Strategic Quality and Systems Management Report for Esprit Holdings

This report provides a detailed analysis of strategic quality and systems management within Esprit Holdings, a Hong Kong-based apparel company. The report begins with an executive summary and introduction that sets the stage for the importance of operations management and quality management. Task 1 explores the significance of effective operations management, emphasizing its role in achieving organizational objectives and evaluating its success through various metrics, including inventory management and profitability. Task 2 focuses on the importance of quality management for Esprit Holdings, highlighting the need for continuous improvement, customer satisfaction, and competitive advantage. Task 3 delves into planning strategic quality changes, including organizational objectives, technology, strategic objectives, targets, resources, and implications for stakeholders. Task 4 outlines the implementation of the strategic quality change, emphasizing a quality culture and monitoring implementation. Task 5 concludes by monitoring the outcomes of strategic quality change and recommending areas for improvement. The report provides a comprehensive overview of the company's quality management practices and suggests strategies for enhancing its performance and achieving its goals.

Strategic Quality
and
System Management

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Executive summary
Esprit Holdings was established in 1968 and works in international market comprises of
Hong Kong, China, Canada, Australia, and North America. They have an architecture
department that is accountable for the worldwide design of its own stores. They have
achieved growth and success and become the recognized brand in the whole world. In the
following, an effort has been made to discuss the significance of operation management &
quality management and monitor the success in meeting the objectives. Additionally, it
discusses the strategic quality change and monitors the execution in the organization. It is
found that processes such as TQM will help the organisation in achieving its quality
objectives. At the same time systems such as ISO and benchmarking will help in evaluating
the performance and hence doing efforts to improve the outcomes.

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Contents
Executive summary...............................................................................................................................1
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
Importance of effective operation management.....................................................................................3
Evaluating the success of operations management............................................................................4
TASK 2.................................................................................................................................................5
Quality management importance.......................................................................................................5
TASK 3.................................................................................................................................................7
Plan through which improvement can be achieved............................................................................7
The organizational objective..........................................................................................................7
Current and proposed technology..................................................................................................7
Strategic objectives........................................................................................................................8
Targets to be achieved...................................................................................................................9
Resources, tools and systems to support business processes..............................................................9
Physical and human resources required.........................................................................................9
Training required.........................................................................................................................10
Evaluation of the implications of planned strategic quality change.................................................10
Effect of the change to the stakeholders and the steps required to manage..................................10
Evaluation of the effectiveness of planned strategic quality change............................................11
Evaluation of the implications of planned strategic quality change.............................................11
Design systems to monitor implementation of a strategic quality change........................................11
TASK4................................................................................................................................................11
Implementation of the strategic quality change...............................................................................11
A quality culture to ensure continuous improvement.......................................................................13
Monitoring of the implementation of the strategic quality change...................................................13
Task 5..................................................................................................................................................14
Monitoring the outcome of strategic quality change........................................................................14
Recommend areas for improvement................................................................................................14
CONCLUSION...................................................................................................................................15

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REFERENCES....................................................................................................................................16
INTRODUCTION
Operations management in any organisation plays an effective role in their performance and
their approach towards achieving success. In the competitive environment this is very much
essential. Along with this, it is also essential that company manages the quality and
implements a plan which has role in changing the scope of quality within the organisation
(Kull and Wacker, 2010). Quality change must be based on the standard procedures that
improves quality and improves firm’s performance. This report comprises the strategic
quality and systems management of Esprit Holdings Limited which is a Hong Kong centered
investment-holding organization involved in the apparel businesses. Its main business
involves retail, wholesale, distribution, and licensing of the garment as well as non-apparel
products. The company delivers apparel for men, women, as well as children, which include
casuals, sportswear, home, and lifestyle products. This report will produce the effectiveness
of operational management plan which helps in achieving organisational objectives. It also
highlights the quality management plan and the way quality management plan is important
for Esprit Holdings Limited. It also provides the improvements that will enhance the
organisational performance or quality as well the tools that will be required for making those
changes. In last part of the assignment, the recommendations have been provided regarding
the strategic quality change within the organization.
TASK 1
Importance of effective operation management
Operation management helps an organisation to move in the path of achieving the objectives
set by them. This is because it guides the organisation at every level of the operational
procedures so that they do not deviate from the goals they have set for themselves. Operation
management is associated with those activities that deliver the products and services to the
clients (Slack and Brandon-Jones, 2018). It is stated that it concentrates on all the activities,
which perform to transform varied inputs such as energy, information, finance, materials,
customer needs, and skills into the desired output for the final output. Efficient operation

