QUALITY AND PERFORMANCE MANAGEMENT AT M&S

“Quality is the second of three value components (Finch,Byron J., 2008).The commitment to producing quality in services and products changes process from just producing to producing things customers want. The development of the methods and techniques to manage quality and a culture of employees who want to produce quality is at the heart of any successful business”.

INTRODUCTION

This Chapter contains an insight into what quality and performance management, meeting customers’ expectations at Marks and Spencer. I will touch on its history and the effect of quality management at the company will be examined. The basis of choosing M & S is due to the fact that it is a well established company. More like an institution. Also I work for the company.

About M&S

For 125 years M&S has been trusted by customers to offer high quality products at great value. It has grown from a Penny Bazaar stall to become the UK’s leading retailer of quality clothing, food and home products. With more than 21 million UK customers, the company is an expanding international force, now in 40 territories. A team of 78,000 people and over 2,000 suppliers form the bedrock of its business, ensuring their brand will continue to offer Quality, Value, Service, Innovation and Trust. These core values are as important today as they ever have been. They are all about doing the right thing which is, quite simply, how they do business (M&S, 2009).

Michael Mark started the business in 1884 selling items at no more than a penny. The business was subsequently joined by Tom Spencer when the partnership started. The business grew gradually and by 1926 there were about 125 stores. Marks & Spencer has been built on the following values:

offering customers a selective range of high quality merchandise;

encouraging suppliers to maintain high quality standards in production and working environment;

store expansion planned for the convenience of customers, with a greater width of product choice;

simplified operating procedures;

supporting British industry and buying abroad only when new ideas, technology, quality and value are not available in the UK;

fostering good human relations with customers, staff, suppliers and the community.

(Whitehead, 1994).

An insight into quality management

Quality is “conformance to requirements” (Crosby, 1979), with emphasis on zero defects. (Swanson, 1995) however, implied quality management to be the totality of features and characteristics of a product or service that bear on its ability to satisfy given needs. Implicit in this assumption is a customer with needs and expectations to be satisfied. Quality is a measurable result; quality management improvement is more about the journey than the result. What we do and how we do it determines quality and the actionable elements of quality involve the process rather than the outcome. Good quality reduces the cost of rework, waste, complaints and returns and most importantly, generates satisfied customers (Slack, 2007).

Marks and Spencer has what is called a ‘golden rule’ to always take ownership of helping their customers and also getting feedback about their services. Staffs at Marks and Spencer are expected to adhere to the following three principles when serving customers:

acknowledge every customer with a hello or a smile

build a relationship by talking and interacting with the customer

saying ‘good bye and have good day’ to customers.

Some feedback is done through online surveys and some directly with their customers using survey forms. The result from the survey enables M&S to review areas of improvement.

I strongly believe that quality of services is M&S’s competitive edge. The ‘golden rules’ means treating the customers with courtesy, interacting and engaging with the customers doing the sales with a smile, always helping to pack on the till, asking customers if there is still anything else we can do for them. All these are attributes of good customer services. Good customer service provides the likelihood that the customers would still want to come back. Mr David Williams, an M&S customer recently stated “It makes a pleasant day for me” when a staff of Marks and Spencer says thank you for waiting, attending to their customers when there was a long queue. Consistency with these values make the customers always want to come back which goes a long way in a business.

Furthermore, from the company’s perspective it also means treating their employees with humanely, with dignity and respect. These in turn encourage the employees to be equally sensitive to the needs and expectations of the customers. “If staff feels that their efforts are being rewarded and that future effort will also be rewarded, their quality of work is likely to improve. In this way, total quality can be improved. Moreover, where incremental strategic change is dependent on individual members of staff, acting upon, opportunities and threats, the reward system must be appropriate and motivating” (Thompson & Martin, 2010). From my experience, I have observed that when staff is not happy, they will not be able to deliver a good service to the customers, which may then affect the business.

As an employee of Marks and Spencer, I can objectively say we are highly treated well. Staffs are rewarded in so many ways. Some of the incentives are 20% off any items in the store, promotion opportunities, recognition within the organization and pension scheme. Also the company provide bonuses, flexible working arrangement for all mothers and graduate scheme for new graduates. All these rewards and incentives are motivating factors that enable staff to perform to their utmost level in serving customers in a satisfactory way.

