A driving force behind total quality was the ‘Customer-First programme’ that was started in 1988. This method of improving quality has been taken on-board by Post Offices worldwide and adapted to accommodate their needs. Royal Mail clearly sees the customer as their main concern and base their business around them. This is clearly demonstrated as most of the improvements that have been made, are a direct result of the customer requesting what their needs and wants consist of. Examples of this are:
- Re-introduce Sunday collections of mail from selected post boxes
- More mail is now transported using Royal Mail’s own vehicles as a result showing a greater commitment to the customer for a more convenient postal service.
Royal Mail has adopted a fishbone diagram, [Appendix A] which enables the organisation to separate out causes from effects, and to be able to identify the problem in its original state.8 There are many occasions when a fishbone diagram is most suited to the situation. These could be:
- To assist both individuals and groups to see the full picture
- To record ideas that have been generated
- To find the symptom of the problem
- To investigate expected results of a course of action
A very positive effect of doing a fishbone diagram is that it is far easier to tell whether a problem has been investigated. In relation to Royal Mail, it helps to maintain their high level of quality standard ensuring any issues concerning quality are investigated in full detail.
Sources
5 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 185
6 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 182
7 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 183
8 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 202
An essential component in ensuring Royal Mail strived to succeed in total quality was the use of benchmarking. Benchmarking is a continuous, systematic procedure that measures Royal Mail’s products, services and processes against industry leaders. For many years now, Royal Mail has been participating in the World Class Financial Benchmarks9.
Royal Mail would use benchmarking to gain a better understanding of how outstanding companies do things, so that they can improve their own operations. Benchmarking consists of four basic steps10.
-
Planning. Identify the product, service or process to be benchmarked and the firm(s) to be used for comparison determines the measures of performance for analysis and collects the data.
-
Analysis. Determine the gap between the firm’s current performance and that of the benchmark firm(s) and identify the causes of significant gaps.
-
Integration. Establish goals and obtain the support of managers who must provide the resources for accomplishing the goals.
-
Action. Develop cross-functional teams of those most affected by the changes, develop action plans and team assignments, implement the plans, monitor progress and recalibrate benchmarks as improvements are made.
Benchmarking focuses on setting quantitative goals for continuous improvement.
[See Appendix B for an example of the benchmarking cycle]. To ensure benchmarking was a meaningful exercise, it was critical that Royal Mail benchmarked themselves against rival organisations, who had realistic turnovers, and who had been recognised through the Deming and Baldridge Awards.
The Malcolm Baldridge National Quality Award was first introduced in 1987 in the USA. The award had two main objectives11:
- To raise the consciousness of quality matters of US business leaders
- To provide a comprehensive framework for measuring the quality programmes of the nation’s businesses.
Sources
9 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 186
10 Based on extracts from “Operations Management, Strategy and Analysis”, by L.J. Krajewski and L.P Ritzman, pages 212 - 235
11 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 221
The first objective was accomplished as top management moved quality to the top of their priorities. The second objective was also accomplished as a framework to measure was constructed. The award attracted great interest from many companies and as many as five hundred thousand copies of the application guidelines were requested. The award has proved invaluable to many companies such as Federal Express who won the Baldridge award in 1990. The awards’ guidelines have become a means of learning how to integrate a total system of quality management for many companies. It is beneficial for companies to benchmark themselves against these companies as it gives a key insight into where the company stands in their level of quality.
To highlight the high level of quality required to achieve an award, in the first nine years (up until 1996) only twenty-eight out of fifty four possible awards were won12. What makes the Award so hard to accomplish is that the Baldridge Award enforces the company to show full commitment to quality in every area of the business. Typical areas that need to be addressed in order to get high recognition from the Award are13:
- Customers define quality
- Quality emerges from well designed and well executed systems and processes
- Senior managers need to create quality values and build them into company operations and company culture
- Continuous improvement is an integral part of the management and all systems and processes
- Companies must set goals and create strategic and operational plans to achieve quality leadership
- Company operations and decision making must be based on facts
- Quality systems include design quality and error prevention
- Companies need to communicate quality requirements to their suppliers and help improve their performance
The award is broken down into seven main parts and companies will be assessed on these areas [Appendix C] As can be seen from the pie chart, each segment is weighted according to their importance. The seven categories are14:
- Leadership
- Information and Analysis
- Strategic Quality Planning
- Human Resource Development and Ultra Utilisation
- Management of Process Quality
- Quality and Operational Results
- Customer Focus and Satisfaction
Sources
12 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 221
13 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 223
14 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 223
A positive effect that has come from the Baldridge Award is the European Quality Award (EQA), which is basically an enhanced Malcolm Baldridge National Quality Award. One significant difference between the two is that the EQA takes account for financial performance.
