Total Quality Management for McDonald's in Australia

This report discusses the implementation of Total Quality Management (TQM) for McDonald's in Australia. It covers the rationale behind TQM, concepts and tools to be implemented, and an implementation plan. The report also highlights the benefits of TQM, including cost reductions, customer satisfaction, organizational development, and competitive advantage.

Running head: TOTAL QUALITY MANAGEMENT
Total quality management
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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Question 1: The rationale behind implementation of Total Quality Management......................2
Question 2: Total quality management concepts and tools to be implemented at McDonald’s..5
Question 3: Implementation plan for total quality management.................................................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
McDonald’s is one of the most popular and well known fast food chains which was
originally founded in the year 1940 in California, United States. It initially began as a hamburger
stand and later emerged as a full blown fast food chain, with franchises around the world. At
present McDonald’s has over thirty five thousand stores in at least 119 countries around the
world. It also happens to be one of the most beloved fast food brands, providing top quality food
and beverages to customers across the globe. The target market for the brand would be people
between the ages of fifteen and thirty, providing affordable yet delicious food to customers
("McDonald’s Australia", 2018). The purpose of this report is to study the concepts of total
quality management or TQM with respect to McDonald’s in Australia. Total Quality
Management may be defines as an organizational approach to instill and inculcate a working
environment in the company where employees would continuously improve their performance
and work towards the overall betterment of the company.
Discussion
Question 1: The rationale behind implementation of Total Quality Management
Total Quality Management may be defined as a continuous process in business where
constant evaluations of the business operations are executed and any flaws or defects within the
system are highlighted (Goetsch & Davis, 2014). These flaws and defects are then rectified so as
to pave the way for seamless supply chain and operations in the organization. TQM can help in
streamlining operations, enhancing the quality of products manufactured, improve customer
experience and ensuring maximum employee performance. The process of total quality

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management at an organization is all encompassing in nature and takes into consideration the
various parties that would be responsible for determining the quality of the final product that is
delivered to the customer (Gharakhani et al., 2013). It can also be called a structured approach to
the overall management and development of an organization.
McDonald’s, which is one of the top moguls in the fast food industry of Australia, has
faced a number of issues pertaining to quality in the past. For one, it has often been accused of
blatantly ignoring the accepted and compulsory food quality standards in a few countries. As
such, implementation of TQM would prove to be extremely beneficial for the company. The
main rationale behind implementation of TQM is competitive advantage and improvement of
product and service quality. The main purpose of total quality management at an organization is
the continuous improvement of the internal practices (Ebrahim & Sadaghi, 2013). TQM takes
into account the industry standards and the internal priorities which are incorporated into its
strategies (Augusto, Lisboa & Yasin, 2014). It also comprises the attitude, environment and the
culture or attitude of the people working at the organization; apart from that, each aspect of
company operations including finance, marketing, engineering, design and production would
also be taken into account. In other words, TQM is a collective process and is adaptable and
infinitely variable. It would address the various key problems in a business which include
redundancy in processes, unnecessary tasks, duplicate efforts, human errors and so on
(Androniceanu, 2017). Post the implementation of TQM, a company would notice the following
changes:
 Cost reductions – If the principles of TQM are applied to an organization for a prolonged
period of time, it can prove to be immensely cost effective and reduce the overall costs
involved in running an organization. The reductions in cost would include elimination of

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repetitive work and waste or rejected products, repairs or reworks, customer support
costs, process efficiency increasing the profit per product, fiscal discipline which
enhances the overall functioning of the operations and increase in production. These cost
reductions would flow straight to the bottom line profits and would not invite any
additional costs. This would result in an increase in the overall profitability of the
organization (Mohammad Mosadeghrad, 2014).
 Customer satisfaction – One of the most important benefits of implementation of TQM
is customer satisfaction. Since the overall productivity of an organization would increase,
along with the quality of service delivered, customers are twice as likely to be satisfied
with the service delivery (Al-Dhaafri, Yusoff & Al-Swidi, 2013). For instance, at
McDonald’s, the implementation of TQM would improve the quality of food items and
service delivered at the store outlets. This is bound to increase customer satisfaction rates
as well. There are predominantly three aspects which determine the level of customer
satisfaction – product, innovation, service and experience (Akgün et al., 2013). The tools
under TQM would quantify the problems and would attempt to achieve the best possible
results. For instance, it would reduce waiting time of customers, improve client handling
techniques, modify the delivery processes to suit the needs of the customer and provide
better quality products.
 Organizational development – It is expected that TQM processes would improve the
overall working environment of the organization through training programs and quality
checks. Each employee of the organization would be educated on the importance of
quality and quality control and how it should be the priority of everyone, not just the
management (Fu et al., 2015). A proactive working environment would also boost the

