Study into Total Quality Management of McDonalds
The father of the quality movement which is W. Edwards Deming introduced the concept of management named Total Quality Management (TQM). This approach management originated in Japanese Industry in the 1950's and became popular in the West since early 1980's. TQM is a system for a customer focused organization in continual improvement that involves all employees of all aspects of the organization. Employee involvement, focus on the customer, benchmarking, and continuous improvement are the four significant elements of TQM. Besides, there are some management techniques which involve in the implementation of TQM, such as quality circles, Six Sigma, reduced cycle time and continuous improvement
Employee involvement is creating an environment for employees as to have impact on decisions making and actions which can affect their jobs.
Focus on the customer
Customer is the only element who determine the level of quality and the worthwhile level from all the efforts which organization do to foster quality improvement, training employees, integrating quality into processes management.
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Benchmarking is the process of comparing one's business processes and performance to industry as to learn and practice from other industry for achieving the best performance.
The process which involve ongoing efforts to improve the system, products, services or process to achieve improvement in an organization and company.
A quality circle is a group of volunteer form by workers under their supervisor who are trained to identify, analyze and solve work related problems as to improve the performance of the organization.
Six Sigma is a management strategy which use to seek for improvement of the quality of an organization process outputs by identify, removing the causes of errors and minimizing variability in business processes.
Reduced cycle time
It is refer to the step taken to complete a business process.
Our group is doing the research on McDonald's TQM. McDonald being recognized as a premier franchising company all over the world in the form of fast food service restaurant which serve the World Famous Fries, Hamburgers, Chicken McNuggets, Egg McMuffin and as well as the Famous Big Mac (hamburgers).
In 1940, McDonald's was open with the name McDonald's Bar-B-Que restaurant on the Fourteenth and E streets in San Bernardino, California by Richard and Maurice McDonald's. At the beginning, it is a car-hop service restaurant with a typical drive-in featuring large menu. However, McDonald's developed as an international recognized company ever since Ray Kroc, the distributer of Multimixer (Milk Shake), who was fascinated by the operation of the two McDonald's brothers and acquired the franchising right from them to run McDonald's restaurant in Des Plaines, IIIinois in 1955.
Nowadays, exceed 75% of McDonald's restaurants worldwide are operated and owned by independent local men and women where serving more than 60 million people in 117 countries each day in the world largest restaurant organization, McDonald's.
1.0 Total Quality Management (TQM) of McDonalds
1.1 Employee Involvement
Total Quality Management (TQM) programs are an important and prominent approach to management. Nowadays, most large corporations have a program that incorporates some of the practices and principles of total quality management. One of the most important principles of TQM concerns employee involvement or often called as empowerment. It is common for a TQM program to state that employee involvement is very important to its success.
For McDonald's, total quality management (TQM) involves that the employees are at work on time, are neatly dressed, and are clean. The employees must make sure that the customers constantly receive safe food, which implies that the employees must wash their hands often to remain clean. Moreover, the employees must follow certain Standard Operational Procedures, so the customers always receive exceptional quality and service. This includes the employees using plastic gloves when they prepare the food, that the meat and fries are properly fried, and that the vegetables are thoroughly washed when used in the food. Another TQM is that the employees rely on teamwork and high energy to get the job done, so that the customers do not have to wait long for their food. Furthermore, McDonald's management emphasizes that their restaurants should be clean. This involves that the restaurants are tidy, sparkling and spotlessly clean. As McDonald's illustrates the quality is that the employees delivers fast, accurate and friendly service with a smile.
For TQM programs that do not have management commitment and employee involvement are bound to fail. This will contribute to poor business results and employee turnover. High turnover rates are a challenge for any company in the food service industry, including McDonald's. Both managers and academics believe that, with commitment from senior management, by involving employees in problem solving, decision making, and business operations, performance and productivity will increase. Employees should be encouraged to control their destiny and participate in the processes of the organization. To be effective, employees should be given power, information, knowledge, and rewards that are relevant to business performance. The Restaurant People Strategy is designed to offer a compelling employment value proposition by providing unique benefits, training and opportunities that meet the needs of today's workers. McDonald's benefits program is designed to attract, retain and engage talented people who will deliver strong performance and help McDonald's achieve our business goals and objectives. These benefits include health and protection such as employee and dependent life insurance, dental, travel and business travel accident insurance; pay and rewards such as base pay and incentive pay, company car, profit sharing, paid holidays and vacation, educational assistance and several other benefits. This will help in higher levels of employee commitment in the countries where the company operate, which in turn, will continuously improve employee retention rates.
