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Issues Faced by IKEA Business and Total Quality Management Assessment 3 Answer

    QUALITY MANAGEMENT

    Assesment-3 

    Task Description 

    You are required to write a 2500 word short report to the owner and the board of the business that describes 'why', 'what' and 'how' the business will implement Total Quality Management (TQM). 

    1. Describe 'why' TQM or parts of it should be implemented in the business. The owner will want to know what the business rationale is and what business benefits the initiative is targeting. In other words: Why should they pay attention to your TQM proposal? What are the visible changes in the business once TQM is implemented? 
    2. Describe 'what' you want to implement within the business as part of the TQM initiative. In other words: What quality management concepts, principles and tools do you want to implement within the business to achieve the business benefits? This must be supported by appropriate references. 
    3. Describe 'how' you intend to implement the TQM initiative within the business. Outline a short plan that lists the steps in implementing TQM within the business. This is a simple list of sequential steps written in plain Australian English describing what will be done, why it will be done, and who will do it. It should be clear to the reader what is involved in each of the steps. This must be supported by appropriate references.

    Your report must demonstrate: 

    • Thorough understanding of relevant quality management concepts, principles, theories, tools and models in regards to the assessment tasks. 60% 
    • Appropriate, well structured, concise and clear expression of quality management arguments. 10% 
    • Clear flow of thought throughout the paper with a clear and succinct purpose described in the introduction, and a clear and succinct conclusion. 10% 
    • Critical review of skills and integration of relevant academic literature. A minimum of eight (8) academic journals must be used. 10% 
    • Appropriate use of within text referencing and a reference list at the end of the report. Adherence to APA Reference Style. 5% 
    • Clarity of expression, grammar and spelling. Appropriate presentation format within (±10%) of the word limit of 2500 words. 5% 

    How to structure the report

    • TQM Rationale

    This ‘why’ section describes the rationale you suggest for implementing TQM.

    • TQM Outcomes

    The ‘what’ section is about what you want to achieve with the TQM effort. What are the goals, targets or visible changes you want to achieve. Improvements in service, active use of particular tools,….etc?

    • TQM Implementation plan

    The ‘how’ section is about planning execution to make sure the goals and targets are achieved. How are you going to achieve the suggested goals. In many cases this is a simple list of sequential steps. So what activates do you suggest within the organisation as part of your execution plan? 

    For example, you can use Demmings, Jurans, Crosbys, ISO9000, etc. as what the steps are in order to achieve your goals and targets in section 2. The suggestions are just guides, you don’t have to follow each step in Jurans, Crosbys, etc. You can even mix and match approaches, but whatever you do, please argue why you selected your approach. Be succinct through.

    Describe 'what' you want to implement within the business as part of the TQM initiative.

    But in assessments 3, the owner/top management gives you the task to implement a Total Quality Management (TQM) System and its Principles within the organisation to influence the behaviour and culture of employees. TQM is the topic of part 3 of MGMT19105 and are addressed in weeks 9 to 12. Typically, implementation of TQM does however also to some extent relate to the parts 1 and 2 of the course and thus tools and techniques. Knowing ‘what’ changes you want to observe in peoples culture, mindsets, behaviour, and the results is important. That leads you to understand ‘what’ TQM concepts, principles, and tools you want to achieve that with.

    The answer also needs to be written in a concise manner because you only have 2500 words and need to be practical. Keep majority of your discussion in the report on Quality Management, which is the content of this unit. It is about Quality and not Human Resources, Leadership or….. these topics are addressed in other units.

    Describe 'how' you intend to implement the TQM initiative within the business.

    There is no fixed recipe for 'how' to implement TQM. It is your task to display critical thinking to select or design the approach that best suits the business or organisation you have selected. Options include but are not limited to (all are included in the textbook):

    • Deming’s fourteen points to quality.
    • Juran’s ten steps to quality improvement.
    • Crosby’s fourteen steps to quality improvement.
    • ISO 9000 certification.
    • Prepare the organisation for a quality award.
    • Benchmarking.
    • Goetch-Davis 20 step total quality implementation process.

    A complete quality management system can be very simple or very comprehensive or anywhere in between. I do not expect you to address all principles the standard mentions. You will need many more words than the assessment allows to do that in detail.

    Note that while focusing on ISO 9000 is fine, there are many other ways to implement TQM too. You are to select the approach most appropriate for your selected organisation. In other words using ISO 9000 as a vehicle to implement TQM is just one option out of a range of approaches.

    It is important  to understand the following about ISO 9000.

    The newer versions of the ISO 9000 standard are less prescriptive than previous versions.  The current version is ISO9000:2015. The standard lists a clear set of principles an accredited quality management system must adhere to - and how to get accredited. ISO 9000 does not prescribe a set way to construct a quality management system beyond the very rough outline listed in the standard. That would also be an almost impossible task due to the range of organisations procuring products and services that can be accredited. Nokia's mobile product development division was ISO 9000 accredited, as were the product development programs I was responsible for. CQUniversity IT services are also ISO 9000 accredited. At Cochlear, hearing implants have to adhere to additional quality systems mandated by the United States, Food and Drug Administration (FDA) and the standards they require companies to adhere to. These quality standards are far more prescriptive in order to ensure the safety and well-being of recipients of such implants. Thus, Cochlear has decided to focus on accreditation following a different sets of standards.

