Total Quality Management Core of any Business

Question: Discuss about the Total Quality Management for core of any business? Answer: Introduction Customers are the core of any business. A business survives only if it meets the needs of consumers. The aim of this report is to measure the quality management procedures of Tesco Plc. The organization was found in the year 1919 with a simple mission of being a champion for customers and improving their quality of life (Tesco plc 2016). The core purpose of Tesco is Serving Britains shoppers a little better every day (Tesco plc 2016). The British multinational grocery and general merchandise retailer is headquartered in UK. Tesco values its stakeholders- customers, suppliers, communities and various others. Tesco understands its people by interacting with them and providing exclusive services to meet their requirements. Tesco binds the organizational structure with a culture of trust and respect (Tesco plc 2016). The company makes a significant contribution towards the world by reducing waste globally, providing affordable and high-quality food, providing high employment opportunitie s and faces challenges as a responsible corporate citizen (Tesco plc 2016). Total Quality Management (TQM) System In the words of Group CEO, Dave Lewis, Tesco believes in Doing the Right Thing (Tesco Plc 2015). Tesco does not prescribe any system of standards and establishes its set of quality processes. Tesco follows two main approaches for managing total quality- Full Customer satisfaction and Zero defects. The quality is checked throughout the supply chain- from the suppliers to the product placement in store. The product standards are the most robust in the industry (Tesco Plc 2014). Full Customer Satisfaction Tesco is a customer-oriented organization. Tesco creates psychographic profile of its customers. The organization not only enrols customers through the Clubcard Loyalty Plan but also engages them by inviting them to join suitable clubs. Tesco ensures customer satisfaction through product preferences, positive attitudes and price sensitivity. Tesco designs offer in a manner that suits the preferences of individual customers visiting the store. Tesco engaged its loyal customers as the company figures out the value being looked forward to by the customers (Mukerjee 2013). Zero Defects Tesco establishes quality audits at every point of the organization. After approving a supplier, Tesco arranges site visits and product surveillances by approved auditors. The program testing is divided into four categories- Chemical and microbiological testing, Authenticity testing, Contaminants Testing and Quality testing (Tesco Plc 2014). Each product goes through quality check at Tesco to provide value for money to customer and assure qualified product. These testing programmes cover all products ensuring Tesco to sell safe products to its customers (Tesco Plc 2014). Development and Use of TQM System Maintaining and improving quality at Tesco is achieved in several ways. Tesco is a retail chain store with several establishments in UK and foreign countries producing its products. For the same reason, Tesco gets to sell products manufactured by other companies. To meet the required standard quality of products, Tesco inspects each product from the point of origin to the point of sale. Food products and pharmaceuticals require high level of cleanliness in comparison to other products sold at Tesco. Therefore, the skilled workforce in the organization ensures that the people handling products requiring high sensitivity to cleanliness maintain hygiene for mitigating errors and complains. All the products are marked with the date of manufacturing and expiry to educate its customers. The products produced by the company as well as products for other companies are sold at Tesco. In case the products lie on the shelf for too long, the employees from quality assurance and improvement team make sure that the products are disposed of properly. The products on the shelf at Tesco need to be fresh. The majorly sold items at Tesco are groceries and meat products. Finding highly perishable products being shelved after a day is difficult. In most cases, the entire product quantity at sold within a day. The company follows a policy of removing defective products from the shelves as soon as they show signs of spoilage (Harris 2015). The company donates the perishable products for immediate use so that the food is not wasted. The quality and assurance team makes sure that the products meet standard requirements at all levels and are shelved. Tesco supports FareShare by providing food to more than 1,000 charities across UK. Tesco diverts all surplus fresh food items to support FareShare. The food items include chicken, fruits and vegetables (Smithers 2013). Tesco maintains its total quality concept through prevention, zero defects, getting things right, at first, continuous improvement and involving all aspects of the organization. Tesco satisfies its customers by following low cost policies. The human resources of Tesco play a critical role in the quality management of the products. The department stresses in ensuring product quality of service delivery. They ensure that the customers are treated with value and esteem while they interact with the company. Tesco devotes treating its associates and deserve respect in turn (Hu et al. 2015). The human resources team at Tesco ensures to motivate its employees so that bets products are provided to the customers. The raw materials used by the company are subject to standard testing. The company does not use products that do not yield expected