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The most attractive side of McDonald's' activity is the training that stands as background in every single employee. McDonald's corporation started his fortune training people on how to be kind, fast, precise and effective. There is a world-famous Hamburger University which is nearby the headquarters building, in Oak Brooke, Illinois, and serves as a training campus for restaurant managers and company leaders. Because of McDonald's international scope, translators and electronic equipment enable professors to teach and communicate in 22 languages at one time. McDonald's also manages ten international training centers, including Hamburger Universities in England, Japan, Germany and Australia. Today, more than 50,000 managers in McDonald's restaurants have graduated from Hamburger University. McDonald's believes that his quick-service format would be lost if service at the order desk was not courteous and efficient, to avoid this problem some detailed video tapes have been created to train every single worker who had to have direct contact with the customers. The tapes cover every aspect of dealing with the customers during his 15 seconds at the counter. Crewmen are instructed to initiate each order with a polite question: 'May I have your order, please?' The success of these service methods cannot be questioned.
1.2 Focus on the customer
Customers are the one who consume goods and services offered by organizations or companies. In other words, all goods and services were provided as to fulfill the demand and the needs of consumer. Besides that, customers also are the only one who ranks the effort and measurer of the satisfaction level of the goods and services offered by the organizations or company. Without customers, the efforts of managing and operating the organizations or company will be wasted. Therefore, focus on the customer is an element to measure the total quality management of the organization or company.
McDonald's brand mission is "to be our customers' favorite place and way to eat". McDonald's operators, suppliers as well as employees cooperate to achieve customers' need in McDonald's unique ways. They also have the best ideas with both large scale efficiency and local style through the most dominant grouping of entrepreneurial spirit and System wide position around their Plan to Win. McDonald's provides the customers with high quality of food and better-quality services in a friendly, hygienic and enjoyable environment at a great value as to make their customers feel good when having McDonald's foods and beverages.
McDonald's takes into account of the customers' nutrition. Researches had being carried out to measure and create a menu which match the daily nutrition of their customers. In this busy lives nowadays, McDonald's concern with the calories consuming and other diet-related concern from the foods they provide as they want their customers to stay within their goals for the day. Besides, McDonald's aim to inspire and motivate people to live balanced, active lives with their Balanced, Active Lifestyles (BAL) efforts by bring in the global theme which is "it's what I eat and what I do". Furthermore, McDonald's introduced children's nutrition meal named Happy Meals which were originally designed for young-age children in suitable portion sizes with essential nutrients such as protein, calcium, iron and vitamins B.
McDonald's hamburger patties are made with 100% United States Department of Agriculture (USDA) inspected beef in U.S. the hamburger patties only cook and prepared with salt and pepper which without added any preservatives and fillers. Besides, McDonald's hamburger buns are made from North American grown wheat flour , the world famous French fries are made from potatoes and cooked in a canola-oil blend. To ensure customers are under protection and satisfaction, McDonald's improve their food safety and quality standard to the highest rank in the industry. They source their ingredient from suppliers that hold on to strict standards for food safety and quality, including behaves a controlled, well-maintain and clean environment throughout their entire supply chain. They conduct stringent procedures for handling, storage and minimize exposure which will contribute to the presence of microorganisms as to maintain the quality of their food.
Furthermore, McDonald's approach to environmental responsibility over the pass thirty years, they come out with the solutions that are good for their business system and also to the world in which they operate. The new environmental responsibility of McDonald's is The 2010 Global Best Of Green. This is a progress that demonstrated on multiple fronts including energy, packaging, anti-littering, recycling, logistics, communications, greening the restaurants, greening the workplace, sustainable food and suppliers leadership.
