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Q1- Describe the meaning of Quality in true spirit for a services organization, How the
Quality can be judged from a customer’s view point, discuss with the perspective of
fitness to standard and fitness to use.
Meaning and Requirement of Quality in Service Organizations
There are many reasons for service industries to be interested in service quality. Service
industries now a days are committed to be accountable to customers and compete for their
loyalty. This industry may have an externally imposed requirement to implement service quality
principles Or may recognized that the managerial approach to service quality implies is a way to
improve their ability to meet their mission of serving users regardless of external pressures.
Service providers deliver services to benefit their customers and perhaps to attract new ones.
Improvement of service requires an understanding of the benefit, the customers, and the actions
of the service provider, and then using that knowledge for planning purposes. The application of
service quality concepts encourages service improvement. There are many reasons interest in
quality, which are as follows,
First, customers who share information about their expectations offer an opportunity for that
industry or other service provider to establish a closer personal contact with them. This
relationship should result in providing (and customers receiving) better service; it makes people
providing services to be more knowledgeable about customers expectations and how to translate
that knowledge into services that delight customers and create loyalty. At the same time,
customers are better informed about industries and their service offerings and, this knowledge
gain a realistic set of expectations about what service provider can and cannot do. This mutually
beneficial communication requires ongoing nurturing and continuous listening to customers. As
problems are identified, they should provide feedback to the organization and be treated as
opportunities for improvement and to raise the overall customer satisfaction with services.
Second, external pressures from customers, call for accountability and the use of basic business
practices by service providers. The accountability characteristic of business operations that
requires self-examination to determine if what is being done is what really benefits the
organization and those it serves. (P. 269)
Fundamental to service quality is the need for cyclic review of service goals and objectives in
relation to customer expectations. By viewing service quality within the context of planning and
implementing a service plan, service provider can identify areas for improvement that are central
to their mission, goals, and objectives (Hernon & Whitman, 2001).
Third, attention to service quality, in brief, enables an organization to develop a partnership with
its customers to gain a competitive edge. Furthermore, technology and competitors help service
providers to shape the expectations of customers about information gathering, evaluation, and
use of services. Service organizations, must have a motivated staff committed to the provision of
excellent service and empowered to work directly with customers to deliver service on a
continuous basis. The focus is no longer merely on quality service possesses; rather, the core
activity of a service provider is center on service provision and improvement and on building an
ongoing relationship between users and services providers.
DIFFERENCE BETWEEN PRODUCT & SERVICE ORGANIZATION
PRODUCT ORGANIZATIONS SERVICE ORGANIZATIONS
Client Interface low Client interface high
Specification verifiable (customize)
easily Interpretation and perception
Perception and Interpretation
Variability low Variability high
Service Sector Issues
Service sector face different issues with regards to maintain quality of their services, these
are as follows,
• Intangibility
• Heterogeneity/Personal Dependency
• Value Perception
• Demand Fluctuations
• Simultaneous Production and Delivery
• Customer’s Participation in Delivery
• Timeliness
• Inconsistencies
• Infrastructure
SERVICE QUALITY DEFINED
Service quality has been defined from at least four perspectives:
Excellence, the attributes of excellence may change dramatically and rapidly. Excellence is often
externally defined.
Value. It incorporates multiple attributes, but quality and value are different constructs-one the
perception of meeting or exceeding expectations and the other stressing benefit to the recipient.
Conformance to specifications: It facilitates precise measurement, but users of a service may
not know or care about internal specifications.
Meeting and/or exceeding expectations. This definition is all encompassing and applies across
service industries, but expectations change and may be shaped by experiences with other
service providers.
Most researchers have concentrated on the last perspective. The Gaps Model of Serziice Quality
reflects that perspective and offers service organizations a framework to identify services in the
form of the gaps that exceed (or fail to meet) customers’ expectations. The model posits five gaps
that reflect a discrepancy between:
• (Gap 1)- customers’ expectations and management’s perceptions of these expectations
• (Gap 2); management’s perceptions of customers’ expectations and service quality
specifications
• (Gap 3); service quality specifications and actual service delivery
• (Gap 4) actual service delivery and what is communicated to customers about it
• (Gap 5); and customers’ expected services and perceived service delivered
The customer’s perception of quality is dependent on how much the product is meeting
customers requirements and needs/wants. Following are the few priorities and requirements of
the customers regarding quality.
Care & Attention:
All customers want prompt attention of the marketer, Reasonable prices, easy availability and
access to products. Products which are easily serviceable and their spare parts are available with
maintenance facility are considered to be quality products.
1. Satisfaction
2. Durability
3. Aesthetics
4. Perceived Quality
5. Conformance
6. Reliability
7. Features
8. Performance
Fitness to Standard
A business view quality of a product as conformance to its design, already defined specifications
and attributes. Manufacturer lay down procedures, define standards to attain desired quality and
conformance to that standard is considered as fitness to standards.
Quality in business, engineering and manufacturing has a realistic interpretation as the non-
inferiority or superiority of something; it is also defined as fitness for purpose. Quality is a
perceptual, conditional, and somewhat subjective attribute and may be understood differently by
different people. Consumers may focus on the specification quality of a product/service, or how it
compares to competitors in the marketplace.
Producers might measure the conformance quality, or degree to which the product/service
was produced correctly. Support personnel may measure quality in the degree that a product
is reliable, maintainable, or sustainable. Simply a quality product has the ability to perform
satisfactorily in service and is suitable for its intended purpose.
Q-2 Elaborate the role of leadership in implementing the total quality management
program in an organization. What critical issues leadership has to tackle while
implementing the quality program in a manufacturing concern? Support your answer with
real time example.
Leadership role in implementation of QMS
Leadership means finding in people their best features and managing them in the way to enable
their common work to be performed according to the leader's directions. The leader is a person
who influences people's behavior without the need to use force.
A fundamental requirement is a sound quality policy, supported by plans and facilities to
implement it. Leaders must take responsibility for preparing, reviewing and monitoring the policy,
plus take part in regular improvements of it and ensure it is understood at all levels of the
organization.
Effective leadership starts with the development of a mission statement, followed by a strategy,
which is translated into action plans down through the organisation. These, combined with a TQM
approach, should result in a quality organisation, with satisfied customers and good business
results.
The 5 requirements for effective leadership are:
• Developing and publishing corporate beliefs, values and objectives, often as a mission
statement
• Personal involvement and acting as role models for a culture of total quality
• Developing clear and effective strategies and supporting plans for achieving the mission
and objectives
• Reviewing and improving the management system
• Communicating, motivating and supporting people and encouraging effective employee
participation
The approach ISO 9004 standard to the role of people in a company points out that people are a
significant resource of an organization and their full involvement enhances their ability to create
value for interested parties. Most current models of business excellence are based on leadership,
as one of the main pillars of assessment. Top management should, through its leadership, create
and maintain a shared vision, shared values and an internal environment in which people can
become fully involved in achieving the organization’s objectives. These changes result in
understanding that majority of factors that improve work's efficacy, lay in social and emotional
character of its employees.
Real Time Example of Poor Leadership Role & its Effects in PCAA
Leadership is an important pre-condition for keeping a quality management system in an
enterprise. Unfortunately, many entrepreneurs do not understand that, I will quote the example of
PCAA, opting to acquire ISO 9001 certification. Although they declare the quality policy to engage
employees, laid down procedure, developed quality manuals to fulfill ISO standard requirements
but their behaviors differ significantly from the leadership’s assumption. Consequently,
procedures would become a means to an absolute settlement of employees assigned tasks
without regard to working conditions, the atmosphere and the way of organizing the work.
Unmotivated employees work carelessly because they do not see the sense of fairness in
tasking, work load distribution, appraisals, career progression and development. The result often
occurs in nonconformities of products/ services.
An implemented corrective action do not produce results because they do not look for the causes,
reviews of corrective actions, analysis and planning at the appropriate stages. Recently a mega
project of taxiway Delta has been carried out without planning and design reviews, analysis and
evaluation, requirements and aircraft movement concerns, a very heavy cost incurred on the
project which resulted a total failure at the end after completion of the project it has been declared
that it is not serving the purpose.
Charismatic leaders who have the ability to integrate the employees, the positive conviction about
the objectives and responsibilities of creating a friendly atmosphere is very significant
requirement in implementation of TQM. In a team having a good , effective leadership , problems
caused by the employee error do not exist.
In light of the above, it is appropriate to treat the leadership, not as a recommendation or
guidelines for improvement. It should be one of the input requirements for the implementation and
farther keeping quality management systems. Only by showing that to the managers, they can
look for employees who are trustworthy, honest, open to other employees, believe in their
capabilities, authority, charisma, professionalism, ability to negotiate in a group of coworkers, and
who can allow for the performance of certification.
The leading people is the requirement of standard for the management and implementation of
TQM in modern companies. Managers of knowledge-based businesses are aware of the
importance of the employee involvement through friendly approach and leadership instead of the
management or dictatorship. This approach brings results, not only in the human resource
management area, but also ultimately in the level of products quality and the financial area.
Hamrol says that achieving success in quality management is dependent only in about 10% on
technical equipment, in 40% on technology, and in as many as 50% on people and their way of
managing. Leadership means that chief management team should coherently cooperate together
by assessing strategies, aims, and organization management policy.
Its goal is also to create and maintain internal conditions in which employees may completely
engage in advancing the organization's objectives. The leader should plan certain activities and
support the subordinates in implementation of their operations. One of the management's task is
to determine an appropriate structure, responsibilities, internal communication, and activities
control in order to assure the constant development. The key components of effective leaders is
the ability to motivate and equip people by being able to communicate clearly, manage and
organize conflicts, develop creativity and technical tasks.
b) What critical issues leadership has to tackle while implementing the quality program in
a manufacturing concern?
An obstacle is an object, a thing, an action or a situation that causes an obstruction. Obstacles
can be physical, social, economic, technological or political. There are a number of barriers that
face the process of TQM implementation.
Lack of management commitment
A quality implementation program will succeed only if top management is fully committed beyond
public announcements. Success requires devotion and highly visible and articulate champions.
Newell and Dale (1990) found that even marginal wavering by corporate managers was sufficient
to divert attention from continuous improvement.
Lack of commitment in quality management may stem from various reasons. Major obstacles
include the preoccupation with short-term profits and the limited experience and training of many
executives. Duran, for example, observed that many managers have extensive experience in
business and finance but not in quality improvement. Similarly, Bothe (1988) pointed out that
although the CEO does not have to be a quality expert, programs fail when the CEO does not
recognize the contribution these techniques make toward profitability and customer satisfaction.
Top management should, therefore, embrace quality improvement programs no matter how far
reaching the programs may appear the monetary implications therein. Competition alone should
not be considered as the single factor that drives managers into implementing quality initiatives.
Poor Planning
The absence of a sound competitive strategy has often contributed to ineffective quality
improvement. Deficiencies in the planning cause a process to run at a high level of persistent
waste. Forecasting before long term planning, analysis of requirements and resources,
infrastructure requirements, knowledge and awareness of competitive market, design analysis is
very important at the pre-planning stage for achieving success in a quality improvement program.
The root cause of poor plans and specifications is that many owners do not understand the
impact that poor drawings have on a project’s quality, cost, and time. Regardless of the cause,
poor plans and specifications lead to a project that costs more, takes longer to complete, and
causes more frustration than it should.
Companies using TQM should always strive towards impressing upon owners the need to spend
money and time on planning. If management took reasonable time to plan projects thoroughly
and invest in partnering to develop an effective project team, a lot could be achieved in terms of
product performance as these investments in prevention- oriented management can significantly
improve the quality of the goods or services offered by an organization
Lack of Leadership for Quality
Excess layers of management quite often lead to duplication of duty and responsibility. This has
made the lower employees of an organization to leave the quality implementation to be a
management’s job. In addition, quality has not been taken as a joint responsibility by the
management and the employees. Coupled with the notion that management is infallible and
therefore it is always right in its decisions, employees have been forced to take up peripheral role
in quality improvement. As a result employees who are directly involved in the production of
goods or delivery of services are not motivated enough to incorporate quality issues that have
been raised by the customers they serve since they do not feel as part of the continuous process
of quality improvement. Moreover, top management is not visibly and explicitly committed to
quality in many organizations.
Inadequate Resources for Total Quality Management
Since most companies do not involve quality in their strategic plan, little attention is paid to TQM
in terms of human and financial resources. Much of the attention is drawn to increasing profit
margins of the organization with little regard as to whether their offers/ supply to customers is of
expected quality. There is paltry budgetary allocation made towards employee training and
development which is critical for total quality management implementation. Employee training is
often viewed as unnecessary cost which belittles the profits margins which is the primary
objective for the existence of businesses and as a result TQM has been neglected as its
implementation “may not necessarily bring gains to the organization in the short term”.