In order to attain total quality, it is important to look at process management and the effect that this will place within an organisation. Firstly, it is essential to establish what a process is.
“To maintain a wave of interest in quality, it is necessary to develop generations of managers who not only understand but are dedicated to the pursuit of never-ending improvement in meeting external and internal customer needs.”15
A process is the transformation of a set of inputs that can include actions, methods and operations, into outputs that satisfy customer needs and expectations, in the form of products, information services or – in Royal Mails case – results. Everything is a process, so in each area or function of Royal Mail there will be many processes that take place. For example, the finance department maybe engaged in budgeting processes, accounting processes, salary and wage processes, costing processes, etc. These processes will determine some of the actions necessary to improve quality. There are also cross-functional processes.
The output from a process is what is transferred to somewhere or someone – the customer. Clearly, to produce an output that meets – or even exceeds – the needs and requirements of the customer, it is necessary to control the inputs to the processes, which in turn may be supplied as an output from an earlier process. At every supplier-customer interface there resides a transformation process [Appendix D], and every single task throughout Royal Mail must be viewed as a process in this way.
Once the process has been established, and it is capable of meeting the requirements, you need to evaluate if you are ‘continuing to do the job correctly?’16
This brings a requirement to monitor the process and the controls on it. By asking this question, it is possible to implement a strategy of detection and prevention. This concentrates all the attention on the front end of any process – the inputs – and changes the emphasis to making sure the inputs are capable of meeting the requirements of the process, which should be a managerial responsibility.
Sources
15 Taken from “Operations Management, Strategy and Analysis”, by L.J. Krajewski and L.P Ritzman, pages 212 - 235
16 Taken from “Operations Management, Strategy and Analysis”, by L.J. Krajewski and L.P Ritzman, pages 212 - 235
These ideas apply to every transformation process; they all must be subject to the same scrutiny as the methods, the people, skill, and equipment and so on to make sure they are correct for the job. Within Royal Mail there are some very large processes – groups of smaller processes are often called ‘core businesses processes’17. Activities that Royal Mail must carry out especially well, for example delivering mail to its twenty three million households, if its mission and objectives are to be achieved.
The control of quality can only take place at the point of operation or production – where the letter is delivered, the sales made or the stamp produced. The act of inspection is not quality control.
To facilitate the benchmarking process, Royal Mail has devised a seven-point action plan. [Appendix E] This diagram represents a step-by-step process of how benchmarking is conducted.
Royal Mail quality improvement teams play a significant part in ensuring that high quality levels are maintained. This is achieved by working through their quality delivery process, going from18:
Output Identification Meeting Customer Feedback Loops
Requirements
By implementing a quality delivery process it has many positive knock-on effects:
- It prioritises work so that the most important activities are completed first
- Improve the quality of work delivered to the customer
- Eliminate work that is wasted due to people not doing it correctly in the first place
- Ensure teamwork and cooperation is carried out
- Satisfy the external customers
The quality delivery process can be seen in [Appendix F].
From the Teamwork Exhibition, Royal Mail were able to incorporate the following quality initiatives19:
- Three cleaning booklets that were constructed by cleaners at Darlington and then distributed nationally
Sources
17 Adapted from “Operations Management, Strategy and Analysis”, by L.J. Krajewski and L.P Ritzman, pages 212 – 235
18 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 181
19 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 180
- Introduction of a new Meter Resetting Centre at Royal Mail Peterborough. As a result of this, customer satisfaction rose from the ease of use and reduced costs and Royal Mail gained from financial savings
- In Guildford questionnaires were distributed in order to gain valuable information. From their findings it showed reason for concern as little as two offices out of the twenty-three had any technical records or drawings on site. Sixteen offices did not know that the engineers at the District office held the main office copies. Thirteen of the supervisors did not know of the location of the main water stopcock. From these findings, the team drew up a clear and concise method of dealing with the problems. As a result this improved overall quality and efficiency.