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In addition, to enhance the image identifying of McDonald's in customers from adults to kids, McDonald's introduce a representative character named 'Ronald McDonald', the Chief Happiness Officer of McDonald's. Ronald was born in 1963 and join McDonald's as goodwill officer at the same year. Ronald appearance is a clown who wears long sleeve shirt with red and white striped, yellow jumpsuit with matching red and white striped high stocking and a big red shoes. Ronald's job is to entertain the customers and bring fun to their lives as he believes that life is all about having a good time. He also loves to entertaining people of all ages, especially children as he labeled himself has a kind of magical power to make everyone happy and laugh. This McDonald's character's first national appearance is in the Macy's Thanksgiving Day Parade. To increase the acceptance of customers, Ronald now is able to communicate in 31 difference languages.
There are also 24-hour McDonald's restaurant to serve customers as to improve customer satisfaction. Besides, McDonald's introduces McValue Lunch from 12noon to 3pm from Monday to Sunday. Nevertheless, McDelivery is available from time to time with only a minimum charge based on every delivery.
Benchmarking is a process which involves obtaining historic construction cost information collected. This historic information provides the benchmark against which a customer can assess their projects value for money at a base building level with set specifics separated out. Benchmarking also can defined as the continuous process of measuring products, services, and practices against the toughest competitors. To successful benchmarking are lies in analysis. Starting with companies own mission statement, a company should honestly analyze its current procedures and determine areas for improvement. Next, a company carefully selects competitors worthy of copying.
Reasons and benefits
Companies benchmark for many reasons. The reasons can be broad for example increasing productivity. The reasons also can be specific for example improving an individual design. Benchmarking is continuous improvement tool. Companies that use benchmarking strategies achieve a cost saving of 30 to 40 percent or more. It supports the process of budgeting, strategic planning and capital planning.
Benchmarking also can enhance learning tool. It is to overcome disbelief and enhance learning. By hearing about another company or competitors successful processes it can make the employees believe there's a better way to compete.
In addition, benchmarking also work as a growth potential tool. After a period time in industry, a company may become practiced at searching inside the company for growth. The company would better off looking outside for growth potential.
Besides, benchmarking is a job satisfaction tool. Benchmarking have developed how to networks to share methods, successes, and failures with each other. The process has successfully produced a high degree of a job satisfaction. Benchmarking is a systematic examination of a company products, services, and work processes.
Types of Benchmarking
There are four different types of benchmarking. Before deciding to benchmark, a company should determine what they want to benchmark.
Benchmarking against operations is called internal benchmarking. This is one of the simplest forms, since most companies have similar function inside their business units. Internal benchmarking objective is enabling a multitude of information to be share. The benefits come from identifying the internal procedures, then transferring them to other portion of organization.
Competitive benchmarking is used with direct competitors. This type of benchmarking perform externally, its goal is to compare companies in the same markets that have competing products, services or work processes. For example, Mc Donald's compete with Burger King. By this strategy, its can compare a related companies performance. With this direct competitor, information is not easy to obtain. Public domain information is the most accessible.
Industry benchmarking is performed externally against industry leaders or against certain company best functional operations. The benchmarking partners usually share some common technological and some market characteristics. Because of no direct competitors are involved, the benchmarking partners are more willing to contribute and share.
Process or generic benchmarking focuses on the best work processes. Instead of focusing on a company's business practice, similar procedures and functions are benchmarked. This type can be used across dissimilar organizations.
1.4 Continuous Improvement
In order to comprehend the need for improvement in the construction industry and to better manage our project and construction companies especially like McDonald. To be competitive in market, McDonald has provided more consistent quality and value to their owners or customers. Such goals demand that a continuous improvement (CI) process be established to provide total quality management. So that McDonald give lot attention to the satisfaction level of it customers with improve quality standards such as trained employees, improve product quality and improve performance and exercises a good strategy for its human resources.
First of all, to fulfill the needs of the customers according to their desires or requirement and also to make its product more competitive, McDonald has improved their products quality. Such as improving ingredients and nutrients of food stuff. For food allergies, McDonald consolidated all allergen information into the gradient statement. Besides, according to the nutrition information of McDonald, their product derived from testing conducted in accredited laboratories, published resources or from in formations provided from McDonald's suppliers. It's based on standard product formations and serving sizes.