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morale of the employees and motivate them to work harder (Al Swidi & Mahmood,
2013). This would also reduce the chances of errors and mistakes which slow down the
process. TQM also encourages the formation of cross departmental teams and facilitates
an environment of knowledge sharing between various individuals of the teams. It would
also pave the way for effective knowledge management, cost competitiveness, flexibility
in personnel management and open lines of communication.
 Competitive advantage – This is another major benefit of the TQM approach in an
organization. For instance, at present, McDonald’s faces severe issues with respect to
competition in the global fast food market. In Australia, there are a number of brands
which pose a serious threat to McDonald’s position as a forerunner in the fast food
industry. However, implementation of TQM would ensure all round benefits for the
company (Jiménez-Jiménez et al., 2015). It would also help the company penetrate newer
markets, break down barriers and promote a free flow of products and communication.
TQO would help organizations attain competitive positioning by innovation of new
products, improvement of existing products and reduction of prices.
Question 2: Total quality management concepts and tools to be implemented at
McDonald’s
At McDonald’s, one of the major issues faced is related to the quality of product and
customer service delivered at various outlets across Australia. As such, the process of total
quality management can be applied to the company in order to improve the overall performance
of the organization. A few concepts and TQM tools must be implemented in this case. They have
been discussed as follows:
Continuous improvement

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Sanchez and Blanco (2014) have defined continuous improvement is an ongoing process
at an organization which strives to improve the quality of products, services or processes at a
firm. The process of continuous improvement is such that it can provide incremental
improvement which takes place over a period of time or it may also provide breakthrough
improvement which happens all at once. In the process of continuous improvement, the customer
is usually the prime focus. Every aspect of improvement or change that must be made to the
organization as part of the process would involve customer feedback. The purpose of such a
process is to incorporate customer feedback with the organization goals to get optimum results.
As a matter of fact, Clark, Silvester and Knowles (2013) have commented that continuous
improvement would be instrumental in implementing lean operations within an organization. If
lean was to be incorporated into the McDonald’s operational strategies, it would ensure that the
process is flawless, seamless and free of defects. Continuous improvement and lean operations
are concerned with periodic evaluation of operations and identification of glitches and defects
which could be slowing the delivery process down. Any aspect of the operation which does not
contribute to the welfare of the service delivery or improves the customer experience for the
customer must be eliminated (Singh & Singh, 2015).
One of the most common tools in continuous improvement is that of the PDCA cycle,
which is an acronym for “plan, do, check and act.” This cycle suggests that continuous
improvement is a never ending cycle and keeps improving the process based on the results
obtained. In the first phase, the company would have to establish a clear mission and goals, along
with the expected outcomes (Pietrzak & Paliszkiewicz, 2015). For instance, in McDonald’s case,
certain changes may have to be made in the supply chain to improve the quality of the end
product. Similarly, the delivery process at the stores may have to be modified and enhanced to

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reduce waiting time for the customer (Kohlbacher, 2013). After the faults have been identified
and plans have been made for change, the next step is execution. Post implementation, it is
important to compare and contrast the performance of the company before the execution and
after it, so as to get a comprehensive idea of further changes necessary. Based on that, more
changes could be implemented and the cycle continues.
Six Sigma
Six Sigma is another tool in total quality management that works towards increasing the
overall capability of an organization. It works by decreasing process variation, defect generation
and increases the performance of the company. It would also improve profitability, quality of
products and services and boost the morale of the employees (Krueger, Mellat Parast & Adams,
2014). It is a data driven, disciplined and quality management approach which eliminates defects
within the operations of a system and strives for perfection in the entire operations chain of a
company, from manufacture of products to the delivery of service. In other words, Six Sigma is a
tool which quantifies the quality of service at a company and puts a number on the lean
operations within an organization. The tool suggests that a company that has successfully been
able to implement lean would not be producing more than 3.4 defects per one million
opportunities (Chakraborty & Kay Chuan, 2013). This can easily be calculated using a six sigma
calculator and highlights the chances of defect in the operations of a company.
There are a number of ways in which Six Sigma can help McDonald’s. For instance,
successful implementation of this strategy would help the company employees manage their time
more effectively. The employees would be working according to specific goals and that would
improve their overall productivity levels (Knapp, 2015). It would also reduce chances of delay in

