Quality Management Essay: Woolworths Retail Industry Case Study

Description

This task is an opportunity to develop and demonstrate your knowledge, skills and ability to apply quality management concepts in the context of a service industry

Task

Your task is to prepare a Quality Management Report covering the following aspects:

1. Identification of current practices, issues, and future trends of quality management in a service industry of your choice using various concepts and principles of quality management covered in the course. In addressing these aspects, you need to: 
   a) discuss definitions of quality in services
   b) discuss a range of relevant approaches to quality management,
   c) identify issues in their implementation
   d) analyse the current and future trends by reviewing the relevant quality management literature.
2. Examine the influence of quality management practices in improving customer satisfaction / service performance / organisational performance. In addressing this aspect, you need to: 
   a) discuss what is meant by customer satisfaction / service or organisational performance
   b) explain which aspects of quality management practices are associated with these outcomes and why.
3. Recommend what kind of initiatives the service organisation of your choice should take to successfully implement quality management practices for improving their performance.

Quality is a significant factor for every organization and industry, as in today’s world the customers are becoming smarter, and the quality has become a major influencer for purchase decision. Quality management is the process of identifying and evaluating the tasks and activities that need to be maintained at a specific excellence level. In other words, the quality management is setting standards for quality while planning, to overview quality of a particular task, controlling the quality to a level and improving the quality in order to cross the benchmark set (Gong & Yi, 2018).

Quality management is applicable in various industries like manufacturing industry. In today’s scenario, the service industry is also indulging quality management within their process. This report will focus on the application of various quality management theories and frameworks focusing on retail industry, for which Woolworth’s organization case will be taken.  Quality is not only important while working with an organization dealing with production or manufacturing of goods, but it is also relevant to manage in case of the service industry (Kaynak, 2018). Woolworths is an Australian based supermarket founded in 1924, and working in 995 locations (woolworthsgroup, 2018).

1a. Quality in service is a tool to evaluate the extent to which the services provided to the customers are able to meet the requirement of customers or are able to reach out to the expectations of the customers. This aspect is measured or known determined through the perception of customers as the services are intangible, and just like a product, it can be checked that way. Moreover, the quality in service is something which can help an organization to gain a competitive advantage in this industry. Profitability is the major result for major companies that provide the best quality in service. Moreover, this is considered to the key for an organization to attract maximum customers and create brand loyalty, and eventually helpful in the success of a service business. In the retail business, they were with the direct reach to the customers are responsible to provide the best services to the customers in terms of quality. In this business, the major services provided to the customers include gift wrapping, delivery, healthy environment, and free parking. For example, Woolworth has competitive advantage of providing high quality service by providing convenience of location, speed of the processes, excellent shopping experience. (Seidu & Aryee, 2016).

1b. Various approaches to the quality management in the service sector include a total quality management approach, in an earlier time it was only used for the manufacturing sector but it is also developed for the service organizations.

Task

Total quality management is managing quality of the services through continuous learning and improvement, it is a passion to satisfy the customers and deliver excellent quality to the customers. This approach results focus while concerning about the employees of the company to develop and improve in order to have customer satisfaction at a high pace. The approach is created on the foundation of trust, integrity, and ethics. Moreover, a staring communication is key to total quality management. Commitment and Patience are highly required while implementing TQM in a service organization (Alegre & Marimon, 20188).

The approaches for total quality management include:

1. Quality circles – this approach is said as a quality circle because it involves a group of individuals working in the same field, in order to improve the quality tends to observe, search and analyze and among each other resolves work related issue. This not only helps in providing a better way to serve but also helpful in work-life balance(Ross, 2017)
2. Continuous improvement – as the name suggests, this includes working for improving the process and quality continuously. This is bringing innovation and continuous change to the service through learning and eventually leading to satisfying customers in long run.
3. Benchmarking – this is one of the most common ways to improve the quality in service. It includes setting standards for the quality of the service, this can be internal benchmarking, that is setting a level among the employees of the department, or competitive benchmarking which includes setting the level of standard according to that of the competitive organization. This will help the employees to reach out to the level of benchmark and eventually able to improve(Nair, 2018) 

The most relevant part of total quality management analysis in service is developed while understanding the difference in both types of organizations, which is provided by Avon training and enterprise council that is called as TEC. The differences are to be considered while developing a TQM plan for the enterprise of the service industry. Although, implementing this approach in service organization could be challenging for an organization. The major differences observed are that TEC is focused enabling an organization with appropriate training so as the level of service and concern is high among the employees of the organization, the processing time of TEC is longer than that of manufacturing. Some of the elements of total quality management in a service organization to implement and organize are strategic planning, which corporate TQM must plan with their corporate strategy, quality costing, and investment in people (Lusk, 2017).  