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management is most significant for Esprit Holdings to attain its goals. The goal of the
company is to enhance quality along with zero defects. The company evaluate and manage all
the day-to-day operations in an efficient manner. The significant objective of Esprit is to
generate a distinctive design of apparel and conduct its business ethically. The company
accelerate its potential for sustainable development to operate it in the future world. It is
stated that only effective operation management enable Esprit to be capable of attaining its
objectives. In respect for Esprit as an industry there develops a need for the human resource,
better technology, effective management, and staff. Through this resources were allocated
several areas as the competent staff is to be hired, products are to be designed effectively,
quality measures are to be taken, and sustainable management so that high-quality product is
to be maintained. It is done so that in future they are capable of maintaining sustainable
development in the coming years (Jagoda and Kiridena, 2015).
The operation management of Esprit has added value to its transformational procedure
through managing activities with the latest technology and adapting with the new design. The
activities that do not have value have been removed and adapted the process of reengineering,
which has assisted the business to achieve effectiveness and stay competent. Therefore, it is
an ethical perspective to support Esprit to manage its responsibility. The company undertake
several operations comprising inventory handling, office administration, quality material,
information processing, and logistics to operate the task and offers the products to the
customers within the proper time (Voss, 2010). It is very significant in operation management
since its establishment. It deals with the operation, finance, design, purchasing,
administration, marketing, and staffing, which offer the products and services in the market.
It works with several activities productively so that able to attain its objectives of value,
excellent, innovative and quality services. Every organizational strategy needs an operational
strategy as it delivers an economic benefit to another.
Evaluating the success of operations management
It is essential for any organisation to evaluate the success of operations management and it
must be done on the basis of different metrics. There must be pre-defined parameters that
help an organisation to succeed in the market and hence ensuring success of their operations
management (Aziz and Curlee, 2017). It is stated that the success and profitability of
operation management determine how effectively Esprit Holdings utilize the adequate
resources to operate daily activities to offer quality products with the effective price at the
correct time for fulfilling the customer needs and preferences. The inventory management

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and profitability is the significant factor of operation management that Esprit utilizes in its
operations. It is stated that controlling and managing the inventory of the organization is very
critical. The innovative methods Just-in-Time and inventory control are used by the Esprit to
save costs and deliver products to clients rapidly. Generally, the significance of operations
management is fixed in every part of the company goals and has a critical role in achieving
the goals and objectives. The company has attained work efficiency, positive feedback from
the customer, high operating profit, and increased sales. These activities proved that they
have positively met its objectives and goals. Esprit Holdings clothing sales were down 3.4%
in 2012. It dealt with difficult trading conditions due to unfavorable weather and high
promotion. For example, the company could develop the commitment, establish a new team,
understand the customer needs and preferences, and deliver the difference on every single
product in such a scenario (Su and Gargeya, 2012).
The company could utilize transformed resources, which could be converted in the process
and should execute their plan adequately in order to attain their targeted goals and focus on
satisfying customer needs and preferences. The operation function is important to the Esprit
as they can produce the goods in several areas so that it can stabilize the worth of it. They can
market their products and services in order to communicate and generate customer requests.
It is indicated that sales have been increased by 5.5%, home furniture increases by 2.3%, and
store performance rose by 3.4% due to fastest delivery and effective operations. It shows that
great achievement of developing their business efficiently and effectively. They need to make
improvements and identify the best way to do the business (Cooke and He, 2010). For
evaluating the success and profitability benchmarking is the best way to target the opponent
and understanding the elements to make the business successful. They should adapt their
elements with certain changes to rise in the market. They can also utilize Balance Scorecard,
which represents the manner in which they deal with diverse stakeholder groups
(Managementstudyguide.com, 2019).
TASK 2
Quality management importance
Esprit holding deals in the business of many kinds of apparels and the quality becomes an
important aspect in its business. Today quality matters the most and hence the companies

