Analysis of Total Quality Management Strategy in Amazon's Operations

This report provides an in-depth analysis of Total Quality Management (TQM) strategies within Amazon's operational activities. It begins with an introduction to operational management and the importance of quality in customer satisfaction. The report then delves into the key aspects of a TQM strategy, including ethics, integrity, employee training, teamwork, leadership, recognition, and communication, and assesses their contributions to organizational performance. The study further explores the use of systems, tools, and techniques to solve quality and process problems, such as the PROFIT model and benchmarking, to improve customer satisfaction and business productivity. The report concludes by examining ways to plan and implement effective quality management strategies within Amazon, addressing issues like delivery services, payment, and pricing. This report is a valuable resource for understanding how TQM can enhance organizational success.

OPERATIONS AND
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
Key aspects of a Total Quality Management strategy and its contributions in organisational
performance.................................................................................................................................1
Way of using system, tools and techniques to solve quality and process problems...................4
Way of planning and implementing strategies for quality management in Amazon..................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
An organisation consists of various functions among whom operational management is
considered as main. In this process, managers are performed various activities in order to make
sure that quality offer to customers must gain their satisfaction. In general, quality of products
can be measured in terms of reliability, performance as well as durability. Therefore, in this
process, management of a firm takes different measures to ensure that commodities manufacture
in firm should be defect free and made as per requirement of consumers. In this process, they use
quality management tools which helps in designing and making a perfect product (Ham, Hitomi
and Yoshida, 2012). This would aid a firm in generating revenues and high productivity for
business as well as in reducing wastages also.
In this context, a project is going to prepare on making an analysis of Total Quality
Management in operational activities of a firm. It will discuss about appropriate research sources
which provide a theoretical review on key aspects of TQM strategies as well as way to increase
performance of an organisation. Further, quality system, tools and techniques used for quality
and process management also discussed. The company which will be taken in present assignment
is Amazon. It is an American electronic commerce firm of UK which offers products like Kindle
e-readers, Fire Tablets, Echo and more. This firm is facing various issues in production due to
which performance of business decreases. Thus, this report will help in resolving its problems by
planning and implementing strategies in systematic way.
TASK
Key aspects of a Total Quality Management strategy and its contributions in organisational
performance
Total quality management refers to the overall growth of the organisation for long term
success by customer satisfaction. In this whole organisation participates in the development
processes, services, products and working environment. Amazon is one among the top
organisation in service industry which provides opportunities to many small and medium-sized
companies to connect with the customer directly (Cheng., and et. al., 2012). This company offers
all of its products and services through online sites which is most trendy and favourite mode of
shopping from customers point of view as it serves vast range of products. Amazon offers
diversified products like grocery, electronic, home furnishing, toys, apparels, books and basic
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necessity of customers. In context to Amazon, there are several elements of total quality
management which have impact on the organisational performance. These elements are
evaluated as below:
Ethics: It is the discipline of good or bad situations in which employees or organisation
may react in the different manner. In context to Amazon, it has its own ethics of working which
works as the guidelines for employees that have to be followed by them. Ethics of organisation
helps employees in improving their work performance as they know the what is expected by
them in terms of job responsibilities. Manager of Amazon uses this element by declaring their
own ethics at the time of inductions. It is most important key element of TQM which helps in
overall growth of the organisation.
Integrity: It is the quality of honesty, values, sincerity, and fairness which an organisation
required to adapt in order to achieve organisational growth. In context to Amazon, its managers
concentrates on building and developing integrity among the employees that will directly attract
the customers. Customers are more loyal towards organisation which are honest and focuses on
customer satisfaction (Drucker., 2012). In terms of TQM, integrity is the important aspect as it
develops the honesty, trust among the employees which results in improved performance.
Employee with honesty always tries give their 100 percent in work that will improve their work
efficiency.
Training: Training is the tool used by organisation to develop skills of the employees
with the motive of achieving organisational goal as well as personal goals of employees. For
example: Manager of Amazon conducts training & development sessions as per the job
requirement of employees. With the changing scenario of technology, this company have to opt
advance technology to maintain its name among the top organisation in service industry and
these new technology requires developed skills and training to utilise its benefits. Amazon
conducts various training & development session for its employees that is the part of TQM
which makes them familiar with advance technology and also make their work easier in order to
save time and efforts of staff (Harding, 2012). These training session improve their interpersonal
skills, decision making, problem solving, technical skills
Teamwork: When a group of employees or team works together with the motive of
achieving common goal can be termed as teamwork. Teamwork is necessary for every business
to complete their work on time and achieve specific goal. It has been observed in many surveys
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that employees feel more comfortable while working the team. In context to Amazon, It is the
responsibility of the manager to develop team spirit among the employees (Goverde and Meng,
2011). For example: Manager of Amazon have made several teams in its offices and branches,
these teams are made on the basis of employees skills to complete their daily base work on time
and achieve organisational goals. Teams are made and separated on the basis of employees who
shares similar job role and responsibility are collaborated in single team which are required to
work together with the motive of achieving common goal and objective (Huang, Jing and
ZHANG, 2012). Teamwork supports the employees in completing their work on time and before
time. In addition to this, it also develops the skills of the employees which they learn while
working with other colleagues.