quality. Selection of materials is a critical aspect and every product has to be tested to meet certain standards. Tesco also ensures speedy delivery of products for maintaining high quality of services. The store attendants are taught to provide efficient delivery services promptly. The company makes sure that the customers do not have to lose their precious time (Evans and Mason 2015). Level of Success of TQM System Tesco is renowned for the quality of products. Despite the success of Clubcard loyalty scheme, several discrepancies have been encountered in the operations of Tesco. The quality performance objective is the most prioritized objective above all other business strategic objectives (Connolly and Wall 2011). The company has a quality improvement team that deals with ensuring maintenance of quality in all the goods the company sells in its stores as well the services it provides to its loyal customers (Connolly and Wall 2011). It is reported that the strengths of Tesco are no longer good enough. There was a decline in operating profits. Tesco encountered various strategic challenges in UK. The competitors such as Sainsbury and Marks Spencer focus on improving quality. The Aldi stores in Germany not only provide low prices but convenience. Tesco established small outlets in high-traffic locations for full customer satisfaction. However, German consumers purchased quality products at lower prices at Aldi (Wells 2014). Despite multiple challenges, Tesco continues to rule the market share in UK as shown in Figure 1. Figure 1: Percentage Share of Total UK Grocery Market Source: (Wells 2014) Tesco uses low price strategies to provide best value to its customers. The brand was severely compromised according to the survey of shoppers (Davidson 2015). The company showed lowest overall customer satisfaction results and the brand image is tarnished. A study was conducted with 2000 customers in UK, and an amount of 250m was reported as losses (Davidson 2015). The criteria of price, range, quality, availability, promotions and range were outranked by other competitors such as Asda. Tesco ranked lowest in a list of grocery chains as stated in Figure 2 (Davidson 2015). Tesco was also outranked by other competitors in categories such as availability of items, cashier courtesy, checkout speed, specialty department service and ability to find items (Davidson 2015). Tesco supermarket was rated the worst grocer for store cleanliness. The brand value declined by 37% in 2014 (Davidson 2015). Figure 2: Composite Loyalty Index Source: (Davidson 2015) Tesco was also outranked by other competitors in categories such as availability of items, cashier courtesy, checkout speed, specialty department service and ability to find items as shown in Figure 3 (Davidson 2015). Tesco supermarket was rated the worst grocer for store cleanliness. The brand value declined by 37% in 2014 (Davidson 2015). Figure 3: Consumer Insights Source: (Davidson 2015) Tesco commits to set new benchmarks in food testing after the horse meat scandal. The customer confidence was lost after the discovery of horse meat in some of its products. Inquiry was ordered after horse meat was found in Tesco value beef burgers in January, prompting a Food Standards Agency (FSA) investigation (Molloy 2013). Tesco promised to set new benchmarks about food testing if the details are not present on the label. Tesco backed-up its commitment by stating that it would educate customers by providing information regarding the products sold at the store. The supply chain system would be reviewed ensuring visibility and transparency (Molloy 2013). Evaluation of impact Before TQM was introduced Tesco introduced Big Price Drop campaign for which prices of daily products slashed (Ruddick 2014). The campaign was criticized as it accentuated the negative perceptions of quality of the products. The low prices convinced people for cheaper products and not quality. The sales of Tesco declined rapidly as the customers lost trust in quality and prices. Tesco did not focus on improving quality while driving down prices. The consumers prefer to buy quality products over cheaper products. Tesco neglected in-store experience, longer shelves, well-designed store environment and other points of differentiation that fully satisfy customers (Ruddick 2014). The markets further reported that Tesco lost its human touch while it was busy expanding its market overseas. The organization failed to position itself between price and quality demands. Tesco also suffered from rising prices of fuel for powering its operations. Tesco tried to make the product range available for all the markets that made them lose its way (Curtis 2012). Both rich and poor want tighter and better quality and niche markets are tending to determine mass markets rather than mass markets crushing niche markets. Tesco was also reported to have poor customer service both in-store and online deliveries. The organization lowered its service levels for bringing the prices down. Tesco exposed its inhumanity of the hypermarket system. Tesco lost the edge and it brought around a serious question if the products were value for money (Curtis 2012). During the implementation For the maximum satisfaction of customers, Tesco introduced the Clubcard loyalty scheme that helped in surging up profits. UK households started redeeming Clubcard points and the organization pledged to pace up its expansion procedures. Tesco went beyond CRM initiatives for providing efficient quality products and services to its customers. Tesco initiated comment cards, research trackers and research techniques for engaging with its customers. The