Quality Management Policy And Procedures

Question:

Discuss about the Quality Management Policy and Procedures.
 
 

Answer:

Introduction

Bazaar Ceramics Studio is a 20 year old organization from Hahndorf, South Australia that sells art and craft products. It first began producing locally designed fine art pieces and domestic wares such as dinner sets and ovenware as a cooperative. The cooperative members were involved in designing, throwing glazing and firing activities for their own products. A gallery director was appointed to take care of gallery and its marketing. Over the years, the organization grew and expanded nationally with inclusion of corporate collection and sculptural pieces. These pieces are obtained from international hotels, private homes, and board rooms in US and Germany and sold on commission basis with 40% as commission. It now operates from Stepney, Adelaide and has more staff including a production manager, 6 production potters, and 2 full time ceramic designers.

Bazaar Ceramics is focused on the international ceramic arts market while doing marketing as it gives more opportunities to do business. The main revenues in the business come from the sales made through gallery. However, cost of running gallery is very high which has resulted into reduction in the returns on investments on gallery maintenance and marketing. Most sales are made to interstate and international clients. However, these major clients find the purchasing process complicated and thus, management is thinking of developing ecommerce website to make the processes streamlined. The company would continue to maintain high standards of technical and artistic needs. The organization has a long term vision of growing its art market globally and builds a strong brand reputation. For this, the company is going to use internet based marketing such that it’s advertising cost is reduced and the company is able to get more feedback from customers.

The organization has a plan to make use of market opportunities using the organization strengths. It would also aim to build strategies to deal with threats and overcome their weaknesses. The strategic plan of the company is presented below:

Vision:  Vision is to create a strong business reputation in the international art market

Mission: Expand the business in national and international market and increase sales figure to exceed competition

Objectives: Objectives of the company would be behavioural, community level, and process related (Carpenter & Weikel, 2012).

Behavioural objectives of the company include:

  • Reduce order processing time
  • Reduce operating cost of the company
  • Expand business into national market and international market

Process objectives of the company include:

  • Spend more on marketing of products that are most popular with customers
  • Automate business process to improve productivity

Action Plan:

  • Train staff into getting more feedback from customers and use them for the organizational benefits
  • Develop ecommerce solution that allows customers to place orders online with convenience
  • Hire IT manager to provide support to the employees managing IT systems in the company
  • Move into a smaller showroom and put more products for sale on website to reduce cost of operations
  • Automate the order management process of the company to reduce time needed for processing orders
  • Develop an ecommerce website to reduce order processing costs and time as well as increase the reach of the business globally
  • Implement analytics on the website to do sales analysis for understanding popular items
  • Automate some of the organizational processes including order management and sales tracking to reduce order processing time and analyse trends(Burnett, 2008)
  • Develop an ecommerce system that has following features and facilities:
    • Online ordering
    • Market products online
    • Sell products online
    • Collect customer feedback

Critical Issues and Strategic Objectives

The company is facing strategic issues that need to be resolved for which strategic objectives are formed.

Critical Issue

Strategic Objectives

Costs of gallery management and marketing are increased with increase in cost of goods sold and fixed costs of gallery management.

Identify and explore more options to sell other than through gallery

Many processes used in the company are manual including order form entries, selling, ordering which consumes more time and also lead to mistakes and redundancies in data management

Automate some of the processes used in the company

Products that are produced by remote workers are double handled between producers and sellers which both time consuming and cost incurring

Develop a system that allows direct shipping of products from workers to clients

There are cost pressures that are affecting the profits from operations. Some of the cost elements that have increased include employee costs, advertising costs, exchange rates, and fixed costs of showroom management. This has resulted in decrease in mark-up and returns on investments.

Reduce the fixed costs of the business

Manual order processing makes processing time consuming. Moreover, there are more challenges like inability of international  customers to order by phone

Automate the process of ordering

Bazaar Ceramics has no person employed for providing IT support

Hire new staff for IT systems management

The company is unable to display all available products in the gallery because of its small size

Sell products  through new channels other than the gallery

The information on sales is not effectively stored and analysed. More unsaleable products are produced because of lack of knowledge of popularity of products.

Improve the customer feedback mechanism

As the products are unique, products displayed in advertisements get sold fast and the advertisements become outdated

Find and utilize alternate modes of advertising

With increase in ecommerce adoption, the competition is increasing. Competitors have more margins with websites as their sales and marketing costs are less.  This gives bargaining power to consumers and they want 25% discounts on all products (Dolinsek & Piskar, 2006).