More than that lot expenditure is made in the quality maintenance and improvement researches. McDonalds maintains the following quality rules such as maintaining strict standards of quality and safety, so that the customers can feel comfortable fitting any of the food products into their personal eating styles. Second, is serving a variety of nutritious, high-quality food products and portion size, including new salad, fruit, and vegetable offerings Happy Meal Choices. Beside, McDonald providing nutrition information to help customers make smart choices that address their individual lifestyle needs. Furthermore, the company informing the customers about energy balance and fun, practical ways to incorporate physical activity into their everyday lives and motivating kids to be active by engaging Ronald McDonald as ambassador for play and activity. Finally McDonald sponsoring major sports competitions, including the Olympics and the FIFA World Cup soccer matches.
More to the point, McDonald creates connection between the quality of product and the ability of employees by give training to their employees. Employees were having training for it work. For example, the cashier is trained for all the cash handling; floor manager is polished against his degree in the hotel management. Besides, workers in McDonald consist of on-the job-training and largely vocational. More than those new workers were given orientation. McDonald also has a training room for their employees. During the training, trainer is use a series of checklist. It's is important for McDonald to create quality employees. In addition McDonald uses the strategy "right person on right job" means that allocates resource in different areas according to the abilities, qualifications, and experiences of employees. Beside, McDonalds has different departments for different functions. For example, marketing department consists of marketing experts who perform marketing analysis and finance department consist of finance experts who arrange and manage finance.
Another strategy that McDonald use is Employee's job satisfaction means that provides training opportunities to its employees. So it results in enhanced performance and they become more interested to work in good manner, which gives a good reputation to the organization and trains its employees of all departments to enhance their capabilities and to improve their skills.
A key part of the McDonald's philosophy is continuous improvement, not only in the restaurants but with its primary and secondary suppliers as well. McDonald has developed a 'Supplier Quality Index' (SQI) by which all suppliers are measured. It allows companies to monitor performance of suppliers across the many agricultural and non-agricultural product and services. McDonald also conducts regular audits each supplier including the two plants of Esca Food Solution Ltd. All Esca Food Solution Supplier in turn are subject to audit:
One in-depth technical audit per year usually taking 2 full days
Traceability audits-unannounceal-three times each year for every supplier including farm visits.
Animal welfare audits
Product integrity audits
McDonald also introduces a sophisticated system of monitoring performance of its meat suppliers. After that based on a number of Key Performance Indicator (KPI'S), system benchmarks quality performance both against other suppliers and past performance that is operates in real-time. Also, supplier receives a monthly summary report of performance.
2.0 Quality Management By Technique of Total Quality Management
2.1 Quality Circle
Quality Circle is one of the employee participation methods. It implies the development of skills, capabilities, confidence and creativity of the people through cumulative process of education, training, work experience and participation. It also implies the creation of facilitative conditions and environment of work, which creates and sustains their motivation and commitment towards work excellence. Quality Circles have emerged as a mechanism to develop and utilize the tremendous potential of people for improvement in product quality and productivity. A quality circle is a small group of 6 to 12 employees doing similar work who voluntarily meet together on a regular basis to identify improvements in their respective work areas using proven techniques for analyzing and solving work related problems coming in the way of achieving and sustaining excellence leading to mutual uplift of employees as well as the organization. Circle members are free to collect data and take surveys. It is "a way of capturing the creative and innovative power that lies within the work force".
The quality circle focuses on making use of people to find solution for management problems. If workers are prepared to contribute their idea, the management must be willing to create a congenial environment to encourage them to do so. As on the McDonald's team, each person plays an important role. Crew and managers work together, constantly communicating and supporting each other in a team which are busy and challenging but yet always strives to be cooperative and fun. McDonald's employee's performance is assessed not only on their work plan accomplishments, but also on the extent to which they demonstrate the Global Leadership Competency Model and McDonald's values.
The concept of quality circle based upon recognition of the value of the workers as a human being, as someone who willingly activisms on his job, his wisdom, intelligence, experience, attitude and feeling. It is based on the human resource management considered as one of the key factors in the improvement of product quality and productivity. Three main attributed:
A form of participation management.
A human resource development technique.
A problem solving technique.
