The UK Retail Industry: A Case of TQM at Tesco Supermarket
Origin and development of TQM
Provision of high quality services is at the top of the agenda of any form of senior management. Quality is used as a strategic weapon that companies use to compete within the current markets (Heckl, et al., 2010). Quality pleases the consumers who are the most influential people for any business whether in the service sector or the manufacturing sector.
Therefore, for a company to have the advantage over other rival companies, it has to identify and develop quality of its products and services and specifically compete on this dimension. When companies are able to produce goods and services of a high quality, they not only please the consumers but also put themselves in a position where they achieve internal effectiveness and reduce their cost of operation. Using the techniques of total quality management, several companies in the UK service sector have been able to achieve success (Yasin, et al., 2009).
The philosophy of total quality management began as a result of dramatic changes in the business environment. The philosophy itself began in the early eighties when the global economy experienced a recession similar to the recent one in 2008 (Yasin, et al., 2009). Several companies experienced this changes which were characterized mainly by factors such as low cost of competition, globalization, rapid technology transfer, and increased consciousness of quality by the consumers. The recession affecting several national economies as well as the global economy; as a result development of policies on quality could easily be blocked (Yasin, et al., 2009). But, companies that consider quality of the product and services they give to consumers can use the idea as a way of being competitive in the market. There are several techniques for quality management that have been used to achieve quality of products and services, but, the most effective technique has been total quality management (TQM) (Wessel & Burcher, 2010).
Total Quality Management in the UK retail industry
It is hard for a company that intends to compete effectively to ignore the use of total quality management. Based on empirical evidence, the technique of total quality management has proven to have a significant effect on the general output or result of a company. It is for this reason that business should not fail to ignore implementing policies of total quality management. Hence, total quality management can be defined as a means of seeking excellence in all functions of business in order to prevent possibilities of errors or mistakes and to create optimal customer satisfaction. The customer satisfaction is achieved when the output is free of errors and it is only through efficiency and effectiveness that defects can be prevented (Heckl, et al., 2010).
Depending on the whether a firm is one the service industry or the manufacturing industry, the techniques for total quality management will vary. The most common characteristics that cause this difference is the fact that in the service industry, the product is intangible compared to manufacturing of tangible goods (Wessel & Burcher, 2010). The manufacturing industry was the first to experience success in the application of total quality management techniques. Because of this of this success, TQM techniques had to be made to fit into the service industry. The financial industry is in the service industry and supermarkets and financial investment firms belong to this industry (Yasin, et al., 2009).
In as much as its resources, time and system are used for cash and asset management, the supermarket has also devoted all its resource in management of its customers as well as its services (Heckl, et al., 2010). Unlike most supermarkets, the system is designed to satisfy the customers and not to control any of the clients. In the old traditional retail systems, every product set up focuses mainly on the convenience of the supermarkets rather than the convenience of the customers. Several large supermarkets may have more than one vice president whose responsibility is focused on the asset management and guarding of the company’s assets (Yasin, et al., 2009).
However, it is a common this to also find that lack of a vice president whose responsibility focuses on customer relation management. For the rare cases where a supermarket can focus its resources on customer relationship management much priority is usually not given on CRM (Yasin, et al., 2009). The customers usually hold the lifeline of any business irrespective of the sector it deals with. It does not matter whether the business is in the service industry of manufacturing industry. Customers would always seek for quality in order to be satisfied. When it comes to the service industry, customers undoubtedly become sensitive to quality of service compared to the manufacturing industry (Yasin, et al., 2009). The reason is because of the fact that interaction between customers and the companies occurs with frontline representatives of the company (Yasin, et al., 2009).
The use of TQM techniques by Tesco to improve efficiency and effectiveness
Tesco is one of the most successful retain supermarket chains in the UK. This is because of its service and product quality. Tesco was started as a retail company in 1920s and since then it has expanded and grown to become among the world largest companies in the retail industry. In terms of the revenue base, the company comes second after Wal-Mart which is a US based company (Ciaran & Wall, 2011). Ever since it began, Tesco has continued to introduce new products and services to satisfy the needs of its customers. Currently it mainly deals with production and sales of food items, groceries, cloths, and electronics among other items. In addition the company also deals in sales of houses, internet services, financial and insurance services. These are among its latest business ventures (Ciaran & Wall, 2011).
The company has used the concept and philosophy of quality management to maintain its position as the leading supermarket in the UK. It goes the extra length not to increase quality of its services but also to maintain the quality for customer continuous satisfaction. The main focus in quality assurance for the company is to provide customers with products and services that will meet their needs as well as providing products and services that are free of accidents, wastes or defects (Ciaran & Wall, 2011).