Garvin (1984) has given various approaches in service quality, which includes transcendent approach, value-based approach, product-based approach, user-based approach, and manufacturing – based approach. The most relevant approach for service organization is a user-based approach, which considers the service attitude to meet the user requirement, which is then said to be a quality in service.

One of the approach adopted by Woolworth for assuring the product quality is “Woolworth quality assurance”, which is a program aiming to diminish the complexity of auditing considered while supplying fresh food and own brand products to Woolworths (wowlink, 2019). 

1c. Issues while implementing quality management in service industry, for instance Woolworth

• Unable to understand the needs of the customer – since the service quality can be measured through customer satisfaction, but what exactly the customers are expecting or what will satisfy the customer is difficult to recognize
• Communication gap – since the services are intangible, the communication is the major key in order to understand the quality constraints. This largely depends on the size of the organization, in case the organization is large, it is difficult to communicate the quality measures and elements that are to be maintained
• Cost-benefit issue – it is difficult to analyze that if the cost of the quality service is able to cover up by the company or not. The company is highly concern over the cost while implementing, and unable to understand the relevance of that cost and how that cost is beneficial to the company(Kerzner, 2017) 
• Measurement issues – this is the major issue while implementing the process because the implementation is of no use if it is not measured properly, unlike manufacturing unit where the measurement can be fixed in numeric terms, the service quality can only be measured through the customer perception, and the satisfaction level of the customers
• Inseparability – the major characteristics of services are inseparability, which tends to be a problem while implementing, it has to be an offer to the customer and consumed by the customer at the same time, and they cannot be separated from each other. Therefore, the presence of eth personnel offering the service is very essential while applying, and any mistake while the production often service, the result could be very adverse and dissatisfaction among the customers (Tari, 2015)
• Heterogeneity – managing the service quality is very difficult due to its nature of being not homogeneous that is it is implemented differently in every situation by the same individual. Therefore understanding the quality issue could be difficult and implementing becomes challenging as well
• ISO9001 – these are the international standards related to the quality management, it set the criteria or standards that has to be attained or certified, which are based on various principles of quality management like customer focus, continual improvement, process approach and implication of motivation by top management. There are various issues while implementing these standards like organization context, stakeholder identification, risk based thinking, out sources approach, process approach, and leadership and commitment(dqsus, 2019)

1d. The trends of quality management have been changed a lot from the past and will change in the future. The trends that would be observed in the future include:

• Management of quality as a project – the quality relevance has been increasing a lot, and in near future, the quality management in all the sectors, especially in service organization will be considered as a separate project, and it also can be outsourced to a company for better management(Shakur & Doherty, 2015).
• Quality is considered as omnipresent – this is current to a level and would be extended in future. This means that the quality management would not be restricted to one or more industries. It will be applicable to the software industry, service industry to a larger extent, and manufacturing industry which it has already been considered. The companies are asking employees to gain quality certification and do courses to improve quality while working in an organization, this certification trend is moving very fast. For instance, various seminars, conferences, and workshops for quality are organized and a large number of individual participates from various industries(Jaca & Psomas, 2016) 
• Sustainability and quality management – in today’s trend like corporate social responsibility has become a trend to be sustained in the industry, in upcoming trend quality management would be a reason for the company to sustain in the industry (Bhat & Upadhyaya, 2016)

2b. Customer satisfaction is level at which the organization is able to reach up to the customer expectation through its product and services. This could include the customer in numbers or percentage of numbers who have a positive perception towards the brand and would repeat the purchase in future. This is very important for the customer because of every aspect of the business and working of the business is for the satisfaction of the customer.

Quality Management in Service Industry

The service or organizational performance is largely affect the customer satisfaction. This could include various key indicators for customer satisfaction, that are procedure of billing or invoicing, willingness of the service provider to listen to the customer and understand their need, friendliness of eth employees, safety of eth service, physical facilities appearance, ability of the organization’s employees and honesty with the customers in their preferred language.  Therefore, it can be said that the performance of the organization as a whole is responsible for the quality of the service provided to the customer and their satisfaction level. Moreover, after sales services are the important factor in the retail industry, are responsible for the services after sales like installation, making customers understand the use and techniques of product purchased, specifically in case of home appliances or electronic goods (Dustershoff & MacGregor, 2014). For instance, The South African Customer Satisfaction Index (SAcsi) indicates most satisfied customers were of Woolworths in supermarket industry of South Africa, through a survey conducted in 2017 (fin24, 2019). 