Rewards depend upon the success of the Organization as a whole as well as individual, contribution to the success (Thompson & Martin, 2010).

As an employee of Marks and Spencer, one thing that I have noticed was that when customers visits the store, they have the assurance that they are going to get exceptional services. Marks and Spencer are not trading in service quality gimmicks but also focus on giving what we call ‘exceptional basics’ i.e. listening very carefully to their customers and giving thoughts to their needs and providing what they really need. For example they offer:

three items for the price of two

‘collect by cab for customers’ if the customer require a cab after shopping

sending customers special order to them within three working days v

effective and efficient refund policy. Marks and Spencer offers full refund to their customers with their receipt or if has been lost, a credit voucher is issued

Marks and Spencer credit card – points and vouchers are given to all the card holders on a regular basis which I believe would encourage customers to use their Marks and Spencer credit card to pay at the till

Marks and Spencer train their staff to take ownership in everything they do.

(Thompson & Martin, 2010) emphasised on ” commitment to customers services, quality and continuous Improvement”. It’s this attention to detail that counts in providing good customer service to the customers. There is nothing more Important to Marks & Spencer than their customers and achieving a high quality of service. The company encourages three things i.e., creativity, initiative and attitude. Attitude is one of the key attributes that management at Marks and Spencer imbues on their employees despite the training and skills developed. It is the quality reflection that sets us apart from the competition. “Marks and Spencer have improved in their product offerings and looks like they hire people with positive attitude that takes great pride in delivering exceptional service.” commented by one of the customers. It is this type of attitude displayed by their employees that leads to innovation and creativity. For example, there was a time a deaf man came into the store for shopping, he wrote all he needed in a sheet of paper. Marks and Spencer already have some employees that help the blind and the deaf for their shopping. After helping him, he was so delighted that he now believes that everybody is treated in the same way without discriminating. Also if a customer likes a particular product which was recommended and is not in store and in order to satisfy the customer, they take total ownership to make sure they make arrangement for more stock to be available for the next visit of the customer in store. Marks and Spencer also track their product through surveys to know how well a particular product is performing.

As explained by (Kanji,Gopal K: Asher,Mike, 1996) “To understand the process of total quality management (TQM),where all work is seen as ‘process’ and total quality management is a continuous process of improvement for individuals, groups of people and whole organizations. What makes total quality management different from other management processes is the concentrated focus on continuous improvement”.

Most of Marks and Spencer customers knows about their quality and are ready to pay more for the value. M&S offers all most ever week, just to motivate customers to buy at the stated price of other competitors products like Tesco and Sainsbury just to let customers knows that there price is still the same as others but the quality is different. Marks and Spencer makes these offers to draw customers’ attention. They have succeeded as shown my consistently increasing their market share.

Also there objectives is to exceed their expectation to deliver good quality to their customers and to achieve zero defects. They design their product to try to prevent errors occurring. Though, it is always impossible to prevent mistakes.

“Knowing the current quality standards of the product or service in your customer’s hands is the first stage of being able to improve. You can make mistake and you can measure your improvement if you know the base you are starting from. Having the facts necessary to manage the business at all levels and giving that information to everyone so that decisions are based upon fact are the essential aspect of Quality Management” (Kanji,Gopal K: Asher,Mike, 1996)

Marks and Spencer rarely get formal complaints but when there is any they resolve it with the customer and they always listen to customers complain which at the end customers feels delighted and satisfy.

(Kanji,Gopal K: Asher,Mike, 1996) “Satisfying agreed customers’ requirements’- relates to internal customers as well external ones it is necessary to achieve successful internal working relations in order to satisfy the needs of the external customers”.

“The key is service recovery; this is why empowerment is so important”. (Slack, 2007) Marks and Spencer train their to turn around any negative experiences they may have into positive ones before the customers leaves the store and not to allow the customer to go home not satisfied. It’s really worth the effort.

