Quality Management Systems Stakeholder Advantages Commerce Essay


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For the purpose of this assignment you are asked to use an example of the organisation you work for, an organisation you have worked for or an organisation that you are familiar with. If it is an organisation that you're familiar with then you will need case material to support Part B.

Part A. 10

Part of this discussion should include a definition of quality and the….. (250)

Benefits of a quality management system. (250 words max.)

Part B. 20

4. Briefly explain the company used in this part of the assignment. (200 - 250 words)

For a company describe the quality management system used for their customers or the quality management system used by a supplier to the company. (750)

Evaluate the affect that this quality management system has on the company. (750 words max.)

Part A - 1

Quality management systems - stakeholder advantages

Importance to suppliers to a company

Reputation for quality helps to differentiate its products from those offered by competitors which in turn allow them to charge a premium price.

Eliminating defects from production reduces waste, increases efficiency, lowers cost structure and increases profitability

Helps to reduce quality related costs

Importance to customers of a company

Customer satisfaction is an organisational priority

A simplified buying process

Increased confidence in the supplier

Reduced receiving inspection costs.

Reduced supplier assessments

Internal importance of a quality management system in a company.

Improves process control.

Reduces wastage.

Lowers costs.

Increases employee participation.

Boosts employee morale

Part A - 2

Quality defined

Quality is not easily defined, it is a multi-dimensional measure of a product or service; one definition is 'the set of features and characteristics of a product or service that are relevant to meeting requirements', another 'delighting the customer by continuously meeting and improving on agreed requirements'. The current thinking on quality is that it is 'whatever the customer says it is', therefore to follow that line of thinking quality is meeting, satisfying and exceeding customer expectations with a product or service that is fit for purpose.

David Garvin maintains that there are eight types of quality,

(1) Performance,

(2) Features,

(3) Reliability,

(4) Conformance,

(5) Durability,

(6) Serviceability,

(7) Aesthetics

(8) Perceived quality.

It would be unusual to seek all eight types in a product or service, the average consumer is seeking only one or two. Which one or two they are seeking may depend on the product or service being sought. For example if buying a car a person may be looking for reliability and serviceability whereas someone buying an iPhone may be looking for aesthetics and features. The consumer's interpretation of what defines quality changes from product to product and from service to service. David Garvin also states that 'firms themselves should define the quality dimensions on which they hope to compete, and then use those as measures in order to achieve them'

Part A - 3

Quality management systems

John Oakland (1995) defines a quality management system as "an assembly of components, such as the organisational structure, responsibilities, procedures, processes and resources for implementing total quality management"; a company with a successful quality management system should always be looking ahead and be willing and ready to adapt and innovate. A quality management system does not just focus on the end product; rather it is about achieving quality at every stage of the development of the product or service. This is achieved through establishing a framework of reference points that are adhered to every time the process is carried out thus ensuring that the methods, skills and controls necessary are applied in a consistent manner.

An example of a quality management system would be the ISO 9000 series of standards. When implemented by an organisation these international standards ensure that the level of quality delivered is standardised and consistent, whether you are in Croatia or Cork, Australia or America.

Part B. 20

4. Briefly explain the company used in this part of the assignment. (200 - 250 words)

For a company describe the quality management system used for their customers or the quality management system used by a supplier to the company. (750)

Evaluate the affect that this quality management system has on the company. (750 words max.)

Part B - 4

Horse Racing Ireland

The organisation I work for is called Horse Racing Ireland (HRI). HRI was established by the Irish Government under the Horse and Greyhound Racing Act 2001. It is a commercial semi-state body which took over the functions previously carried out by the Irish Horse Racing Authority (IHA). HRI is responsible for the administration, promotion and development of Horse Racing in Ireland. As a semi state organisation HRI receives a grant from the exchequer each year.

HRI currently raises revenue through the following methods:

- Race entry fees

- Declaration fees

- Processing colour applications

- Processing authority to act forms, naming forms and colourapplications

- Subscriptions to the Irish Racing Calendar and the Irish Form Book.

- Designing and producing race cards for the HRI racecourses.

HRI is the parent company to the following subsidiaries;

Irish Thoroughbred Marketing. ITM was established by the Irish Government in order to promote Ireland as a premier source of thoroughbred horses. ITM is a non-trading, non-profit-making organisation.