- The Sales Operations Department, based in Oxford, introduced a high-speed courier service where they proposed to offer a collection at 17:30 and delivery before 09:00 next day, nationwide. Key features of this service included:
- Optional late hand-in at mechanical letter offices
- Guaranteed money back service
- Credit account facilities (good for larger companies who use the service more frequently)
- Packaging provided
- Saturday collection option
- Minimal paperwork as the envopacks are all recorded by barcode marking
- A health and fitness centre was set-up in Cambridge in August 1999 to promote teambuilding. The knock-on effect of this was very positive reducing exceptionally high labour turnover rates and absenteeism and promoting better employee relations. As this was such a success, similar schemes were introduced throughout the country.
After addressing the current situation of Royal Mail regarding total quality, the report shall now look at how they were inspired by internal and external ideas to reach the standard that they have achieved.
An influencing factor came from ‘Teamwork 1991’. The purpose of this exhibition was that over one hundred total quality teams came from around the country and converged at a Post Office college in Milton Keynes. The exhibition gave each team a chance show their proposals for improving quality within Royal Mail. The Royal Mail team were able to draw upon many ideas from ‘Teamwork 1991’ and were able to put them into practice.
A US company called Corning Glass demonstrated a good idea. Their proposed idea was flow-charting a process. The aim of flow-charting is to create an optimum process by getting groups of people to individually draw-up a simple flow chart of a task. These simple flow charts were then placed on a wall and compared to one another. A process of discussion and debate then produces a final – or optimal – flow chart for the task20.
Another proposed idea from the Corning Glass Company was ‘Coffee Clutches’. The principal idea behind these is to build a stronger relationship between workers and managers. ‘Coffee Clutches’ take on an informal atmosphere approach where management have informal conversations with individuals about general issues such as quality issues or anything that employees feel is important. In contrast, group discussions were held where more formal feedback was provided.
The group work was conducted with fifteen employees, a facilitator and flipchart. The groups then attempted to answer the following21:
- What is right about quality here?
- What is wrong with quality here?
- Form a dozen or so issue statements; prioritise by votes
- Get the group to present their views back to their plant manager and union jointly
Corning Glass showed a strong commitment towards quality. This is demonstrated with the use of one hundred and fifty quality improvement teams, whose sole purpose was to monitor quality.
Corning’s idea of ‘Coffee Clutches’ shows great resemblance to the principal of quality circles.
Quality circles are typically said to have originated in Japan in the 1960s but others argue that the practice started with the United States Army soon after 1945 with the Japanese then adopted and adapted the concept and its application.
‘A group of staff who meet regularly to discuss quality related work problems so that they may examine and generate solutions to these. The circle is empowered to promote and bring the quality improvements through to fruition.’ 22
Sources
20 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 177
21 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 178
22 Adapted from “Operations Management, Strategy and Analysis”, by L.J. Krajewski and L.P Ritzman, pages 212 – 235
The adoption of quality circles (quality improvement team) has a social focus. There must be commitment from senior management, unit management and supervision, other staff and of course the circle members. A team of 6-9 people need to participate freely together, to challenge assumptions and existing methods, examine data and explore possibilities. They need to be able to call in expertise and ask for training. The quality circle needs a budget so that members can be responsible for tests and possible pilots. They need a skilled team leader who is sometimes known as a facilitator.
The circle needs to have a very good approach to23:
- Analysing the context of the problem and its situation
- Defining the problem and the relationship between its component parts
- How it identifies and verifies that the causes are indeed the causes. These must be understood otherwise solutions as developed may fail to address the real problem
- Problem definition requires quantitative measurement and often a consensus of qualitative judgement
- Understand the quality objectives to be achieved and evaluate the resources that can be brought to bear on the problem and possible solutions. Objectives relate to both what must be done and what would like to be done
Quality circles are a powerful way of involving large numbers of people in the quality improvement drive. Quality circles involve groups of junior staff tackling problems that they understand better than anyone else. They are improving tasks and processes for which they are responsible and are likely to be a major force in any continuous improvement scheme – generating masses of small ideas in teams rather than as individuals. Quality circles are highly effective if properly organised, supported and funded by management.