Lack of Customer Focus.
Most strategic plans of organizations are not customer driven. They tend to concentrate much on
profit-oriented objectives within a given time frame. Little (if any) market research is done to
ascertain the product or service performance in the market relative to its quality. Such surveys
are regarded by most organizations as costly and thus little concern is shown to quality
improvement for consumer satisfaction
Lack of Proper Training / Inadequate Human Resource Development
There is evidence that lack of understanding and proper training exists at all levels of any
organization, and that it is a large contributor to worker resistance. Schein (1990), for example,
mentioned that business school failure to teach relevant process skills contributed to manager
ineffectiveness. TQM requires a well-educated workforce with a solid understanding of basic
math, reading, writing and communication. Although companies invest heavily in quality
awareness, statistical process control, and quality circles, often the training is too narrowly
focused. Poor education and training present a major obstacle in the development and
implementation of a quality program. . For a company to produce a quality product, employees
need to know how to do their jobs. For TQM to be successful, organizations must commit to
training employees at all levels. TQM should provide comprehensive training, including technical
expertise, communication skills, small-team management, problem-solving tools, and customer
relations.
Resistance of the Workforce
A workforce is often unwilling to embrace TQM for a variety of reasons. Oakland (1989) explained
that a lack of long-term objectives and targets will cause a quality implementation program to lose
credibility. Keys (1991) warned that an adversarial relationship between management and non-
management should not exist, and he emphasized that a cooperative relationship is necessary
for success. A TQM project must be supported by employee trust, acceptance and understanding
of management's objectives. Employees, therefore, should be recognized by the management as
vital players in the decision making processes regarding to quality improvement as involving them
would have motivating effect on implementation of quality programs.
Real Time Example of TQM @ Nisan Automobile Manufacturing Firm
Total Quality Management (TQM) is a key feature of Nissan's way of working. TQM involves
making customer satisfaction top priority. Given this goal, everything the organisation and its
people do is focused on creating high quality. To achieve this, Nissan has to:
• Understand customer requirements
• Consider the processes involved in providing quality, not just the end result
• Prioritise and standardise tasks to deliver quality
• Educate all employees to work in this way.
In practical terms TQM involves:
• Identifying customers and their requirements
• Establishing and using objectives (targets) for all areas of activity
• Basing decisions on researched hard facts rather than on hunches
• Identifying and eliminating the root causes of problems
• Educating and training employees.
TQM is an ongoing process; a way of thinking and doing that requires an 'improvement culture'
in which everyone looks for ways of doing better. Building this culture involves making everyone
feel their contributions are valued and helping them to develop their capabilities.
With a just-in-time approach, specific vehicles and their components are produced just-in-time
to meet the demand for them. Sub-assemblies move into the final assembly plant just as final
assemblers are ready to work on them, components arrive just in time to be installed, and so on.
Every vehicle is monitored automatically throughout each stage of production. A transponder
attached to the chassis leg contains all of a vehicle's production data e.g. its required colour,
specification and trim. This triggers sensors at various points along the production line thus
updating the records.
It is vital to train people to work in such a hi-tech industry with such sophisticated quality
systems. NMUK's training department conducts a training needs analysis to assess individual
employees' needs and to organize training programs.
The department concentrates on five main areas:
• Technical Development - e.g. teaching skills relating to robotics and electrics, plus the
required knowledge e.g. wiring rules/regulations.
• People Development - identifying employee needs and ambitions; providing courses to
help personal development e.g. in team building and communication skills
• Understanding Processes - workshops covering safety, production operations etc
• Computer Skills and Graduate Training - from basic to highly technical
• Trainee Development - courses for graduate trainees ranging from accountancy to team
building.
'Kaizen' or Continuous Quality Improvement. Nissan is famously associated with 'Kaizen' or
continuous quality improvement. Nissan states: 'We will not be restricted by the existing
way of doing things. We will continuously seek improvements in all our actions.' Kaizen
can be applied everywhere, any time, any place. It can involve the smallest change in
everyday working practice as well as a major change in production technology. Typically
these improvements are initiated by teams of employees sitting down together and
sharing ideas for improvements. Small steady changes are maintained to make sure that
they actually work. No improvement is too small. Everyone at Nissan is responsible for
thinking about the current way of doing a job and finding a better way of doing things.
Conclusions
Productivity levels at Nissan's plant in Sunderland, and the quality of final production
there, have not happened by chance or good fortune. They stem from an all-embracing
approach to a production process, designed to bring out the best in both people and
machines. It continues to be conspicuously successful.
The advantages of TQM have been widely discussed, but the challenges of
implementation have received little attention. A quality philosophy is required for the
successful implementation of a quality project. This philosophy must facilitate a long-term
lifestyle change for the company.
Commitment of top management is essential. Substantial inflow of resources, adequate
training, workforce participation and effective measurement techniques are some of the
key success factors. A successful TQM program is unique, and it should motivate middle
management to focus on long-term strategies rather than short-term goals.
Teamwork is the key to involvement and participation. Groups should be encouraged to
work closely and effectively, and should focus on quality improvement and customer
satisfaction.
Q-4 The quality begins with the customer and ends on the customer. Provide
logical justifications about this statement. How far it has been concern with the
customer relationship program and why? Support your answer with any
multinational corporation operating in Pakistan.
Ans- Quality starts and ends with the customer. The customer must be the body and soul
of the business. Businesses that have attained quality superiority have learned to take
care of their customers. A company cannot progress qualitatively unless it has made the
customer its driving force. Peter Drucker’s definition:
“Quality in a product or service is not what the supplier puts in. It is what the
customer gets out and is willing to pay for. A product is not quality because it
is hard to make and costs a lot of money, as manufacturers typically believe.
This is incompetence. Customers pay only for what is of use to them and
gives them value. Nothing else constitutes quality.”
Companies achieving long-term continuous improvement in quality possess lasting
characteristics such as customer orientation, customer consciousness and customer
responsiveness.
CUSTOMER ORIENTATION
The customer orientation plays a very significant role in the core of corporate strategy.
Only one or two functions of any organization are not enough to be proved a firm
customer oriented , the organization is required to incorporate this ideology in its all
functions. Customer oriented approach understand the importance of creating and
retaining the customer. Excellence in quality can be achieved through corporate-wide
customer orientation. A “customer orientation” approach arises from the policies and
practices put into effect by top management. Customer satisfaction through total quality
must be placed at the heart of the business mission as defined, communicated, and
promoted.
Communication of customer-oriented policies to all levels of organization is very
important. Sharing information of customers requirements, feed back, complaints ,
enquiries , returned products due to defects should be treated on priority to avoid delays
in providing quality products and services.
Employees suggestion and letters from customers should be circulated through out the
levels directly or indirectly involved in the process of manufacturing or designing/planning
of products and services for current and future needs. Supervisors and managers should
be transferred to the customer services departments interfacing with customers to
understand the customer’s requirements and problems.
Customer Realization
Companies care for providing ultimate satisfaction to the customer consider quality as
conformance to the customers requirements rather than conformance to the products
specifications.
A truly customer conscious organization requires top management commitment to design
organizational structures, mechanisms, and processes that communicate the voice of the
customer in all managerial, technical and operating activities carried out by the company.
The realization of customer requirements, needs, concerns, preferences along with
communication throughout the organization proves that the firm is conscious for its
customers requirements
Responsiveness to customer
Customer responsiveness means that customers are exercising real influence over
quality and other business activities.
Responsiveness to customer needs and concerns is basic to any quality improvement
effort. Companies exhibit “customer responsiveness” by incorporating customer’s
suggestions and feedbacks in QFD and by soliciting their customers for suggestions,
ideas, and concerns. True customer responsiveness is present when customers see
measurable improvements in quality or cost that are the result of feedback that they, as
customers, provide to the company.
Management must intervene to build the organizational processes, communication
channels, and coordinating mechanisms that will inspire the company to listen and
respond to customer requirements. Information flow is only one indicator that a business
is trying to listen to its customers. More important is what happens to the information that
the company receives. Information may be received and transmitted to all functional units
like research and development, production, marketing, etc. However, these units may be
failing to use the information to improve quality and customer satisfaction.
Flow of information is important, better quality and increased customer satisfaction will
not happen if the information is not digested and acted upon by the entire company.
Building a customer responsive organization involves much more than designing
structures to facilitate the flow of information across the business functions, suppliers,
and customers, or requiring that customers exercise real influence over quality.
It ultimately requires building and nurturing a customer satisfaction culture and value
system that makes quality improvement and heightened concern for customer
satisfaction a permanent aspect of organizational life.
BUILDING THE CUSTOMER SATISFACTION CULTURE
World-class enterprises know that superior quality and customer satisfaction are the
means for achieving survival, growth, and profitability in the marketplace. To attain that
goal, top managers, including the CEO, also need to establish a complimentary
“corporate culture”, that is, they create a system of shared values, assumptions, beliefs,
and norms centered around customer satisfaction.
This means that the glue that unites members of an organization together revolves
around customer satisfaction, thus making this value relevant to survival. A shared value
system, in turn, enables behavior to become more predictable and helps to diffuse the
anxiety stress, and fear that can come from social interaction.
Customer Relationship Management (CRM)
CRM is an acronym that stands for Customer Relationship Management. It describes the
strategy that a company uses to handle customer interactions. One example of a
common CRM strategy is the rewards card program offered by many supermarkets. The
store gives its customers a free card that gives them access to special deals and
discounts when they swipe the card during checkout. But that card also tracks everything
the customer buys and allows the store to create an extremely detailed customer profile
based on his or her purchasing habits. Armed with that information, the store can then
offer its customers targeted coupons and other programs that will motivate its customers
to buy more products from that store.
CRM’S RELATIONSHIPS WITH CUSTOMER SATISFACTION
Effect of customer relationship management (CRM) on customer knowledge and
customer satisfaction is very positive. Firms using CRM shows that the use of CRM
applications is positively associated with improved customer knowledge and improved
customer satisfaction. Customer knowledge about products increase loyalty and
satisfaction.
An integrated customer relationship management and customer satisfaction
measurement system can help businesses develop marketing strategies that drive delight
and grow customer loyalty — not just deliver satisfaction. Companies invest on CRM
because it improves customer loyalty and subsequently helps in retaining customers by
increasing customer satisfaction.
Nowadays Organizations implement customer satisfaction According to Yang and
Peterson (2004) for building a positive link between customer and the company, loyalty
plays an important role. Customers get loyal with the companies only if they deliver better
services than their competitors.
Customers satisfaction is increased with the implementation of CRM strategies.
Customers are delighted when find their suggestions incorporated in the
services/products and their trust on the producers/marketers enhanced and become
strong.
Cadbury Schweppes – Example of Customer Relationship
Cadbury Schweppes plc, a global beverage and confectionary giant with annual sale of
Rs 20,000 crores ,is the worlds number one non – cola soft drink company having
bottling and partnership operations in 14 countries and franchises of its brand in a further
86 countries around the world.
Dairy Maid became Dairy Milk and Cadbury’s Dairy Milk with its unique flavor and smooth
creamy texture was ready to challenge the Swiss domination of the milk chocolate
market. By 1913 it had become the company’s best selling line and in the mid twenties
Cadbury’s Dairy Milk gained its status as the brand leader, a position that it has held ever
since. Today more than 250 million bars of Cadbury’s Dairy Milk are made every year
and sales reach over 100 million Pound in value.
While advertising and label design have changed with fashion and considerable strides
have been made in manufacturing technologies, the recipe for Cadbury’s Dairy Milk its
‘glass and a half of full cream milk in every half pound produced’ is still basically the
same as when it was launched
Cadbury target kids with Milk Treat: - It is a product that talks directly to the target
consumer. The product benefits have been defined as “The goodness of milk to the fun of
chocolate”. it combines both good health, multi nutrition value of milk along with the pinch
of fun and excitement. The kinds formally associate with Cadbury chocolate offering.
It is aimed at the niche “international chocolate “ segment of the chocolate market a
segment upgraded from brands such as Cadbury’s to premium international offering such
as Tolerance, Lindit and Hersheys. Roughly 5%of the total domestic consumption
expected to grow to some 10%. This segment is too good to miss out on. The Previous
Cadbury’s range available in India did not offer consumer an option to upgrade to
international chocolate within the Cadbury’s fold. Temptation is an attempt to lug niche,
priced Rs. 30.