Quality performance objective is the most prioritized objective above all other business strategic objectives (Ciaran & Wall, 2011). The company uses various strategies to achieve this goal of quality. The company dedicates a highly skilled human resource to maintain and improve the quality of services offered to its customers. Every single day, the company’s management staff has to attend a meeting with the main agenda being total quality management. The staff discusses ways in which every business function can be integrated or adjusted to meet quality. 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. In addition the quality improvement team is charged with the responsibility to identify ways of improving the quality of service to its customers every day. This team meets on a weekly basis to lead and monitor the process of quality assurance (Ciaran & Wall, 2011).
In addition to the dedication of human resource to customer service management, the company also has principles and policies used to govern quality assurance.
The first policy is that, it is a mandatory for all employees to meet the requirements of the customers all the time.
Secondly the policies also focus on prevention of defects in its products and errors during the process of customer service.
The goods sold in Tesco stores must meet certain standards and this means that total quality management according to Tesco involves also the supply chain management. Suppliers of goods are not expected to deliver goods with defects which would cause the customers to raise complaints.
Thirdly, the policies also focus on the verification of processes to measure whether they are meeting the right standards for quality.
Speed performance objective
The condition for food preparation has to be hygienic
The company also considers the quality management system of all its suppliers before getting into business with them
Cost performance objective
Human resource management. The company has policies that ensure its team of workers is treated with the respect it deserves
Improving quality in the products is achieved in several ways. Tesco as a company produces its own products. Being a retain chain with stores online and in several other location in the UK, the company gets to sell products produced by other manufacturing companies. The company subjects all its products to testing in order to meet the required standard of quality. It inspects all its products at every point during the process of production (Ciaran & Wall, 2011). Hygiene is maintained especially for production of goods that require cleanliness. Food products and pharmaceuticals are just but the example of products that require high sensitivity to cleanliness. Therefore, a part from employing skilled workforce, the company ensures that the people handling products that require high sensitivity to cleanliness maintain a certain level of hygiene to mitigate errors and complains. If customers who use the food court at any of the company’s stores complain of about the quality of food, then this would affect the business and cause customers to develop mistrust for the company. However, when customers enjoy the food produced by Tesco because of the quality, then they would undoubtedly develop a habit of buying food at Tesco’s stores (Ciaran & Wall, 2011).
Products sold at the stores have to have marks indicating the date of expiry. This includes both the products produced by the company and the products produced by other companies. When a good is about to expire after staying on the shelf for too long, the quality assurance and improvement team ensure that they are removed from the shelves and disposed properly (Ciaran & Wall, 2011). The goods which are shelved on Tesco’s stores have to be fresh. As such, the company has found it highly possible to make sells of items such as groceries and meat fresh meat products. Perishable goods are sold within the stores on a daily basis and replenished on a daily basis. It is hard to find highly perishable products being shelved after 24 hours (Ciaran & Wall, 2011). In most cases, they are entirely sold out within the time period of 24 hours. The company also has a policy where once perishable goods such as groceries begin to show signs of defect, they are automatically removed from the shelves and donated to homes where they can be used immediately. The team charged with the responsibility of quality control and assurance ensures that only products that meet the required standards are shelved.
Quality control is therefore majorly achieved through two main methods: inspections and testing (Yasin, et al., 2009). It is a technique that is applied during the entire process of production. It is applied before the finished product is produced and also after production (Yasin, et al., 2009). The raw materials have to be subjected to standard testing. It cannot use raw materials that will not yield the expected quality. Therefore selection of materials to be used in production is an crucial aspect of quality that the company emphasizes on. Every product of the various stages of production has to be tested to meet certain standards (Yasin, et al., 2009).
Speed is an notable emphasis in the company when it comes to performance objective. This implies the time taken for delivery of an item once the client places an order. Customers are highly valued and none of them is expected to wait longer than the required time for delivery (Yasin, et al., 2009). The company simply tries to reduce cases of customer complaints by ensuring that they get value for their money (Yasin, et al., 2009). A customer can get what he or she needs whenever they need it; and hence it is only through speedy delivery of products that this objective can be achieved. Speed is used when handling customers. The store customer attendants are taught to be very prompt as they attend to customers. The company has noticed that customers can be frustrated by long queues especially when making payments (Yasin, et al., 2009). This frustration can cause the customers to opt for other stores or supermarkets with shorter queues. In response to this need, the company has ensured that delivery of service at the teller points is very fast and efficient so that customers do not have to waste their valuable time (Yasin, et al., 2009).
When speed is achieved in the operations of the company, then all the other departments will be impacted to incorporate speed (Yasin, et al., 2009). Communication of information is done with the same necessary speed for effectiveness. Speedy communication helps in proper record keeping. It helps throughout the entire process of supply chain management and inventory management. Quality in communication however is only achieved through proper IT system that integrates all the business functional units for smooth flow of information. The company has an enterprise resource planning system that helps to improve the quality of internal and external communication in the company. The system enhances smooth and quick flow of communication throughout the process of supply chain management (Yasin, et al., 2009).
