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Study Into Total Quality Management of McDonalds v1
Study Into Total Quality Management of McDonalds v1
of McDonalds
Introduction
The father of the quality movement which is W. Edwards Deming introduced the concept of
management named Total Quality Management (TQM). This approach management originated in
Japanese Industry in the 1950's and became popular in the West since early 1980's. TQM is a
system for a customer focused organization in continual improvement that involves all employees of
all aspects of the organization. Employee involvement, focus on the customer, benchmarking, and
continuous improvement are the four significant elements of TQM. Besides, there are some
management techniques which involve in the implementation of TQM, such as quality circles, Six
Sigma, reduced cycle time and continuous improvement
Employee involvement is creating an environment for employees as to have impact on decisions
making and actions which can affect their jobs.
Focus on the customer
Customer is the only element who determine the level of quality and the worthwhile level from all the
efforts which organization do to foster quality improvement, training employees, integrating quality
into processes management.
Benchmarking
Benchmarking is the process of comparing one's business processes and performance to industry
as to learn and practice from other industry for achieving the best performance.
Continuous improvement
The process which involve ongoing efforts to improve the system, products, services or process to
achieve improvement in an organization and company.
Quality circles
A quality circle is a group of volunteer form by workers under their supervisor who are trained to
identify, analyze and solve work related problems as to improve the performance of the organization.
Six Sigma
Six Sigma is a management strategy which use to seek for improvement of the quality of an
organization process outputs by identify, removing the causes of errors and minimizing variability in
business processes.
For TQM programs that do not have management commitment and employee involvement are
bound to fail. This will contribute to poor business results and employee turnover. High turnover
rates are a challenge for any company in the food service industry, including McDonald's. Both
managers and academics believe that, with commitment from senior management, by involving
employees in problem solving, decision making, and business operations, performance and
productivity will increase. Employees should be encouraged to control their destiny and participate in
the processes of the organization. To be effective, employees should be given power, information,
knowledge, and rewards that are relevant to business performance. The Restaurant People Strategy
is designed to offer a compelling employment value proposition by providing unique benefits, training
and opportunities that meet the needs of today's workers. McDonald's benefits program is designed
to attract, retain and engage talented people who will deliver strong performance and help
McDonald's achieve our business goals and objectives. These benefits include health and protection
such as employee and dependent life insurance, dental, travel and business travel accident
insurance; pay and rewards such as base pay and incentive pay, company car, profit sharing, paid
holidays and vacation, educational assistance and several other benefits. This will help in higher
levels of employee commitment in the countries where the company operate, which in turn, will
continuously improve employee retention rates.
The most attractive side of McDonald's' activity is the training that stands as background in every
single employee. McDonald's corporation started his fortune training people on how to be kind, fast,
precise and effective. There is a world-famous Hamburger University which is nearby the
headquarters building, in Oak Brooke, Illinois, and serves as a training campus for restaurant
managers and company leaders. Because of McDonald's international scope, translators and
electronic equipment enable professors to teach and communicate in 22 languages at one time.
McDonald's also manages ten international training centers, including Hamburger Universities in
England, Japan, Germany and Australia. Today, more than 50,000 managers in McDonald's
restaurants have graduated from Hamburger University. McDonald's believes that his quick-service
format would be lost if service at the order desk was not courteous and efficient, to avoid this
problem some detailed video tapes have been created to train every single worker who had to have
direct contact with the customers. The tapes cover every aspect of dealing with the customers during
his 15 seconds at the counter. Crewmen are instructed to initiate each order with a polite question:
'May I have your order, please?' The success of these service methods cannot be questioned.
McDonald's brand mission is "to be our customers' favorite place and way to eat". McDonald's
operators, suppliers as well as employees cooperate to achieve customers' need in McDonald's
unique ways. They also have the best ideas with both large scale efficiency and local style through
the most dominant grouping of entrepreneurial spirit and System wide position around their Plan to
Win. McDonald's provides the customers with high quality of food and better-quality services in a
friendly, hygienic and enjoyable environment at a great value as to make their customers feel good
when having McDonald's foods and beverages.
McDonald's takes into account of the customers' nutrition. Researches had being carried out to
measure and create a menu which match the daily nutrition of their customers. In this busy lives
nowadays, McDonald's concern with the calories consuming and other diet-related concern from the
foods they provide as they want their customers to stay within their goals for the day. Besides,
McDonald's aim to inspire and motivate people to live balanced, active lives with their Balanced,
Active Lifestyles (BAL) efforts by bring in the global theme which is "it's what I eat and what I do".
Furthermore, McDonald's introduced children's nutrition meal named Happy Meals which were
originally designed for young-age children in suitable portion sizes with essential nutrients such as
protein, calcium, iron and vitamins B.