Cadbury’s Market Segment
Market place for any product is comprised of many different segments of consumers,
each with different needs and wants. Markets segmentation can be defined in a number
of ways such as:
for in a product or on the occasions when the product might be consumed. It targets
different segments within the market, such as the.
• Break segment – products which are normally consume as a snatched break and
often with tea and coffee, for example Cadbury’s Perk and snack range.
• Impulse segment – these products are often purchase on impulse, eating these
and then. They include product such as Cadbury’s Dairy Milk.
• Take home segment – this describes product that are normally purchased in
supermarkets, taken home consumed at a later stage.
CRM STRATEGY & ITS EFFECTS ON CSM IN CADBURY
Confectionery Company Cadbury is leading their industry by deploying an advanced
mobile field marketing solution that empowers its mobile workforce with exceptional
customer relationship management (CRM) and trade marketing capabilities.
According to Pieter Spies, Sales Director at Cadbury South Africa, the solution provides
the company with a significant competitive advantage in field marketing by improving
customer service, boosting revenue and reducing costs. "We are anticipating a 5%
growth in revenue as direct result of efficiencies provided by the system," he says.
"Now, when our reps visit a store, they have real-time visibility of stock levels, and can
place an order for a customer there and then," says Spies. "This ensures the accuracy of
the order, and means our customers are getting their products faster, increasing
customer satisfaction.
"Critically, our reps can also see if a product is out of stock, and recommend suitable
substitute products. Their ability to do this is expected to boost revenues by a further
1%."
The solution also allows Cadbury to tighten their controls in terms of their mobile CRM
and trade marketing initiatives. Managers have a dynamic dashboard view of sales, out-
of-office activity and access to reports focusing on key activities such as numbers of
calls, orders per call, etc. The immediacy of the information enables them to improve
sales agent performance and CRM.
Two days of initial training and two days of follow-up was all that was required to get the
mobile workforce up and running. In addition, Cadbury has identified "super-users" --
those agents who are technically astute to support the reps through the learning curve,
and ensure that they are using the full spectrum of JEM's functionality.
"We implemented the full system across our product range in September 2008 and
currently 180 sales reps are active," says Spies. "Not only are we pioneering this solution
within our industry in South Africa, we are the first country within Cadbury's global
operation to be fully mobile enabled."
Conclusion
The customer satisfaction culture, nourished by the desire to attract, retain, and create
value for the customer, builds the organizational drive towards performance of the crucial
competitive requirements of quality, cost, innovation, customer service, and flexibility.
Corporate strategy should link these requirements to define a unique competitive position
for the company.
High quality and customer satisfaction levels, short cycle times (in design, production,
and delivery), are now included in the mission statements of many of the best companies
in the world. If we add a few other elements like employee involvement and
empowerment, supplier and customer partnership, flexibility, variation reduction, waste
elimination, and continuous improvement, we have captured the major tenets of total
quality management and customer satisfaction. As total quality management and
customer satisfaction reshape business practices, they tend to nudge common strategic
goals already mentioned. Moreover, as TQM and customer satisfaction basics become
more influential, executives may be drawn away from their traditional roles of formulating
strategies, setting numerical targets, and monitoring performance – the control mentality
of the machine theory of management – and embrace their new role as facilitators of the
changes necessary to make quality and customer satisfaction everybody’s business.
4. Quality Management programs and strategies cannot be developed and
implemented in isolation. Do you agree or disagree with this statement. What
critical success factor you consider to be the most important to address from
human resources perspective during quality implementation phase.
Implementing a total quality management system has become the preferred approach for
improving quality and productivity in organizations. TQM, which has been adopted by
leading industrial companies, is a participative system empowering all employees to take
responsibility for improving quality within the organization. Instead of using traditional
bureaucratic rule enforcement, TQM calls for a change in the corporate culture, where
the new work climate has the following characteristics:
• An open, problem-solving atmosphere;
• Participatory design making;
• Trust among all employees (staff, line, workers, managers);
• A sense of ownership and responsibility for goal achievement and problems
solving; and,
• Self-motivation and self-control by all employees.
In cultivating the TQM philosophy, strategy implementation must involve a focused effort
on the part of every employee within the organization. It cannot be applied successfully
on a piecemeal basis. TQM requires that every member of the organization, commit to
the need for continual improvement in the way work is accomplished. Business plans,
strategies, and management actions require continual rethinking in order to develop a
culture that reinforces the TQM perspective.
The challenge is to develop a robust culture where the idea of quality improvement is not
only widely understood across departments, but becomes a fundamental, deep-seated
value within each function area as Total Quality Management cannot be implemented in
isolation all functions and all employees of the organization at all levels are required to be
onboard for acquisition of quality. Products and services are planned, designed,
produced, priced, delivered, marketed, distributed following the quality strategies and
objectives of the organization.
Each organization is unique in terms of the culture, management practices, and the
processes used to produce and deliver its products and services, therefore, the TQM
strategy vary from organization to organization; however, basic needs for defining
strategies and developing standards to meet the TQM requirements remain same.
Following are the basic requirements of the TQM implementation.
Generic Requirements for TQM Implementation
1. Top management learns about and decides to commit to TQM. TQM is identified
as one of the organization’s strategies.
2. The organization assesses current culture, customer satisfaction, and quality
management systems.
3. Top management identifies core values and principles to be used, and
communicates them.
4. A TQM master plan is developed on the basis of steps 1, 2, and 3.
5. The organization identifies and prioritizes customer demands and aligns products
and services to meet those demands.
6. Management maps the critical processes through which the organization meets its
customers’ needs.
7. Management oversees the formation of teams for process improvement efforts.
8. The momentum of the TQM effort is managed by the steering committee.
9. Managers contribute individually to the effort through hoshin planning, training,
coaching, or other methods.
10.Daily process management and standardization take place.
11.Progress is evaluated and the plan is revised as needed.
12.Constant employee awareness and feedback on status are provided and a
reward/recognition process is established.
Improving quality has become a company-wide effort as the increasing globalization of
business underscores the necessity of continuous improvement. Total quality
management (TQM), the preferred approach to achieving this end, is no longer the sole
concern of quality engineers, product designers, process engineers and other specialists.
Important Critical Success Factors to Address from Human Resources Perspective
during Quality Implementation Phase.
The human resource management (HRM) function has an important role to play in
developing quality across the entire organization. The HRM department can jumpstart the
TQM process by serving as a role model through the performance of two vital tasks:
• Providing customer-oriented service and
• Contributing to the running of the business.
TQM can be promoted by integrating the process into HR functions as
• Recruitment and Selection,
• Training and Development,
• Performance Evaluation and
• Reward Systems.
Developing quality across the entire firm is an important function of the human resource
management (HRM) department. A failure on HRM's part to recognize this opportunity
and act on it may result in the loss of TQM implementation responsibilities to other
departments with less expertise in training and development. The ultimate consequence
of this loss is an ineffective piecemealing of the TQM strategy. HRM should act as the
essential change agent necessary for the successful implementation of TQM.
HRM can act as senior management's tool in implementing TQM in two fundamental
ways.
First, by modeling the TQM philosophy and principles within its departmental operations,
the HR department can serve as a basis for the TQM process throughout the company.
Second, the HR department, with senior management's support, can take the TQM
process company-wide by developing and delivering the long-term training and
development necessary for the major organizational culture shift required by TQM. The
HR department also has major strengths in terms of recruitment, selection, appraisal, and
reward system development to institutionalize a quality-first orientation. An appreciation
of the capabilities of HRM to model and institutionalize TQM begins with an
understanding of the TQM philosophy.
In their efforts to achieve total quality management, HRM can demonstrate commitment
to TQM principles by soliciting feedback from its internal customer groups on current HR
services. HRM should include suggestions from its customers in setting objective
performance standards and measures. In other words, there are a number of specific
TQM principles that the HR department can model.
The Role of HRM in Instituting a TQM Culture
Human resource management can plan a vital role in implementing and maintaining a
total quality management process. HR managers are responsible for recruiting high-
quality employees, the continual training and development of those employees, and the
creation and maintenance of reward systems.
TQM Trainings to Employees
Identification of specific training and development needs for making TQM a practical
reality is the responsibility of HRM. HR professionals must identify the requirements of
knowledge and skills needed to be taught to the employees. Standards of
employees/processes performance/rewards criteria should be developed and
implemented to attain quality objectives.
The foundation of the entire TQM process is an employee's awareness that quality is
vitally necessary and a top organizational priority. Building this foundation begins with
extensive "quality awareness" training for all organization members. Sensitivity to quality
starts with senior management training followed by the training of middle- and lower-level
managers. The end result is a synergy between the quality team and the manager that
produces solutions to quality problems.
Employee involvement and commitment by establishing employee suggestion systems
and quality improvement teams should be ensured by HRM.
TQM - Recruitment & Selection.
HRM's responsibility in implementing TQM should extend beyond the training and
development of existing employees. HRM must take the lead in attracting, retaining and
motivating a high quality work force.
Successful recruitment and selection of employees with the proper knowledge, skills,
abilities, and attitudes compatible with a TQM philosophy can be a driving force
supporting continued program effectiveness. In recruiting for all departments and for all
organizational levels, the HR department can identify people who will promote the TQM
philosophy. Candidate qualities to target in recruiting include a willingness to receive new
training and to expand job roles, to try new ideas and problem-solving techniques, to
work patiently in teams within and across departments, and to be enough of a team
player to be evaluated and rewarded on a team basis.
TQM and Performance Evaluation and Reward Structures.
The fundamental influences HRM can have on the TQM process is in the development of
performance evaluation and reward systems that reinforce the TQM team philosophy.
HRM can have a great deal of influence in developing promotion policies that are
consistent with the overall goals of the organization. HRM can be influential in the
promotion of employees who believe in and totally support the TQM philosophy, to
positions of influence.
The HR department has the ability to help design the evaluation system so that quality
improvement teams conduct performance appraisals of one another, interview and select
team members, schedule the team's work, and set performance goals.
In rewarding team efforts for quality improvement, HR managers can keep both
management and employees informed about TQM achievements and can identify
opportunities to feature outstanding accomplishments of team members who deserve
recognition and rewards. Many companies publish TQM newsletters that recognize team
achievements and feature customer council meetings, future training schedules, and
other pertinent information.
Conclusion
The international focus on quality, combined with increasing costs of materials,
equipment, labor and training, are driving the implementation of TQM as a competitive
strategy in all types of organizations. These forces for change also provide an opportunity
for an expanded role of human resource management in making TQM succeed.
Quality can no longer be viewed as the responsibility for one department. It is a
company-wide activity that permeates all departments, at all levels. The key element of
any quality and productivity improvement program is the employee. Consequently,
employee commitment to a TQM program is essential. Because of its fundamental
employee orientation, HRM should seek the responsibility for implementing TQM
programs rather than risk losing their influence over the key element of TQM -- the
employee.
As a guardian of such functions as recruitment and selection, training and development,
performance evaluation and reward systems, the HRM professional is best able to take
charge of these important functions as they relate to a TQM strategy. The full potential of
the entire work force must be realized by encouraging commitment, participation,
teamwork, and learning. HRM is best suited to accomplishing this by modeling these
qualities.
Q-5 Why ISO certification is important for both service and manufacturing
organization? Select an organization and guide through the initial steps in the
certification process. Help the organization to make a decision regarding ISO
certification with reference to the strength and drawbacks of ISO, as to whether or
not certification would be advantageous.
Introduction to ISO Certification
The International Organization for Standardization (ISO) is the world’s largest developer
and publisher of international standards. With a network of institutes in 163 participating
countries, ISO is a non-governmental organization that forms a bridge between public
and private sectors. As a result, ISO standards are constantly advancing to meet the
needs of growing sectors within the industry. The vast majority of the ISO international
standards are highly specific to product, material, and process, ensuring regulation from
start to finish.
Reasons to Acquire ISO Certification
In today’s competitive business world, customers are placing more and more demands
on their suppliers. In an ISO 9001-certified company, the use of a quality management
system enhances the final product by ensuring that the organization meet or exceed its
customer expectations. It also causes organizations to focus on management
responsibility, quality objectives, human resources, infrastructure, vendor relations, and
continual improvement. This is done through a process approach, which enables an
organization to systematically improve performance.
Importance of ISO Certification for Service Organizations
Although implementing and maintaining a quality management system based on the ISO
standards is difficult, a company benefits more by engaging at all points throughout the
project. Because expertise in building automation systems is very specific and constantly
changing, consistent application of standards will help identify critical items that could
throw an entire project off track. The ISO 9001:2008 standard provides a tried and proven
framework for implementing a systematic approach to managing an organization’s quality
processes to meet and exceed customer requirements.