Leadership: Skills of leading people, employees or an organisation is defined as the
leadership. Leadership in total quality management is required have manager who have ability to
motivate his team, provide them inspiring vision, regular guidance and better strategies for the
growth which can be easily understood by the team mates. For example: manager of Amazon is
required to have the leadership skills with great influence over the employees to convince them
to work according to his own philosophy, values, goals and objectives. In addition to this, TQM
helps the manager by sharing good relation with the teammates and guide them timely according
to the organisational goals and requirement. Proper guidance of the manager inspires the
employees to work efficiently and in effective manner.
Recognition: It is termed as the identification of the person or employee with his
previous work performance. Recognition plays an important role in TQM as it motivates
employees for long term and inspire them in improving there work performance with the motive
of achieving more recognition and award in future. In context to Amazon, manager of this
company measure work performance of the employee and give them awards and recognition
accordingly (Nakayama and Bucks, 2012). Company believes in recognise its employees in
different ways, time and places. Top performers are awarded in front of the top management in
award ceremonies with trophies and rewards to realise them that organisation values their work.
Communication: This term is defined as the exchange of ideas between two or more
people with the valuable meaning. In an organisation, employees communicates with their
colleagues, managers, top management and other staff for the motive of completing the task.
Manager of Amazon have to perform various job responsibilities in the organisation to complete
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achieve organisational goal. For this he adapts proper method of communication in organisation
between the employees, suppliers, customers etc. to convey correct information to them. There
are several ways of effective communication followed by amazon to improve their organisational
performance are discussed below: Downward communication: In this system, managers usually give advices and orders to
its employees. Through this medium of communication supervisor discusses TQM
objective with the employees. Upward communication: Through this subordinates provides suggestions to its superiors
which have impact on the TQM as employees are the only one who could give actual
suggestions to the senior authority about the issues and where improvement can be done.
 Sideways communication: This kind of communication refers to free mode which breaks
the barrier between different-different departments. Also provides complete liberty to
employees which supports in communicating to customers as well as suppliers (Pavlineri,
Skoulikidis and Tsihrintzis., 2017).
Total management system includes all the above discussed key elements to improve the
performance of the Amazon. It is the responsibility of the manager to include all the factors in
the workplace to execute successful TQM in the company. Hence training is required for the
employees to manufacture quality product and also improves their methods of customer
handling. By following these elements organisation can develop its overall performance.
Way of using system, tools and techniques to solve quality and process problems
Due to more sophisticated markets, manufacturing companies are going under deep
pressure. It forces them to produce higher quality of products which is considered as the main
requirement of customers (Importance of Total quality management in organisation,2018). Other
reasons behind the same are increasing globalisation, intense competition under business
environment, customer awareness and more. Thus, in this context Amazon Company is required
to understand concept of way of changes unfold in competitive environment. This firm mainly
concern on satisfying needs of consumers by offering them high quality services in short period
of interval at minimum cost. For continuous improvement, a company needs to address problem
first in a systematic manner by using a consistent and analytic approaches and use different-
different methodology on regular purpose as problems are also changes. For this process, they
can use PROFIT model which states six-step procedure that are-
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P- Problem definition
R- Root cause identification and analysis
O- Optimal solution based on root cause
F- Finalise procedure needed to be implemented
I- Implement the plan
T- Tract effectiveness of such plan and make verification so that desired outcomes can be
obtained
This process is used in terms of making improvement in quality by solving problems
occurred while improving quality of products or services (Turner, 2016). If desired outcomes are
not met in set period of time then this cycle will be repeated again and again. Thus, as per
present scenario, Amazon Company faces various issues in gaining satisfaction of customers due
to which productivity of business reduces. Therefore, to make improvement in the same and
gains attention of consumers, this firm is needed to use PROFIT model. This method helps in
identifying root cause of problems and techniques to resolve. Hence, it has identified that some
major problems find in this firm are delivery services, payment and pricing issues. Such kinds of
problems affect productivity of business also due to which customers can move towards other
companies for making their orders and get required services. Therefore, to resolve such problems
and deliver commodities on time to consumers some tools and techniques are given below which
would help in making improvement in quality.
Techniques for making improvement in quality
 Benchmarking: It is defined as a quality tool which is used in measuring entire
procedures for analysing performance. It would help in making a comparison with
standard performance after changes implementation in order to evaluate effectiveness of
improvement.
