Q1.

Total Quality Management (TQM) refers to management methods used to enhance quality and
productivity in business organizations. TQM is a comprehensive management approach that works
horizontally across an organization, involving all departments and employees and extending backward
and forward to include both suppliers and clients/customers.

The theoretical essence of the Deming approach to TQM concerns the creation of an organizational
system that fosters cooperation and learning for facilitating the implementation of process management
practices, which, in turn, leads to continuous improvement of processes, products, and services as well
as to employee fulfillment, both of which are critical to customer satisfaction, and ultimately, to firm
survival. It is the responsibilities of top management to take the lead in changing processes and
systems. Leadership plays in ensuring the success of quality management, because it is the top
management’s responsibility to create and communicate a vision to move the firm toward continuous
improvement. Top management is responsible for most quality problems; it should give employees clear
standards for what is considered acceptable work, and provide the methods to achieve it. These
methods include an appropriate working environment and climate for work-free of faultfinding, blame
or fear.

It is important to identify and measure of customer requirements, creation of supplier partnership, use
of functional teams to identify and solve quality problems, enhancement of employee skills,
participation of employees, and pursuit of continuous improvement. The means to improve quality lie in
the ability to control and manage systems and processes properly, and in the role of management
responsibilities in achieving this. Deming (1986) advocated methodological practices, including the use
of specific tools and statistical methods in the design, management, and improvement of process, which
aim to reduce the inevitable variation that occurs from “common causes” and “special causes” in
production. “Common causes” of variations are systemic and are shared by many operators, machines,
or products. They include poor product design, non-conforming incoming materials, and poor working
conditions. These are the responsibilities of management. “Special causes” relate to the lack of
knowledge or skill, or poor performance.

Deming's 14 Points explained

(1)Create constancy of purpose toward improvement of product and service, with the aim to become
competitive and to stay in business, and to provide jobs.

(2) Adopt the new philosophy. We are in a new economic age. Western management must awaken to
the challenge, must learn their responsibilities, and take on leadership for change.

(3) Cease dependence on mass inspection to quality. Eliminate the need for inspection on a mass basis
by building quality into the product in the first place.

(4) End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move
toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
(5) Improve constantly and forever the system of production and service, to improve quality and
productivity, and thus constantly decrease costs.

(6) Institute training on the job.

(7) Institute leadership. The aim of supervision should be to help people and machines and gadgets to
do a better job. Supervision of management is in need of overhaul, as well as supervision of production
workers.

(8) Drive out fear, so that people may work effectively for the company.

(9) Break down barriers between departments. People in research, design, sales, and production must
work as a team, to foresee problems of production and in use that may be encountered with the
product or service.

(10) Eliminate slogans, exhortations, and targets for the workforce asking for zero defects and new
levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes
of low quality and low productivity belong to the system and thus lie beyond the power of the
workforce. (

11) (a) Eliminate work standards (quotas) on the factory floor. Substitute leadership. (b) Eliminate
management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
(12) (a) Remove barriers that rob the hourly worker of his right to pride of workmanship. The
responsibility of supervisors must be changed from sheer numbers to quality. (b) Remove barriers that
rob people in management and in engineering of their right to pride of workmanship. This means, inter
alia, abolishment of the annual or merit rating and of management by objective.

(13) Institute a vigorous program of education and self-improvement.

(14) Put everybody in the company to work to accomplish the transformation. The transformation is
everybody’s job.

Question 2
2.1 Discuses the eight principles defined by ISO 9000 and two key benefits of it for organizations like the
Dormont Manufacturing Co.

ISO 9001 is underpinned by the 8 Principles of Quality Management. They’ve been the guiding principles
for the most popular quality standard; ISO 9000. But they’re also useful resources for any management
professionals who want to implement or improve their existing quality management programme.

Principle 1: Customer Focus

Organizations depend on their customers and therefore should understand current and future customer
needs, should meet customer requirements and strive to exceed customer expectations.

Principle 2: Leadership

Leaders establish unity of purpose and direction of the organization. They should create and maintain
the internal environment in which people can become fully involved in achieving the organization’s
objectives. Top Management has a responsibility to embrace these principles and your quality system.
Specifically, organization’s leadership should hold management review meetingsto keep your QMS (and
organization) running smoothly.

