For example, Tesco who are currently the market leaders believe that to improve customer quality they will need to attend to their customers very needs immediately i.e. if a customer is standing in a queue which has an additional two customers in front of them; they will open up a new checkout point.
This in turn will help to increase customer quality as they are providing a more efficient way of doing business in the manner that the queues will have become shorter and so customers will have a quick and easy route to pay for their goods/services they have bought.
Once having identified the most suitable company in the same field for Sainsbury’s which may well be Tesco, Sainsbury’s will try to match Tesco as to what is making them better. Sainsbury’s will then make relative comparisons between themselves and Tesco possibly via inter-firm comparisons which is looking at statistical data and by weighing themselves against Tesco, Sainsbury’s will have discovered what modifications could be made to improve their quality and can then start to apply what is needed in order for them to develop quality.
Successful benchmarking will involve commitment from management and elements such as best practice information available to make feature comparisons. Benchmarking can help to strengthen overall quality of a firm as it can stimulate new conceptions about other ways of doing things.
This process may help improve quality in other areas too and so if Sainsbury’s identify their weakness and rectify it then the objectives outlined earlier will be achieved.
Total Quality Management at Sainsbury’s
By the same level of importance, Sainsbury’s employ a total quality management system and quality control.
Where the customer has choice, quality is vital. Sainsbury’s have a system of quality checks in the production department which is beneficial to them because if product faults are identified and corrected before being sold as being a quality end product to customers then it can increase brand loyalty, generate repeat purchases and allow a price minimum because quality adds value and can for that reason help to boost more profit and sales for the firm which are two of their aims.
If faults are detected, corrected and products and processes are continually improved on a regular basis then customers will repeat purchases as Sainsbury’s product’s will be at their height in terms of quality and appearance, thus helping to improve business performance as more sales and profit will be generated, for this reason they will achieve brand recognition and their reputation will become more renowned.
The keystone of company-wide quality management is the concept of customer and supplier working together to their mutual advantage. For Sainsbury’s this becomes 'total' quality management if the supplier/customer interfaces extend beyond the immediate customers, and beyond the immediate suppliers.
In order to achieve this, Sainsbury’s must organise itself in such a way that the human, administrative and technical factors affecting quality will be under control and produce consistency.
This leads to the requirement for the development and implementation of a quality system which enables the objectives such as improve and provide a highly quality assured service set out in the quality policy to be accomplished.
The quality system in use must be appropriate to the type of activity and product or service being offered.
Quality food is seen as a main concern for Sainsbury's customers. Sainsbury's have in place quality control at numerous stages of the food retailing business; in the enlargement of new food products, the company's Food Centre operates a three step process of quality assurance: Quality Control; Sensory Appraisal; and Development.
In Quality Control, new and re-developed products are sampled by product managers and buyers; in Sensory Appraisal, focus groups are used to discover what consumers think about existing and new products; and in Development, the Food Centre is concerned in identifying trends in food to make new recipe ideas.
I will now assess Sainsbury’s financial performance and use key sections of their five year summaries as a means of a financial indicator to prove whether or not they are achieving the corporate and strategic objectives that they set out to achieve as mentioned in task 2. In addition, bar charts, information from each Sainsbury’s directors, annual reports will be utilised upon too.
Sainsbury’s Performance
The results for Sainsbury’s shows that good progress has been completed in more challenging and demanding market conditions.
As you can see, the bar chart on the left hand side illustrates that Sainsbury's on behalf of all of their subsidiary companies have improved their operating profitability levels greatly because from the years 1999 to 2000, the plc lost a lot of operating profit as their profits depreciated by £123 million from £730 million to £607 million. But since then Sainsbury’s group profit levels have taken a turn for the good as they started to grow up until 2003 where the profit level has risen to a massive £752 million which has been their best ever operating profitability levels. £752 million pounds has shown to be a large improvement on Sainsbury’s group underlying profits since 2002 has they have shown an improvement of £73 million pounds.
The bar chart on the left demonstrates that Sainsbury’s Supermarkets have started to increase their profits once again as by 2003 profits had increased from £505 million to £572 million which shows an increase in £67 million. However having said the graph also acts as an indication that shows Sainsbury’s are still not quite performing as they should be because in 1999 their year finishing profits were a substantial £671million which was almost £100 million more, £99 million to be precise.
Sainsbury’s Supermarkets
The table here shows that Sainsbury’s have become more cost cutting effective by employing more part-time workers.
This cost cutting measure has proved to help in assisting Sainsbury’s make more profit because by employing additional part-time workers such as teenagers, they have cheap labour.
Moreover, the introduction of new business concepts by the Research and Development and Marketing departments such as the Sainsbury’s reward card, Nectar card and famous coups such as Jamie Oliver have helped increase sales as Sainsbury’s sales have augmented by £441 million customers from 2002.
The opening of more outlets have also helped improve the company’s sales figure because the additional stores give customers a much better reach, access and opportunity to purchase. So as a result the opening of more outlets has proven to be a success in terms Sainsbury’s achieving more Sales.
GE Lighting
As the largest governing organisation with regards to lighting in the world, it can be noted that one of their main activities/service that they provide – Lighting which is a subsidiary of General Electric has improved their overall performance in terms of sales revenue and profit. This is further explained on the next page.
