Part A
Question 1
McDonald’s is the largest chain of fast food restaurants. Most McDonald’s restaurants operate as affiliates, franchisees or as the corporation’s own property. Although the most traditional McDonald’s food includes hamburgers, french fries and soft drinks, the recent customer demands dictate the need to expand the menu into healthier food, such as salads, fruits and wraps. The company is famous for diversifying their menu based on the local needs in response to cultural peculiarities and the typical regional cuisine. Despite the menu dissimilarity, McDonald’s emphasizes standardization and constantly controls the quality of food and service in their restaurants.
Question 2
The first question to be asked is whether their partners (especially franchisees) have sufficient resources and commitment and whether they can contribute to the development of the company. As the emphasis of McDonald’s is processes standardization, in the second step it is important to question whether all the processes are designed according to the standards. Thirdly, it is crucial to ask whether the menu meets local demands. Fourthly, the company needs to make sure it complies with the local environmental and labour regulations. Finally, McDonald’s should consider whether they differentiate from the competition and how they maximize customer value compared to their rivals.
Question 3
According to Deming, it necessary to avoid quality checks, while controlling processes and inputs. This approach allows McDonald’s to control the quality of franchise restaurant by setting standards for outputs and inputs. Secondly, Deming suggests the selection of quality suppliers, which is implemented by McDonald’s through close partnerships with suppliers and franchisees. The concept of continuous improvement is deeply rooted in the McDonald’s process development and into the reconfiguration of their menu according to the market needs. Moreover, McDonald’s Hamburger University encourages lifetime and targeted employee training. Lastly, worker satisfaction is enhanced by a three-pillar appraisal system: social policy, financial and non-financial encouragements.
Question 4
For monitoring process effectiveness McDonald’s could implement control charts, which map process information in order to compare it to the control limits. When “out-of-control” values are found, e.g. in the service time per customer or in the cost of a burger are too high, the causes of the deviation should be investigated in order to introduce corrective measures. Once a problem has been identified, McDonald’s can implement another quality monitoring tool, a fishbone diagram, which could help to identify the potential origins of the problem and to determine its root causes. Finally, the use of a histogram can facilitate evaluation of the frequency of the deviation distribution.
Question 5
Downward communication is the most commonly used communication technique. It relies on the formal information flow from the superiors to subordinates. This approach can be used in McDonald’s for introducing the standardized quality procedures across all restaurants and for explaining the general expectations. Upward communication offers a bottom-up information flow, thus providing employees with the opportunity to supply necessary information to their superiors. This form of communication is extremely effective in McDonald’s, especially on the restaurant level, since it ensures that the lowest-level employees, who are the closest to the customers, can inform their managers about customer needs and demands.
Part B
Question 1
The company described by Bruce Flick does not exactly fit into the Deming’s definition of a quality company. Firstly, it sacrifices the quality of their products for maintaining the constant production flow, thus violating the basic idea of Total Quality Management. According to the points presented in “Out of Crisis” book by Deming, management has to embrace the new management style, which entails the consistency of purpose towards the continuous quality improvement that fosters company’s competitiveness in the market. Secondly, the company’s promise to exchange faulty products suggests the lack of commitment to the quality assurance and a strong preference for inspection in favour of error prevention, which contradicts the principles of quality control developed by Deming. Moreover, the fact that the company admits quality inconsistency by suggesting that “at times they buy an inferior product” shows that this organization is not yet fully focusing on quality and has not embraced the concept of continuous improvement, which has been prescribed by Deming in order to create a Total Quality Control system. The organization is currently concentrating its attention on short-term profit maximization by reducing unit cost through scale-economies. However, such business approach is considered one of the “deadly diseases” by Deming and it puts the company at risk to lose its competitiveness over time. Having considered all the abovementioned aspects, it is possible to suggest that the CEO of a well known clothing company, Bruce Flick, misunderstands the concept of quality, at least in a sense it is used in the modern Total Quality Management. In fact, his business does not meet most of the quality requirements suggested by Deming, therefore much work and managerial initiative is needed in order to redirect the company onto the course of continuous improvement and total quality control.
Question 2
1. KPI introduction improves documentation and information transparency within the company. In this part of the speech, the CEO can describe the benefits, which can be achieved with the introduction of the additional KPIs, which would give more information about company’s performance. Higher information transparency fosters communication and collaboration within the company, thus promoting efficiency.
2. Quality control through KPI decreases waste in the system and enhances efficiency. As the new KPIs are introduced, it will be possible to monitor more aspects of the business and to identify problem areas once they appear. Using quality monitoring tools, such as control charts, the company will be able to determine the “out-of-control” measurement and to identify the root cause of the problem, which would improve company efficiency and reduce waste.
3. Improvement of customer satisfaction. As customers usually try to maximize their utility by looking for cheap and high quality items, introduction of ISO 9000 and the KPIs would enhance customer satisfaction. With the improvement of processes, continuous quality control and waste reduction, the company will be more efficient, thus supplying cheaper and higher quality products to their customers.
4. Helps to improve credibility and simplifies partner relationships. ISO certification indicates company’s commitment to quality control and continuous improvement. It shows to the external partners, such as suppliers and customers, that the company is more trustworthy. Moreover, it gains a positive image in the eyes of the society in general, thus satisfying current customers and attracting new ones.
5. Provides access to the markets, where ISO is mandatory requirement. Due to the high level of quality control, some markets are not available to non-certified organizations. Therefore, by introducing the necessary KPIs and receiving certification, the company may increase its market share and improve profits.
References
Aboutmcdonalds.com, 2011. Our Curriculum: AboutMcDonalds.com. [online] Available at:
<http://www.aboutmcdonalds.com/mcd/corporate_careers/training_and_development/ hamburger_university/our_curriculum.html> [Accessed: 14 Feb 2012].
Cole, K., 2005. Management, Theory and Practice, 3rd edn, Prentice Hall.
Deming, W., 1982. Out of the Crisis, Massachusetts Institute of Technology, Cambridge, MA.
McDonald’s, 2012. Training & Education: McDonalds.com. [online] Available at:
<http://www.mcdonalds.com/us/en/careers/training_education.html>. [Accessed 19 February 2012].
Referenceforbusiness.com, 2010. ISO 9000 - benefits. [online] Available at:
<http://www.referenceforbusiness.com/encyclopedia/Int-Jun/ISO-9000.html> [Accessed: 14 Feb 2012].
Royle ,T., 2001. Working for McDonald's in Europe: The Unequal Struggle (Routledge Studies in Employment Relations). 1 Ed.London: Routledge.
The McDonald's Franchise Agreement, 2012. [online] Available at: http://www.business2000.ie/pdf/pdf_2/mcdonalds_2nd_ed.pdf.