In our experience at Pakistan Civil Aviation Authority, we have found that following ISO
9001 guidelines and establishing our quality management system has added value to our
authority. As a management team, we have set goals, measured our progress in
achieving those goals, and seen the benefits of our dedication. our customers are
managed efficiently, and we have virtually no turnover with our employees. The
achievement of our goals through ISO 9001 has instilled confidence in both our team and
quality management system, while solidifying our reputation in the marketplace.
Guidance through the initial steps in the certification process
Developing the Quality Policy
The process of implementing ISO 9001 depends upon the sophistication of organizations
existing quality program, The size of organization / the complexity of processes. The 14
steps described below present a basic roadmap to implement an ISO 9001 quality
management system successfully.
Top Management Commitment
• The top management (managing director or chief executive) should demonstrate a
commitment and a determination to implement an ISO 9001 quality management
system in the organization. Without top management commitment, no quality
initiative can succeed. Top management must be convinced that registration and
certification will enable the organization to demonstrate to its customers a visible
commitment to quality. It should realize that a quality management system would
improve overall business efficiency by elimination of wasteful duplication in
management system. The top management should provide evidence of its
commitment to the development and implementation of the quality management
system and continually improve its effectiveness by:
• Communicating to the organization the importance of meeting customer as well as
statutory and regulatory requirements,
• Defining the organization's quality policy and make this known to every employee
• Ensuring that quality objectives are established at all levels and functions
• Ensuring the availability of resources required for the development and
implementation of the quality management system,
• Appointing a management representative to coordinate quality management
system activities, and
• Conducting management review.
• Establish implementation team
ISO 9001 is implemented by people. The first phase of implementation calls for the
commitment of top management - the CEO and perhaps a handful of other key people.
The next step is to establish implementation team and appoint a Management
Representative (MR) as its coordinator to plan and oversee implementation. Its members
should include representatives of all functions of the organization - Marketing, Design and
development, Planning, Production, Quality control, etc. In the context of the standard,
the MR is the person within the Organization who acts as interface between organization
management and the ISO 9001 registrar. His role is, in fact, much broader than that.
Start ISO 9001 Awareness Programs
ISO 9001 awareness programs should be conducted to communicate to the employees
the aim of the ISO 9001 quality management system; the advantage it offers to
employees, customers and the organization; how it will work; and their roles and
responsibilities within the system. Suppliers of materials and components should also
participate in these programs. The awareness program should emphasize the benefits
that the organization expects to realize through its ISO 9001 quality management system.
The program should also stress the higher levels of participation and self-direction that
the quality management system renders to employees. Such a focus will go far to enlist
employee support and commitment. Thprograms could be run either by the
implementation team or by experts hired to talk to different levels of employees.
Provide Training
Since the ISO 9001 quality management system affects all the areas and all personnel in
the organization, training programs should be structured for different categories of
employees - senior managers, middle-level managers, supervisors and workers. The ISO
9001 implementation plan should make provision for this training. The training should
cover the basic concepts of quality management systems and the standard and their
overall impact on the strategic goals of the organization, the changed processes, and the
likely work culture implications of the system.
In addition, initial training may also be necessary on writing quality manuals, procedures
and work instruction; auditing principles; techniques of management; calibration; testing
procedures, etc. When in-house capacity to carry out such training is not available, it may
be necessary to participate in external training courses run by professional training
organizations. Alternatively, an external training institution could be invited to conduct in-
house training courses.
Conduct Initial Status Survey
ISO 9001 does not require duplication of effort or redundant system. The goal of ISO
9001 is to create a quality management system that conforms to the standard. This does
not preclude incorporating, adapting, and adding onto quality programs already in place.
So the next step in the implementation process is to compare the organization’s existing
quality management system, if there is one -- with the requirements of the standard (ISO
9001:2000).
For this purpose, an organization flow chart showing how information actually flows (not
what should be done) from order placement by the customer to delivery to this customer
should be drawn up. From this over-all flow chart, a flow chart of activities in each
department should be prepared. With the aid of the flow charts, a record of existing
quality management system should be established. A significant number of written
procedures may already be in place. Unless they are very much out of date, these
documents should not be discarded. Rather, they should be incorporated into the new
quality management system. Documents requiring modification or elaboration should be
identified and listed.
This exercise is some times referred to as " gap analysis''. During these review
processes, wide consultation with executives and representatives of various unions and
associations within the organization is required to enlist their active cooperation.
In the review process, documents should be collected, studied and registered for further
use, possibly after they have been revised. Before developing new quality management
system documentation, you need to consider with which quality requirements or
department you should start. The best is to select an area where processes are fairly well
organized, running effectively and functioning satisfactorily. The basic approach is to
determine and record how a process is currently carried out.
Once it has been agreed how to describe the current process, this process has to be
adapted, supplemented and implemented according to the requirements of the quality
standard (ISO 9001:2000).
Create a Documented Implementation Plan
Once the organization has obtained a clear picture of how its quality management system
compares with the ISO 9001:2000 standard, all non-conformances must be addressed
with a documented implementation plan. Usually, the plan calls for identifying and
describing processes to make the organization’s quality management system fully in
compliance with the standard. The implementation plan should be thorough and specific,
detailing:
• Quality documentation to be developed
• Objective of the system
• Person or team responsible
• Approval required
• Training required
• Resources required
• Estimated completion date
These elements should be organized into a detailed chart, to be reviewed and approved.
The plan should define the responsibilities of different departments and personnel and
set target dates for the completion of activities.
Once approved, the Management Representative should control, review and update the
plan as the implementation process proceeds.
Develop Quality Management System Documentation
Documentation is the most common area of non-conformance among organizations
wishing to implement ISO 9001 quality management systems. As one company pointed
out: "When we started our implementation, we found that documentation was inadequate.
Even absent, in some areas. Take calibration. Obviously it's necessary, and obviously we
do it, but it wasn't being documented. Another area was inspection and testing. We
inspect and test practically every item that leaves here, but our documentation was
inadequate". Documentation of the quality management system should include:
• Documented statements of a quality policy and quality objectives,
• A quality manual,
• Documented procedures and records required by the standard ISO 9001:2000,
Document Control
Once the necessary quality management system documentation has been generated, a
documented system must be created to control it. Control is simply a means of managing
the creation, approval, distribution, revision, storage, and disposal of the various types of
documentation.
Document control systems should be as simple and as easy to operate as possible --
sufficient to meet ISO 9001:2000 requirements and that is all. Document control should
include:
• Approval for adequacy by authorized person (s) before issue,
• Review, updating and re-approval of documents by authorized person (s),
• Identification of changes and of the revision status of documents,
• Availability of relevant versions of documents at points of use,
• Identification and control of documents of external origin,
• Assurance of legibility and identifability of documents, and
• Prevention of unintended use of obsolete documents.
The principle of ISO 9001 document control is that employees should have access to the
documentation and records needed to fulfil their responsibilities.
Implementation
It is good practice to implement the quality management system being documented as
the documentation is developed, although this may be more effective in larger firms. In
smaller companies, the quality management system is often implemented all at once
throughout the organization. Where phased implementation takes place, the
effectiveness of the system in selected areas can be evaluated. It would be a good idea
initially to evaluate areas where the chances of a positive evaluation are high, to maintain
the confidence of both management and staff in the merits of implementing the quality
management system. The implementation progress should be monitored to ensure that
the quality management system is effective and conforms to the standard. These
activities include internal quality audit, formal corrective action and management review.
Internal Quality Audit
As the system is being installed, its effectiveness should be checked by regular internal
quality audits. Internal quality audits are conducted to verify that the installed quality
management system:
• Conform to the planned arrangements, to the requirements of the standard (ISO
9001:2000) and to the quality management system requirements established by
organization, and
• Is effectively implemented and maintained. Even after the system stabilizes and
starts functioning, internal audits should be planned and performed as part of an
ongoing strategy.
• A few staff members should be trained to carry out internal auditing. Use ISO
19011 for guidance in auditing, auditor qualification and programmes.
Management Review
When the installed quality management system has been operating for three to six
months, an internal audit and management review should be conducted and corrective
actions implemented. The management reviews are conducted to ensure the continuing
suitability, adequacy and effectiveness of the quality management system.
• The review should include assessing opportunities for improvement and the need
for changes to the quality management system, including the quality policy and
quality objectives. The input to management review should include information on:
• Results of audits,
• Customer feed back,
• Process performance and product conformity,
• Status of preventive and corrective actions,
• Follow-up actions from previous management reviews,
• Changes that could affect the quality management system, and
• Recommendations for improvements.
• Management reviews should also address the pitfalls to effective implementation,
including lack of CEO commitment, failure to involve everyone in the process, and
failure to monitor progress and enforce deadlines.
Pre-Assessment Audit
When system deficiencies are no longer visible, it is normally time to apply for
certification. However, before doing so, a pre-assessment audit should be arranged with
an independent and qualified auditor. Sometimes certification bodies provide this service
for a nominal charge. The pre-assessment audit would provide a degree of confidence for
formally going ahead with an application for certification.
Certification and Registration
Once the quality management system has been in operation for a few months and has
stabilized, a formal application for certification could be made to a selected certification
agency. The certification agency first carries out an audit of the documents (referred to as
an "adequacy audit"). If the documents conform to the requirements of the 10 quality
standard, then on-site audit is carried out. If the certification body finds the system to be
working satisfactorily, it awards the organization a certificate, generally for a period of
three years. During this three-year period, it will carry out periodic surveillance audits to
ensure that the system is continuing to operate satisfactorily.
Continual Improvement
Certification to ISO 9001 should not be an end. You should continually seek to improve
the effectiveness and suitability of the quality management system through the use of:
• Quality policy
• Quality objectives
• Audit results
• Analysis of data
• Corrective and preventive actions
• Management review
• ISO 9004:2000 provides a methodology for continual improvement.
• Conduct initial status survey
• Create a documented implementation plan
• Develop quality management system documentation
• Document control
• Implementation
• Internal quality audit
• Management review
Advantages of ISO 9000
The advantages associated with ISO 9000 certification are numerous, These benefits,
which can impact nearly all corners of a company, range from increased stature to
bottom-line operational savings. They include:
Increased marketability—Nearly all observers agree that ISO 9000 registration provides
businesses with markedly heightened credibility with current and prospective clients alike.
This benefit manifests itself not only in increased customer retention, but also in
increased customer acquisition and heightened ability to enter into new markets; indeed,
ISO 9000 registration has been cited as being of particular value for small and mid-sized
businesses hoping to establish a presence in international markets.
Reduced operational expenses—The cost of scrap, rework, returns, and the employee
time spent analyzing and troubleshooting various products are all considerably reduced
by initiating the discipline of ISO 9000
Better management control—The ISO 9000 registration process requires so much
documentation and self-assessment that many businesses that undergo its rigors cite
increased understanding of the company's overall direction and processes as a
significant benefit.
Increased customer satisfaction—Since the ISO 9000 certification process almost
inevitably uncovers areas in which final product quality can be improved, such efforts
often bring about higher levels of customer satisfaction
Improved internal communication—The ISO 9000 certification process's emphasis on
self-analysis and operations management issues encourages various internal areas or
departments of companies to interact with one another in hopes of gaining a more
complete understanding of the needs and desires of their internal customers.
Improved customer service—The process of securing ISO 9000 registration often
serves to refocus company priorities on pleasing their customers in all respects, including
customer service areas. It also helps heighten awareness of quality issues among
employees.
Reduction of product-liability risks—Many business experts contend that companies
that achieve ISO 9000 certification are less likely to be hit with product liability lawsuits,
etc., because of the quality of their processes.
Attractiveness to investors—Business consultants and small business owners alike
agree that ISO-9000 certification can be a potent tool in securing funding from venture
capital firms.
DISADVANTAGES OF ISO 9000
Following is a list of potential hurdles for entrepreneurs to study before committing to an
initiative to gain ISO 9000 certification:
Owners and managers do not have an adequate understanding of the ISO 9000
certification process or of the quality standards themselves—Some business owners
have been known to direct their company's resources toward ISO 9000 registration, only
to find that their incomplete understanding of the process and its requirements results in
wasted time and effort.
Funding for establishing the quality system is inadequate—Critics of ISO 9000 contend
that achieving certification can be a very costly process, especially for smaller firms.
