Total Quality Management

Executive summary The main purpose of this report is to create an action plan of the implementation of total quality management (TQM) for a large car dealership in a Eastern suburb of Sydney. The report consists of the detail steps of the action plan, the reason for each step, recommendation, and conclusion. The car dealership industry is quite competitive and car purchasing is quite differs from buying daily necessity. A large majority of the customers will take a few months in getting in touch with different car dealership, informing themselves with the characteristics of different car brand and prices, and etc.

Thus the implementation TQM successfully can play an important role in improve companies’ professionalism and the quality of customer-oriented services. 2. 0 Introduction Previous TQM theories and application by many famous companies such as Toyota showed that the TQM can help companies to have a leap in comprehensive strength including financial performance, operational improvements, customer satisfaction, and organization and management effectiveness. Based on the characteristic of car dealership industry, this report will give a comprehensive plan of how to implementation TQM in a car dealership company in Sydney.

The first part is TQM measurement: describing how to prove the owner the successful implementation of TQM. Next, action play will be given followed by its explanation. A general action plan will includes a simply list of sequential steps in implementing TQM with. Then, more details of the action plan will be given describing why, how, and who will conduct. The report will be ended with a brief conclusion and recommendation. 3. 0 Total Quality Management Measurement There are several ways to show the owner of the success of the implementation of the total quality management (TQM).

First, undoubtedly, the revenue and the profits earned. Compared with previous financial performance, the improved profits can be regarded as the outcome of the successful TQM and vice versa. Moreover, the histogram (Mukhopadhyay, C. & Nataraja, HS. , 2005, p. 105) can be used to show the nature of the relationship between the profit and all operational strategies including TQM. What’s mover, fishbone diagram can be achievement in TQM specially the team work. Fishbone is a kind of living document.

It records the solutions to the problem the organization have met, thus team members can share and gain some knowledge from it. On the other hand, when new challenges come and new solutions found, the fishbone will be further filed (Hedley, M. , 2005,). Last but not least, Pareto charts can be used to identify the larger contributors to the success of TQM (Hedley, M. , 2005,). During the TQM, after-sale service is suggested to investigate customers’ satisfaction and identify the major defects. In addition, Pareto charts can also be used to identify inhibitors of entire TQM process within the organization. . 0Action Plan Four actions are suggested: TQM transformation, organization restructure, after-sales service, and organization self evaluation. These actions will be helpful to prepare employees ready for TQM, build cross-functional teams, and identify customers’ needs (Beer, M. 2003, p. 623). Action I: The senior management team should hold a TQM transformation with a clear explanation why TQM is necessary to achieving the goal and objectives and how TQM philosophy fits (Beer, M. 2003, p. 633). Action II: Organization restructure plan involves rebuild the team to matrix structure as Figure 1.

Also, encouraging empowerment as well as team work. Action III: After-sales service includes continuous informing customers of skills of car maintenance, remind customers to conduct annual inspection, conducting annual car quality tracking, perform survey and investigating customers’ feedback, helping customers to contacting car manufactures concerning quality issues, maintenance, and etc. Action IV: One critical challenge facing organization achieving TQM is not impropriate theory or method but the gap between senior manager’s rhetoric and the implementation reality (Beer, M. , 2003, p. 624).

Thus organization self evaluation aims to make sure the successful implementation at all levels within the organization. 4. 0Explanation of the action plan 4. 1 Action I: TQM transformation TQM transformation helps all employees aware of the importance of the implementation of TQM and how it is fit the company’s goals and objective, and moreover, the senior managers to get the feedback of their plan from them and help to learn about and have a clear overview of the role they play, the responsibility they take, and the importance they are in the whole service line (Gregg, L. , 2005, p. 10).

In a word, TQM transformation functions as preparation stage. 4. 2 Action II: Organization Restructure Teamwork and empowerment are essential elements of quality (Scarnati, 2001, ). In order to showing the great care of customers and services are customer-oriented, empowerment is encouraged. Meanwhile, due to certain disadvantages of empowerment, teamwork had better to be implemented within the organization as follows. Empowerment is defines that individual employees are given the power to be in charge of all the processes they undertake and the products and services which are produced (Goetsch & Davis, p. 60). For example, in the car dealership, each sales representative is empowered to take care of a particular customer from knowing the customer’s needs (including personal preference, total budget), introduce different types of cars according to customer’s needs, introducing purchasing methods (payment in full/payment by installment), and giving advice of getting driving license if that customer are new driver. The service in the car dealership can be regarded as one package service which is customer-oriented and is in charge by a sales representative throughout the whole process.

As Peters, T. &and Waterman, R. concluded, staying close to the customer – learning his preferences and catering to them is the second most important principles within the eight basic principle in searching of excellence (In Search of Excellence, 1982, ). This sales strategy showing the company’s great care of their customers and is very attractive. Customers will be feel quite good once they feel that services are provided particularly prepared for them and fit their needs. Empowerment has several benefits once it is implemented.

First, it can motivate employees and let they feel their vitality to the company. Second, it can build commitment and sense of belonging. Last but not least, it can stimulate effective communication. Last but not least, empowerment can provide a single face to the customers and improve efficiency (Gregg, L. , 2005, p. 9) However, empowering also exist risk. On the one hand, the decision making skills is high demanding. As Scarnati, J & Scarnati, B (2002,) said, process and the quality of product can be improved if individuals who are empowered make appropriate and reasonable decisions.

