Issues Faced by IKEA Business and Total Quality Management Assessment 3 Answer
The business report discusses the need of Total Quality management (TQM) in the competitive global market. It identifies the quality problems faced by IKEA business. The report discuss the eight core principles of TQM on which it works and how these principles ensures quality management in the organization.
There are various models which helps in TQM but the ISO 9000 standard is selected for IKEA business because of the nature of business management. The business has large number of franchises which are operated independently. Centralized manufacturing and procurement is not possible for IKEA. Thus the use of ISO 9000 standard is best to implement TQM in the organization.
TQM will help IKEA to enhance customer satisfaction with least wastage and at low cost.
Introduction to TQM
TQM is a practice which when followed in the organization helps to identify and refer to the parameters and factors that make their products superior or inferior as compared to the competitors. Quality is one of the attributes that differentiates the product from its competitors. No customer will be loyal to a company or brand if its competitors are also providing the same product (Juneja, P., 2020).
Quality is the first way to survive the market competition and ensure sustainability of the business. With increasing competition and globalization of economy the products have crossed the borders and boundaries of nations and cultures (Parul, K., Rubal, KM, 2016). Thus product quality and service are the only criterions which can help the business attract and retain the customers. Quality management will not only result in attracting and retaining customers but will also help in reducing and managing cost by reducing the wastages and faulty products. TQM is also environment friendly as it increases the utility and durability of the products there by generating less wastages and longer use of products and services with higher customer satisfaction (Juneja, P., 2020).
IKEA is guided by the Vision of “To create a better everyday life for the many people” (ikea.com). IKEA offers a wide range of products mainly for functional home furnishings at low prices and hence makes them affordable to most of the people. IKA group consists of three core business being Franchise, Range & Supply and Industry (Inter.ikea.com, 2020).
All across the world IKEA has large number of companies under its trademark. All the franchises of IKEA are independent of IKEA Group. With this comes into play the need for quality control in IKEA business. With widespread ownership and management bodies, the Quality management principles in IKEA has to very clear, specific and strong to maintain the brand value of the company.
Why TQM is important in IKEA?
IKEA is known for providing household products in reasonable price and is the most preferred store all across the world. However in recent times there has been lots of complaints against its products and services. In 2012 the company has to recall a large variety of its products due to quality complaints. It recalled 97000 lighting units because of the electric shock hazard (People’s Daily online, 2012). There were lots of complaints against the furniture of the company like the deformed wood clapboards, collapsed sofa cushions, etc.
The customer reviews of the furniture of the company were not good with complaints regarding the design, material and quality (Quora.com, 2017). The company saw nearly the drop of 40% in the profits from its furniture retail business in 2017-2018. Online retail business with competing prices and better quality resulted in crisis at IKEA (Kwun, A., 2018). One of the biggest reason for the failure was the “Quality”. Quality is the factor which keeps the customers coming back to the same brand.
Thus it can be understood from above review of IKEA that lack of quality products is one of the biggest reason for the fall and crisis at the blue box giant. In the organization, the concerns are productivity, quality, and issues for the employees to deliver and having key learning (Aquilani, 2017). The basic problems which employees have to face are to understand, what would be the consequences if they go off-limits in deliverables and compromising the qualities. It is also how there can be a consequent concern, for the employees to improve, deliver at par and also provide quality results.
IKEA needs TQM because as defined by W. Edwards Deming, Joseph M. Juran, and Armand V. Feigenbaum jointly, TQM is the process when implemented in the organization ensures that every employee in working in the same direction which is improving the work culture, manufacturing processes, service systems so as to ensure long term success (Juneja, P., 2020).
IKEA needs TQM approach to resolve the following identified problem of the employees at the company:
For the IKEA employees, it is important to understand the challenges, which would be questioned through the surveys and though the face to face interview questions.
- How often do you create an alternative plan, when facing challenges?
- Process technicalities and finding a solution?
- How do you understand the upper limit and lower limit, when delivering?
- How much quality is important for you?
- How do you find a solution, related to the problems and the process technicalities?
The challenges identified in iKEA are as follows:
|Managerial Reasons||Employee Reasons|
a) For the manager, it is important to find reasons in between the different sections of the firm or company.
b) To understand how much gaps are there in productivity and quality, lags and defining a plan?
c) To improve and finding an alternative solution.
a) To provide adequate support to teamwork and have better coordination.
b) Concerns related to productivity and finding an appropriate way to improve the skills, knowledge and having an improvement plan (Al-Dhaafri, 2017).
c) To constantly focus on innovation and finding a solution to solve problems by reducing the failures.
What is TQM?