Giving exceptional service has always been the motto of Marks and Spencer for years up till now. It is well known to everybody about their good customer services. They also get tremendous feedback from their customers and that is the more reason that most customers always want to come back despite the prices of their products. Older people are also helped with their shopping list by assigning a member of staff to the customer to do the shopping. It gives the customer confidence to know that their shopping is done to their satisfaction. One of M&S’s customers, Mrs Johnson commented that “price is not the determinant factor for shopping at M&S; it is the good customer services and the way staffs attends to me considering I have been shopping here for over 25 years. They are all well mannered, always with a smile on their face, they take ownership and always wanting to help to pack our shopping” One of the key tasks of operation management is to ensure that quality goods and services are provided to both internal and external customers (Finch,Byron J., 2008). Marks and Spencer value their customers; queues are monitored and customers are often thanked ‘for waiting’ and are given the offer to pack their shopping for them. It is more than compensation to acknowledge someone and as a member of staff, I often hear from customers that how grateful and delighted they for the attention that is given to them. The professionalism shown by the M&S employees emanated from the training provided and also interacting with customers makes our job more interesting. (Finch,Byron J., 2008) Contends that “The best answer to a customer’s questions can often come only from the employee directly responsible for a good customers services to the customers”

M&S gives customer choice. They have different range for customers, for the older women it is called classic range. This range was developed as result of the survey that was carried out. One of the survey participants, a customer known as Ms. Williams in the survey wrote “It fits perfectly ok without any adjustment or complain, I just cannot go anywhere else to buy my clothes than Marks”.

Another range for the middle age is called ‘Peruna’, they are long lasting but very costly. Customers are happy to pay for what they get because of “the quality of the finished products and is visible to see” said one of their customers. “A quality is the degree of fit between customer’s expectations and customer perception of the product or service”. (Slack, 2007)

Marks and Spencer respond quickly to customer demand. “One key element of quality management is the dependence on empowered teams to document and then streamline processes based on team knowledge and understanding of customer needs and expectation. States customer requirements often fall short of defining customer needs and expectations” (Swanson, 1995)

If a product was not in store. Marks and Spencer take responsibility to make sure they find an alternative way to get the product and send it to the customer address just for meeting the customer’s expectation and to make sure they satisfy customer demand.

Dimensions of Quality

(Finch,Byron J., 2008) identified eight product quality dimensions and five service quality dimensions which consist of the followings:

Performance – relates to the perceived characteristics of the product.

Features – the additional or secondary capabilities of a product or service.

Reliability ­- measures the dependency and how consistently it achieves the promises given about the product/service.

Durability – deals how long the product/service last for.

Serviceability – usually deals with after sales in terms of repairs guarantees and complaints resolution.

Aesthetics – deals with the appearance and style of the product/service.

Response – the relationship between the product/service provider and the customer.

Reputation – deals with the perception of customers on the company.

In addition to the above (Finch,Byron J., 2008)also identified five dimensions of service quality which includes:

Reliability – in terms of the company keeping to its promises.

Responsiveness – deals with how promptly the company responds to their customer needs.

Assurance – dealing with trust and confidence between the customers and employees.

Empathy – deals with how employees are sensitive to the needs of the customers.

Tangibles – showing care and attentions with respect to the physical facilities and written materials available at the company.

Marks and Spencer provides both products and service to their customers and fully conforms to all the service/product quality dimensions mentioned above. This I believe has led to the consistent domination of market share in the retail industry by M&S.

Cost of Quality

Cost of quality relates to the cost associated with assuring quality of the product/services in addition to costs incurred in correcting defective items. (Finch,Byron J., 2008) explained cost of quality as the cost associated with maintaining and sustaining goods/services which can be categorised into primarily internal and external failure costs, prevention cost and appraisal costs. All of these costs are identifiable with M&S. An example of external failure i.e. cost incurred after transfer of ownership to customers at M&S are the returns made by customers when something goes wrong with the items purchased at the store when replacement would need to be made in additional to employee time involved in dealing with the defective product. Internal failure cost i.e. costs that may arise due to inadequacy of quality before transfer of ownership to customers occurs at M&S when inspection staff have noticed a defection in a product line and had to be withdrawn before reaching the floor level. All the costs associated with this defective product including production and distribution costs aggregates to the internal failure costs. The appraisal costs are those cost associated with meeting quality specification which may include inspection, testing and sampling. At M&S this category of quality cost are incurred before the products are distributed to various stores. Usually the quality audits are carried taking samples from millions of product items to ensure they meet quality specification. (Finch,Byron J., 2008) stated that “a frequent cause of poor quality is the failure of system that are intended to maintain quality.” Hence organisations need to ensure their quality system is audited to ensure that they meet their quality requirements and thereby reduce their appraisal cost. The cost associated to reducing appraisal costs can be categorised as prevention costs. Some these costs includes cost of training, improving the process, quality planning activities. Where more efforts are put in prevention, it should have an impact in reducing the other category of quality costs. However, as can be seen from figure1 below, quality cost increases as quality problems gets to customers.

