there is not much of competition in Turkey, they adhere to the specified standards and do not compromise on quality. The company realizes that irrespective of the size and the potential, they need to remain customer-focused. Empowerment is an important factor for the success of TQM which is practiced at CCI but along with that accountability has also to be accepted. The unit at Turkey is basically a bottling company as they mix the necessary ingredients to the concentrate received from the headquarters, and bottle the solution. CCI has to follow certain norms and guidelines from the headquarters in Atlanta and certain guidelines that have been laid down locally. Despite this only 3 out of their 10 factories in Turkey were able to achieve ISO 9002 certificate after which they introduced the TCCQS, a quality system based on ISO 9000. Adhering to the guidelines specified in TCCQS is critical to the Turkey unit, failing which they risk the cancellation of their licence to bottle the drink. They do have the flexibility to make changes as per local requirement but only when they adhere to the mandatory guidelines. As discussed in the literature review, TQM is based on the human element and the guidelines provided in the company’s TCCQS pertain to the hiring standards and the job description of the new recruit. It also specifies the training standards failing which the wrong training may result. TCCQS is a highly developed quality system as it also includes the HACCP (Hazardous analysis critical control points), essential to be followed globally. This pertains to the health of the employees. As far as the environment is concerned the company in Turkey does not follow the specifications of ISO 14401 but they abide by their own norms in the TCCQS, which they claim is sufficient. While the company has taken care of the human element and the environment, they face a challenge in their production process, which needs to be addressed urgently. Their factories in Turley were built in early 1960 and have not been renovated since. Trying to block the sunlight in their production Hall by placing bricks is a crude method. The company also does not have any special requirements to maintain their standards in finance as their finance department does not deal directly with the sales department. This means inter-departmental communication and information sharing is lacking. They need cross-functional teams. The company also seems to be taking it easy since there are no competitors that they have to play against. They are making attempts only to maintain quality standards for the product. This approach too is not right because the market place is rapidly changing and they may be caught unawares. Then, they have defined the job requirements in the documents which are handed over to the new recruit. There is no mention of employee-orientation to the culture of the organization. Delegation has to come with responsibility – the senior managers or the line managers have to take the responsibility of the performance of the new subordinates. They may be using the latest technology and producing products with zero error but this does not protect them from the fallout in other areas of their operation. For instance, they have not made any efforts towards standards in the distribution process. Their distribution points have to be included into the quality process, if they are looking at long-term benefits. While the company is effectively using empowerment, they lack in benchmarking. Outsourcing is another critical factor where the local unit at Turkey has the independence to change suppliers. Since even the quality of water can change the taste of the drink, every supplier has to be individually scrutinized in different ways. The company had followed the norms of maintaining quality circles and achieved the ISO 9002 in 1995 but since then there has been no mention of how they are still attempting to maintain the standards. This was done some 13 years ago and needs to be addressed. Thus the study shows that CCI needs to address these issues urgently. The rapid pace at which changes take place, CCI would soon find itself in a difficult situation. The urgent areas they need to address are culturing of their employees, the revamping of their production process, their distribution system, their communication system, and developing cross-functional teams. The interaction between the mangers of their different global units takes place after an interval, which could be shortened. What has been most surprising that the managers at Turkey were content with the use of their own internal standards and remained indifferent to ISO standards. They claimed that they could achieve the same standard through their own norms. The study was based on the assumption that CCI would be achieving what they claim in their mission, vision and goals. While they still claim it verbally, the analysis of the study does not agree to this claim. The outcome of this research is based on the interviews supported by the secondary data which is the research of other people. The findings and discussion chapter has not been segregated as it makes it easy to discuss each finding simultaneously. It is expected that the data analyzed and the outcome of the research would contribute to the existing knowledge and could help other bottled drink manufacturers round the world. At times, companies reel under the assumption that they are on the right track. It would go a long way in making other bottling units conscious of the possible loopholes in their strategy. No research method is unique and each method has its own drawbacks and difficulties. It is difficult to establish how many of the officers have registered true opinions or position. Firms and managers tend to conceal the true picture especially when their strategies fail. To some extent this was taken care of interviewing both the top management and the lower managers. Nevertheless, there is a tendency to over emphasize the benefits when they know it is for the purpose of the research. It is also possible that the lower managers were cautioned by the top management. The primary data has added weight to the previous research and has provided direction for future research. Further research could be done with special focus on how culture of an organization can contribute to attaining TQM and to what extent the top management involvement is essential