IBM had an original idea of incorporating quality measurement into performance appraisals. Each customer was dealt with on an individual basis through a quality plan. This process resulted in a positive outcome as it showed that nobody could get a better rating than was achieved in the quality area. This idea inspired Royal Mail that directs customer contact was essential.
Another key point that was emphasised at ‘Teamwork 1991’ was teamwork to help resolve problems and improve quality. It was demonstrated that the use of effective teams could improve relationships with both internal and external customers. This demonstrates the theory of synergy whereby the output is greater than the sum of its parts. This means that if a team works efficiently together, then the results are proven to be far greater than simply individuals working on their own.
Sources
23 Adapted from “Operations Management, Strategy and Analysis”, by L.J. Krajewski and L.P Ritzman, page 223
In contrast, however, individual effort was also emphasised as important. This is demonstrated with the company American Express (AMEX) where positive recognition at the individual level gives everyone real-time feedback on key areas of their work.
The Westinghouse’s also brought a valuable contribution to the teamwork 1991 with a valuable contribution of highlighting the importance of time management24. Royal Mail was already aware of the implications of time management; Westinghouse’s idea, however, has taken a new approach and adopted a strategic approach to time management. What they propose to do is:
- Enable senior managers to establish their priorities
- Measure how long they actually spent on them
By identifying time spent on a task, it is far easier to calculate what needs to be done in a set period of time, hence prioritising work.
A unanimous message that came back from the team sent to America was illustrated by a comment from Westinghouse:
‘People don’t normally come to work thinking lets see what we can screw up today. Provided people understand goals and are given proper empowerment and training the evidence is that enormous improvements can be achieved’25.
Royal Mail, like any organisation focusing on total quality, must have an imperative commitment to keep costs at a minimum. Quality costs are the total costs incurred by investing in prevention of non-conformance to requirements, appraisal of a product or service for conformance to requirements and failure to meet requirements.
The costs of poor quality
Most experts on the costs of poor quality estimate losses in the range of twenty to thirty percent of gross sales for defective or unsatisfactory products. Four major categories are associated with quality management: prevention, appraisal, internal failure and external failure.
Sources
24 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 179
25 Taken from “The Essence of Total Quality Management”, by J. Bank, Page 179
Prevention costs
Prevention costs are associated with preventing defects before they happen. They include the costs of redesigning the process to remove the causes of poor quality, redesigning the product to make it simpler to produce, training employees in the methods of continuous improvement, and working with suppliers to increase the quality of purchased items or contracted services. In order to improve quality, Royal Mail has to invest additional time, effort and money.
Appraisal costs
Appraisal costs are incurred in assessing the level of quality attained by the operating system. Appraisal helps management identify quality problems. As preventative measures improve quality, appraisal costs decrease, because fewer resources are needed for quality inspections and subsequent search for causes of any problems that are detected.
Internal failure costs
Internal failure costs result from defects that are discovered during the production of a product or service. They fall into two major cost categories: yield losses, which are incurred if a defective item must be scrapped, and rework costs, which are incurred if the item is rerouted to some previous operation(s) to correct the defect or if the service must be performed again.
External failure costs [see Appendix G for the costs of detecting a defect]
External failure costs arise when a defect is discovered after the customer has received the product or service. For instance, you are expecting a package to be delivered and it does not arrive on time. External costs to Royal mail may include compensation, but more importantly, the dissatisfied customer will talk about the bad service or products to their friends. The friends will, in turn, tell others. If the problem is bad enough, consumer protection groups alert the media. The potential impact on future profits is difficult to assess, but without doubt external failure costs erode market share and profits.