Figure 1 (Finch,Byron J., 2008)

Cost of quality

Prevention

Internal failure

External failure

Cost of quality from Prevention to external failure

Total Quality Management

As defined by (Chartered Institute of Management Accountant, 2002), TQM is a programme that ensures that goods or services supplied are of the highest quality. However, (Feigenbaum, 1986)

defined TQM as an “effective system for integrating the quality development, quality maintenance and quality improvement efforts of the various groups in an organisation so as to enable production and service at the most economical levels which allows a full customer satisfaction”. TQM as a process must encompass everyone in the organisation and with full commitment of senior management. (Finch,Byron J., 2008) put forward that TQM is based on three principles:

customer focus

continuous process improvement and

total involvement.

With customer focus, the customer defines what quality is. A distinction is required between what is known as internal customers that are employees within the organisation and external customers who buys the products or services. Each employee in the organisation should have a well defined customer so that there is what is known as supplier-customer relationship extending from the internal customers to the final consumer who consumes the product. For instance in M&S an output from a staff (internal supplier) then becomes and input for another staff (internal customer). This chain feeds itself into the final consumer. If the process is broken i.e. the supplier-customer relationship and the quality needs of the internal customer is not met, it is bound to affect the ultimate consumer.

Continuous process improvement is about reducing or eliminating variability from quality processes. Outcomes from processes should be predictable and when this is not the case it may become difficult to consistently meet customer expectations. Continuous process improvement at M&S has a very low variability if all any. Continuous process improvement is part of M&S ‘Plan A’ which is quality management plan that contains a comprehensive set of objectives that governs how M&S does business. The plan came into existence in January 2007 and commits to changing one hundred things over five years. Plan A is makes a real change to the environment, customers, employees and people working in the M&S’s supply chains. Through Plan A, M&S have introduced products and services to help customers live in a sustainably way, continued contribution to local communities and with additional profit generated ploughed back into the business. M&S engages every one of its 21 million customers by building Plan A qualities into all of its products and helping customers to develop their own Plan A eco-plans. M&S has integrated its Plan A from being a ‘Plan’ to ‘How We Do Business’ by integrating it into processes and giving its workforce the skills, tools and motivation required to make a difference. (M&S, 2009)

I believe that it is the commitment from management and the active involvement of employees in developing and implementing their quality objectives ‘Plan A’ that have contributed to the success of the company. To continue to sustain the level of confidence of quality assurance, managers need to ensure that everyone consistently adhere to their standards and ensured it is continuously measured and monitored. Where necessary corrective action should be taken as advocated by (Deming, 1982) to use of the Shewhart’s PDCA cycle (Plan-Do-Check-Act), as an approach to process analysis. This cycle inevitably leads to redesign and improvement in quality.

Tools for solving quality problems

There are several processes available for quality improvement including DMAIC(Design, Measure, Analyse, Improve and Control) and DMADV (Define, Measure, Analyse, Design and Verify) of Six Sigma improvement projects. DMAIC is used for existing processes where performance is below what is expected while DMADV is for developing new products/service in order to meet the desired quality level. Also there is the PDCA cycle as illustrated by (Finch,Byron J., 2008) where he identified seven steps to quality improvement summarised as follows:

Figure 2 PDCA Quality Improvement tool (Finch,Byron J., 2008)

Most organisations including M&S can improve their quality by implementing any of the available quality improvement processes. Any process used need to be supported by applying appropriate tools for each step. There are various tools and techniques that can be applied as illustrated in figure 3 below

Analytical tools

Mostly used

Frequently used

Idea Generation Tools

Consensus tools

Process Definition

Data Collection

Analysing Cause & effect

Analysing & displaying data

Planning tools

Meeting management tools

Benchmarking

Questionnaires

PLAN

Problem identification

Analysis of current situation

Analysis root causes

CHECK

Selection & planning of solution

Check result

ACT

Standardise

Conclusion / next cycle

Figure 3 Quality Improvement Tools & Technique Matrix (Swanson, 1995)

In using the above tools and techniques, analysts should list activities to be carried out and the expected output/results of each step. Though not prescriptive in nature employees or analysts can be flexible with the tools they apply depending on the situation they’re faced. The quality improvement models identified above provides an iterative steps but do not provide how the steps are to be prosecuted but there are tools that will aid the accomplishments of the steps identified within the quality improvement model. These tools as identified by (Swanson, 1995) are not exhaustive but majority of them have been converted into a matrix as illustrated in figure 4 below.