Heavy emphasis on documentation
Length of the process—Business executives and owners familiar with the ISO 9000
registration process warn that it is a process that takes many months to complete. The
1996 Quality Systems Update survey indicated that it took businesses an average of 15
months to move from the early stages of the process to passage of the final audit, and
that processes of 18-20 months or even longer were not that uncommon.
Decision for ISO Certification
ISO 9001 Certification will provide maximum benefit to your organisation if it approaches
ISO 9001 implementation in a practical way. This will ensure that the Quality
Management Systems that are adopted, work to improve the business and are not just a
set of procedures that your employees will find hard to manage.
By adopting an approach that starts out to implement more efficient working practices
and focuses on the business objectives of the organisation, you will achieve a system
that will help and support your staff, and improve your levels of customer satisfaction.
Whether you use an external assessor or allocate an internal resource to carry out the
initial assessments, you will need to ensure that they have buy-in from senior
management, so that all areas of the organisation are aware of the importance of the ISO
9001 Certification process.
ISO 9001 Certification is not just suitable for large organisations but also small
businesses that will benefit from adopting efficient Quality Management Systems that will
save time and cost, improve efficiency and ultimately improve customer relationships

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TQM

  • 1. Q1- Describe the meaning of Quality in true spirit for a services organization, How the Quality can be judged from a customer’s view point, discuss with the perspective of fitness to standard and fitness to use. Meaning and Requirement of Quality in Service Organizations There are many reasons for service industries to be interested in service quality. Service industries now a days are committed to be accountable to customers and compete for their loyalty. This industry may have an externally imposed requirement to implement service quality principles Or may recognized that the managerial approach to service quality implies is a way to improve their ability to meet their mission of serving users regardless of external pressures. Service providers deliver services to benefit their customers and perhaps to attract new ones. Improvement of service requires an understanding of the benefit, the customers, and the actions of the service provider, and then using that knowledge for planning purposes. The application of service quality concepts encourages service improvement. There are many reasons interest in quality, which are as follows, First, customers who share information about their expectations offer an opportunity for that industry or other service provider to establish a closer personal contact with them. This relationship should result in providing (and customers receiving) better service; it makes people providing services to be more knowledgeable about customers expectations and how to translate that knowledge into services that delight customers and create loyalty. At the same time, customers are better informed about industries and their service offerings and, this knowledge gain a realistic set of expectations about what service provider can and cannot do. This mutually beneficial communication requires ongoing nurturing and continuous listening to customers. As problems are identified, they should provide feedback to the organization and be treated as opportunities for improvement and to raise the overall customer satisfaction with services. Second, external pressures from customers, call for accountability and the use of basic business practices by service providers. The accountability characteristic of business operations that requires self-examination to determine if what is being done is what really benefits the organization and those it serves. (P. 269) Fundamental to service quality is the need for cyclic review of service goals and objectives in relation to customer expectations. By viewing service quality within the context of planning and implementing a service plan, service provider can identify areas for improvement that are central to their mission, goals, and objectives (Hernon & Whitman, 2001). Third, attention to service quality, in brief, enables an organization to develop a partnership with its customers to gain a competitive edge. Furthermore, technology and competitors help service providers to shape the expectations of customers about information gathering, evaluation, and use of services. Service organizations, must have a motivated staff committed to the provision of excellent service and empowered to work directly with customers to deliver service on a continuous basis. The focus is no longer merely on quality service possesses; rather, the core activity of a service provider is center on service provision and improvement and on building an ongoing relationship between users and services providers.
  • 2. DIFFERENCE BETWEEN PRODUCT & SERVICE ORGANIZATION PRODUCT ORGANIZATIONS SERVICE ORGANIZATIONS Client Interface low Client interface high Specification verifiable (customize) easily Interpretation and perception Perception and Interpretation Variability low Variability high Service Sector Issues Service sector face different issues with regards to maintain quality of their services, these are as follows, • Intangibility • Heterogeneity/Personal Dependency • Value Perception • Demand Fluctuations • Simultaneous Production and Delivery • Customer’s Participation in Delivery • Timeliness • Inconsistencies • Infrastructure SERVICE QUALITY DEFINED Service quality has been defined from at least four perspectives: Excellence, the attributes of excellence may change dramatically and rapidly. Excellence is often externally defined. Value. It incorporates multiple attributes, but quality and value are different constructs-one the perception of meeting or exceeding expectations and the other stressing benefit to the recipient. Conformance to specifications: It facilitates precise measurement, but users of a service may not know or care about internal specifications.
  • 3. Meeting and/or exceeding expectations. This definition is all encompassing and applies across service industries, but expectations change and may be shaped by experiences with other service providers. Most researchers have concentrated on the last perspective. The Gaps Model of Serziice Quality reflects that perspective and offers service organizations a framework to identify services in the form of the gaps that exceed (or fail to meet) customers’ expectations. The model posits five gaps that reflect a discrepancy between: • (Gap 1)- customers’ expectations and management’s perceptions of these expectations • (Gap 2); management’s perceptions of customers’ expectations and service quality specifications • (Gap 3); service quality specifications and actual service delivery • (Gap 4) actual service delivery and what is communicated to customers about it • (Gap 5); and customers’ expected services and perceived service delivered The customer’s perception of quality is dependent on how much the product is meeting customers requirements and needs/wants. Following are the few priorities and requirements of the customers regarding quality. Care & Attention: All customers want prompt attention of the marketer, Reasonable prices, easy availability and access to products. Products which are easily serviceable and their spare parts are available with maintenance facility are considered to be quality products. 1. Satisfaction 2. Durability 3. Aesthetics 4. Perceived Quality 5. Conformance 6. Reliability 7. Features 8. Performance Fitness to Standard A business view quality of a product as conformance to its design, already defined specifications and attributes. Manufacturer lay down procedures, define standards to attain desired quality and conformance to that standard is considered as fitness to standards. Quality in business, engineering and manufacturing has a realistic interpretation as the non- inferiority or superiority of something; it is also defined as fitness for purpose. Quality is a
  • 4. perceptual, conditional, and somewhat subjective attribute and may be understood differently by different people. Consumers may focus on the specification quality of a product/service, or how it compares to competitors in the marketplace. Producers might measure the conformance quality, or degree to which the product/service was produced correctly. Support personnel may measure quality in the degree that a product is reliable, maintainable, or sustainable. Simply a quality product has the ability to perform satisfactorily in service and is suitable for its intended purpose. Q-2 Elaborate the role of leadership in implementing the total quality management program in an organization. What critical issues leadership has to tackle while implementing the quality program in a manufacturing concern? Support your answer with real time example. Leadership role in implementation of QMS Leadership means finding in people their best features and managing them in the way to enable their common work to be performed according to the leader's directions. The leader is a person who influences people's behavior without the need to use force. A fundamental requirement is a sound quality policy, supported by plans and facilities to implement it. Leaders must take responsibility for preparing, reviewing and monitoring the policy, plus take part in regular improvements of it and ensure it is understood at all levels of the organization. Effective leadership starts with the development of a mission statement, followed by a strategy, which is translated into action plans down through the organisation. These, combined with a TQM approach, should result in a quality organisation, with satisfied customers and good business results. The 5 requirements for effective leadership are: • Developing and publishing corporate beliefs, values and objectives, often as a mission statement • Personal involvement and acting as role models for a culture of total quality • Developing clear and effective strategies and supporting plans for achieving the mission and objectives • Reviewing and improving the management system • Communicating, motivating and supporting people and encouraging effective employee participation The approach ISO 9004 standard to the role of people in a company points out that people are a significant resource of an organization and their full involvement enhances their ability to create value for interested parties. Most current models of business excellence are based on leadership, as one of the main pillars of assessment. Top management should, through its leadership, create
  • 5. and maintain a shared vision, shared values and an internal environment in which people can become fully involved in achieving the organization’s objectives. These changes result in understanding that majority of factors that improve work's efficacy, lay in social and emotional character of its employees. Real Time Example of Poor Leadership Role & its Effects in PCAA Leadership is an important pre-condition for keeping a quality management system in an enterprise. Unfortunately, many entrepreneurs do not understand that, I will quote the example of PCAA, opting to acquire ISO 9001 certification. Although they declare the quality policy to engage employees, laid down procedure, developed quality manuals to fulfill ISO standard requirements but their behaviors differ significantly from the leadership’s assumption. Consequently, procedures would become a means to an absolute settlement of employees assigned tasks without regard to working conditions, the atmosphere and the way of organizing the work. Unmotivated employees work carelessly because they do not see the sense of fairness in tasking, work load distribution, appraisals, career progression and development. The result often occurs in nonconformities of products/ services. An implemented corrective action do not produce results because they do not look for the causes, reviews of corrective actions, analysis and planning at the appropriate stages. Recently a mega project of taxiway Delta has been carried out without planning and design reviews, analysis and evaluation, requirements and aircraft movement concerns, a very heavy cost incurred on the project which resulted a total failure at the end after completion of the project it has been declared that it is not serving the purpose. Charismatic leaders who have the ability to integrate the employees, the positive conviction about the objectives and responsibilities of creating a friendly atmosphere is very significant requirement in implementation of TQM. In a team having a good , effective leadership , problems caused by the employee error do not exist. In light of the above, it is appropriate to treat the leadership, not as a recommendation or guidelines for improvement. It should be one of the input requirements for the implementation and farther keeping quality management systems. Only by showing that to the managers, they can look for employees who are trustworthy, honest, open to other employees, believe in their capabilities, authority, charisma, professionalism, ability to negotiate in a group of coworkers, and who can allow for the performance of certification. The leading people is the requirement of standard for the management and implementation of TQM in modern companies. Managers of knowledge-based businesses are aware of the importance of the employee involvement through friendly approach and leadership instead of the management or dictatorship. This approach brings results, not only in the human resource management area, but also ultimately in the level of products quality and the financial area. Hamrol says that achieving success in quality management is dependent only in about 10% on technical equipment, in 40% on technology, and in as many as 50% on people and their way of managing. Leadership means that chief management team should coherently cooperate together by assessing strategies, aims, and organization management policy. Its goal is also to create and maintain internal conditions in which employees may completely engage in advancing the organization's objectives. The leader should plan certain activities and support the subordinates in implementation of their operations. One of the management's task is
  • 6. to determine an appropriate structure, responsibilities, internal communication, and activities control in order to assure the constant development. The key components of effective leaders is the ability to motivate and equip people by being able to communicate clearly, manage and organize conflicts, develop creativity and technical tasks. b) What critical issues leadership has to tackle while implementing the quality program in a manufacturing concern? An obstacle is an object, a thing, an action or a situation that causes an obstruction. Obstacles can be physical, social, economic, technological or political. There are a number of barriers that face the process of TQM implementation. Lack of management commitment A quality implementation program will succeed only if top management is fully committed beyond public announcements. Success requires devotion and highly visible and articulate champions. Newell and Dale (1990) found that even marginal wavering by corporate managers was sufficient to divert attention from continuous improvement. Lack of commitment in quality management may stem from various reasons. Major obstacles include the preoccupation with short-term profits and the limited experience and training of many executives. Duran, for example, observed that many managers have extensive experience in business and finance but not in quality improvement. Similarly, Bothe (1988) pointed out that although the CEO does not have to be a quality expert, programs fail when the CEO does not recognize the contribution these techniques make toward profitability and customer satisfaction. Top management should, therefore, embrace quality improvement programs no matter how far reaching the programs may appear the monetary implications therein. Competition alone should not be considered as the single factor that drives managers into implementing quality initiatives. Poor Planning The absence of a sound competitive strategy has often contributed to ineffective quality improvement. Deficiencies in the planning cause a process to run at a high level of persistent waste. Forecasting before long term planning, analysis of requirements and resources, infrastructure requirements, knowledge and awareness of competitive market, design analysis is very important at the pre-planning stage for achieving success in a quality improvement program. The root cause of poor plans and specifications is that many owners do not understand the impact that poor drawings have on a project’s quality, cost, and time. Regardless of the cause, poor plans and specifications lead to a project that costs more, takes longer to complete, and causes more frustration than it should.