Moreover, to survive, leaders should will to consistently strive to corporate their products with their value and convey them according to customers’ needs (Scarnati, J & Scarnati, 2002, p 111). Thus, the value of the car dealer is the most appropriate suggestions of which type of cars according to customers’ preference and professionalism. In other words, if customers feel comfortable with the suggestions made by sales representatives or think suggestions do not conform to their demand, the reputation will fail.

On the other hand, traditional seniors might regard the empowerment of their subordinates as losing their control over subordinates and even their abdication to some extent (Goetsch & Davis, 2009, pp. 162-162). Concerning the disadvantages of empowerment, team work should be highly inspired and recommended and meanwhile, fishbone is encouraged during the team work. What’s more, the organizational structure should be ready to support the team work and get rid of the inhibition of empowerment (Goetsch & Davis, 2009, pp. 163-167).

In addition, all employees should be aware the true meaning of empowerment is about broader involvement in decisions making, they will have more opportunity to extend their potential and is not without the support from their senior staff and colleges, and meanwhile the senior can focus on more importance business and urgent issues. Each sales representative (SR) is in charge of their own customers throughout the whole process as mentioned before. Moreover, there are sales car brand representatives who take care of the negotiation with car companies to get the most competitive price or promotion.

Moreover, he/she should be close in touch with the car manufactures and be well informed of all newly released cars from the manufacture he/she is in charge of. For the team work within SRs, some are more expertise in the car brand while some are more expertise in the car type. Sometimes, customers might choose their cars focusing on a particular brand, SR would be better selected to take care of them while some customers might just want a particular car type and not much care about the brand, at that time, SB had better to be asked to take care of them. However, SRs and SBs should interact as much as possible.

For the SRs, they can learn more about the comparison among different car manufacturers from SBs and SBs can know how to help customers choose the appropriate car type from SRs. Thus, members can report metrics for the team (including financial, customer, internal business processes, learning, and growth) and share the skills of managing customer relationship (Gregg, L. , 2005, p. 9). In a word, for the organization, it is a win-win strategy. Active team work is helpful and avoids poor vertical communication which reduces the organization quality of learning and is regarded as one of silent killers of strategy implementation (Beer, M. 2003, p. 630). The ability of all team players to join together and meet the customers’ requirement is one of the primary precepts of a superior organization. Figure 1 Organization Matrix Structure 4. 3 After-sale Service Once the good reputation is built, previous customers will recommend their friends and family member the company. Thus, as Scarnati, J & Scarnati, B (2002, p. 111) mentioned in their paper, quality can build increased profit because of the customer loyalty. Thus high-quality of service and good reputation are quite important for the car dealer company.

And after-service can be an effective way to achieve them. First, Scarnati, J & Scarnati, B (2002, p. 112) emphasized that eliminating defects before they occur is the golden rule and financial rewarding. Thus continuous informing customers of skills of car maintenance, remind customers to conduct annual inspection are helpful for car owners. What’s more, annual car quality tracking is conducted to investigate customers’ feedback and satisfaction of their experience and Pareto charts is also conducted to investigate which character are most experienced driver prefer, thus help SR gain the promotion skills.

Last but not least, after-sale customer satisfaction survey is conducted and Pareto charts to identify what aspect should be further improved to improve the service. In conclusion, after-sale service is the channel for company to hear the voice of customers, and further understood, analyzed, and translated for deployment. It helps the improving management. 5. 4 Self-valuation Organizational self evaluation includes internal survey and organizational fitness profiling (OFP). The organization internal survey had better to be implemented anonymous. Beer, M. 2003, p. 627) pointed out that employees might hesitate to tell the truth and as a consequence, the senior could hardly indentify the true problem once a TQM program is launched. By conducting periodic anonymous survey, there exist a way for open dialogues as well as enable senior managers to follow up their initial commitment with changes in organizational arrangements and behavior needed to support TQM. Moreover, OFP will inform senior team of the opinions and perception about the objects and capacity from subordinates (Beer, M. , 2003, p. 628).

The OFP process initiates with the identified organizational direction which is what organizational should do to achieve to the goal. Next step is to select a few employees and appoint them task force. They are responsible to communicate with the senior managers about the unvarnished truth concerning the strength, weakness, opportunities, and threats facing the implementation with completely confidentiality. 6. 0 Recommendation Implementation of TQM is challenges in various aspects including human resources, organization culture, effective communication, service and product quality, and the real action.

An action plan has been suggested including four steps: organization transformation, organization restructure, after-sale service, and self-evaluation. The first step is the foundation of TQM without it all the other three could not implement successfully and what’s more, the feedback from employees should be put emphasis because they are the most valuable resources for the company. The second step is the support for the TQM. Organization structure is the network for company as the artery for human being while information as the blood, without it organization cannot survive.

After-sale service is the nutrition without the company cannot make progress and improving its service. Last but not least, self evaluation is the inspection of the TQM and makes sure the success of the whole process. 7. 0 Conclusion This report gives TQM action plan to a car dealership company based on relevant theories and previous studies and practices. Four steps and their reason is given and explained afterwards. The last part gives the recommendation and the role of each step plays in the whole TQM procedures.