Essay: TQM And Six Sigma Benchmarking - A Case Study On Harvey Norman.

Completing this assignment will help you achieve the following learning outcomes:

• Analyse project quality issues in various project settings (e.g. geographically distributed project team members, cultural issues).
• Design outputs that would contribute to the successful management of quality in a project.
• Identify and be able to use the appropriate tools and techniques for managing quality in these processes.
• Identify and describe (and where applicable, design) inputs into the various project quality processes.
• Identify where this unit (project management knowledge area) integrates into the project management process.

Importance of Quality Management in the Changing Global Business Environment

The business environment around the globe has gone under tremendous changes in the last few decades. This change in the global market for business has made it essential for organizations to improve their product or service quality. In this changing environment enhancement of product quality and continuous improvement have become the essential tools to take a competitive advantage in the market (Bhukya, & Singh, 2015). To manage quality, organizations use total quality management strategy, which consists of several tools and techniques of quality management. It can be stated that total quality management is a strategy aiming at the generating and transferring more superior and efficient services every time also achieving a better cooperation between organization members (Bou-Llusar, et al., 2009).

In addition to maintaining this quality management organization also uses continuous improvement strategy too. This technique is used to continue the trend of enhancing the service quality for long time to support the sustainability of business in future. Harvey Norman also uses the same strategies to sustain as well as expand its business overseas. It is an Australian-based multi-national retailer company. In this report, both the total quality management and six sigma & benchmarking strategies are discussed to understand the importance as well as their practice in real-world business operations.

Harvey Norman is an Australian-based multinational online retailing company dealing with top brands across the globe. This mainly operates as a franchise of these brands. The very first store of Harvey Norman was opened in 1961 which was specialized in electrical goods and appliances. After a long journey, in 2011, the company had decided to join the online retailing industry. Since then, company is doing a great job and have shown that its promise of “Shop with confidence” can be delivered to the customers through all digital channels.

(Livewire, 2017)

This promise of the company to its customers requires an effective strategic quality management so that a better quality service can be provide to its customer to make them feel satisfied. To improve the quality management of services that the company is providing some other strategies like six-sigma and benchmarking are also used by the organization (Harvey Norman, 2018b). All the success that the company has got till now is only the result of its strategic quality management and benchmarking strategies. Success of the company since 2011 can be seen through all the awards and appreciation that the company earned in all these year. This list of awards and appreciation that the company has earned is as following which shows that the organization has maintained its quality and created new benchmarks for the industry.

• Winner - Best Multi-channel retailer 2016
• Gold Medal - Innovation in e-Commerce 2016
• Gold Medal – Best e-Commerce Site 2015, and many more.

Their awards reflect the quality management and strategic implementation of such other strategies to improve the company service better each time.

Total quality management and six sigma & benchmarking have been identifying as the best two strategies for any industry including manufacturing, SMEs and Services (Cassia, et al., 2018). This also has become a prerequisite to achieving success in the competitive global market. TQM upheld the concept and practices of an organization and evolves it into specific sectors by keeping the attraction of customers (Bou-Llusar et. al., 2009). TQM is also defined as an integrated approach comprising of practices and principles aiming to improve the overall quality and service organization providing. To take a competitive advantage for the organization both the strategies act as a strengthening tool for the management. Mainly TQM focuses on the improving the customer satisfaction. On the other hand six-sigma and benchmarking defined as an approach to achieve, this objective set by the organization. Such strategies lead to some periodic changes for the pre-existing management strategies and operations that the organization is following.

Total Quality Management and Continuous Improvement Strategy

In addition, the strategy of Total Quality Management is also defined as an approach of the total system which works in both the horizontal as well as vertical direction across all the functions as well as departments. This approach involves employees from very top to bottom and extends the organizational capabilities to make its customers feel like satisfied. TQM helps the organization to reduce the process variance so that the previous service can be improved to a significant level.

On the other hand six-sigma and benchmarking are the approaches to make an effective TQM strategy for the organization operations. All important issues which should be improved for quality management related to product, service, staff management, teams, institutions, and other competitive organization can be identified using six-sigma approach. Along with this, the benchmarking approach secured its position as a tool that is used to improve an overall performance and competitiveness of the organization. In recent time this approach has extended its applicability from large organizations to SMEs and public and/or semi-public sectors.  