  • 7. Companies using TQM should always strive towards impressing upon owners the need to spend money and time on planning. If management took reasonable time to plan projects thoroughly and invest in partnering to develop an effective project team, a lot could be achieved in terms of product performance as these investments in prevention- oriented management can significantly improve the quality of the goods or services offered by an organization Lack of Leadership for Quality Excess layers of management quite often lead to duplication of duty and responsibility. This has made the lower employees of an organization to leave the quality implementation to be a management’s job. In addition, quality has not been taken as a joint responsibility by the management and the employees. Coupled with the notion that management is infallible and therefore it is always right in its decisions, employees have been forced to take up peripheral role in quality improvement. As a result employees who are directly involved in the production of goods or delivery of services are not motivated enough to incorporate quality issues that have been raised by the customers they serve since they do not feel as part of the continuous process of quality improvement. Moreover, top management is not visibly and explicitly committed to quality in many organizations. Inadequate Resources for Total Quality Management Since most companies do not involve quality in their strategic plan, little attention is paid to TQM in terms of human and financial resources. Much of the attention is drawn to increasing profit margins of the organization with little regard as to whether their offers/ supply to customers is of expected quality. There is paltry budgetary allocation made towards employee training and development which is critical for total quality management implementation. Employee training is often viewed as unnecessary cost which belittles the profits margins which is the primary objective for the existence of businesses and as a result TQM has been neglected as its implementation “may not necessarily bring gains to the organization in the short term”. Lack of Customer Focus. Most strategic plans of organizations are not customer driven. They tend to concentrate much on profit-oriented objectives within a given time frame. Little (if any) market research is done to ascertain the product or service performance in the market relative to its quality. Such surveys are regarded by most organizations as costly and thus little concern is shown to quality improvement for consumer satisfaction Lack of Proper Training / Inadequate Human Resource Development There is evidence that lack of understanding and proper training exists at all levels of any organization, and that it is a large contributor to worker resistance. Schein (1990), for example, mentioned that business school failure to teach relevant process skills contributed to manager ineffectiveness. TQM requires a well-educated workforce with a solid understanding of basic
  • 8. math, reading, writing and communication. Although companies invest heavily in quality awareness, statistical process control, and quality circles, often the training is too narrowly focused. Poor education and training present a major obstacle in the development and implementation of a quality program. . For a company to produce a quality product, employees need to know how to do their jobs. For TQM to be successful, organizations must commit to training employees at all levels. TQM should provide comprehensive training, including technical expertise, communication skills, small-team management, problem-solving tools, and customer relations. Resistance of the Workforce A workforce is often unwilling to embrace TQM for a variety of reasons. Oakland (1989) explained that a lack of long-term objectives and targets will cause a quality implementation program to lose credibility. Keys (1991) warned that an adversarial relationship between management and non- management should not exist, and he emphasized that a cooperative relationship is necessary for success. A TQM project must be supported by employee trust, acceptance and understanding of management's objectives. Employees, therefore, should be recognized by the management as vital players in the decision making processes regarding to quality improvement as involving them would have motivating effect on implementation of quality programs. Real Time Example of TQM @ Nisan Automobile Manufacturing Firm Total Quality Management (TQM) is a key feature of Nissan's way of working. TQM involves making customer satisfaction top priority. Given this goal, everything the organisation and its people do is focused on creating high quality. To achieve this, Nissan has to: • Understand customer requirements • Consider the processes involved in providing quality, not just the end result • Prioritise and standardise tasks to deliver quality • Educate all employees to work in this way. In practical terms TQM involves: • Identifying customers and their requirements • Establishing and using objectives (targets) for all areas of activity • Basing decisions on researched hard facts rather than on hunches • Identifying and eliminating the root causes of problems • Educating and training employees.
  • 9. TQM is an ongoing process; a way of thinking and doing that requires an 'improvement culture' in which everyone looks for ways of doing better. Building this culture involves making everyone feel their contributions are valued and helping them to develop their capabilities. With a just-in-time approach, specific vehicles and their components are produced just-in-time to meet the demand for them. Sub-assemblies move into the final assembly plant just as final assemblers are ready to work on them, components arrive just in time to be installed, and so on. Every vehicle is monitored automatically throughout each stage of production. A transponder attached to the chassis leg contains all of a vehicle's production data e.g. its required colour, specification and trim. This triggers sensors at various points along the production line thus updating the records. It is vital to train people to work in such a hi-tech industry with such sophisticated quality systems. NMUK's training department conducts a training needs analysis to assess individual employees' needs and to organize training programs. The department concentrates on five main areas: • Technical Development - e.g. teaching skills relating to robotics and electrics, plus the required knowledge e.g. wiring rules/regulations. • People Development - identifying employee needs and ambitions; providing courses to help personal development e.g. in team building and communication skills • Understanding Processes - workshops covering safety, production operations etc • Computer Skills and Graduate Training - from basic to highly technical • Trainee Development - courses for graduate trainees ranging from accountancy to team building. 'Kaizen' or Continuous Quality Improvement. Nissan is famously associated with 'Kaizen' or continuous quality improvement. Nissan states: 'We will not be restricted by the existing way of doing things. We will continuously seek improvements in all our actions.' Kaizen can be applied everywhere, any time, any place. It can involve the smallest change in everyday working practice as well as a major change in production technology. Typically these improvements are initiated by teams of employees sitting down together and sharing ideas for improvements. Small steady changes are maintained to make sure that they actually work. No improvement is too small. Everyone at Nissan is responsible for thinking about the current way of doing a job and finding a better way of doing things. Conclusions
  • 10. Productivity levels at Nissan's plant in Sunderland, and the quality of final production there, have not happened by chance or good fortune. They stem from an all-embracing approach to a production process, designed to bring out the best in both people and machines. It continues to be conspicuously successful. The advantages of TQM have been widely discussed, but the challenges of implementation have received little attention. A quality philosophy is required for the successful implementation of a quality project. This philosophy must facilitate a long-term lifestyle change for the company. Commitment of top management is essential. Substantial inflow of resources, adequate training, workforce participation and effective measurement techniques are some of the key success factors. A successful TQM program is unique, and it should motivate middle management to focus on long-term strategies rather than short-term goals. Teamwork is the key to involvement and participation. Groups should be encouraged to work closely and effectively, and should focus on quality improvement and customer satisfaction. Q-4 The quality begins with the customer and ends on the customer. Provide logical justifications about this statement. How far it has been concern with the customer relationship program and why? Support your answer with any multinational corporation operating in Pakistan. Ans- Quality starts and ends with the customer. The customer must be the body and soul of the business. Businesses that have attained quality superiority have learned to take care of their customers. A company cannot progress qualitatively unless it has made the customer its driving force. Peter Drucker’s definition: “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.” Companies achieving long-term continuous improvement in quality possess lasting characteristics such as customer orientation, customer consciousness and customer responsiveness. CUSTOMER ORIENTATION The customer orientation plays a very significant role in the core of corporate strategy. Only one or two functions of any organization are not enough to be proved a firm customer oriented , the organization is required to incorporate this ideology in its all
  • 11. functions. Customer oriented approach understand the importance of creating and retaining the customer. Excellence in quality can be achieved through corporate-wide customer orientation. A “customer orientation” approach arises from the policies and practices put into effect by top management. Customer satisfaction through total quality must be placed at the heart of the business mission as defined, communicated, and promoted. Communication of customer-oriented policies to all levels of organization is very important. Sharing information of customers requirements, feed back, complaints , enquiries , returned products due to defects should be treated on priority to avoid delays in providing quality products and services. Employees suggestion and letters from customers should be circulated through out the levels directly or indirectly involved in the process of manufacturing or designing/planning of products and services for current and future needs. Supervisors and managers should be transferred to the customer services departments interfacing with customers to understand the customer’s requirements and problems. Customer Realization Companies care for providing ultimate satisfaction to the customer consider quality as conformance to the customers requirements rather than conformance to the products specifications. A truly customer conscious organization requires top management commitment to design organizational structures, mechanisms, and processes that communicate the voice of the customer in all managerial, technical and operating activities carried out by the company. The realization of customer requirements, needs, concerns, preferences along with communication throughout the organization proves that the firm is conscious for its customers requirements Responsiveness to customer Customer responsiveness means that customers are exercising real influence over quality and other business activities. Responsiveness to customer needs and concerns is basic to any quality improvement effort. Companies exhibit “customer responsiveness” by incorporating customer’s suggestions and feedbacks in QFD and by soliciting their customers for suggestions, ideas, and concerns. True customer responsiveness is present when customers see measurable improvements in quality or cost that are the result of feedback that they, as customers, provide to the company. Management must intervene to build the organizational processes, communication channels, and coordinating mechanisms that will inspire the company to listen and
  • 12. respond to customer requirements. Information flow is only one indicator that a business is trying to listen to its customers. More important is what happens to the information that the company receives. Information may be received and transmitted to all functional units like research and development, production, marketing, etc. However, these units may be failing to use the information to improve quality and customer satisfaction. Flow of information is important, better quality and increased customer satisfaction will not happen if the information is not digested and acted upon by the entire company. Building a customer responsive organization involves much more than designing structures to facilitate the flow of information across the business functions, suppliers, and customers, or requiring that customers exercise real influence over quality. It ultimately requires building and nurturing a customer satisfaction culture and value system that makes quality improvement and heightened concern for customer satisfaction a permanent aspect of organizational life. BUILDING THE CUSTOMER SATISFACTION CULTURE World-class enterprises know that superior quality and customer satisfaction are the means for achieving survival, growth, and profitability in the marketplace. To attain that goal, top managers, including the CEO, also need to establish a complimentary “corporate culture”, that is, they create a system of shared values, assumptions, beliefs, and norms centered around customer satisfaction. This means that the glue that unites members of an organization together revolves around customer satisfaction, thus making this value relevant to survival. A shared value system, in turn, enables behavior to become more predictable and helps to diffuse the anxiety stress, and fear that can come from social interaction. Customer Relationship Management (CRM) CRM is an acronym that stands for Customer Relationship Management. It describes the strategy that a company uses to handle customer interactions. One example of a common CRM strategy is the rewards card program offered by many supermarkets. The store gives its customers a free card that gives them access to special deals and discounts when they swipe the card during checkout. But that card also tracks everything the customer buys and allows the store to create an extremely detailed customer profile based on his or her purchasing habits. Armed with that information, the store can then offer its customers targeted coupons and other programs that will motivate its customers to buy more products from that store. CRM’S RELATIONSHIPS WITH CUSTOMER SATISFACTION Effect of customer relationship management (CRM) on customer knowledge and customer satisfaction is very positive. Firms using CRM shows that the use of CRM applications is positively associated with improved customer knowledge and improved
  • 13. customer satisfaction. Customer knowledge about products increase loyalty and satisfaction. An integrated customer relationship management and customer satisfaction measurement system can help businesses develop marketing strategies that drive delight and grow customer loyalty — not just deliver satisfaction. Companies invest on CRM because it improves customer loyalty and subsequently helps in retaining customers by increasing customer satisfaction. Nowadays Organizations implement customer satisfaction According to Yang and Peterson (2004) for building a positive link between customer and the company, loyalty plays an important role. Customers get loyal with the companies only if they deliver better services than their competitors. Customers satisfaction is increased with the implementation of CRM strategies. Customers are delighted when find their suggestions incorporated in the services/products and their trust on the producers/marketers enhanced and become strong. Cadbury Schweppes – Example of Customer Relationship Cadbury Schweppes plc, a global beverage and confectionary giant with annual sale of Rs 20,000 crores ,is the worlds number one non – cola soft drink company having bottling and partnership operations in 14 countries and franchises of its brand in a further 86 countries around the world. Dairy Maid became Dairy Milk and Cadbury’s Dairy Milk with its unique flavor and smooth creamy texture was ready to challenge the Swiss domination of the milk chocolate market. By 1913 it had become the company’s best selling line and in the mid twenties Cadbury’s Dairy Milk gained its status as the brand leader, a position that it has held ever since. Today more than 250 million bars of Cadbury’s Dairy Milk are made every year and sales reach over 100 million Pound in value. While advertising and label design have changed with fashion and considerable strides have been made in manufacturing technologies, the recipe for Cadbury’s Dairy Milk its ‘glass and a half of full cream milk in every half pound produced’ is still basically the same as when it was launched Cadbury target kids with Milk Treat: - It is a product that talks directly to the target consumer. The product benefits have been defined as “The goodness of milk to the fun of chocolate”. it combines both good health, multi nutrition value of milk along with the pinch of fun and excitement. The kinds formally associate with Cadbury chocolate offering. It is aimed at the niche “international chocolate “ segment of the chocolate market a segment upgraded from brands such as Cadbury’s to premium international offering such as Tolerance, Lindit and Hersheys. Roughly 5%of the total domestic consumption expected to grow to some 10%. This segment is too good to miss out on. The Previous
  • 14. Cadbury’s range available in India did not offer consumer an option to upgrade to international chocolate within the Cadbury’s fold. Temptation is an attempt to lug niche, priced Rs. 30. Cadbury’s Market Segment Market place for any product is comprised of many different segments of consumers, each with different needs and wants. Markets segmentation can be defined in a number of ways such as: for in a product or on the occasions when the product might be consumed. It targets different segments within the market, such as the. • Break segment – products which are normally consume as a snatched break and often with tea and coffee, for example Cadbury’s Perk and snack range. • Impulse segment – these products are often purchase on impulse, eating these and then. They include product such as Cadbury’s Dairy Milk. • Take home segment – this describes product that are normally purchased in supermarkets, taken home consumed at a later stage. CRM STRATEGY & ITS EFFECTS ON CSM IN CADBURY Confectionery Company Cadbury is leading their industry by deploying an advanced mobile field marketing solution that empowers its mobile workforce with exceptional customer relationship management (CRM) and trade marketing capabilities. According to Pieter Spies, Sales Director at Cadbury South Africa, the solution provides the company with a significant competitive advantage in field marketing by improving customer service, boosting revenue and reducing costs. "We are anticipating a 5% growth in revenue as direct result of efficiencies provided by the system," he says. "Now, when our reps visit a store, they have real-time visibility of stock levels, and can place an order for a customer there and then," says Spies. "This ensures the accuracy of the order, and means our customers are getting their products faster, increasing customer satisfaction. "Critically, our reps can also see if a product is out of stock, and recommend suitable substitute products. Their ability to do this is expected to boost revenues by a further 1%." The solution also allows Cadbury to tighten their controls in terms of their mobile CRM and trade marketing initiatives. Managers have a dynamic dashboard view of sales, out-