Make the business more competitive by developing ecommerce platform (USFSM, 2017)

Business quality assurance Plan

  • Having more stock of products that are most popular with customers
  • Selling products that are reliable and of high standards of art and craft
  • Sell the products that are durable and long lasting
  • Sell products that have good aesthetics that are pleasing to customers
  • Providing good support and communication with customers such that customers become loyal which is shown by repeat purchases.
  • Complaints from customers are responses to within 24 hours

Expectations of the customers and other stakeholders related to the quality of the business would include:

  • Prompt service personnel response to queries of the customers
  • Good quality of products that follow international standards
  • Flexibility in terms of order placement and payments against orders
  • Understanding of the customer needs and fulfilment of the same
  • Company staff has a caring attitude towards customers(WEF, 2017)

Business Quality standards and business model

Business would use ISO 9001 standards that define following responsibilities of the business:

  • Develop quality systems as per the needs of the customers and ensure that the top management of the company are committed to meet them
  • Ensure that resources and infrastructure that is need to improve the quality of systems are present
  • Understand customer needs and ensure they are delivered what they want
  • Conduct surveys or interviews with customers to understand if their needs are sufficiently met and make improvements in case dissatisfaction is seen(Inglis, 2005)

Quality standards would be measured against benchmarks reflecting upon desired quality of the business. Benchmarking would be done in following steps:

  1. Understanding the current and new processes that would be followed in the company
  2. Analyse the processes used by coming organizations in the industry
  3. Compare the performance of the company with its competitors
  4. Take steps to eliminate the performance gap between the company and its competitors

Benchmarking would be used for the development of the ecommerce solution which would be made ensuring that it follows the minimum quality standards used by other competing companies using ecommerce for selling their products (Booth, 2015).

The expectations of the customers and stakeholders would be documented in service level agreements that would include details of products, professional services that would be provided by the company staff, support provided by the company, and agreement of the customer on expectations documented (Haustein, 2017).

The standards that would be used for the business would include ISO9001 which would be used for internal operations management and Australian standards like CWA which would be used for cataloguing of the products on the ecommerce website (Wladen University, 2017).

Industry benchmarks of quality of products and services would be followed as the base for performance assessment. The benchmarks would be set for the following parameters:

  • Material quality of domestic wares such as dinner sets and ovenware
  • Efficiency of processes including designing, throwing glazing and firing
  • Exclusivity of corporate collection and sculptural pieces
  • Aesthetics and maintenance of art gallery
  • Features of the ecommerce website

Roles

Quality Responsibilities

Quality Manager

Review and approve the quality management plan

Provide assistance in ensuring implementation of quality management processes

Direct team on delivering quality.

Quality Assurance Officer

Provide assistance in building a quality management plan

Develop quality control procedures with assistance from stakeholders

Ensure that all stakeholder requirements are sufficiently documented

Review and audit the quality control procedures

Give feedback to the program or project manager on quality aspects

Help team make improvements in production and other management processes

Record compliance issues and ensure that they are resolved (EPA, 2016)

Implement quality policies and plans

Quality policy of business would follow ISO9001:2015 standard. The policy would be build on corporate objectives of the company and the values they have, The quality policy of Bazaar Ceramics would be:

Bazaar Ceramics provides high quality products including fine art pieces, household wares, corporate collection and sculptural pieces and uses best in classes processes in the industry including designing, throwing glazing and firing. It is the policy of Bazaar to provide products in accordance with the given details and pricing. The company Directors, Top Management and Staff are responsible for ensuring quality of products and services to the satisfaction of the customers. The company woudl use the quality procedures defined in ISO 9001 standards and would try to even exceed for increasing customer satisfaction (Hénard & Roseveare, 2012).

Feedback analysis – Quality Management Plan

The feedback of the customers and stakeholders on the quality of products and business processes would be taken and based on the analysis of the feedback, changes would be incorporated in the quality management plan. An initial feedback of the customer on the quality aspects revealed that the international customers are not very satisfied with the communication modes and are looking for options to connect to the company representatives directly. Also, it was found that the order processing time is longer as compared to competition mainly because of manual processes unlike the competition that is using ecommerce systems

Based on the customer feedback on quality of business processes, some corrective actions are recommended including:

  • Ecommerce systems would be implemented through which the customers would be able to place the orders which would make the process faster
  • The producers would be connected to the company database directly such as upon placement of the orders, the shipments can be made from the producer to the customer directly without the need for involving the company in between

The quality assurance officer would conduct an audit in which the quality performance of the business would be measured based on the monitored data throughout the quality management process. The QA officer would report the quality deviations to the project manager and would seek necessary corrections.

The staff would need to be trained on the ecommerce system to be able to achieve fast order processing and order fulfilment.