How the Products/Services GE Lighting Provide help them achieve their Aims/Objectives
In 2003, GE Lighting augmented their existing product portfolio by introducing 15 new types of lights to their customers. These new lights that they provided are shown as follows:
“Enrich Lamp Range, MR16 230V GE Twist & Lock, PAR 16 lamp, PAR 25 lamp, T5 long lamp, Cov-R Guard Lamp, Micro Tech lamp, Biax T/E42W lamp, Biax 2D Integral lamp, Constant colour CMH lamp, Mini L Lamp, PAR 20/30 lamp, Tubular FX lamp and the Elliptical lamp 3.”
In relation, all the above new products had improved features such as increased wattage and were even smaller in size.
The new products that were launched will all help GE lighting achieve their main aims and objectives of profit, sales, growth and offer a highly competitive and quality assured service to the consumer/retailing chain, increase on customer perceptions because the additional products mean that the company are providing even more lights to their customers.
As different people in society have differing requirements and needs, GE lighting can now target a wider variety/range of customers. In turn, the introduction of new lights has reflected well on GE lighting’s performance which is demonstrated below.
GE Lighting’s Performance
GE Lighting Segment’s Sales Revenue for the year ended December 2003 (In Billions $)
GE Lighting Segment’s Profit for the year ended December 2003 (In Billions $)
As you can the tables clearly show that the introduction of new products such as lights by GE Lighting has proved to be a success. For example, before 2003 where no new lights were offered to customers, GE lighting generated less sales revenue and profit – GE Lighting made $1.5 billion dollars worth of profit in 1999 and 10 Billion sales. This got better down the years and by 2003 GE Lighting finished with almost $5 billion dollars worth of more profit and more than double the amount of sales revenue, 10 billion in 1999 which increased to 24 billion by 2003.
How Performance Tools GE Lighting Use helps them achieve their aims & objectives
Total Quality Management used by GE Lighting
Good companies are like good athletes - they have the will to win, but they need the right approach, the right attitude and the right training, for the edge which will make them world class performers.
When the competition is truly global, the opportunities to make manufacturing operations leaner and more cost effective may be small, but vital. GE Lighting’s approach to Continuous Improvement makes the difference, and aims to get the most from their workforce by involving employees in all aspects of their operation.
With statistical process control, quality inspection of each individual part produced is no longer used - the process is monitored through sampling. Dependent on the results from the sample, adjustments are made to the process to ensure 'quality' production.
W. Edwards Deming worked as Walter Shewhart's assistant and protégé and helped further develop this radical approach to improving quality. At about the same time, Shewhart also developed a never-ending approach toward process improvement called the Shewhart Cycle (also known in Japan as the Demming cycle): Plan-Do-Check-Act.
This approach emphasises the continuing, never-ending nature of process improvement. The cycle is in effect a simple feedback loop system.
PLAN
A plan is developed to improve a process.
DO
The plan is tested in a small field test.
CHECK
The results of the test are assessed.
ACT
If successful, the plan is implemented. The improvement process then begins again and the cycle is repeated. The repetition of the PDCA cycle, with each cycle producing improvement, leads us to the term
continuous improvement.
Benefits to GE Lighting as a company
- Improvement in quality.
- Reduction in tool changeover time.
- Inventory reduction in the order of 60%.
- Identification of where cost is added in the value chain.
- Halve throughput times.
- A working culture with a positive attitude.
- A workforce which is actively seeking improvements.
- Improve quality while reducing costs.
- Simplify administration.
- Eliminate of waste through an understanding of value
With total quality management GE Lighting ensures that a system of quality control and checks are implemented. If errors are identified whilst manufacturing lighting components before they are sold to their customers then customers will not lose their perception of the company as the end product delivered to them is of good quality. This in turn will help GE Lighting achieve their aims and objectives related to providing superlative products and improvement in user perceptions. If these objectives are met then it could result in an increase of their sales as people’s belief’s about the company will have risen and help GE lighting accomplish the aim of generating more profit, growth and maximise sales too.
As a conclusion, it can be said that the contribution of activities that both GE Lighting and Sainsbury’s provide are of great importance in the quest to achieve their respective aims and objectives. Activities in businesses regardless of what they provide will contribute towards their goal of achieving a certain corporate/strategic aim such as growth and increase in sales and profit because without them, there is no incremental contribution. TQM plays a pivotal part in GE lighting’s success, year on year they can strive to make their operations more streamlined and efficient. TQM enables GE lighting to tangibly identify and measure the effective of their operations.
The more efficient GE Lighting become, the greater the chances of them increasing in the likelihood of achieving their aims and objectives because there will be less flaws in the manufacturing stages of their production. If there are minimal errors identified, quality is improved. Quality is the key and everything that GE Lighting and Sainsbury’s strive for because they know that if they enhance products and introduce more activities, it will help them achieve all their objectives. Without profit a business will be unable to modernise themselves, reward shareholders, install new and innovative technologies nor justify some sort of investment. Without quality in products, an organisation cannot increase perceptions, gain loyalty thus hindering them to achieve the objective of increasing in sales and trying to grow.
https://secure.gelightnet.com/eu/specoem/highlights/index.html
http://www.lmu.ac.uk/lis/imgtserv/tools/