  • 15. of-office activity and access to reports focusing on key activities such as numbers of calls, orders per call, etc. The immediacy of the information enables them to improve sales agent performance and CRM. Two days of initial training and two days of follow-up was all that was required to get the mobile workforce up and running. In addition, Cadbury has identified "super-users" -- those agents who are technically astute to support the reps through the learning curve, and ensure that they are using the full spectrum of JEM's functionality. "We implemented the full system across our product range in September 2008 and currently 180 sales reps are active," says Spies. "Not only are we pioneering this solution within our industry in South Africa, we are the first country within Cadbury's global operation to be fully mobile enabled." Conclusion The customer satisfaction culture, nourished by the desire to attract, retain, and create value for the customer, builds the organizational drive towards performance of the crucial competitive requirements of quality, cost, innovation, customer service, and flexibility. Corporate strategy should link these requirements to define a unique competitive position for the company. High quality and customer satisfaction levels, short cycle times (in design, production, and delivery), are now included in the mission statements of many of the best companies in the world. If we add a few other elements like employee involvement and empowerment, supplier and customer partnership, flexibility, variation reduction, waste elimination, and continuous improvement, we have captured the major tenets of total quality management and customer satisfaction. As total quality management and customer satisfaction reshape business practices, they tend to nudge common strategic goals already mentioned. Moreover, as TQM and customer satisfaction basics become more influential, executives may be drawn away from their traditional roles of formulating strategies, setting numerical targets, and monitoring performance – the control mentality of the machine theory of management – and embrace their new role as facilitators of the changes necessary to make quality and customer satisfaction everybody’s business. 4. Quality Management programs and strategies cannot be developed and implemented in isolation. Do you agree or disagree with this statement. What critical success factor you consider to be the most important to address from human resources perspective during quality implementation phase. Implementing a total quality management system has become the preferred approach for improving quality and productivity in organizations. TQM, which has been adopted by leading industrial companies, is a participative system empowering all employees to take responsibility for improving quality within the organization. Instead of using traditional bureaucratic rule enforcement, TQM calls for a change in the corporate culture, where the new work climate has the following characteristics:
  • 16. • An open, problem-solving atmosphere; • Participatory design making; • Trust among all employees (staff, line, workers, managers); • A sense of ownership and responsibility for goal achievement and problems solving; and, • Self-motivation and self-control by all employees. In cultivating the TQM philosophy, strategy implementation must involve a focused effort on the part of every employee within the organization. It cannot be applied successfully on a piecemeal basis. TQM requires that every member of the organization, commit to the need for continual improvement in the way work is accomplished. Business plans, strategies, and management actions require continual rethinking in order to develop a culture that reinforces the TQM perspective. The challenge is to develop a robust culture where the idea of quality improvement is not only widely understood across departments, but becomes a fundamental, deep-seated value within each function area as Total Quality Management cannot be implemented in isolation all functions and all employees of the organization at all levels are required to be onboard for acquisition of quality. Products and services are planned, designed, produced, priced, delivered, marketed, distributed following the quality strategies and objectives of the organization. Each organization is unique in terms of the culture, management practices, and the processes used to produce and deliver its products and services, therefore, the TQM strategy vary from organization to organization; however, basic needs for defining strategies and developing standards to meet the TQM requirements remain same. Following are the basic requirements of the TQM implementation. Generic Requirements for TQM Implementation 1. Top management learns about and decides to commit to TQM. TQM is identified as one of the organization’s strategies. 2. The organization assesses current culture, customer satisfaction, and quality management systems. 3. Top management identifies core values and principles to be used, and communicates them. 4. A TQM master plan is developed on the basis of steps 1, 2, and 3. 5. The organization identifies and prioritizes customer demands and aligns products and services to meet those demands. 6. Management maps the critical processes through which the organization meets its customers’ needs. 7. Management oversees the formation of teams for process improvement efforts. 8. The momentum of the TQM effort is managed by the steering committee. 9. Managers contribute individually to the effort through hoshin planning, training, coaching, or other methods.
  • 17. 10.Daily process management and standardization take place. 11.Progress is evaluated and the plan is revised as needed. 12.Constant employee awareness and feedback on status are provided and a reward/recognition process is established. Improving quality has become a company-wide effort as the increasing globalization of business underscores the necessity of continuous improvement. Total quality management (TQM), the preferred approach to achieving this end, is no longer the sole concern of quality engineers, product designers, process engineers and other specialists. Important Critical Success Factors to Address from Human Resources Perspective during Quality Implementation Phase. The human resource management (HRM) function has an important role to play in developing quality across the entire organization. The HRM department can jumpstart the TQM process by serving as a role model through the performance of two vital tasks: • Providing customer-oriented service and • Contributing to the running of the business. TQM can be promoted by integrating the process into HR functions as • Recruitment and Selection, • Training and Development, • Performance Evaluation and • Reward Systems. Developing quality across the entire firm is an important function of the human resource management (HRM) department. A failure on HRM's part to recognize this opportunity and act on it may result in the loss of TQM implementation responsibilities to other departments with less expertise in training and development. The ultimate consequence of this loss is an ineffective piecemealing of the TQM strategy. HRM should act as the essential change agent necessary for the successful implementation of TQM. HRM can act as senior management's tool in implementing TQM in two fundamental ways. First, by modeling the TQM philosophy and principles within its departmental operations, the HR department can serve as a basis for the TQM process throughout the company. Second, the HR department, with senior management's support, can take the TQM process company-wide by developing and delivering the long-term training and development necessary for the major organizational culture shift required by TQM. The HR department also has major strengths in terms of recruitment, selection, appraisal, and reward system development to institutionalize a quality-first orientation. An appreciation of the capabilities of HRM to model and institutionalize TQM begins with an understanding of the TQM philosophy.
  • 18. In their efforts to achieve total quality management, HRM can demonstrate commitment to TQM principles by soliciting feedback from its internal customer groups on current HR services. HRM should include suggestions from its customers in setting objective performance standards and measures. In other words, there are a number of specific TQM principles that the HR department can model. The Role of HRM in Instituting a TQM Culture Human resource management can plan a vital role in implementing and maintaining a total quality management process. HR managers are responsible for recruiting high- quality employees, the continual training and development of those employees, and the creation and maintenance of reward systems. TQM Trainings to Employees Identification of specific training and development needs for making TQM a practical reality is the responsibility of HRM. HR professionals must identify the requirements of knowledge and skills needed to be taught to the employees. Standards of employees/processes performance/rewards criteria should be developed and implemented to attain quality objectives. The foundation of the entire TQM process is an employee's awareness that quality is vitally necessary and a top organizational priority. Building this foundation begins with extensive "quality awareness" training for all organization members. Sensitivity to quality starts with senior management training followed by the training of middle- and lower-level managers. The end result is a synergy between the quality team and the manager that produces solutions to quality problems. Employee involvement and commitment by establishing employee suggestion systems and quality improvement teams should be ensured by HRM. TQM - Recruitment & Selection. HRM's responsibility in implementing TQM should extend beyond the training and development of existing employees. HRM must take the lead in attracting, retaining and motivating a high quality work force. Successful recruitment and selection of employees with the proper knowledge, skills, abilities, and attitudes compatible with a TQM philosophy can be a driving force supporting continued program effectiveness. In recruiting for all departments and for all organizational levels, the HR department can identify people who will promote the TQM philosophy. Candidate qualities to target in recruiting include a willingness to receive new training and to expand job roles, to try new ideas and problem-solving techniques, to work patiently in teams within and across departments, and to be enough of a team player to be evaluated and rewarded on a team basis. TQM and Performance Evaluation and Reward Structures. The fundamental influences HRM can have on the TQM process is in the development of performance evaluation and reward systems that reinforce the TQM team philosophy.
  • 19. HRM can have a great deal of influence in developing promotion policies that are consistent with the overall goals of the organization. HRM can be influential in the promotion of employees who believe in and totally support the TQM philosophy, to positions of influence. The HR department has the ability to help design the evaluation system so that quality improvement teams conduct performance appraisals of one another, interview and select team members, schedule the team's work, and set performance goals. In rewarding team efforts for quality improvement, HR managers can keep both management and employees informed about TQM achievements and can identify opportunities to feature outstanding accomplishments of team members who deserve recognition and rewards. Many companies publish TQM newsletters that recognize team achievements and feature customer council meetings, future training schedules, and other pertinent information. Conclusion The international focus on quality, combined with increasing costs of materials, equipment, labor and training, are driving the implementation of TQM as a competitive strategy in all types of organizations. These forces for change also provide an opportunity for an expanded role of human resource management in making TQM succeed. Quality can no longer be viewed as the responsibility for one department. It is a company-wide activity that permeates all departments, at all levels. The key element of any quality and productivity improvement program is the employee. Consequently, employee commitment to a TQM program is essential. Because of its fundamental employee orientation, HRM should seek the responsibility for implementing TQM programs rather than risk losing their influence over the key element of TQM -- the employee. As a guardian of such functions as recruitment and selection, training and development, performance evaluation and reward systems, the HRM professional is best able to take charge of these important functions as they relate to a TQM strategy. The full potential of the entire work force must be realized by encouraging commitment, participation, teamwork, and learning. HRM is best suited to accomplishing this by modeling these qualities. Q-5 Why ISO certification is important for both service and manufacturing organization? Select an organization and guide through the initial steps in the certification process. Help the organization to make a decision regarding ISO certification with reference to the strength and drawbacks of ISO, as to whether or not certification would be advantageous. Introduction to ISO Certification The International Organization for Standardization (ISO) is the world’s largest developer and publisher of international standards. With a network of institutes in 163 participating
  • 20. countries, ISO is a non-governmental organization that forms a bridge between public and private sectors. As a result, ISO standards are constantly advancing to meet the needs of growing sectors within the industry. The vast majority of the ISO international standards are highly specific to product, material, and process, ensuring regulation from start to finish. Reasons to Acquire ISO Certification In today’s competitive business world, customers are placing more and more demands on their suppliers. In an ISO 9001-certified company, the use of a quality management system enhances the final product by ensuring that the organization meet or exceed its customer expectations. It also causes organizations to focus on management responsibility, quality objectives, human resources, infrastructure, vendor relations, and continual improvement. This is done through a process approach, which enables an organization to systematically improve performance. Importance of ISO Certification for Service Organizations Although implementing and maintaining a quality management system based on the ISO standards is difficult, a company benefits more by engaging at all points throughout the project. Because expertise in building automation systems is very specific and constantly changing, consistent application of standards will help identify critical items that could throw an entire project off track. The ISO 9001:2008 standard provides a tried and proven framework for implementing a systematic approach to managing an organization’s quality processes to meet and exceed customer requirements. In our experience at Pakistan Civil Aviation Authority, we have found that following ISO 9001 guidelines and establishing our quality management system has added value to our authority. As a management team, we have set goals, measured our progress in achieving those goals, and seen the benefits of our dedication. our customers are managed efficiently, and we have virtually no turnover with our employees. The achievement of our goals through ISO 9001 has instilled confidence in both our team and quality management system, while solidifying our reputation in the marketplace. Guidance through the initial steps in the certification process Developing the Quality Policy The process of implementing ISO 9001 depends upon the sophistication of organizations existing quality program, The size of organization / the complexity of processes. The 14 steps described below present a basic roadmap to implement an ISO 9001 quality management system successfully. Top Management Commitment • The top management (managing director or chief executive) should demonstrate a commitment and a determination to implement an ISO 9001 quality management system in the organization. Without top management commitment, no quality initiative can succeed. Top management must be convinced that registration and certification will enable the organization to demonstrate to its customers a visible commitment to quality. It should realize that a quality management system would improve overall business efficiency by elimination of wasteful duplication in
  • 21. management system. The top management should provide evidence of its commitment to the development and implementation of the quality management system and continually improve its effectiveness by: • Communicating to the organization the importance of meeting customer as well as statutory and regulatory requirements, • Defining the organization's quality policy and make this known to every employee • Ensuring that quality objectives are established at all levels and functions • Ensuring the availability of resources required for the development and implementation of the quality management system, • Appointing a management representative to coordinate quality management system activities, and • Conducting management review. • Establish implementation team ISO 9001 is implemented by people. The first phase of implementation calls for the commitment of top management - the CEO and perhaps a handful of other key people. The next step is to establish implementation team and appoint a Management Representative (MR) as its coordinator to plan and oversee implementation. Its members should include representatives of all functions of the organization - Marketing, Design and development, Planning, Production, Quality control, etc. In the context of the standard, the MR is the person within the Organization who acts as interface between organization management and the ISO 9001 registrar. His role is, in fact, much broader than that. Start ISO 9001 Awareness Programs ISO 9001 awareness programs should be conducted to communicate to the employees the aim of the ISO 9001 quality management system; the advantage it offers to employees, customers and the organization; how it will work; and their roles and responsibilities within the system. Suppliers of materials and components should also participate in these programs. The awareness program should emphasize the benefits that the organization expects to realize through its ISO 9001 quality management system. The program should also stress the higher levels of participation and self-direction that the quality management system renders to employees. Such a focus will go far to enlist employee support and commitment. Thprograms could be run either by the implementation team or by experts hired to talk to different levels of employees. Provide Training Since the ISO 9001 quality management system affects all the areas and all personnel in the organization, training programs should be structured for different categories of employees - senior managers, middle-level managers, supervisors and workers. The ISO 9001 implementation plan should make provision for this training. The training should cover the basic concepts of quality management systems and the standard and their overall impact on the strategic goals of the organization, the changed processes, and the likely work culture implications of the system.