Principle 3: Involvement of people

People at all levels are the essence of an organization and their full involvement enables their abilities to
be used for the organization’s benefit.

ISO requires training to ensure employees have the tools they need to do their job and contribute to the
success of your organization. In order for people to support your quality initiatives, they must
understand them. We recommend an employee overview of ISO 9000.

Principle 4: Process approach

A desired result is achieved more efficiently when activities and related resources are managed as a
process. A process is a set of activities that uses resources (people, machines, etc.) to transform inputs
into outputs. Every organization is made up of a series of interacting processes.

Principle 5: System approach to management

Identifying, understanding and managing interrelated processes as a system contributes to the

organization’s effectiveness and efficiency in achieving its objectives. This is especially important when
auditing. If you only audit “within” a process, you may not consider the impact on other processes.

Principle 6: Continual improvement

Continual improvement of the organization’s overall performance should be a permanent objective of

the organization. Auditing company’s QMS and improving your processes is a key requirement of ISO
9001.

Principle 7: Factual approach to decision making

Effective decisions are based on the analysis of data and information. It is important to make a
correction, and take corrective and preventive action. Root Cause Analysis is good way to determine the
problem

Principle 8: Mutually beneficial supplier relationships

An organization and its suppliers are interdependent and a mutually beneficial relationship enhances
the ability of both to create value

Two key benefits of applying the ISO 9000 quality standards are:
Better process integration – By looking at the overall process interactions through the
process approach of ISO 9001, you will be able to more easily find improvements in efficiency and cost
savings. This is done through eliminating the waste that can occur when processes are maintained
without a view of the inefficiencies that can arise during process handoff. The better process flow can
also be used to drive efficiencies towards fewer errors and resulting reworks, which can improve cost
savings.

Create a continual improvement culture – Continual improvement is a third quality

management principle of ISO 9001. By adopting this culture to improve your processes and
organizational output, you will find efficiencies and cost savings, including the use of systematic
processes when problems occur in order to reduce the impact of the problem and increase the speed of
recovery. By making this continual, improving year after year, the company can see continuing benefits
from this.

2.2 Explain the principles of customer relationship management, and

how the application of these principles would help Dormont
Manufacturing Co. achieve its goals.
Customer relationship management (CRM) is a term that refers to practices, strategies and technologies
that companies use to manage and analyze customer interactions and data throughout the customer
lifecycle, with the goal of improving business relationships with customers, assisting in customer
retention and driving sales growth.

1) Establish a rational vision of the future. The implementation of CRM in the organization needs to be
viewed as a culture-change initiative. Resistance to the CRM culture change means catastrophe.
Quantify the value that the CRM will bring to the organization.

2) Management Team Leads the way. An attitude needs to be developed in the management group that
supports the initiative from the top. What needs to be reinforced is that usage of the system is not
voluntary. When management presents a report to the team during a staff meeting that is clearly not
based on the data the users have added to CRM, the users get discouraged. They perceive that if the
system is of no use to our managers, then it is not critical to our success. Activity, sales forecast, and
account reports should be derived from the info that you are having your users enter into the system.
The managers should be using reports from the system during internal meetings and they should be
referring to data inside the system during their conversations with teammates. Basically they need to
lead the way with CRM culture.

3) CRM Requires Customer Analysis. CRM is defined as focusing on "The Customer." However, many
CRM projects are focused on organizational improvements and not actually improving the customer's
experience. Customer analysis requires actually talking to the customer and consolidating their feedback
and finding ways to internalize what they perceive as valuable, into the operation of the company.
When the value perception is met or exceeded, the company will achieve good results.

4) Get the Big Picture. Improving the customer's perception of value is done by understanding the
customer's entire experience, and their perception of value at each touchpoint.

5) Integrity: It means consistency in decision-making and in actions by both customers and salespeople.
Integrity preserves the relationships because it promotes trust between customers and salespeople.
People want to be able to rely on each other to make the same decision and to take the same action in
the same set of circumstances. They want to know they will get the same result from the same set of
actions. If integrity is not demonstrated by both parties, it’s almost impossible to develop a long-term
relationship.