McDonald's hamburger patties are made with 100% United States Department of Agriculture (USDA)
inspected beef in U.S. the hamburger patties only cook and prepared with salt and pepper which
without added any preservatives and fillers. Besides, McDonald's hamburger buns are made from
North American grown wheat flour , the world famous French fries are made from potatoes and
cooked in a canola-oil blend. To ensure customers are under protection and satisfaction, McDonald's
improve their food safety and quality standard to the highest rank in the industry. They source their
ingredient from suppliers that hold on to strict standards for food safety and quality, including
behaves a controlled, well-maintain and clean environment throughout their entire supply chain.
They conduct stringent procedures for handling, storage and minimize exposure which will contribute
to the presence of microorganisms as to maintain the quality of their food.
Furthermore, McDonald's approach to environmental responsibility over the pass thirty years, they
come out with the solutions that are good for their business system and also to the world in which
they operate. The new environmental responsibility of McDonald's is The 2010 Global Best Of
Green. This is a progress that demonstrated on multiple fronts including energy, packaging, antilittering, recycling, logistics, communications, greening the restaurants, greening the workplace,
sustainable food and suppliers leadership.
In addition, to enhance the image identifying of McDonald's in customers from adults to kids,
McDonald's introduce a representative character named 'Ronald McDonald', the Chief Happiness
Officer of McDonald's. Ronald was born in 1963 and join McDonald's as goodwill officer at the same
year. Ronald appearance is a clown who wears long sleeve shirt with red and white striped, yellow
jumpsuit with matching red and white striped high stocking and a big red shoes. Ronald's job is to
entertain the customers and bring fun to their lives as he believes that life is all about having a good
time. He also loves to entertaining people of all ages, especially children as he labeled himself has a
kind of magical power to make everyone happy and laugh. This McDonald's character's first national
appearance is in the Macy's Thanksgiving Day Parade. To increase the acceptance of customers,
Ronald now is able to communicate in 31 difference languages.
There are also 24-hour McDonald's restaurant to serve customers as to improve customer
satisfaction. Besides, McDonald's introduces McValue Lunch from 12noon to 3pm from Monday to
Sunday. Nevertheless, McDelivery is available from time to time with only a minimum charge based
on every delivery.
1.3 Benchmarking
Benchmarking is a process which involves obtaining historic construction cost information collected.
This historic information provides the benchmark against which a customer can assess their projects
value for money at a base building level with set specifics separated out. Benchmarking also can
defined as the continuous process of measuring products, services, and practices against the
toughest competitors. To successful benchmarking are lies in analysis. Starting with companies own
mission statement, a company should honestly analyze its current procedures and determine areas
for improvement. Next, a company carefully selects competitors worthy of copying.
Reasons and benefits
Companies benchmark for many reasons. The reasons can be broad for example increasing
productivity. The reasons also can be specific for example improving an individual design.
Benchmarking is continuous improvement tool. Companies that use benchmarking strategies
achieve a cost saving of 30 to 40 percent or more. It supports the process of budgeting, strategic
planning and capital planning.
Benchmarking also can enhance learning tool. It is to overcome disbelief and enhance learning. By
hearing about another company or competitors successful processes it can make the employees
believe there's a better way to compete.
In addition, benchmarking also work as a growth potential tool. After a period time in industry, a
company may become practiced at searching inside the company for growth. The company would
better off looking outside for growth potential.
Besides, benchmarking is a job satisfaction tool. Benchmarking have developed how to networks to
share methods, successes, and failures with each other. The process has successfully produced a
high degree of a job satisfaction. Benchmarking is a systematic examination of a company products,
services, and work processes.
Types of Benchmarking
There are four different types of benchmarking. Before deciding to benchmark, a company should
determine what they want to benchmark.
Benchmarking against operations is called internal benchmarking. This is one of the simplest forms,
since most companies have similar function inside their business units. Internal benchmarking
objective is enabling a multitude of information to be share. The benefits come from identifying the
internal procedures, then transferring them to other portion of organization.
Competitive benchmarking is used with direct competitors. This type of benchmarking perform
externally, its goal is to compare companies in the same markets that have competing products,
services or work processes. For example, Mc Donald's compete with Burger King. By this strategy,
its can compare a related companies performance. With this direct competitor, information is not
easy to obtain. Public domain information is the most accessible.
Industry benchmarking is performed externally against industry leaders or against certain company
best functional operations. The benchmarking partners usually share some common technological
and some market characteristics. Because of no direct competitors are involved, the benchmarking
partners are more willing to contribute and share.
Process or generic benchmarking focuses on the best work processes. Instead of focusing on a
company's business practice, similar procedures and functions are benchmarked. This type can be
used across dissimilar organizations.
ways to incorporate physical activity into their everyday lives and motivating kids to be active by
engaging Ronald McDonald as ambassador for play and activity. Finally McDonald sponsoring major
sports competitions, including the Olympics and the FIFA World Cup soccer matches.
More to the point, McDonald creates connection between the quality of product and the ability of
employees by give training to their employees. Employees were having training for it work. For
example, the cashier is trained for all the cash handling; floor manager is polished against his
degree in the hotel management. Besides, workers in McDonald consist of on-the job-training and
largely vocational. More than those new workers were given orientation. McDonald also has a
training room for their employees. During the training, trainer is use a series of checklist. It's is
important for McDonald to create quality employees. In addition McDonald uses the strategy "right
person on right job" means that allocates resource in different areas according to the abilities,
qualifications, and experiences of employees. Beside, McDonalds has different departments for
different functions. For example, marketing department consists of marketing experts who perform
marketing analysis and finance department consist of finance experts who arrange and manage
finance.