 Brainstorming: Under this kind of methodology, management team of a firm work with
each other in order to analyse problems. It will help in developing fresh ideas for solving
specific issues occur in process improvement. This process includes four main steps that
are- Clarify, Ideate, Develop and Implement. Clarify aids in exploring the vision through
determining main goals of business, Ideate involves procedure of identifying ideas
through brainstorming and Developing will help in formulating solutions for the same.
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While Implement aids in formulating an action plan after exploring all kind of resources
need for implementing strategies (Subramanian and Ramanathan,2012).
 Flowcharts: This is considered as the most important quality tool in process
improvement. It enables management to draw entire process in a logical form which
helps in analysing major stages carried out in process easily. Flowcharts is generally used
in selecting important procedure among many for summarising the system of processing
accurately.
 PDCA cycle: It stands for Plan; Do; Check; Act cycle which is used as initiative in
process improvement which results to do actions in improving quality in more systematic
manner.
These techniques help operational management of Amazon in identifying and addressing
areas where problems are occurred in business.
Tools for making improvement in quality:
 Balanced Scorecard- This kind of tool is used to identify problems and improve
different internal functions of business. It would help in getting desired outcomes of a
company in short period of time. The main purpose behind using balanced score card in
an firm like Amazon is to reinforce positive behaviours within working system by
analytic four different aspects that involve business procedures, customers, finance,
learning and growth. It is used basically to meet desired objectives, initiatives as well as
goals of business. In addition to this, it also aid in identifying factors which hider
performance of enterprise as well as outlining changes for future scorecards (Söderlund,
2011). Management of Amazon use this tool to implement strategies and policies in order
to map where value is needed to add so that improvement in quality can be made.
 Lean Manufacturing- It is a systematic tool used to minimise wastage in manufacturing
companies without making any kind of defects in productivity. It helps a firm in
determining what adds value in quality through reducing unwanted else. The main
purpose of lean manufacturing is based on simple idea i.e. to relentlessly work on
reducing wastage from manufacturing process so that higher quality of products can be
obtained. In general, waste is stated as a term that doesn't add value in products from
customer's point of view. Thus, this would help Amazon in providing defect free products
to customers and manufacture only at the time of demand. Some tools used in this
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methodology are Cellular Manufacturing, Takt Time, Standardised Work, Quick
Changeover, Mistake Proofing, Total Productive Management and more. In Cellular
manufacturing physical resources of organisation are arranged in proper way so that
similar kinds of products can be manufactured in group (Robichaud and Anantatmula,
2010). Managers of Amazon use Takt Time (Time available, Demand, T describes
information for number of units) which assist in executing transactions only at the time of
consumer's requirement. While for solving problems related with quality of products is
solved by TPM technique. It is based on team-work system in order to improve Overall
Equipment Effectiveness (OEE) which involves performance, quality and availability.
 Just in time (JIT) manufacturing- This tool assist a firm to manufacture products as per
requirement of customers, when they want it and in number of quantities as demanded by
them. It is used by management of Amazon to resolve problems occur within business
environment due to late delay of products to customers or complete their demands within
set period of time. Generally this kind of problem arise when customers put an order of a
certain commodity which is not available in stock so they have to wait. Therefore, by
using JIT system, a firm like Amazon gets various benefits such as reduction in inventory
costs, handling equipment, lead time, improving quality and more (Hitt, Xu and Carnes,
2016). All these things help in increasing productivity by highlighting problems in more
quick way.
 Six Sigma- It is a set of techniques or tools used in making improvement in quality. In
general, it is used in identifying as well as removing causes which creates defects in
output of a process. In addition to this, this kind of tool also use in minimising variability
occur in manufacturing and business processes. It includes empirical and statistical
methodology which assist Amazon to follow a defined sequence of steps as per set
objectives like to minimise costs, reduce process cycle, increase customer satisfaction
and more. Six sigma is based on DMAIC model which stands for Define, Measure,
Analyse, Improve and Control. In first phase, managers of Amazon is required to define
problems based on demands of customers (Ramasesh and Browning, 2014). In second
step, they must quantify problem i.e. to measure current performance of production or
business by gathering reliable data. In another phase, they need to identify root cause of
problem by closely analysing the process, graphically display data, verify causes and
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more. While in fourth stage, managers are needed to choose best solution and
implementation the same in effective way by ensuring improvement. Further in last step,
for controlling complete procedure of quality improvement, they have to maintain entire
solution. Thus, through all these processes of JIT manufacturing, Amazon can resolve its
problems and gain higher satisfaction of customers.