The objectives of quality circle are multi-faced. One of the objectives is a change in attitude. It is a continuous improvement in the quality of work life through humanization of work. Based on McDonald believes that good governance is a journey, is not a destination. Accordingly, they commit to review their governance principle at least annually with a view to continuous improvement. Apart from that is self development. Bring out people who potential but never been develop. For example, in mid 2006 McDonald introduced the McDonald's Leadership Institute, a virtual learning community of guidance and resources to support and develop employee leadership and talent. Thus, people will get to learn additional skills. Addition, objective is development of team sprit. Team work is much better than individualism work. With team work its help eliminate inter departmental conflict. Moreover, improved organizational culture is also the main objective. It provides positive working environment with total involvement of people at all level. Thus, higher the motivational level due participate management process. McDonald's values were recently integrated into their Global Leadership Competency Model, which has in turn, been embedded into their Performance Development System (PDS). As a result, every McDonald's employee's performance is assessed not only on their work plan accomplishments, but also on the extent to which they demonstrate the Global Leadership Competency Model and McDonald's values.
2.2 Six Sigma
In the mid-1980s Six Sigma was started. Motorola was started Six Sigma but popularized in the 1990s by Allied Signal and General Electric, the approach between quality management and Six Sigma were different than the previous. By using different quality approach, management no need play important role when bring external experts to teach new workforce. By using Six Sigma also, the work begins with management. The management has identifying and measuring the processes of their organization before the work is done. A process which means as the activities and steps that provide by supplier to take input add value and provide product for customer.
Every companies want be profitable. If companies get their profitable they can provide jobs and pay taxes for the community, state, and country benefits where they make their products or provide their services. By having customer who wants your product or service it can making profit for the companies. Each customer has their own requirements regarding the product or service. In Six Sigma revolves around a few key concepts are, critical to quality mean attributes most important to the customer, defect mean falling to deliver what the customer wants, process capability mean what your process can deliver, variation mean what the customer sees and feels, stable operations mean ensuring consistent, predictable processes to improve what the customer sees and feels and lastly design for six sigma mean designing to meet customer needs and process capability.
Adapt to McDonald's management based on key concepts:
Critical to Quality: McDonald's has used the food safety management system in place, including Good Manufacturing Practices (GMP), sanitation program, an approved Hazard Analysis Critical Control Point (HACCP) plan, as well as crisis management and food security program. Supplier Quality Management System that including food safety and high expectations for all McDonald's suppliers throughout the world has been updating by McDonald's in 2007.
Defect: McDonald's management would also like to keep the companies from contaminated when received complaints from customers who fail to get what they want, McDonald's will try to deliver the desired products by customers to their homes.
Process Capability: McDonald's has used the system to facilitate the drive-through customers to buy without having come down from the vehicle and provide a home delivery service.
Variation: McDonald's has introduced a variety of menus for customers to make choices and feel the food. By the way, in each month of the McDonald's will try to introduce new menu items to customers.
Stable Operation: McDonald's management has increased its operations from year to year with the introduction of new products to enhance customers' willingness to dine in their restaurants
Design for Six Sigma: McDonald's has been encouraging businesses to focus on its customers.Â Under the entrepreneurial spirit and harmony of system wide about McDonald's plan to win enables them to execute the best ideas to the efficiency of large-scale and local talent.Â With the McDonald's restaurant have been giving experience simple, easy and please the customer.
McDonald's referred to as DMAIC (Define, Measure, Analyze, Improve, and Control) which provide a structure way for its own to approach and solve problems. McDonald's also are learning about Six Sigma through GE's program, At the Customer, For the Customer (ACFC). McDonald's Management will get a new perspective on their business through this program and this can help McDonald's to continue grow. McDonald's has incorporated some aspects of the philosophy. "It's a disciplined approach to decision making." Six Sigma philosophies involve measuring weakness in a process and determining how to change the weakness to advantages. Proponents contend that using the philosophy can result in cost reductions, less waste, and improved understanding of customer needs.
McDonald's management has minimize costs, the problems of pollution, waste management, water and energy conservation or that have occurred around the world to build a green restaurant in Brazil.Â For example, the first green restaurant was opened in Sao Paulo, Brazil, in 2008, designed and built to maximize the latest technological innovations to minimize about a natural.Â The technology used in restaurant are rainwater storage tank to assist in irrigation, post-central drive through illuminated photovoltaic power generated, and smart air conditioning, all of which contributed to a 50 percent savings in water consumption and 14 percent in electricity for the first year of operation restaurant.