A well implemented CRM application will bring together multiple sources of information to support
decision-making, allowing marketing campaigns to be targeted and managed most effectively.
A sales force is a valuable and possibly one of an organization’s most costly resources. With this in mind,
it’s imperative that sales people spend their time selling, and less time chasing fruitless leads or
navigating administrative hurdles. ’s commonly known that it’s significantly cheaper to retain existing
customers than to acquire new ones. So it makes sense to focus resources that help to build customer loyalty,
increase spend and encourage longevity. CRM allows you to analyses customer spend, joining up your
marketing and sales processes. Additionally, you can build detailed customer profiles – all of which aids the
reduction of customer churn. A great customer experience must be balanced with the need to control cost. An
effective CRM tool can help make service improvements whilst reducing costs associated with managing
customers, both by making agents more effective, and by automating data entry processes. All these benefits
gained from CRM ultimately helps in achieving the organizational goals.

2.3 Explain
how you would establish a process for the handling of
external complaints received by Dormont Manufacturing Co.
At some point, everyone in business has to deal with an upset customer. The challenge is to handle the
situation in a way that leaves the customer thinking you operate a great company. When it comes down
to it, many customers don't even bother to complain. Obviously, customer satisfaction is not enough.
Businesses nowadays need to positively delight customers if they want to earn their loyalty. It may seem
counter-intuitive, but a business owner’s ability to effectively deal with customer complaints provides a
great opportunity to turn dissatisfied customers into active promoters of the business. Here are some
customer-oriented tips to deal with external complaints received by Dormont Manufacturing Co.

1. Listen
Whenever the company is set out to handle a customer complaint the first thing that you must do is
listen. Listen to the customer to figure out why they are upset. Listen to the customer to determine
whether any of your policies were not abided by or if this is something outside or not contemplated by
your systems. Listen to what they want from the company to resolve the issue.

2. Understand

Next, put yourself in the shoes of the customer. Until the issue is viewed from their perspective the
company cannot have a complete picture of the reason for the complaint.

3. Elevate

Once you have heard the complaint and understand the basis for the same, elevate the customer to a
supervisor or manager where possible. If the issue is with the front-line employee this will instantly
remove some if not all of the customer’s acrimony towards their current representative at the company
allowing them to have a more open conversation with someone else. Often this move alone is sufficient
to alleviate some of the customer’s concerns by instilling in them a sense of importance, that their
complaint is significant enough to be elevated to someone higher in the chain of command.

4. No Fighting

Defend if it is a must. But do not fight with the customer. Often times it comes down to tone and
respect. Your job in handling the matter is to listen, understand, and then discuss with the customer
their concerns in a calm and friendly manner while conducting an open discussion regarding the issues
complained of and how they will be responded to. Fighting with the customer will never resolve the
issue and will only lead to heightened aggression and anger on their part. As such, calmly defend your
policies or personnel if you must but do not permit the conversation to erode into a argument at any
point.
5. Resolution

Offer a resolution where possible. Once you have listened and understood the customer’s complaint and
have avoided fighting over the same divert the customer’s focus to how you intend to resolve the
matter. Here it is difficult to include all manners of resolution which can be offered given the nature and
scope of the goods and services which could be offered, but some suggestions include offering a refund
or partial refund of monies paid, if warranted.

6. Resolve

In every customer service situation you will ultimately come to a point of what you can and cannot do to
address the issue. Most situations will be able to be addressed and the customer issue resolved to their
satisfaction. Unfortunately, from time-to-time, there will be issues which simply cannot be resolved. For
these customers you must understand that despite your best reasonable efforts to offer a reasonable
resolution they are unwilling to join you in reality and, accordingly, although our aim is always to please
the customer if that which the customer demands cannot be satisfied you must maintain your best
offered solution and no more.

7. Learn

Above all, use customer complaints as a manner to learn about potential flaws in your systems. Maintain
a manner of tracking customer complaints and the resolution thereof such that, over time, trends or
specific issues may be identified to the point that if you see one or more specific situations occurring
with any frequency systems can be amended or put into place to address the same in the future before
they become future complaints.