Operations Management, Total Quality Management. Royal Mail Company.

1.0         Introduction

The purpose of this report is to demonstrate and analyse an understanding of Total Quality Management (TQM) and the concepts within it. The report also describes the Royal Mail public limited company and explains the main operational processes that are needed to deliver the company’s products or services. Different authors’ viewpoints cover a brief review of Total Quality Management and a theory of the three concepts such as customer focus, employee empowerment and six sigma approach, which give benefits to a user. To support all these theoretical arguments and statements, a number well-known industry examples are shown and discussed in this report.

2.0         Description of organisation

Royal Mail Plc. is a well-known mail service company in the UK and Northern Ireland which was initially established in 1516. Royal Mail Group delivers a six-days-a-week, one-price-goes-anywhere postal service to more than 29 million addresses across the United Kingdom. They provide a wide range of services and products for customers in the United Kingdom or overseas. For instance, Royal Mail offers “1st and 2nd Class mail” delivering letters and parcels all across the UK with the “Sign-For” proof of delivery opportunity in order to avoid deception or theft. There also are two guaranteed services such as “Sameday” or “Special Delivery” which warranty the delivery within an hour and provide a compensation up to £20,000. It is also interesting to note that there is a special postal service called “Articles for the Blind” and designed for blind or visually impaired people as well as the charities that work hard to improve their lives. Another attention-grabbing service is “HM Force Mail” which offers discounted mail delivery to a friend or loved-one in the armed force overseas. International delivery services are quite similar to the UK mail system. Airmail service delivers the parcels and letters to Western and Eastern Europe within a couple of working days, while it may take a whole working week to deliver to any other country like Turkey, China or Taiwan. Royal Mail also worries and respects those customers who receive mail. For example, “Keepsafe” service protects the letters and parcels for up to 66 days while person is away from home for a long period of time. There is an opportunity for customers to choose the needed length of this service, i.e. 17 days absence costs £12.40 and 66 days costs £41. “Po Box” particularly designed for people who live in shared accommodation or want to receive confidential or private mail. Also, this service gives an opportunity for receiver to collect the parcel from another convenient place in town. Royal Mail Shop has a range of products such as stamps, pre-paid envelopes, frames and albums, games for kids, toys and pins, personalised and dinosaurs stamps, Doctor Who movie products, famous football players stamps and six decades of Royal Portraits pack as well as books and DVDs. Official web-site has a useful media tool known as “Track your item”. By entering a 13 characters number, customer becomes aware on what stage of delivery process the parcels or letters are. As it is known, Royal Mail is a large-scale business which serves each family member at any age, gender and occupation every day operating across 42 countries and delivering 360 million parcels every year. They collect from more than 79,000 large and small businesses in the United Kingdom. Many customers come from eBay (multinational internet corporation), Amazon and other online marketplaces as well. All operations processes have one common thing, they all take their ‘inputs’. They do this in different ways and the main four are known as the Four V’s profile, Volume, Variety, Variation in demand and Visibility.  The graph (1.0) shows that Royal Mail Plc. has a high Volume. That means high repeatability in the everyday processes due to familiarity of the process, also, there is specialisation, systemisation, more capital intensive and low unit costs. Variety dimension relates to the different types of actions that are being performed. The Royal Mail is in the low side of the scale which means that procedures are well defined, routinised and, of course, a low unit cost. Low variation in demand scale shows that the company has a stable and predictable demand, routine and low unit costs. The visibility dimension refers to a customer’s ability to see and track the order online. The Royal Mail has a high visibility which involves short waiting tolerance, satisfaction governed by customer perception, besides, customer skills are very important and the received variety is obviously high.

3.0         Description of main operational processes

The tables (2.0 and 3.0) describe two operational process in Royal Mail in a sense of Inputs, Transformational Process Activities and Outputs.

Inputs

Transformation Process Activities

Outputs

Resources

Store/shop

Shop products (envelopes, stamps, etc.)

Staff members

Counter

Scales

Till

Bags

Royal Mail van

Technical equipment

Transforming resources

Petrol/diesel/gas

Electricity

Online payment system

Delivery options choices

Postman

Drivers

Customer

-Customer selects delivery method

-Customer prints the label and sticks to parcel or signs up an envelope and sticks some stamps

-Customer goes to post office (or wait till collection)

-Checking weight, putting items in a bags or mailbox by post office staff

-Payment from customer if needed (for extra service or items)

-Royal Mail Plc. receives a request to collect items from post offices

-Delivering items to the main RM office

– Sortation by area, postcode and service options, weight, size, etc.