Control quality assurance processes

In order to maintain the quality of the services and processes of the organization, the company is adopting ISO and AS based standards that cover the aspects of customer involvement, staff involvement and processes. Various procedures that are used in the organization for the management of the quality can be recorded in a quality, management policy and procedures document which would include the following:

Policy Statement: Bazaar Ceramics specializes in selling or art and craft products and corporate collections from Germany and US. It provides following services to customers:

  • Gallery for viewing art and craft collection
  • Sales of art and craft products
  • Survey of customers to get feedback for improvement
  • Provision of items from producers sold directly to the customers

Bazaar ceramic is committed to maintain reputation of good quality products and uses stringent procedures for managing quality products. The company is committed towards continuous improvement and have planned to develop an ecommerce platform to allow customers more ease in ordering through online platform. The company also strives to improve its IT processes and employ staff for efficient IT systems management support.

The quality management approach of Bazaar Ceramics is based on four principles that include:

  • Conforming to the needs of customers for products and services
  • Focus on improvements with identification of performance gaps and working for their improvement
  • Ensure that all the staff understand the quality need sufficiently and is committed to achieve them
  • Involve all major stakeholders in the review process to take a 360 degree feedback to help improvement

Stakeholder feedback for monitoring and implementation

Stakeholder feedback is taken using survey with customers and interviews with other representatives of stakeholder groups including suppliers, marketers, sponsor, and vendors.

The performance of the quality processes is measured based on the monitoring procedures that includes quality logs where all the quality related steps that are taken are recorded.

Major problems with the system are high cost of operation mainly due to the maintenance cost of gallery and manual processing of the organization activities. Because of manual systems, order processing is time consuming. Also, because of lack of certain features that are provided by competition, the company is losing on the international customers. For improvement, the company is  planning to implement an ecommerce system that would help it automate order management processes and widen the reach of the company. Further, the company would modify its processes to involve producers in direct sales such that deliveries are made directly from the producer to the customers upon receiving orders. For this, the company is planning to outsource development to a third party and hire more staff for managing IT systems that are developed.

Quality performance use standards defined by ISO and AS including ISO9001:2015 and CWA. The two quality standards define the processes related to customer needs management and process management.

Benchmark standards are defined based on the competitive analysis that has found that the company is lacking presence of the online systems to interact with and sell to customers.

The monitoring procedures include quality logs where all the quality related steps that are taken are recorded.

Quality performance assessment reveals that the company has a longer order processing time than competition and has higher operating costs. Moreover, some of the facilities that are made available to customers by competitors are not available with the company such as availability of alternatives for ordering and direct delivery from producers to customers (Cotleigh Engineering Co. Limited, 2016).

Review business procedures

A review of business procedures revealed certain concerns with existing processes that need to be improved:

  • Most processes used for order management and sales are manual and thus, ecommerce system would help automating some of them
  • The staff is unable to keep track of popular items and thus, non-popular items are stocked. Implementation of analytics on ecommerce would reveal the sales statistics that would help company managers know popular items and accordingly stock them
  • Despite good quality products, the company incur high marketing cost because of traditional marketing methods and thus, use of digital marketing along with ecommerce platform use would help company widen its reach.

Conclusion

This report explored the case of South Australia based Bazaar Ceramics Studio that sells arts, crafts, domestic wares, corporate collection, and sculpture pieces through its gallery. The report identified issues faced by the company including manual processing, shrinking, cost increases, and long order processing time. Some recommendations were made for improvement of the situation such as development of the ecommerce website that would automate order processing as well as provide sales analytics capabilities that can be used by the organization to get the trend and accordingly focus their marketing on popular products

References

Booth, S. (2015). International Peer Review Benchmarking for Quality Higher Education. University of Tasmania.

Burnett, J. (2008). Core Concepts of Marketing. Zurich, Switzerland.: Jacobs Foundation.

Carpenter, M. A., & Weikel, M. K. (2012). Management Principles. Creative Commons.

Cotleigh Engineering Co. Limited. (2016). QUALITY MANAGEMENT POLICY & PROCEDURES. Cotleigh Engineering Co. Limited.

Dolinsek, S., & Piskar, F. (2006). Implementation of the ISO 9001: from QMS to business model. Industrial Management & Data Systems, 1333-1343.

EPA. (2016). Training Program for Quality Training Program for Quality Systems. EPA.

Haustein, J. R. (2017). Service Level Expectations. Cornell University.

Hénard, F., & Roseveare, D. (2012). Fostering Quality Teaching in Higher Education:Policies and Practices. IMHE.

Inglis, A. (2005). Quality Improvement, Quality Assurance, and Benchmarking: Comparing two frameworks for managing quality processes in open and distance learning. Melbourne, Australia: Victoria University .

USFSM. (2017). A Strategic Planning Overview. USFSM.

WEF. (2017). Retail for Consumer Retail for Consumer Industries. World Economic Forum.

Wladen University. (2017). Form and Style Review Process: Document Expectations. Wladen University.

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