The human resource management affects quality of the products. HRM is one other area that the company stresses on when it comes to ensuring quality of service delivery. Customers have to be treated with value and esteem when they interact with the company (Yasin, et al., 2009). Human resource is valued since the company has realized the role human resource plays in ensuring effectiveness and efficiency of operations. Tesco has devoted to treating its associates with the respect they deserve and in effect this has yielded fruits in the company’s general output (Yasin, et al., 2009).
The associates and employees need to be motivated to work harder and be at their best (Chew & Sharma, 2006). The human resource team at Tesco has ensured that the best potential of every employee is produced. For instance, the company has dedicated substantial amount of its vast revenue and profits to employee reward and compensation system (Chew & Sharma, 2006). The packages provided to employees for their work is worth it since at the end of it all the employees are motivated to work for the best of the company. The organizational culture created by the human resource team is one that is aligned to the strategic objectives of the company. Quality assurance is among the strategic objectives of the company (Yasin, et al., 2009).
Tesco has low cost policies. This performance objective depends on the efficiency of the internal operations of the company (Yasin, et al., 2009). When the company is able to be effective internally, then it implies that it uses less money in running its operations. As a result the company will be in a better position to provide its customers with high quality goods and services at a reduced cost compared to its competitors (Yasin, et al., 2009). Resources are usually wasted or spent unnecessarily when trying to repair products or correct errors made. Such cost has been avoided by the company because of its effectiveness in its internal operations (Ciaran & Wall, 2011). The effectiveness has been reflected in the cost of its products. UK companies have been experiencing effects of the recession for the fourth year now since 2008 (Ciaran & Wall, 2011). However, Tesco is among the few companies in the retail industry that has continued to experience increased revenues and profitability despite the effects of the recession. With the low cost policy customers are still able to maintain their shopping volume (Yasin, et al., 2009).
Adjusting to the recession required flexibility as form of performance objective (Yasin, et al., 2009). The company has been able to achieve this objective and as a result maintained its competitiveness in the market (Yasin, et al., 2009). The market has a lot of changes and diversification. The company changes its marketing strategy to suit the opportunities available in the market. For instance, during the peak of the recession in 2008, customer purchase behavior changed drastically (Ciaran & Wall, 2011). This meant that the company had to adjust to the purchase behavior of that moment. It required constant updated analysis of the market situation and considering the four elements of market mix to identify ways in which they can be adjusted to fit the needs of the markets. In this way the company managed to maintain its sales volume, revenue base, and profit margins (Ciaran & Wall, 2011).
Flexibility also entails introduction of new services and products to enhance the experience of the customers when they visit Tesco stores. The latest products introduced by the company are mainly in the service industry. They include sales of houses, financial, insurance, and internet services. Another example of a new product is the Irish yoghurt (Ciaran & Wall, 2011). This was introduced with the realization of consumers appreciating natural products. In order to reduce the cost incurred through the process of product distribution, the company decided to have its own products that are used domestically on daily basis. This includes items such as milk, bread, butter, jam, ice cream etc. all these products bear the brand name of the company and they retail at cheaper prices compared to other brands produced by other companies (Ciaran & Wall, 2011).
Approaches to Improve TQM and customer care
There are numerous approaches that can be adopted in order to improve the quality of customer experience in an organization. Leadership in a company needs to be active and involved in all aspect of business function (Smith, 2009). Leadership inspires success and it is therefore recommended that effective leadership and managerial skills be employed. The kind of leadership required is one that envisions quality of customer experience as means that would make a difference in the company intended impact to the consumers (Smith, 2009). Anybody can offer leadership, but the leadership needs to be vital to cause positive change in the organization. It is a practice that has to be adopted if companies want to improve the quality of customer experiences of its products and services (Smith, 2009).
The other solution to effective improvement of customer care is through a joint ownership of a company’s essential business function. Marketing, human resource, and customer service are important business functions of any company such that whenever a problem occurs with one of the function, there is need to have a collective ownership by all the three departments in order to fix the problem (Smith, 2009). When such a problem is solved by the triad, then effectiveness of the solution is optimized. There is also need to focus on strategically important customers (Smith, 2009). A company needs to collect data of all its potential customers and develop strategies of attracting them and sustaining their loyalty (Smith, 2009).
Total quality management can be defined as a means of seeking excellence in all functions of business in order to prevent possibilities of errors or mistakes and to create optimal customer satisfaction Quality is used a strategic weapon where companies use to compete within the current markets. Quality pleases the consumers who are the most important people for any business whether in service sector or deals with production of goods. This paper has provided a critical analysis of case studies that focus on how the UK based Tesco supermarket has introduced and developed a holistic system total quality management. Throughout the entire paper, it is apparent that techniques of TQM are important for a company to succeed and remain competitive in the marketplace. The techniques of TQM are applied on every essential function of a business including, Human Resource Management, SCM, CRM, and marketing.
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