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must be able to deliver what they have promised to their consumers. This is also essential for
gaining an edge over the rivals (Dror and Sukenik, 2011). Quality management is termed as a
continuous effort to make sure that it maintains customer satisfaction and customer loyalty
with the products and services delivered to them. These methodologies need personnel to
achieve tasks and adhere to structured policies that can sometimes be disruptive to Esprit.
Integrated tools can manage quality management activities and empower Esprit to avail the
maximum advantage at minimum risk. Esprit offers an integrated portfolio to address the
challenge of quality control with the advantage of ease of integration and adaptability. It is a
process, which constantly enhances the product quality through research & development,
fulfilling the customer needs, and feedback of the customer. It is believed that the products
Esprit Holdings sell are more developed, innovative and have high quality, which is only
accessible in their stores. They operate tough quality management systems, which have
grown with its suppliers. A varied range of product testing and online development supports
them (Fougnie, et al. 2016).
Esprit Holdings is more particular about the highly efficient products and services delivered
to the customers. They are initiating National Institute of Standards and technology, which
assists in productivity and performance excellence. It is a significant part of operation
management, which assists employees and management to constant improvement of their
products and services to satisfy the customer preferences and needs. However, quality
management is very significant for Esprit Holdings to develop the standards of high-quality
products and services. They should manage and establish client and quality maintained
processes, which can be a major part of their success and growth. It is to be stated that
establishing quality methods can be challenging for these organizations, which rapidly adjust
the fluctuations in the market. It makes sure that their customers are always satisfied with
what they observed. The quality management assists Esprit Holdings to lessen the damage of
products, waste, and inventory. It also assists to increase profitability and revenue and attain
its organizational objectives (Caridi, Perego and Tumino, 2013).
Esprit is having issue with the quality and currently along with the informal quality
procedures. Recently the company is facing increase in the number of return products for the
defective clothes. The cloth imported from broad for the sake of improved quality is also
reducing the profit margins of the company. It is also challenging to the turnover of Esprit.
The effectiveness of quality can be evaluated through the techniques like PDCA, SMART, 5
Gap Model, Process Mapping, and Servqual questionnaire. The PDCA (Plan Do Check Act)

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is a four step model for initiating change in the organization. It has no end and carried out on
the regular basis for the continuous improvement. This model identifies the opportunity and
plans a change. It tests the change to carry out small scale study. The test is reviewed and the
results are analysed finally the action is taken (Helfat and Martin, 2015).
Servqual model is utilized for quality improvement and 5 Gap model recognizes the gap
among customer perception & expectations, service quality and service delivery,
management perception & customer expectation, service delivery external communication &
customer delivery, and customer expectations & service quality. On the other is side, the
quality management in Espirit strives to use the highest percentage of the sustainable fibre in
the material. The Espirit decision tree process even has even created a good basis for the
usage of sustainable materials.
TASK 3
It is essential in the modern day business to have a quality change program that is
strategically designed. This is crucial for improving the quality of the output of the
organisation and hence the overall performance of the firm
Plan through which improvement can be achieved
The organizational objective
It is the objective of Esprit to produce products with zero defects. It is a management tool
which aims at reducing defects through preventions. This objective can be achieved by
motivating employees in the organization to prevent mistakes by contributing conscious
efforts. For instance, Esprit manufactures 2000 garments in a week. Generally, 100-200 items

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are found defective due to the carelessness of the organizational members. But the process of
zero defects can actually reduce the defects to 3-4 which is negligible. The zero defects can
lead to the consistent defect free products and to the continuous improvement.
Current and proposed technology
Esprit uses a pioneering technological strategy in order to adapt new tools. Such tools have
role in reducing the defects. The pioneering technological strategy also comprises the big data
which is used to outpace is direct competitors. The technology used by Esprit is more of
functional rather than fashionable (Boiral, 2012). Esprit is proposed to lean on the
technological innovation and user experience. The technological innovation of Espirit
comprises the steps like basic research, applied research, development, engineering,
manufacturing, marketing, promotion and continuous improvement. It innovations can double
the size in just 10 years along with improving the quality standards. The company aim to
practice zero defects in the future to maintain quality (Hornstein, 2015).
Strategic objectives
It is the strategic objective of Esprit to enhance quality of the products by reducing the
defects to almost zero. It can be made possible by using the total quality management (TQM).
It is a customer focused approach to foster quality improvement. All the employees in the
organization work towards the common goal which is quality. The quality can be obtained
once the defects have been removed from the organisation. TQM is also process centred and
includes a series of steps to carry out the process. The quality can be managed by consisting
different functional specialities. ISO 9000:2000 and ISO 9001:2000 are the two standards
which can be focused by Esprit. The artificial intelligence can also be used in improving
quality. The artificial intelligence along with huge set of data will enhance the way in which
process is carried on. TQM can even enhance the quality Esprit by 50%.

