Tqm

Q1. Company Profile, History and Challenges

1.1 Introduction

The Fast moving consumer goods (FMCG) industry is one of the established and also the competitive industries in the world. From a small Dutch margarine manufacturing company to a large scale corporate giant, Unilever has established itself as a market leader across dozens of categories. Again they are the global market leader in food categories in which they operate (like savoury, tea, Ice cream) and also in skin care and deodorants. (Its pre-packaged products are definitely a household name such as Continental, Rexona, Sunsilk, Dove, Lipton, Flora, Lynx etc).Unilever markets and sells its products in 150 countries and has an annual turnover of about 40 billion pounds(2005) by controlling its subsidiaries in 100 countries and employing about 206,000 people worldwide (www.unilever.com).With an armada of brands in its pocket Unilever definitely meets its mission statement "To add Vitality to life and Meeting the everyday needs of people everywhere" (www.corporatewatch.org.uk)

1.2 Brief History

The time was early 1900, 1930 to be precise, when the British soap maker lever brothers merged with a Dutch margarine company called Margarine Unie. William Hesketh Lever was the founder of Lever brothers while Margarine Unie had grown through mergers with other regional margarine companies in the early 1920's.In 1990's it entered the European market by concentrating on fewer core brands. (http://hbswk.hbs.edu). The beginning of the 21st century saw the company coining a major initiative plan which aims at sharpening the core products and increase the sales via definite marketing channels and in focus brand recognition. (http://en.allexperts.com)

1.3 Market and Operational Challenges

The Paradox lies in Unilever's vast presence world wide, is the low visibility of its products. Though it has strong base in the developing countries like India, Ghana, Sri Lanka, Brazil and Turkey, it faces tremendous competition in the European markets from the other FMCG giants like Nestle, Kraft and hence they needed to work closely with the grass root level retailers and also with the end customers to get the desired feedback. (Van Hoesel, R and Narula, R., 1999).The firm invests a huge amount of money in information technology however comparatively lesser is invested on knowledge based programs, this could be attributed to the fact that there was a considerable amount of turbulence at the top management level and the company was trying to survive the competition by buying and selling many of its products/subsidiaries. Also Unilever gives more importance to sales volume and operational costs and hence they are trying to shift focus from European market to the emerging markets (Developing countries) which means attrition of the workforce and increasing the productivity with machines. This plan will not only affect the main operations but the whole supply chain in turn but somehow Unilever is positive about the change. (www.companymonitor.org)

Q.2 Total Quality Management Concepts and Applications

2.1 TQM in General

Today's world is driven by quality and value for price. It becomes difficult for businesses drifting away from quality, customer satisfaction and focussing only on return on profits. The success mantra adopted by the Japanese manufacturers which eventually became the benchmark for the businesses worldwide was to achieve customer satisfaction through quality. Thus the term total quality was evolved. It basically includes three fundamental principles.

1. Customer focus to the fullest and also the stakeholder attention.

2. Participation and teamwork.

3. Process focus and performance measurement. (Lee and Kincade, 2003)

According to Oakland (1993), TQM is the strategy or the approach which involves planning, organising, brainstorming which depends on individuals at each level and thus to in turn improve the competitiveness, effectiveness and flexibility of the whole organisation. Thus we can conclusively say that TQM is the management philosophy that encourages creation of high quality goods and services, customer satisfaction, employee empowerment and participation, measurement of results and continuously striving for excellence by means of benchmarking and coining of new strategies to keep abreast of new technology. In fact the concept of TQM has now been moved ahead of the core values or principles which we discussed above and has indeed become a management principle as also suggested by Deming, he describes TQM as a system which consists of a network of interdependent components that work or come together to try and accomplish the aim of the organisation. (Deming, 1994). We can visualise the actual meaning of the TQM as a management theory when we bring in the planning aspect for achieving the short and long term goals because of the simple fact that any management theory or strategy cannot be complete without a mission statement or a plan. Thus TQM requires active co-ordination between top management level and employees of the organisation.

2.2 Key Components of TQM

As discussed above, TQM is essentially a Management theory which focuses more on the strategic planning concept. Thus accordingly TQM consists of 3 key components, which are interdependent on each other and subset of each other.

1. Core Values of an organisation

2. Techniques used by the organisation.

3. Tools employed by the organisation.

1. Core Values: Hellsten (1997) suggests that the core values of an organisation as the name suggests are the key factors which the organisation decides on how it will in turn shape, these may include utmost customer focus, process focus and measurement of the same, Management as well as the employee commitment and continuous improvement. Bergman and Klefsjo (1994) also identified similar points and called these core values as the cornerstones of TQM

Management Commitment: Management commitment is absolutely essential for the successful implementation of TQM as a sound quality policy will be coined by the top management which will be overlapping with the corporate policy which states its mission statement, Vision and also the implementation, In short a complete strategic plan should be chalked out because as Deming (1986) suggests,