-Dividing items between postmen and van driver postmen

-Delivering to addresses

-Knocking on the door to give a parcel/letter to customer

-Customer signature if needed

-Thank customer

Satisfied customers receive their parcels and letters

Wastes

Gas/Petrol/Diesel

Electricity

Time

Torn postmen bags

Table 2.0 Overall process

Inputs

Transformation Process Activities

Outputs

Resources

Computer

Cheque with 13 numbers

Transforming resources

Electricity

Time

-Customer receives a cheque from post office (if the item has a tracking system option)

– Customer goes online on http://www.royalmail.com

-Entering 13 characters tracking number in a special box area

-Pressing the button ‘Track’

-Customer sees if the item was delivered, signed or not yet.

Customer becomes aware and satisfied about the delivery process and can provide this number to a receiver to track.

Wastes

Electricity

Time

Table 3.0 Tracking system process

4.0         Literature review on TQM

Total Quality Management covers both the techniques of quality assurance and the approach of total quality control. A number of implementation models have been put forward by the quality gurus, who include Feigenbaum (1991), Juran (1993) and Slack (2010).

Feigenbaum (1991) states that TQM is an effective system for integrating the quality development, quality maintenance and quality improvement efforts of the various groups in an organisation so as to enable production and service at the most economical levels which allow for full customer satisfaction. In 2010, Slack, Chambers and Johnston claimed that TQM means covering all the parts of the organisation. For an organisation to be truly effective , every single part of it, each department and each activity along with every person on each level must work properly together, because every person and activity affects and in turn is affected by others. In other words, TQM is a system of activities directed at achieving delighted customers, empowered employees, higher revenues and lower costs. (Juran, 1993)

One of the most significant aspects for the success of any business is its customers. Customer focus means seeing a product or service from the perspective of value to the customer. It is essential to satisfy all the needs of internal and external customers and keep them satisfied. Juran (1993) points out that customer needs may be clear or they may be distinguished; they may be rational or less than rational. To create customers, those needs must be discovered and served. Business must try to find out what people want or expect to see, how much and how often they will buy and how their post-purchase satisfaction will be guaranteed. Customer satisfaction is a relative concept that varies from one customer to another. A customer might be satisfied with today’s products or services but not satisfied with them in the future. For instance, while one customer may consider a BMW vehicle perfectly satisfactory, another may not. However, if the BMW customer wins the lottery, the BMW may no longer be satisfactory; now the customer may have a preference for a Volvo or a Mazda. Each person defines quality in relation to his individual expectation at a specific time. Slack (2011) suggests that the operation’s view of quality is concerned with trying to meet customer expectation. If the service or product experience was on a highest level than expected then the customer is satisfied and quality is perceived to be excellent. If service or product was less than the customer had expected then quality is low and the customer may be dissatisfied. If the service or product matches expectations then the perceived quality of the product is seen to be acceptable. There is a small possibility for running a good business enterprise without having a clear customer focus concept. An example of the best customer satisfaction is John Lewis store operating in the United Kingdom since 1864. The “Which?” Magazine (2013) announced it as the UK’s best retailer at the Verdict Customer Satisfaction Award 2013 beating Apple, Liz Earle and others. Also, in 2010 JohnLewis.com was named “Best Online Retailer” by achieving impressive scores from a 14,000 of shoppers.