To prevent the costs of poor quality, an International Organisation for Standardisation (or ISO 9000) has been introduced throughout the world. ISO9000 is not concerned with the efficiency of business processes that do not actually supply the product - process such as marketing, recruiting, invoicing and financial accounting. Examples of activities are26:
- Agreeing with a customer what work is required
- Defining the responsibilities for work
- Identifying the work done for a customer
- Calibrating and maintaining equipment
- Planning how work is to be produced
- Ensuring staff have the skills to do the work
- Inspecting that finally produced work meets the customer’s order
The ISO 9000 standard specifies in general terms only the requirements or work activities to be included in quality systems. Importantly, Royal Mail would be required to manage and record these activities by having a documented quality system. One of the aims of ISO 9000 is to prevent problems and errors by:
‘The purpose of the standards is to provide models for quality assurance, not specifications. The standards are not intended to enforce uniformity. To use the standards, you should select from their contents just what will meet your own needs.’27
The purpose of such formality is to ensure everyone within Royal Mail follows agreed methods of working, thus preventing breakdowns of communication. The best-known ISO 9000 standards are28:
-
ISO 9001: Model for quality assurance in design, development, production, installation and servicing
-
ISO 9002: Model for quality assurance in production, installation and servicing
-
ISO 9003: Model for quality assurance in final inspection and test
Sources
26 Taken from
27 Adapted from “Quality 2000 – Management for Success”, by The Institute of Quality Assurance, page 11
28 Adapted from “TQM”, by J. Oakland, Page 12
Proposals
For over a decade now, Royal Mail have been looking at their organisation with the aim of improving total quality in every area and although much work has already been done, there is still a need for further improvement.
In a recent newspaper article [Appendix H], it clearly shows that Royal Mail is falling short of their targets by some margin. The key areas that were addressed were29:
- More than 14 million letters a day arrive late – or not at all
- Much of the disruption is due to wildcat strikes by postal workers
- Marketplace now open to competitors since it was stripped of its monopoly
- Only 69% of First-Class mail arrived next day (as opposed to a target of 92.5%)
- Only 86.4% of Second-Class mail arrived by the third day (as opposed to a target of 98.5%)
- One million letters a week never arrive. They are either lost or dumped by postmen
- Strikes by postal workers account for half the UK’s annual strikes
- Industrial disputes were often the result of mismanagement
- 56,000 man-days were lost through strikes (as opposed to 22,000 in the preceding 12 months)
The above clearly shows the areas that need to be addressed, otherwise Royal Mail will be quickly loose their competitive edge. Due to the recent change in policy, competitors are now able to enter the market place that, until now, Royal Mail has had the monopoly.
The report has highlighted that there is a personnel issue that needs to be addressed. Royal Mail should look at why there are so many wildcat strikes, on a weekly basis, and what corrective measures should be implemented to resolve the situation.
Sources
29 Adapted from “Daily Mail”, 31st March 2001
A helpful technique to use would be the why-why30 analysis [Appendix I]. The benefit of using this technique is that the problem is broken down and attempts to find the root cause.
Continuing on from this problem solving method, an alternative method that could also be used is the PDCA (Deming Wheel) [Appendix J]. This stands for31:
Plan: Examine process method or problem area. Collect and analyse data and formulate an action plan.
Do: Implement improvement.
Check: Is enhanced performance being achieved?
Act: What lessons have been learnt? Can the improvements be used elsewhere?
The PDCA Cycle is a concept of continuous improvement. This simply means the never-ending process of repeatedly questioning and re-questioning the way work is conducted.
The last proposal for Royal Mail would be to use competitive benchmarking, whereby they compare and contrast their operations to that of its competitors. This will become imperative now that there is an open market where new competitors will be emerging. As already stated, benchmarking is a proven method on maintaining and improving quality levels throughout the organisation.
Sources
30 Adapted from Lecture notes dated 23rd March 2001
31 Adapted from “The Essence of Total Quality Management”, by J. Bank, Page 81
Conclusion
To conclude, if Royal Mail are to remain the dominant postal service within the market place that they have established over the year’s. These proposals need to be implemented, checked and evaluated on a regular basis in an attempt to improve the total quality throughout the organisation.
The report has shown that total quality is a never-ending process that must be addressed by Royal Mail in order for them to remain competitive in this competitive market place.