2b. The aspects of the quality management that are responsible for organizational performance and customer satisfaction of Woolworth are

• Customer focus/ orientation – the organization empowering customer focus while operating and developing a strategic plan, will make the customer as a priority and the products and services would be developed according to the customer need and requirement. Therefore the services provided to the customer would be according to their expectation and will eventually lead to better organizational performance and customer satisfaction(Gibson, 2016).
• Teamwork – the organization where the teamwork is promoted while doing business will focus over the applicability of process and tends to bring innovation in the team, the teamwork would be beneficial for the organizational performance as a whole because of ideas generated by the employees in the group would be better than that of an individual. Moreover, if a whole team would be working in order to improve the quality like in case of a quality circle, the total quality management would be improved and which will eventually result into higher organizational performance and customer satisfaction through better service provided.
• Continuous improvement – this is a way the company is regularly working for improving every task in the business that is the process of doing things are improved in the organization in order to enhance the quality of the product and service. This will always keep the process and service quality up to the mark and updated, therefore increasing the performance quality of eth organization, and will eventually help in high customer satisfaction
• Training – training while quality, management plays a relevant role while working in a service organization because it is the employee who is providing services to the customer and needs to enhance their skills in order to satisfy the customer to a large extent. Therefore through training, the efficiency and competencies of the employees can be improved and hence improve customer satisfaction(Jaca & Psomas, 2016)
• Programs by Woolworth – Supplier excellence program, Woolworth quality assurance, programs related to safety and health, resulted into better quality management.

• Integration – it is recommended to integrate quality control with organizational activities such as human resource management, financial activities, supply chain. This would be done in order to make the process to reach out to the customer more effective and effective, and quality constraint would be indulged in the organizational culture as a whole in order to keep the customer satisfaction on the priority
• Forward-thinking – it is important to think forward, and for being a competitive advantage it is highly recommended to think forward and be head while providing service to the customers. Moreover, in today’s world companies are changing their focus from product orientation to the service-oriented in order to attract and retain maximum customers.
• Regular evaluation – the evaluation must be done regularly to understand the deviations in the service quality at the earlier stage and the improvement can be done. This is recommended because one of the major approaches of total quality management is continuous improvement
• Customer feedbacks – the feedback from the customers can be very helpful to understand what customers are expecting and taking the feedback are part of the service provided to the customer. The employee’s feedback while providing service is very crucial in order to take decision for the management to provide them the training or helping them to improve the service quality. For instance, while delivering goods by the retailer to the customer at home and taking the delivery boy feedback from the customer through online rating can be helpful (Shakur & Doherty, 2015)
• Problem-solving teams – a team must be developed in order to solve the customer problems, many companies has outsourced or created the customer care service team in order to take care of the customer need and any issue faced by them. This is recommended for the service organization as well, and this could be part of after-sales services in case of a retail organization, like the warranty of the products or issue with maintenance (Seidu & Aryee, 2016)

Conclusion 

Through the report, it can be concluded that the quality is not only important in the manufacturing sector, but also relevant in service organizations. Through analyzing the quality management literature, it can be said that quality management is the process of identifying and evaluating the tasks and activities that need to be maintained at a specific excellence level. The report focused over the retail organization in the service industry to critically evaluate the quality management and their approaches, which include analysing the organizational case of Woolworths. Some of the approaches recognized are total quality management and user-based approach given by Garvin. Moreover, the TQM have further relevant approaches like quality circles, continuous improvement, and benchmarking. Specifically in Woolworths, “Woolworth quality assurance” approach is used. 

Customer satisfaction is the key objective of quality in services and the various aspect that effect this factor largely are customer focus/ orientation, teamwork, continuous improvement, and training. The recommendation for the company for a retail service organization in order to improve service quality is integration, forward-thinking, regular evaluation, customer feedbacks, and problem-solving teams.

References

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Bhat, K. & Upadhyaya, G., 2016. The mutual influence among quality awards and quality initiatives: preliminary investigation among Indian quality award winners. International Journal of Business Excellence, 9(1), pp. 1-17.

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Available at: https://www.wowlink.com.au/wps/portal/topic_centre?WCM_GLOBAL_CONTEXT=/cmgt/wcm/connect/Content%20Library%20-%20WOWLink/WOWLink/Topic%20Centre/StandardsCompliance/WQA/WQA