Idea Generation Tools

Consensus tools

Process Definition

Data Collection

Analysing Cause & effect

Analysing & displaying data

Planning tools

Meeting management tools

Benchmarking

Questionnaires

Brainstorming

X

Brainwriting

X

Crawford slip method

X

Affinity diagram

X

Balance sheet

X

Criteria rating

X

Is/Is Not stratification

X

List reduction

X

Paired comparison

X

Weighted voting

X

Flow charts

X

Process analysis worksheet

X

Tree diagram

X

Check sheets

X

Focus groups

X

Sampling

X

Surveys

X

Cause & effect diagram (Ishikawa diagram)

X

Interrelationship digraph

X

Force field analysis

X

Bar charts/ Pie charts

X

Histogram

X

Pareto chart

X

Scatter diagram

X

Prioritisation matrix

X

Statistical process control

X

Network diagrams

X

Gantt chart

X

Process decision program chart

X

Agendas

X

Minutes

X

Benchmarking

X

Questionnaires

X

Figure 4 Tools and techniques matrix

Quality Awards and Quality Standards

Many customers are quality assured knowing a business has quality award accreditation. It provides the customer with the confidence that they are buying quality product or quality service. In many cases businesses use quality award as marketing tool which are visible in their marketing and promotion. In some cases some businesses can afford to charge at a premium as a result of quality accreditation. A quality award enables a business or organisation to conform to certain specified standard. A standard that must be consistently adhered to and where a business conducts its business internationally, it may well be a requirement to have and internationally recognised quality standard accreditation. Two internationally recognised standards are the Malcolm Baldrige National Quality Award and the International Standards Organisation. The ISO is one of the most world-acclaimed quality standard award/accreditation is the ISO quality standards amongst others. According to (International Standards Organisation Discover ISO, 2010) the objectives of the standards where implemented, are to enable products/services to be more efficient, safer and cleaner; trade facilitation; assist governments with technical foundation for legislation in health & safety; sharing of good management practice; safeguarding of consumers and making life simpler. With the insistence of having ISO quality standard in place, it ensures that certified company have the capacity, capability and infrastructure available to produce quality products/services. (Finch,Byron J., 2008). There are various other specific awards depending on the industry. Marks and Spencer especially in the last couple of years have had several awards in recognition of its performance when compared to its competitors in the industry. Some of these awards include are listed below.

Awards

Position

Environmental Investigation Agency’s Supermarket refrigeration table

Winner

Cosmopolitan Magazine Awards

Winner of Most Ethical retailer

Carbon Trust standard

Certification

Pesticide Action Network UK supermarket pesticide league table

Winner

Ethisphere World’s Most Ethical Companies

Top 100

Consumer Focus ‘Green to the Core’ supermarket league table

Joint Winner

Greener Package Awards

Retail Leadership Award

RSPCA Good Business Awards

Fashion Commitment Award

Letsrecycle.com Awards

High Street Recycling Champion 2009

International Wine Challenge Awards

Environmental Initiative of the year

Forest Footprint Disclosure Project

Best General Retail Sector Performer

Business in the Community 2009 Corporate Responsibility Index

Platinum performer

The Independent Green Awards

2010 Best Supermarket

ENDS Carbon

2009 Brand Emissions Leader

Figure 5 M&S Awards (Marks and Spencer, 2010)

Conclusion

Most organisations including M&S strive to continue to satisfy or meet their customer requirements. M&S over years have consistently developed and sell quality products to their consumers. This is reflected as they continue to dominate their industry and the fact that consumers believes that whatever they purchase from M&S, it is essentially a quality item. Total Quality Management is a continuous process and must have the contribution of everyone in the organisation from the corporate leadership right down to the shop floor staff in order for the organisation to continue to meet their responsibility in delivering quality. Organisations with quality standards and awards must continually review their processes and find a way to continue to improve in order to maintain their market share and most importantly their profitability and competitiveness.