Way of planning and implementing strategies for quality management in Amazon
Quality of any kind of product can be evaluated as per reliability, durability as well as
how it performs. It is considered as crucial parameter that differentiates a company from its
competitors. The main purpose behind taking approaches of quality management is to offer a
high quality of products to customers as per their expectation. As it has seen that consumers
always like to repeat purchase procedures from a firm when they get high satisfaction. As per
present scenario, it has seen that Amazon Company which operates business in many countries
worldwide and offers international shipping of goods to other nations.
Currently, it faces various problems in terms of service quality due to late delivery of
products. So, its management is going to use hybrid strategy to overcome from this kind of issue.
This strategy is a combination of two approaches of total quality management that are lean
manufacturing and six sigma (Zhang, Shah and Papageorgiou, 2013). Both approaches of quality
management helps in reducing cost of manufacturing by minimising wastages and variability
occur in the same. This will provide various benefits like- Increasing efficiency: By minimising wastages in production and manufacturing high
quality of products, entire process of Amazon will become more efficient. Decrease costs:Reducing or eliminating defects in products will automatically reduce
wastage and costs of products. By using six sigma and lean manufacturing process,
operational managers of Amazon become able to manufacture defects free products. Increase employee motivation: By involving employees in decision-making procedures
and given them opportunities for development help in increasing motivation level of
them. Enhance customer satisfaction: Improving qualities of commodities makes and
delivering the same on time aids this firm in getting high satisfaction of customers.
 Increase revenue: After getting efficiencies in production, manufacturing cost of
Amazon got reduced and offer best services to customers in short period of interval (Zeng
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and et.al., 2012). This will aid them in gaining loyalty and retention of customers for long
period of time.
The ways to for implementation of this strategy that managers are needed to be focused
more given as below- Define strategy framework-In this context, managers of Amazon are required to define
the whole concept of strategy to employers and employees so that they can get necessary
information. This would help in understanding goals and objectives of organisation as
well as on which manner they need to work on. Thus, they management is required to
organise a meeting with staff members to tell them strategies going to use in improving
quality of products. Build plan-This is the second step in which managers are required to analyse from where
they need to actually create a plan. It includes various steps of building a plan that are
make a proper team, address area where plans need to be executed and set a proper time
framework. Define KPIs- Key performance indicators is considered as one of the oldest management
tool in which employers of Amazon are required to select at least one KPI in each
addressed area as well as keep update the same in every month. Implement strategy reporting- This step guides a firm to implement strategy by focusing
on reporting (White, 2016). Some main objectives of this kind of report are consistency,
simplicity, accountability and insightful.
 Link performance to strategies- In order to get perfect outcomes in above phases, it is
necessary for management of Amazon to create a link between performance reviews and
strategies used by them.
Some other ways that are required to be concerned also for implementing strategies are:-
Getting strategy ready for implementation: In order to reduce wastage time for planning
process, strategic plan used to evaluate how activities will be done in operations. Along with this,
it also addresses who, when, where and how strategy will be implemented.
Avoiding the implementation pitfalls: To stay away from pitfalls while implementing strategy
plan based on hybrid, managers are needed to determine causes which many create the same. In
includes lack of ownership and communication at workplace, lose sight of set goals, meaningless
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plan, no accountability and more. Thus, they require to focus on these pitfalls so that strategic
plan can be implemented in desired way.
Ensure support of people within business environment: Without a proper resource, a company
cannot gets its desired success in set period of time. Therefore, in such a process, operational
managers of Amazon should make sure that there is sufficient availability of resources in
organisation (Victor and Ponnuswamy, 2012). It includes human resource, structure, system,
culture and raw materials. A systematic arrangement of these key components help in
implementing strategies successfully. In addition to this, they must provide proper information to
people so that higher commitment of them can be gained.
Determine plan of attack:For implementing plan, managers of operational management of
Amazon are needed to go through on below steps that are:-
 Finalise strategic plan after raising funds properly
 Prepare a proper budget plan to implement strategy
 Produce some more versions of plan
 Establish balance scorecard system in order to track and monitor performance of plan
 Introduce performance and reward system at workplace to motivate workers
 Roll out desired plan to entire organisation
 Set up short-term goals to accomplish objectives of long-term plan
CONCLUSION
It has been concluded from this report that operational management is an important
function of a company. In this department, managers perform various activities in order to
manage entire functions of organisation. As per present scenario, manufacturing and services
industries have been taken to evaluate the importance of operation management in business.
These kinds of firms are needed to take various actions in business in order to ensure that perfect
quality of products to be offered to customers. It includes different approaches of total quality
management like just in time, lean manufacturing, six sigma and more. All these approaches help
managers in evaluating strategies they need to implement in production and organisational
system so that wastage can be minimised. It also helps in reducing cost of manufacturing by
producing best services and defect free products to customers as per their expectation.
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