Another strategy that McDonald use is Employee's job satisfaction means that provides training
opportunities to its employees. So it results in enhanced performance and they become more
interested to work in good manner, which gives a good reputation to the organization and trains its
employees of all departments to enhance their capabilities and to improve their skills.
A key part of the McDonald's philosophy is continuous improvement, not only in the restaurants but
with its primary and secondary suppliers as well. McDonald has developed a 'Supplier Quality Index'
(SQI) by which all suppliers are measured. It allows companies to monitor performance of suppliers
across the many agricultural and non-agricultural product and services. McDonald also conducts
regular audits each supplier including the two plants of Esca Food Solution Ltd. All Esca Food
Solution Supplier in turn are subject to audit:
One in-depth technical audit per year usually taking 2 full days
Traceability audits-unannounceal-three times each year for every supplier including farm visits.
Animal welfare audits
Product integrity audits
McDonald also introduces a sophisticated system of monitoring performance of its meat suppliers.
After that based on a number of Key Performance Indicator (KPI'S), system benchmarks quality
performance both against other suppliers and past performance that is operates in real-time. Also,
supplier receives a monthly summary report of performance.
environment with total involvement of people at all level. Thus, higher the motivational level due
participate management process. McDonald's values were recently integrated into their Global
Leadership Competency Model, which has in turn, been embedded into their Performance
Development System (PDS). As a result, every McDonald's employee's performance is assessed
not only on their work plan accomplishments, but also on the extent to which they demonstrate the
Global Leadership Competency Model and McDonald's values.
Stable Operation: McDonald's management has increased its operations from year to year with the
introduction of new products to enhance customers' willingness to dine in their restaurants
Design for Six Sigma: McDonald's has been encouraging businesses to focus on its
customers. Under the entrepreneurial spirit and harmony of system wide about McDonald's plan to
win enables them to execute the best ideas to the efficiency of large-scale and local talent. With the
McDonald's restaurant have been giving experience simple, easy and please the customer.
McDonald's referred to as DMAIC (Define, Measure, Analyze, Improve, and Control) which provide a
structure way for its own to approach and solve problems. McDonald's also are learning about Six
Sigma through GE's program, At the Customer, For the Customer (ACFC). McDonald's Management
will get a new perspective on their business through this program and this can help McDonald's to
continue grow. McDonald's has incorporated some aspects of the philosophy. "It's a disciplined
approach to decision making." Six Sigma philosophies involve measuring weakness in a process
and determining how to change the weakness to advantages. Proponents contend that using the
philosophy can result in cost reductions, less waste, and improved understanding of customer
needs.
McDonald's management has minimize costs, the problems of pollution, waste management, water
and energy conservation or that have occurred around the world to build a green restaurant in
Brazil. For example, the first green restaurant was opened in Sao Paulo, Brazil, in 2008, designed
and built to maximize the latest technological innovations to minimize about a natural. The
technology used in restaurant are rainwater storage tank to assist in irrigation, post-central drive
through illuminated photovoltaic power generated, and smart air conditioning, all of which
contributed to a 50 percent savings in water consumption and 14 percent in electricity for the first
year of operation restaurant.
profits. Sine McDonald felt that those services are effective, so they will continuously use the
services and keep on improving it. Thus, McDonald can process most order within a short time after
the order is received. Hence, McDonald can reduce the cycle time efficiently and effectively.
Conclusion
Throughout this assignment, we learnt the real meaning of Total Quality Management (TQM). TQM
is a very important concept use to apply in an organization or company daily operations. TQM
principles must be supported at all levels of the organization or company as to be effective in
improving quality from the lowest-level hourly employees to the highest managerial department.
TQM is essential to all functional areas of the organization including finance, marketing, production
departments and information system. The process begin with receive and understand customers'
wants and needs then produce goods and services based on it or even improve them to fulfill
customers' desires. TQM encourage each member of the organization remain alert, aware and
responsible for their contribution as to stay focus on the quality.
Managers and employees are encouraged by the implementation of TQM as to collaborate across
functions and departments as well as customers and suppliers to identify areas of improvement at
any possible areas. Teamwork, increase the satisfaction of customers, cut down costs are the
elements which emphasize in TQM philosophy. To achieve high standard of quality of the
organization, employees are trained and empowered to make decisions for problem solving. TQM
shift from a bureaucratic to a decentralized approach to control.
The financial benefits from using TQM included cut down costs, improve returns on sales and
investment and the ability to change higher rather than competitive prices. Besides, TQM increase
the reputation as a quality organization or company, develop new innovations using short period of
time, increase customer retention levels and improve access to global markets. By implementing
TQM, organization or company with the limited necessary resources may gain major competitive
advantages in their industry.