performance was tracked over time. The customers got a chance to accumulate points on the clubcard while presenting their opinions through other initiatives. The customer base for Tesco is large, and Tesco bridged the gap for introducing schemes for various market segments. The initiatives were well taken by the customers as they considered it high quality services. Tesco also changed its store formats based on the size and range of products sold. Customer demands were met with the introduction of various schemes, product range and product locations (Visser 2012). During development and potential future Tesco sales have been declining rapidly in the last two years with increased internet shopping. Tesco is losing its market share because nowadays, shoppers are questioning if the Clubcard is more helpful to the supermarket than to the shopper. Tesco benefits itself following the 6Cs of TQM- Commitment, culture, cooperation, continuous improvement, customer focus and control (Connolly and Wall 2011). Tesco dedicates a human resource management team to attend a meeting with total quality management. The quality improvement team is also charged with responsibilities for dealing with the loyal customers (Ruddick 2014). Tesco successfully adapts cost structure helping the consumers save money. Clubcard is a unique strategy followed by Tesco to keep up the competition in providing quality services to its customers. The clubcard also helps the customers in understanding the customer behaviours as they are recently switching from retail and merchandise stores to online and convenience stores (Ruddick 2014). Recommendations Based on the above research and analysis, some of the gaps are identified about customer satisfaction and defect free products. The recommendations are cost-effective from both individual and organizational perspectives. Several issues and concerns are provided about provision of high quality services and loyalty for Tesco. Some of the recommendations are listed as ahead. Tesco must improve the knowledge and understanding of customers by providing information regarding the product. Several models must be established for measuring customer satisfaction over time based on the range of products, prices, competitors information and preference (Visser 2012). Tesco may continue to satisfy its customers by continuing current business strategies such as Tesco loyalty programme. A few strategies such as a discount, better service to customers, ensuring quality products, commitment to staff, customers and environment must be taken. Marketing research may be conducted on a regular basis for identifying the expectations and demands of the customers (Croucher, 2012). A quality manager may be appointed additionally for analysing the current market trends, nature of competition and the quality standards followed by rivalries such as Aldi, Sainsbury and various others. The customer satisfaction survey would help in knowing the level of customer satisfaction. Online feedback processes may be initiated for the convenience of data collection (Keegan and Green 2015). Tesco may further enhance its effective leadership and managerial skills. The customer service may be improved through collective ownership. Considering the current market trend, Tesco must improvise its supply chain through online distribution. The website may be enhanced providing the visitors some options to surf easily. The website may also be provided with more filtering options and improve the quality of experience received by customers (Visser 2012). Free shipping may be provided by the brand. Daily checks at the factory and warehouse must be enhanced. The food and product checks may be signed off routinely by the retail manager. A rigorous audit programme may be arranged for managing the cross contamination risk, personal hygiene standards, and cleanliness at the stores, pest control measures, labelling and stock rotation procedures and management of waste. The Food Safety Risk Managers may provide stringent regulations for managing the quality of food products (Leng, Li and Liang 2015). Conclusion The above report assesses the total quality management at Tesco Plc. Tesco understands its people by interacting with them and providing exclusive services to meet their requirements. Tesco follows two main approaches for managing total quality- Full Customer satisfaction and Zero defects. Tesco ensures customer satisfaction through product preferences, positive attitudes and price sensitivity. The quality performance objective is the most prioritized objective above all other business strategic objectives. Each product goes through quality check at Tesco to provide value for money to customer and assure qualified product. Tesco as a company produces its products. Tesco is a retail chain store with several establishments in UK and foreign countries. Tesco also ensures speedy delivery of products for maintaining high quality of services. To meet the required standard quality of products, Tesco inspects each product from the point of origin to the point of sale. Daily checks at the fac tory and warehouse must be enhanced. Selection of materials is a critical aspect, and every product has to be tested to meet certain standards. Customer demands were met with the introduction of various schemes, product range and product locations. References Connolly, C. and Wall, T., 2011. The global financial crisis and UK PPPs.International Journal of Public Sector Management, 24(6), pp.533-542. Croucher, S., 2012.Tesco Trouble vs Sainsbury's Success: How Justin King is Winning the Supermarket Battle. 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