    The very short version of ISO 9000 accreditation is that you will have to describe the i) scope of the ISO 9000 certification ii) describe 'what' your quality management system is set to achieve and iii) 'how' the quality management system goes about achieving it. This system can then be more or less comprehensive. It is up to the company to decide the scope and ambition level. Thus an ISO 9000 certification does not by itself guarantee that a company has implemented TQM. ISO 9000 certification means that the company has a quality management system that is accredited and audited according to its purpose.

    Here is a short example to explain how this might work out for Domino's. In the case of Domino's you will have to define the scope for its ISO 9000 certification. This could for example focus on its production of Pizzas. The company could then i) set targets for the quality of the Pizzas, ii) set targets for how team works to solve challenges and iii) the use of tools and techniques they expect to see in use. Then it can seek accreditation, meaning the quality management system sensible and the company adheres to it in its everyday operations.

    Now this is just an example and you can specify it may other ways. Hopefully it illustrates how a quality management system works. To be ISO 9000 accredited a company must demonstrate that it actually adheres to and executes what it has stated that its quality system is supposed to do to meet set targets. If it does not meet the set targets then the system will also explain what a company should do to address that.

    Short report requirements:

    Short Report Requirements

    Your report should be presented in short report format, and incorporate the structure outlined below. Use headings and sub-headings as appropriate.  Also, please consult the supplementary text Your  Business Degree (McCulloch & Reid 2012) regarding report writing.

    Your short report must contain the following:

    • Title Page
    • Executive Summary
    • Table of Contents
    • Introduction
    • Body/ Discussion
    • Conclusion/Recommendations
    • References
    • Appendices

    Title Page

    The title page / cover sheet must contain the following information:

    • Report title
    • Unit number and name: MGMT19105 Quality Management
    • Assessment number 
    • Business name.
    • Your name and student number
    • Your campus
    • Word Count (mandatory to include this information). The word count includes the body of the report, from introduction to the conclusion. Exclude the executive summary, table of contents, references and appendices from the word count. 

    Executive Summary

    The executive summary is intended for the busy executive needing an overview of the short report. The executive summary is expected to contain summary statements key/important elements of the report such as of the purpose and scope of the report, findings, discussion, conclusion and in some cases recommendations.

    Table of contents

    The table of contents is used to show the reader where parts of the report can be found. It is up to you to decide on the level of detail in the table of contents.

    Introduction

    The introduction provides the purpose and scope of the report. In this case the subheadings of Background, Aim and Scope may be used.

    Discussion

    The body/discussion includes the findings, analysis, discussion in which the material is analysed and interpreted. This is the core of the report. Use appropriate headings.

    Conclusion

    The important conclusions justifiable reached as a result of the work should be stated in this section.

    Key recommendations should be included in the conclusion.

    References

    Your report must include in-text referencing and a correctly cited list of references ordered alphabetically by surname of first author, in accordance with the APA style of referencing. See the link under Assessment Guidance.

    Note that references are usually not cited in the executive summary, introduction and conclusion. These are used in the main body of the text.

    Note: You can assume some information about the business/organization. Do not use up a lot of words doing this, and try to keep it realistic. Always remember that the purpose of the report is to demonstrate what you know about quality management and its practical application. It is about demonstrating your knowledge and understanding of what TQM can do for a business/organization and its limitations.

    • You should conduct research to identify a suitable implementation process. Inspiration and further advice to guide your research and application will be provided on the unit website.
    • Use the business as a way to demonstrate your knowledge of the unit content, including the textbook and additional reading you have done. This involves extensive referencing of theory available from these sources.
    • Provide an executive summary, introduction, a body of the the report addressing 'why, 'what' and 'how' of the initiative and a conclusion. See the recommended short report format.
    • Use at least eight (8) references from the unit materials and your own reading that are specifically 'quality management' references. These should be from peer reviewed journal articles and quality management textbooks. The eight (8) references described above are in addition to any references you provide that give information about the selected business.
    • Use in-text referencing and a reference list, following the CQUniversity Harvard Referencing or APA Style Guide provided on the unit website.
    • You are encouraged to use bullet points, illustrations and diagrams to reinforce your argumentation where appropriate.

    Answer

    QUALITY MANAGEMENT

    Assessment-3

    Executive Summary

    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). 

    About IKEA

    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 :

    • Performance
    • Reliability 
    • Durability

    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.):

    1. 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. 
    2. 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. 

    1. 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. 
    2. 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:

    TQM Strategy

    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:

    1. Customer Focus
    2. Leadership
    3. Engagement of people
    4. Process approach
    5. Improvement
    6. Evidence based decision making
    7. Relationship management 

    The above principles if ISO are overlapping and work in coordination with each other as can be depicted in the following diagram:

    quality management principlesHow 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:

    1. The management will adhere to the needs of the customers by taking their reviews and making market research of the current market trends
    2. The problems and concerns of the customers will be forwarded to the relevant department through right mode of communication
    3. The relevant department will study the complaints and research on these to find out the lacking areas
    4. The employees working in the production department will be trained  to overcome the problems faced by the customers and resolve their concerns
    5. 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.

    Conclusion/Recommendations

    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:

    1. The latest design and customer needs in terms of durability and sustainability will be studied and the right type of material will be used.
    2. The suppliers will be bound by code and standards to provide the right type and quality  of material
    3. 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
    4. The problems if identified ta every level will be communicated to the relevant department to addressed immediately.
    5. The quality checks and inspections will be performed to ensure the good quality product reaches the customer
    6. 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.

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