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service delivery. Implementation of Six Sigma would automatically improve the quality of
product and service delivered to the customer, thus improving customer satisfaction rates. It
would also improve the rates of customer retention and loyalty. Moreover, it has been found that
six sigma can shorten the length of the cycle of product delivery (Assarlind, Gremyr &
Backman, 2013). With too many steps leading to the customer, there are often chances of delay
and prolonged waiting periods. However, Six Sigma would successfully cut out unnecessary
aspects of the product cycle, thus shortening it.
Service quality management or SERVQUAL
In simple words, service quality management may be explained as the comparison
between the perceived or expected quality of a product or service and the actual performance of
the company. A company which has high service quality management would be more equipped
to meet the ever changing needs and demands of the customers than a company with low service
quality. Such a company is also more likely to hold a favorable position in the market, with
respect to its competitors (José Tarí, Heras-Saizarbitoria & Pereira, 2013). Improvement in
service quality management would involve a renovation of operational procedures, identification
of problems and systematic establishment of valid, reliable and practical performance solutions
(Talib, 2013). It also includes measurement of customer satisfaction and incorporation of
obtained results into TQM strategies.
At McDonald’s which operates within the food and beverages industry, the five
principles of SERVQUAL are of prime importance. They are:
 Reliability – This refers to the brand’s ability to provide services accurately and
dependably, while at the same time, abiding to the promises made to the customer.

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 Responsiveness – This refers to the ability of an organization to respond to the changing
needs of the customers and be prompt with their service delivery.
 Assurance – This is the ability of the company to convey trust and assurance to the
employees, ensuring them of quality of food products and service delivered (Tseng &
Wu, 2014).
 Empathy – Each customer is unique and thus personalized attention is compulsory. The
company must also be considerate of the needs and requirements of the customer.
 Tangibles – This refers to the physical attributes of the company like brand image,
appearance, ambience, facilities, packaging and so on.
Question 3: Implementation plan for total quality management
In order to implement total quality management and the various tools and concepts
mentioned above, the following steps would have to be followed (Calabrese & Corbo, 2015).
 The first step in the process would be clarification of the company goals and missions.
Every aspect of the company’s TQM strategy would be customer oriented. Employees
would have to realize that every action on their part would have an impact on the overall
performance of the company.
 The critical success factors of the company would be identified. For example, the critical
success factors in the case of McDonald’s would be the market share, customer
experience, customer loyalty and product quality.
 Measures would have to be taken to accumulate customer feedback. This could be done
through online surveys or questionnaires. For instance, the customers visiting the stores
and outlets would be invited to take part in the survey. The data obtained from this survey

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would then be used to understand the level of customer service at the organization. This
would also highlight room for improvement at the organization (Topalovic, 2015).
 There should be commitment on the part of all the employees towards quality
management and improvement. A culture of continuous and ongoing improvement must
be implemented within the organization which is based on cooperation and coordination
between the management and the employees (Gimenez-Espin, Jiménez-Jiménez &
Martínez-Costa, 2013).
 A map must also be created for the processes that require change and the course of action
to bring about required change. For instance, while using the Six Sigma tool, the
company would have to take into account the redundant procedures and unnecessary
steps that slow down the service delivery process to the customer.
 Employee training is an important aspect of implementing TQM at McDonald’s. Each
employee would have to be on board with the idea of change for improvement and they
would also have to trained for successful implementation. For instance, if some
technology is to be added to the operations as part of the continuous improvement
process, adequate resources and training would have to be provided to the employees
(Khanam, Siddiqui & Talib, 2016).
Conclusion
To conclude, it can be said that total quality management or TQM is one of the most
useful strategies that any company can implement. It is entirely focused on the quality of service
and product that is delivered to the customer. Total quality management can be said to be an
integral aspect of every company since it ensures that top quality products are delivered to the

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customer in a timely and efficient manner. The above report presents an analysis of the concepts
of total quality management in McDonald’s Australia and the myriad benefits it would entail.
The three major tools of TQM have also been discussed, and an implementation plan has also
been provided for the same.

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