TQM ensures that the products and services provided by the company are of superior quality. The quality of the product is measured in terms of :
Total Quality management and other tools like the six sigma works towards removal of the excess time and efforts which do not contribute to the productivity of the organization. Thus the waste in terms of idle time and non value added activities is removed resulting in better time management and maintaining the quality of the products. Thus TQM helps in reducing waste and inventory stocks. Thus it enables fast adaptation and coordination in between the demand and products offered to the customers. Thus TQM involves that the employees, suppliers are working close to the customers and incorporate” just in time” philosophy (Juneja, P., 2020, a).
Implementation of TQM involves the eight elements divided into four groups which can be defined as under (Juneja, P., 2020 b.):
- Foundation: Foundation implies to the basic guiding principles of the company for its employees. It includes the Ethics, Integrity and Trust. The whole process of TQM is based upon the strong business ethics. Every employee at the workplace irrespective of the designation and position needs to work in good ethics. Ethics helps in identifying what is good or bad the workplace with respect to all the stakeholders of the company. Thus the organization must have strong code of conduct and everyone must adhere to these rules. Integrity refers to honesty and values that should be imbedded in every individual at workplace. The policies and vision of the organization must be respected by all. There should be respect and trust for each other.
- Building Bricks: the building bricks are referred to training and knowledge of the employees. In order to build a strong building the strong bricks are placed over strong foundation. The employees should be trained and made aware of the benefits of TQM to the organization and how it can be beneficial to the company. The employees should be trained to perform their tasks and should be skilled in their job. This can be ensured by regular training and enhancement of the knowledge. The employees should be imparted technical knowledge as well as problem solving and decision making skills. This will make the employees at every level to be capable of solving day to say problems efficiently.
The employees should also be good at teamwork. Since the business activity involves various skills, employees need to work in teams. Thus the employees should be ready to listen to others ideas and appreciate them.
Leadership is another important factor in TQM. The leader/supervisors should be people who can inspire the employees and make the people believe in themselves. Authority and responsibility should be given to the employee is right manner so that they are able to take better decisions and own their work.
- Binding Mortar: Building motor is the communication in the organization. The right method of communication at right time and of the right information is very important for all the department and people in the organization to work towards the same goal. Hence termed as the building mortar. Communication should be both upwards and downwards. The employees should be communicated the strategies and vision of the top management while the top management should be communicated the floor problems and capabilities of the organization.
- Roof: Roof is referred to recognition. There should be due recognition for the work performed by the employees to keep them motivated. Recognition works as a catalyst and drives the employees to work hard. The hard work should be rewarded appropriately.
Thus the various components of TQM can be defined as follows:
Various models that can be used to implement TQM are establishing and adhering to various quality standards. ISO quality management standards are the which are set at international level that ensures quality management and quality assurance and helps the companies in implementing the efficient quality system.
ISO 9000 is such set of quality management that can be implemented by IKEA. These standards are not industry specific and can be applied to any organization irrespective of the type of product, service and size. The standards helps in enhancing the customer satisfaction by meeting the regulatory requirements and resulting continuous improvement. The governing principles of ISO 9000 are:
- Customer Focus
- Engagement of people
- Process approach
- Evidence based decision making
- Relationship management
The above principles if ISO are overlapping and work in coordination with each other as can be depicted in the following diagram:
How TQM will Help IKEA?
The application of ISO:9000 set of standard’s will help IKEA rebuilt the trust of its customers and improve the overall process in following way:
- The management will adhere to the needs of the customers by taking their reviews and making market research of the current market trends
- The problems and concerns of the customers will be forwarded to the relevant department through right mode of communication
- The relevant department will study the complaints and research on these to find out the lacking areas
- The employees working in the production department will be trained to overcome the problems faced by the customers and resolve their concerns
- The suppliers and partners of the organization will be informed about the material problems and hence the procurement of the right material will take place.
TQM is a process which will not only lead to customer satisfaction but will also enhance the productivity of the organization by improving the coordination between the employees, the partners of the organization and setting the culture.
TQM will help the organizational departments to work in coordination with each such that there is no gap and right communication is at the right time. This ensures that the problems are taken care off at the earliest and there is least adverse effect on the business.
For example in the case of complaints by the customer against the furniture, TQM will work in the following manner:
- The latest design and customer needs in terms of durability and sustainability will be studied and the right type of material will be used.
- The suppliers will be bound by code and standards to provide the right type and quality of material
- The employees will be skilled and trained to make good quality product and identify any defects with the material supplied if that be the case
- The problems if identified ta every level will be communicated to the relevant department to addressed immediately.
- The quality checks and inspections will be performed to ensure the good quality product reaches the customer
- If still there is any complaint by the customer it will taken care off immediately and the supply and production of the product will be stalled immediately.
Thus TQM will ensure that there is always quality product provided to the customer at least cost and there is continuous improvement in the process.