  • 22. In addition, initial training may also be necessary on writing quality manuals, procedures and work instruction; auditing principles; techniques of management; calibration; testing procedures, etc. When in-house capacity to carry out such training is not available, it may be necessary to participate in external training courses run by professional training organizations. Alternatively, an external training institution could be invited to conduct in- house training courses. Conduct Initial Status Survey ISO 9001 does not require duplication of effort or redundant system. The goal of ISO 9001 is to create a quality management system that conforms to the standard. This does not preclude incorporating, adapting, and adding onto quality programs already in place. So the next step in the implementation process is to compare the organization’s existing quality management system, if there is one -- with the requirements of the standard (ISO 9001:2000). For this purpose, an organization flow chart showing how information actually flows (not what should be done) from order placement by the customer to delivery to this customer should be drawn up. From this over-all flow chart, a flow chart of activities in each department should be prepared. With the aid of the flow charts, a record of existing quality management system should be established. A significant number of written procedures may already be in place. Unless they are very much out of date, these documents should not be discarded. Rather, they should be incorporated into the new quality management system. Documents requiring modification or elaboration should be identified and listed. This exercise is some times referred to as " gap analysis''. During these review processes, wide consultation with executives and representatives of various unions and associations within the organization is required to enlist their active cooperation. In the review process, documents should be collected, studied and registered for further use, possibly after they have been revised. Before developing new quality management system documentation, you need to consider with which quality requirements or department you should start. The best is to select an area where processes are fairly well organized, running effectively and functioning satisfactorily. The basic approach is to determine and record how a process is currently carried out. Once it has been agreed how to describe the current process, this process has to be adapted, supplemented and implemented according to the requirements of the quality standard (ISO 9001:2000). Create a Documented Implementation Plan Once the organization has obtained a clear picture of how its quality management system compares with the ISO 9001:2000 standard, all non-conformances must be addressed with a documented implementation plan. Usually, the plan calls for identifying and describing processes to make the organization’s quality management system fully in compliance with the standard. The implementation plan should be thorough and specific, detailing: • Quality documentation to be developed
  • 23. • Objective of the system • Person or team responsible • Approval required • Training required • Resources required • Estimated completion date These elements should be organized into a detailed chart, to be reviewed and approved. The plan should define the responsibilities of different departments and personnel and set target dates for the completion of activities. Once approved, the Management Representative should control, review and update the plan as the implementation process proceeds. Develop Quality Management System Documentation Documentation is the most common area of non-conformance among organizations wishing to implement ISO 9001 quality management systems. As one company pointed out: "When we started our implementation, we found that documentation was inadequate. Even absent, in some areas. Take calibration. Obviously it's necessary, and obviously we do it, but it wasn't being documented. Another area was inspection and testing. We inspect and test practically every item that leaves here, but our documentation was inadequate". Documentation of the quality management system should include: • Documented statements of a quality policy and quality objectives, • A quality manual, • Documented procedures and records required by the standard ISO 9001:2000, Document Control Once the necessary quality management system documentation has been generated, a documented system must be created to control it. Control is simply a means of managing the creation, approval, distribution, revision, storage, and disposal of the various types of documentation. Document control systems should be as simple and as easy to operate as possible -- sufficient to meet ISO 9001:2000 requirements and that is all. Document control should include: • Approval for adequacy by authorized person (s) before issue, • Review, updating and re-approval of documents by authorized person (s), • Identification of changes and of the revision status of documents, • Availability of relevant versions of documents at points of use, • Identification and control of documents of external origin,
  • 24. • Assurance of legibility and identifability of documents, and • Prevention of unintended use of obsolete documents. The principle of ISO 9001 document control is that employees should have access to the documentation and records needed to fulfil their responsibilities. Implementation It is good practice to implement the quality management system being documented as the documentation is developed, although this may be more effective in larger firms. In smaller companies, the quality management system is often implemented all at once throughout the organization. Where phased implementation takes place, the effectiveness of the system in selected areas can be evaluated. It would be a good idea initially to evaluate areas where the chances of a positive evaluation are high, to maintain the confidence of both management and staff in the merits of implementing the quality management system. The implementation progress should be monitored to ensure that the quality management system is effective and conforms to the standard. These activities include internal quality audit, formal corrective action and management review. Internal Quality Audit As the system is being installed, its effectiveness should be checked by regular internal quality audits. Internal quality audits are conducted to verify that the installed quality management system: • Conform to the planned arrangements, to the requirements of the standard (ISO 9001:2000) and to the quality management system requirements established by organization, and • Is effectively implemented and maintained. Even after the system stabilizes and starts functioning, internal audits should be planned and performed as part of an ongoing strategy. • A few staff members should be trained to carry out internal auditing. Use ISO 19011 for guidance in auditing, auditor qualification and programmes. Management Review When the installed quality management system has been operating for three to six months, an internal audit and management review should be conducted and corrective actions implemented. The management reviews are conducted to ensure the continuing suitability, adequacy and effectiveness of the quality management system. • The review should include assessing opportunities for improvement and the need for changes to the quality management system, including the quality policy and quality objectives. The input to management review should include information on: • Results of audits, • Customer feed back, • Process performance and product conformity,
  • 25. • Status of preventive and corrective actions, • Follow-up actions from previous management reviews, • Changes that could affect the quality management system, and • Recommendations for improvements. • Management reviews should also address the pitfalls to effective implementation, including lack of CEO commitment, failure to involve everyone in the process, and failure to monitor progress and enforce deadlines. Pre-Assessment Audit When system deficiencies are no longer visible, it is normally time to apply for certification. However, before doing so, a pre-assessment audit should be arranged with an independent and qualified auditor. Sometimes certification bodies provide this service for a nominal charge. The pre-assessment audit would provide a degree of confidence for formally going ahead with an application for certification. Certification and Registration Once the quality management system has been in operation for a few months and has stabilized, a formal application for certification could be made to a selected certification agency. The certification agency first carries out an audit of the documents (referred to as an "adequacy audit"). If the documents conform to the requirements of the 10 quality standard, then on-site audit is carried out. If the certification body finds the system to be working satisfactorily, it awards the organization a certificate, generally for a period of three years. During this three-year period, it will carry out periodic surveillance audits to ensure that the system is continuing to operate satisfactorily. Continual Improvement Certification to ISO 9001 should not be an end. You should continually seek to improve the effectiveness and suitability of the quality management system through the use of: • Quality policy • Quality objectives • Audit results • Analysis of data • Corrective and preventive actions • Management review • ISO 9004:2000 provides a methodology for continual improvement. • Conduct initial status survey • Create a documented implementation plan • Develop quality management system documentation
  • 26. • Document control • Implementation • Internal quality audit • Management review Advantages of ISO 9000 The advantages associated with ISO 9000 certification are numerous, These benefits, which can impact nearly all corners of a company, range from increased stature to bottom-line operational savings. They include: Increased marketability—Nearly all observers agree that ISO 9000 registration provides businesses with markedly heightened credibility with current and prospective clients alike. This benefit manifests itself not only in increased customer retention, but also in increased customer acquisition and heightened ability to enter into new markets; indeed, ISO 9000 registration has been cited as being of particular value for small and mid-sized businesses hoping to establish a presence in international markets. Reduced operational expenses—The cost of scrap, rework, returns, and the employee time spent analyzing and troubleshooting various products are all considerably reduced by initiating the discipline of ISO 9000 Better management control—The ISO 9000 registration process requires so much documentation and self-assessment that many businesses that undergo its rigors cite increased understanding of the company's overall direction and processes as a significant benefit. Increased customer satisfaction—Since the ISO 9000 certification process almost inevitably uncovers areas in which final product quality can be improved, such efforts often bring about higher levels of customer satisfaction Improved internal communication—The ISO 9000 certification process's emphasis on self-analysis and operations management issues encourages various internal areas or departments of companies to interact with one another in hopes of gaining a more complete understanding of the needs and desires of their internal customers. Improved customer service—The process of securing ISO 9000 registration often serves to refocus company priorities on pleasing their customers in all respects, including customer service areas. It also helps heighten awareness of quality issues among employees. Reduction of product-liability risks—Many business experts contend that companies that achieve ISO 9000 certification are less likely to be hit with product liability lawsuits, etc., because of the quality of their processes. Attractiveness to investors—Business consultants and small business owners alike agree that ISO-9000 certification can be a potent tool in securing funding from venture capital firms.
  • 27. DISADVANTAGES OF ISO 9000 Following is a list of potential hurdles for entrepreneurs to study before committing to an initiative to gain ISO 9000 certification: Owners and managers do not have an adequate understanding of the ISO 9000 certification process or of the quality standards themselves—Some business owners have been known to direct their company's resources toward ISO 9000 registration, only to find that their incomplete understanding of the process and its requirements results in wasted time and effort. Funding for establishing the quality system is inadequate—Critics of ISO 9000 contend that achieving certification can be a very costly process, especially for smaller firms. Heavy emphasis on documentation Length of the process—Business executives and owners familiar with the ISO 9000 registration process warn that it is a process that takes many months to complete. The 1996 Quality Systems Update survey indicated that it took businesses an average of 15 months to move from the early stages of the process to passage of the final audit, and that processes of 18-20 months or even longer were not that uncommon. Decision for ISO Certification ISO 9001 Certification will provide maximum benefit to your organisation if it approaches ISO 9001 implementation in a practical way. This will ensure that the Quality Management Systems that are adopted, work to improve the business and are not just a set of procedures that your employees will find hard to manage. By adopting an approach that starts out to implement more efficient working practices and focuses on the business objectives of the organisation, you will achieve a system that will help and support your staff, and improve your levels of customer satisfaction. Whether you use an external assessor or allocate an internal resource to carry out the initial assessments, you will need to ensure that they have buy-in from senior management, so that all areas of the organisation are aware of the importance of the ISO 9001 Certification process. ISO 9001 Certification is not just suitable for large organisations but also small businesses that will benefit from adopting efficient Quality Management Systems that will save time and cost, improve efficiency and ultimately improve customer relationships