A wide literature work has been done on TQM that states that different tools like six-sigma technique and benchmarking are being used by the organization since 1920. At this time the very first hypothesis for services and nature of the product. Later in the 1940s, Americans made some changes that can be seen in the literature work of Japanese management. That time this strategy was called total quality control (Mateos-Ronco, & Hernández Mezquida, 2018). To describe the history of total quality control several primary segments were introduced such as inspection, control, and management hypothesis, products quality, add up to quality and quality administration and many more (Carmona-Márquez, et al., 2016). After this, several other organizations in different sectors were focused on this strategy of improving their quality by using several tools like six-sigma and benchmarking (Nasim, Iqbal, & Khan, 2014). In the last two decades, total quality management had increased its interest among many scholars and considered as an important and essential tool for organizations to manage their quality or products and services (Chen, Choi, & Xia, 2017). Contributing to the literary of TQM, in 2010, Talib and Rahman proposed a model for the same which was recognized as “Components of TQM” model. In this model, they clarified the main practices that can enhance the performance of the organization.  A wide literature on Total Quality Management provided several concepts, however, all of these share basic elements which are similar in all concepts (Talib et al., 2012). 

Today integration of total quality management is growing increasingly in e-commerce businesses. Total quality management has its own limitations in every industry varying from industry to industry. It has been found that several companies have implemented the concept of total quality management, but did not achieve their desired outcomes from the strategic implementation of TQM (Billewar, & Babu, 2012). Harvey Norman operates in E-Commerce retailing industry which also has its limitation for TQM implementation and effectiveness. In E-Commerce industry, when it comes to the quality standards of the business in one of the business field, information technology, there are different issues or limitations for TQM such as: website design and content, technology infrastructure of the organization, environment, security, and supplemental services (Dubey, et al., 2016).

Introduction to Harvey Norman

In e-commerce businesses, there is a possibility that a huge number of web visitors are withdrawing from the particular business website. This may be possible because of the visiting complexity or rapid change in the technology. To measure the quality of business service customers’ feedback is a must. Additionally, businesses can improve their strategies to attract more customers. On the other hand, there are challenges for organizations to measure their business environment, privacy, security, and service quality from the customer end. These challenges have to be overcome with the highest priority (Molina-Azorín, et al., 2015). In e-commerce market security has been the most critical challenge for e-commerce companies as cyber attackers are becoming more sophisticated by exploring the weakness of the company to prepare more attacks. These attacks must be avoided effectively by increasing more technical awareness. In this order e-commerce companies have to follow the security norms and privacy policies to be aware of such threats.

Harvey Norman being an e-commerce business has similar challenges. Although e-commerce models differ from each other, such challenges of TQM are quite common up to some extent as they have certain characteristics in terms of competition, service quality, and customer’s need.

Apart from these challenges, there are also some logistic challenges that have been faced by the e-commerce market while implementing the total quality management mechanism into their business strategy. Providing best services in e-commerce market are more challenging to achieve. In e-commerce business of retail, in terms of business-to-customer applications, application developers have to face various challenges. Along with these in the process of continuous improvement strategy companies have to manage their business strategies on a periodic basis to implement adaption of recent strategies and technologies in any means to improve their quality of business.

From the above discussion, it is very clear that there are several limitations or shortcomings in the TQM implementation in an e-commerce business. Along with these limitations, there are several risks and issues that an e-commerce business like Harvey Norman faces in its strategic business plan designed to implement the TQM (Ghazzawi, Alharbi, & Aziz, 2016). Some of the key quality risks and issues of e-commerce market while implementing total quality management mechanism are given below:

Information Asymmetry: This risks id about making frauds like taking money without delivering any goods, or providing the goods quality less than that of the promised quality at the time of order placement. TQM sub-characteristics the accuracy and any issue in software may cause a risk to the whole system implementation of the mechanism (Mani, Gunasekaran, & Delgado, 2018).

Payment issue: Many times retailer demand for payment before delivery as cash on delivery is not possible always. In such situations TQM sub Characteristics the delivery flexibility proposed as Atkinson’s “Flexibility firm” model. This model helps in solving such issues related to the payment option for the customer (Govindan, et al., 2015).