Tote Ireland. The Tote is a wholly-owned subsidiary of HRI, with responsibility for the operation of a totalisator on the 25 racecourses in the Republic of Ireland. All revenue raised by the Tote is reinvested in the industry

HRI Racecourses. The HRI Racecourse Division is responsible for four racecourses (Fairyhouse, Leopardstown, Navan & Tipperary) as well as holding an interest in Cork Racecourse.

HRI has circa 120 staff based in its main office and across the subsidiaries.

Part B - 5

HRI uses a quality management system for the design and production of race cards for the HRI racecourses. The race cards are produced by the publications department but there is input into the content from a number of other sources such as the race planning department, the entries and declarations department, the turf club, the race course and the sponsors to name a few.

With horse racing taking place every day of the week in Ireland and across the world it is vital that the race cards contain up to date and correct information.

The quality management system used is based on 3 fundamental principles:

Ensuring that we fully identify and conform to the needs of our clients.

Looking at our service provision processes, identifying the potential for errors and taking the necessary action to eliminate them.

Everyone understanding how to do their job and doing it right the first time.

The production of race cards has a number of stages which mirror the entry and declaration pattern of the races themselves, below I have set out the stages involved in the production of race cards:

Stage 1 - Entries

3 to 5 days before the race meeting (exact time depends on the day the race meeting is taking place).

At this stage the race articles have to be checked by two members of the publications department, race articles contain information pertaining to race type, distance, sponsors and prize money. This information will already have been examined and proof read by the race planning department. This check by the publications department allows for a fresh pair of eyes to view and proof read the information.

Stage 2 - Weights

2 to 4 days before the race meeting (exact time depends on the day the race meeting is taking place).

At this stage each horse in the race has been allotted a weight by the turf club handicapper.

Stage 3 - Declarations

Stage 4 - Jockeys

Stage 5 - Issue to printers

Purchasing System: The purchasing system allows the procurement function in HRI to monitor all buyers across the group. If a buyer attempts to generate a PO without following the necessary procedures or obtaining the necessary quotes, the order will be routed to procurement for review; procurement can reject the PO if they feel procedures have not been adhered to or query it if corrective action is still an option. The system also allows for reports to be generated, for instance a report regarding variances between invoices and PO's or a report about a specific buyer's activity. This allows HRI a level of control over group spending. The purchasing system would be an example of concurrent control as it deals with buyer issues as they arise.

A5. Benefits of a quality management system.

David Garvin (1985) defines a quality management system as "the organisational structure, responsibilities, procedures, processes and resources for implementing quality management"; a company with a successful quality management system should always be looking ahead and be willing to adapt and innovate. Benefits of a quality management system include the following;

Reduced wastage, efficient use of time and increased productivity.

Best practice is adhered to; the company is always striving for greater efficiencies and innovation.

The needs and wants of the customer are focused upon; this in turn leads to customer retention and loyalty and may help the company to carve out a competitive advantage.

Employee involvement is increased which in turn helps to improve morale, commitment and job satisfaction.

Quality can be difficult to define as it can mean different things to different people, in a 1990 interview David Garvin noted the following

"When Japanese cars first entered the market their performance wasn't very hot. They didn't go very quickly, they weren't especially luxurious or comfortable; there weren't a lot of features. They scored the bottom of the list for durability, and for safety. But if you asked auto customers what they thought was the most-desired quality characteristic in a car, the answer was reliability. That's the quality niche the Japanese targeted. It started every time. And it only broke down once every five years. That's what customers were saying when they told GM, Ford and Chrysler, "Your cars aren't high quality." GM would say, "But look at all the features we give you in a Cadillac." But that didn't meet what the customers were really saying, which was, "Your cars break down too much." (Healthcare Forum Journal, September - October 1990, Vol 33, #5, Joe Flower)

David Garvin broke quality into eight dimensions: performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality. It is unusual for a person to be concerned with all eight when they are in the market for a product or service. Usually they are talking about one or two which are important to them personally, for example a person investing in an apple iphone might be concerned with features and aesthetics.

This is achieved through the application of four distinct components;

Quality planning

Quality control,

Quality assurance

Quality improvement

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