2.3 Reduced Cycle Time
Cycle time has become a critical quality issue in today's fast-paced world. Cycle time refers to the steps taken to complete a company process, such as making an airline reservation, processing an online order, or opening a retirement fund. In McDonald's company, the ways they use to reduce cycle time are by introducing McDonalds McDelivery and Drive-Thru for 24 hours. The simplification of work cycles, including dropping barriers between work steps and among departments and removing worthless steps in the process, enables a TQM program to succeed. Even if an organization decides not to use quality circles or other techniques, substantial improvement is possible by focusing on improved responsiveness, acceleration, and effectiveness of activities into a shorter time. For example, by doing McDelivery, customers do not have to take a long time and queue up in McDonald's restaurant to make an order. Besides, the company can prevent wastes by doing such services. McDonald also introducing Drive-Thru that will be opening for 24 hours. People just need to stay in the car instead of go inside the restaurant. Just get in queue, look at the menu and place their order. After that, collect your order and enjoy your meal! This service is fast and customers will not be bored to eat meals of McDonald. The workers energy are needed and used up all the time. Workers can cooperate nicely with their employees and will increasing the company profits. Sine McDonald felt that those services are effective, so they will continuously use the services and keep on improving it. Thus, McDonald can process most order within a short time after the order is received. Hence, McDonald can reduce the cycle time efficiently and effectively.
3.0 Critical Thinking Cases of McDonald's
In dynamic business environment, managers must constantly make decisions so marketers need to evaluate data and craft appropriate response strategies in fast speed. This is to improve for better preparing for the next generation business leaders. Critical thinking skills are essential as for evaluate the situation, identify key issues, analysis and make decision.
McDonald's has the world largest fast food service retailing chain as it has over 30,000 restaurants in more than 100 countries. There are over 50 millions people eat McDonald's food daily. The popular meals of McDonald's are Big Mac, Chicken Mc-Nuggets, Egg McMuffin which all of them are not a kind of healthy food for customers but popular as they are easy to prepare so call fast food. With this, leaders of fast food business should think of a way to add healthier products such as more fruits and vegetables slide dishes in their menu list and expediting the trans-fat-free frying medium oil rollout.
Secondly, McDonald's has a service which named McDelivery. Offering a delivery option for customers, the company will have to establish a call center with a toll-free number which is 1300-13-1300 and have to increase the number of workers as scooter drivers to deliver the food products rapidly as to ensure the freshness of the meal which ordered by their customers. This option is profitable for company as the store costs reduced and the associated clean-up costs for dining in customer can be eliminate. While McDelivery will put a risk in the safety of workers who involve in delivery as they have to deliver in fast speed to ensure the food being deliver in the limited time or else they will being penalize.
Thirdly, McDonald's face problem during the rush time which is during the time break for working hour. Customers often complain about the disordered multiple waiting lines to approach the service counter. When they fail to examine the menu, customer often will be intent on looking for ways to improve their position in the line. The confusing menu design will cause the customer who stand a distance behind the service counter not able to read the menu. With this matter, the customers will be undecided when is their turn to order and prolong the ordering process which cause dissatisfaction of other customers.
Throughout this assignment, we learnt the real meaning of Total Quality Management (TQM). TQM is a very important concept use to apply in an organization or company daily operations. TQM principles must be supported at all levels of the organization or company as to be effective in improving quality from the lowest-level hourly employees to the highest managerial department. TQM is essential to all functional areas of the organization including finance, marketing, production departments and information system. The process begin with receive and understand customers' wants and needs then produce goods and services based on it or even improve them to fulfill customers' desires. TQM encourage each member of the organization remain alert, aware and responsible for their contribution as to stay focus on the quality.
Managers and employees are encouraged by the implementation of TQM as to collaborate across functions and departments as well as customers and suppliers to identify areas of improvement at any possible areas. Teamwork, increase the satisfaction of customers, cut down costs are the elements which emphasize in TQM philosophy. To achieve high standard of quality of the organization, employees are trained and empowered to make decisions for problem solving. TQM shift from a bureaucratic to a decentralized approach to control.
The financial benefits from using TQM included cut down costs, improve returns on sales and investment and the ability to change higher rather than competitive prices. Besides, TQM increase the reputation as a quality organization or company, develop new innovations using short period of time, increase customer retention levels and improve access to global markets. By implementing TQM, organization or company with the limited necessary resources may gain major competitive advantages in their industry.
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