Security issues: While making online payment customers share their personal account credentials this might be a risk to customers as cyber attackers can access their personal bank details at the time of cyber-attacks.

Harvey Norman's Promise to Customers

Privacy: E-commerce businesses collect customers’ personal information that is unnecessary for the transaction. Collection and safe storage of such information is a big risk for the company.

Time of delivery: Customers would appreciate if their products are delivered as per their plan instead of retailer’s plan of delivery. Sometimes, customers don’t even get their product on time. This may be the failure of TQM’s time behavior characteristic.

Strategic change: Any change in the business can be of any type like a strategic of an operational process.

Taxation: Tax authorities around the world are monitoring the transactions of e-commerce business for tax collection. In this order to create a simple mechanism for tax collection there are several risks related to the standardized norms and policies of different governments. Such risks are more with e-commerce businesses operating internationally. Harvey Norman is operating in different nations therefore, such risks are common in the organization.

Harvey Norman has implemented the mechanism of total quality management to enhance its quality in terms of its services as well as its products around the nations. Harvey Norman has its stores fully owned and operated by independent franchisees. Still, customers cannot make buy offers at the independent websites of its franchisees. To make a buy offer customers have to visit the official website of Harvey Norman. This ensures the monitoring of quality product demands and their delivery. Also, the company takes its responsibility to protect the personal information of its customers seriously that has attracted more customers. As of 2012, more than 200 franchised stores exist only in Australia. With the successful delivery of quality services company has experienced a rapid expansion in the last few years. In this expansion, company has 70 company-owned stores in different locations of New Zealand, S.E. Asia, and Europe. Successful implementation of total quality management tools is the only reason that the company has become a household name in terms of both the office and house products. This strategy of total quality management has made for the company to take a competitive advantage, pricing of retail outlets, and the quality of its services.

In the process of implementation of total quality management, Harvey Norman has independently owned and operated stores to ensure and monitor the better quality of services. To maintain the quality business Harvey Norman doesn’t offer buying a product by any franchise. Customers availed to make a buy offer only on official website of Harvey Norman itself. This ensures that the company is doing business at its own. That is important to measure the quality faults if there is any. This implementation of TQM in the management of Harvey Norman helped the company to build a brand value in the competitive market of retailing in the e-commerce market. This strategic implantation has made the company achieve so many awards in the field of quality management. The company has claimed quality awards like Best Multi Chain Retailer 2016, Gold Medal for Innovation in E-commerce 2016, Best E-commerce Site 2015 and many more (Harvey Norman, 2018a).

Awards and Appreciations earned by Harvey Norman

Apart from these achievements, there is so much that has not been achieved yet. Like company has made a significant growth in terms of its production due to its expansion in other countries along with establishing its own stores at a different location. With the strategic implementation of TQM in the marketing strategy of Harvey, Norman employees are not adopting the change that has been required by the implementation. Also, the company is facing some technical changes in its existing information changes that have to be resolved as first priority to make the successful business more sustainable.

Conclusion

The above report on the implementation of total quality management and an analysis on retail marketing in e-commerce market concludes that it is one of the most suitable and relevant strategies to make a business successful and adaptive in nature to adopt new strategy and technology for the business. Total quality management has a long literature work that concludes that the strategy is very effective and can enhance the business significantly with an efficient implementation. For retail businesses in e-commerce market implementation of total quality management has some limitations and risks associated with it. These risks are to be managed in order to make the implementation more efficient. For this companies can modify their strategies and plans to resolve these issues. A successful and efficient implementation of total quality management can make a business more sustainable with significant success as well.

References

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Chen, J., Choi, T. M., & Xia, Y. (2017). Editorial to the Special Issue on Optimization of Industrial Systems with Market Disruptions. International Transactions in Operational Research, 24(4), pp. 687-696.

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Govindan, K., Rajendran, S., Sarkis, J., & Murugesan, P. (2015). Multi criteria decision making approaches for green supplier evaluation and selection: a literature review. Journal of Cleaner Production, 98, pp. 66-83.

Harvey Norman, (2018a). Awards. Retrieved from: https://www.harveynorman.com.au/about-harvey-norman-online 

Harvey Norman, (2018b). About Harvey Norman stores. Retrieved from: https://www.harveynorman.com.au/about-harvey-norman-stores

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