in this. Recommendations The area where CCI needs to address issues has been highlighted in the section above. CCI has concentrated on the people and the product but not on the process. They have also not bothered about inter-departmental teams. As such CCI should immediately the Six Sigma in their unit at Turkey. Six Sigma is a quality improvement process that had originally started with the focus on the customer and eliminating the manufacturing defects but today it includes the billing, marketing, purchasing and invoicing functions (Heuring, 2004). Six Sigma methodology defines, measures, analyzes, improves and controls (DMAIC) the entire improvement process and teams are formed to oversee the improvement process. The sigma level serves as a benchmark for the ability of a process to accomplish the demanded requirements. CCI appears to lack strong leadership and Six Sigma would emphasize on such a leadership for the success of the program. Six Sigma strategy places emphasis on achieving quantifiable and measurable financial returns to the bottom line of an organization (Antony, 2004). CCI does not follow any standards for financial control. This is one area where they would benefit immensely with Six Sigma. Six Sigma methodology integrates the human and the process elements of improvement, which is very essential for CCI. The human elements include the culture change, customer focus, belt system and infrastructure while the process includes process management, statistical analysis of data, and measurement system analysis. CCI needs a culture change to effectively benefit from the tools they employ. The manner in which the tools and techniques are employed would determine the success or failure of Six Sigma. CCI should immediately engage Six Sigma consultants who could help in the identification of the problem, analysis and measurements. They would also train the workers including the executives in the implementation of the process but the involvement of the senior executives is essential. There has to be a culture change which has to be driven by senior leadership. Even the consultants would not be able to help much if the data they are provided with is distorted or insufficient (Antony, 2004). The start-up cost for institutionalizing the Six Sigma process can be costly but that should not be a problem at Coca-Cola Company. In fact, the company can adopt this at the corporate level. Even the selection of the consultants needs discretion because too many consultants have come into the business of Six Sigma without really understanding the tools and techniques. Communication is the most essential element in interdepartmental relationships. This implies that each employee should be aware of what the program is, what the objectives are, how it will work, and how each employee can participate and contribute. Cross-functional teams like the TQM team can ensure proper flow of information and work together on potential problems. Top management support and involvement is essential to bring about a change. They should be personally involved in inspiring quality (Kruger, 2001). At CCI there is no indication that top management is involved or even actively interacts with the subordinates. The culture of the organization should be such that every employee takes pride in it. Flow of communication across departments and different levels is essential. There has to be total expertise from all departments to solve problems. Apart from Quality Circle, CCI should also have a Quality Council which can coordinate the functions of various departments. Quality should be the responsibility of every employee and all should understand that quality problems do not originate with workers. The top management has to lead by example. When a new employee joins, there should be some process in place that brings him into the fold of the company. This implies that the transition should be smooth and he should not feel alienated. The culture of the company should be such that any new employee is able to become a part of it in no time. Merely defining the job requirements and handing them the document is not enough. They need proper training and regular involvement of the top management. For benchmarking they do not have any suitable company or competitor and hence do so with other units within their company. This is no doubt a good alternative but meeting several times a year is not the right approach. Today technology has advanced to such an extent that even companies like General Motors have their own blogs and forums where people exchange news and views. The company should immediately start a blog for its employees where the executives from different units round the world can share their experience and advice. This is possible in real time as technology changes by the minute. This would help units in places like Turkey where managers may tend to slack due to lack of competition. Thus, CCI would benefit by the introduction of the Six Sigma process which by itself would take care of most of the issues. This would enable process improvement, management of cross-functional teams, enhance communication, monitor the distribution process, and smoothen the transition process for the new recruits. The production Hall or the bottling plant needs urgent renovation and with permission from the headquarters, it should be taken up forthwith. Integration of people and the process is essential, which is lacking at CCI. Culture change is essential. Consultants should be contacted immediately because the process of incorporating the data and implementation may take up to six months. Hence they should act immediately on this count. Starting a forum or a blog for their managers across nations can be dome immediately. This does not involve any expenses and all experts from different countries and regions should be made to join and share information. With the implementation of Six Sigma the Turkey unit of Coca-Cola would be at par with its other units and they would also be ready to face competition at any time. References: Antony, J 2004, Some pros and cons of six sigma: an academic perspective, The TQM Magazine, vol. 16, no. 4, pp. 303-306. Heuring, L 2004. Six Sigma in Sight, Reviewed online 01 February 2009, from http://63.134.192.206/pdf/suggestedReading/9_Heuring.pdf Kruger, V 2001, Main schools of TQM: ``the big five, The TQM Magazine, vol. 13, no. 3,.pp. 146-155. Read More