Juran (1993) states that empowerment is the process of delegating decision-making authority to lower levels within organisation. It means encouraging people to take the initiative and develop their scope and being supportive if mistakes are made. When employees became more empowered in their work, the sense of responsibility becomes more meaningful. Slack et al. (2011) suggest that staff could be asked to contribute their ideas for how the operation might be improved; or staff could be empowered to redesign their jobs. The Credit Union Times newspaper (2012) describes employee empowerment as a culmination of many of the ideas and principles of employee satisfaction that are discussed and analyzed regularly in a variety of books and journals focused on the subject. The main benefit of employee empowerment is generally seen as providing fast responses to customer needs, it enables an employee to think, behave, act, react and control the work in more autonomous, self-directed ways. When employees feel more empowered in terms of control ability, in other words, when the organisation delegates employees sufficiently or at the promised level of decision-making authority, the employees are more likely to trust the organization and to agree on the mutual influence. (Hiebert, R.2011) In 2005, McDonald’s, the quick-service restaurant, allowed family members to cover each other’s shifts without getting a manager’s permission. By doing this, the company stimulated people to become more qualified and flexible as well as cut absenteeism and improved staff retention. Another example of successful employee empowerment comes from ‘Innocent’, fruit Smoothies Company, which sells its beverages throughout the United Kingdom, Ireland and Paris. The company allows each member of staff to work in the way that suit them best. Staff are encouraged to work from home. For instance, the youngest employees work four days a week to allow them to do a college or school work or six weeks off in order to fulfill the worker’s ambition to go travelling.

Greasley (2013) describes six sigma approach as a quality improvement initiative launched by Motorola, the electronics and communications system company, in the USA in the 1980s. Six Sigma provided a common worldwide language for measuring quality and became a global standard. (Source: http://www.motorola.com) This allowed Motorola to become the first American company who won the Malcolm Baldrige Quality Award in 1988. General Electric (GE) defined Six Sigma as a disciplined methodology of defining, measuring, analyzing, improving and controlling the quality in every one of the company’s products, processes and transactions-with the ultimate goal of virtually removing all defects. The main aim of Six Sigma is to meet the needs of customers. Motorola concluded that true customer satisfaction would only be achieved when products or services were delivered on time, without defects or early-life failures and when the product did not fail in handling. To achieve this, the company focused on removing manufacturing defects but then realised that issues were caused due to the latest hidden defects within the design itself. Any Six Sigma implementation aims at improving customer satisfaction, by mean of improved processes capability. (Brun, 2011) The DMAIC approach is one aspect of a framework for implementation of the Six Sigma concept. This approach emphasizes the use of statistical tools to collect data at every of the five steps of define, measure, analyze, improve and control. It also requires the involvement of stakeholders such as well-qualified employees, suppliers who deliver high-grade inputs to organization and customers. Today, the Ford Motor Company is extremely successful since 1980 as they have been following the TQM at all levels of production. The DMAIC process helped the company to build an overall business strategy and focus on immediate customer satisfaction issues. (Sheid, 2011)

5.0         How concepts could help Royal Mail Plc.

Every organisation or business company face a number of omissions which could be improved and Royal Mail is not an exception. Firstly, Royal Mail’s online tracking system is not working properly and must be improved in order to achieve an excellent customer satisfaction. There are some complaints from customers who state that the system does not provide enough information about the exact time, place and name of the receiver. Secondly, some people argue that they would prefer to pay for weight of the parcel or letter rather than size. People poorly pack the parcels in the hope to save some money and meanwhile not exceed the size. When the receiver gets the damaged parcel or letter, he becomes dissatisfied with the delivery service and writes a complaint to Royal Mail with the request for compensation. Dissatisfied customers are risky. All these disadvantages could be improved if Royal Mail paid more attention to Customer Focus concept. Further, lots of parcels and letters are sometimes damaged by inappropriate handling manner of postmen. By providing more productive and long-term training courses and practice tasks from the CEO to the lowest-level worker, the organisation could improve the employee empowerment. As it has been previously mentioned, the DMAIC methodology is a quality strategy for improving processes within organisation. Each step in cyclical DMAIC process is required to provide the best possible results which lead to successful TQM. By defining and measuring the customer issues and performances of processes, analysing them in order to identify defects for improvement, and then find out the best innovative solution to improve the process or prevent the future ones, the Royal Mail organisation can control and run its business successfully.

6.0         Conclusion

This report discussed and analysed different authors’ viewpoints and thoughts about Total Quality Management and three concepts by providing some successful industry examples like John Lewis, McDonalds, Innocent Smoothies, Ford Motors and Motorola Companies. The report also described the Royal Mail Company, its products and services as well as two operational processes. Each concept has been applied to Royal Mail Company in order to show how it could help to reach a high standard TQM in running such a worldwide business.

References

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Greasley, A (2013). Operations Management. 3rd ed. West Sussex: John Wiley & Sons Ltd. p.410-412, p.197

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