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Targets to be achieved
Esprit aims to achieve target to reduce the wastage by 10% in the first quarter. The TQM will
have significant role in reducing the wastage due to defects in the organization. Further, the
plan aim to reduce the defects in the second quarter by 5%. Finally Esprit will reduce the
defect wastage by 1% in the third quarter which is highly negligible.
Resources, tools and systems to support business processes
The resources, tools and systems are required to support business processes for the strategic
quality change. Espirit can make use of the fabric inspection machines as these machineries
are capable of inspecting all the visual, printing and defects. This machinery can be imported
by the company from India. It will cost around $4,000. This machine can be used by Espirit
to reduce the defects. It is gear box driven and with the VFD controlled.
Physical and human resources required
There are 15 human resources required in Esprit. These human resources will look after the
quality related tasks in the organization. The human resources required are:
Quality assurance manager – 2

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Design check manager- 4
Quality control inspector- 3
Specialised labor- 6
There is requirement of additional 6 specialised labor who can only focus mainly on the
defects. These labors will check the garments manufactured on the basis of quality. The
number design check managers required is 4. These managers will concentrate on bringing
out the defective garments due to the variations in design. The quality control inspector
needed in Esprit as per plan is 3. The quality control inspectors will check out the quality of
the garments on the basis of several measures. These inspectors tell the scope for
improvement. Finally the quality assurance managers required are 2. These managers assure
the quality along with the competence, suitability and efficiency.
The physical resources required for the Esprit are inventory and machineries in order to
conduct the business process. These have significant role in the producing high quality
products in the industry. At the same time capital is also required for making the changes as
in this process many new kinds of investments must be needed (Matthias, 2013). Company
also needs high quality raw materials that enable them to produce high quality products. New
technologies such as data management system, performance management system, inventory
control system and many others are to be used during this change (Hon Kam, Chen and
Wilding, 2011).
Training required
The training is required during implementation of the TQM in Esprit. The onsite training will
enable management and implementation team of Esprit to participate in the training group.
The discussion is done on the real life challenges faced due to poor quality. It helps in as a
result of positive impact on the TQM implementation process. The offsite training is also
given to the employees to escape from the distractions and interruptions in the routine
activities (McGrath, et al. 2016). The online training can also be provided to the employees.
It is interactive through the audio, video and downloadable reference materials. The training
for the TQM can even reduce the number of persons required in the organization from 3 to 2.

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Evaluation of the implications of planned strategic quality change
Effect of the change to the stakeholders and the steps required to manage
As the way of doing process and overall output of the company changes, it will have effect on
the stakeholders. It can be understood by the example that since company will automation
technology so as to reduce the defects hence it will reduce the numbers of job roles. Once the
quality is improved it will reduce the extra work burden on the employees (Schafer, 2011).
The task of 3 employees can be tackled by 2 employees. This might have negative impact on
the employees. At the same time it will have positive impact on the customers as they will get
high quality products. The steps required to manage are:
 Offer training to the employees on the regular basis so that they can become
compatible working with the changing working conditions. Such employees handle
the quality check. The training is provided on the quarterly basis.
 Include more stakeholders in the decision making process of the change plan.
 Communicate with the stakeholders effectively so that there is not distrust in the mind
of the stakeholders. The communication is helpful in enhancement and management
of quality (Manzoor, 2012).
Evaluation of the effectiveness of planned strategic quality change
The strategic quality changes have various kinds of challenges. It should be planned in the
effective manner. The effectiveness of the strategic quality change will surely reduce the
defects to 1%. It will also arrange all the resources that will required at the time of change. It
will even allow Esprit to ensure that their resources are not over utilised or underutilised.
Planned strategic quality change removes the last moment’s chaos (Thürer, 2013). It also
increases the chances of success of the plan as the company will make all the efforts that can
improve the performance of the company.
Evaluation of the implications of planned strategic quality change
The planned strategic quality change will help the organisation in keeping their stakeholders
together. Planned strategic quality change always allows a company to manage the
performance of the people while the changes are going on. It also ensures that their
performance does not get hampered. Its implications can be seen on the overall development
of the organisation as employees support the company in the process of making quality