The Total Quality Method (TQM) adopted by the‘Shop Top’ for the management of its suppliers all around the world, could be considered as a best approach in today’s competitive world. Under this method, the quality of the products are improved and maintained with the help of the joint collaboration of the management, employees, materials used for production, processes adopted, suppliers and the equipments. The approach towards TQM simultaneously results in the generation of quality product and services in accordance with the requirements of the customers. Moreover, under this method, the focus is made on the production of such quality goods that could be offered to the customers at a price easily affordable by them.‘Shop Top’ has been practicing the awareness of the quality among its employees and suppliers that would ultimately result in the success of the company (Rawlins 2008).
In order to be competitive and maintenance of relationship with the‘Shop Top’, the company should work closely with the designers in order to produce products in accordance with the present fashion trends. The company should first identify the potential customers and then should develop a product responsive to the needs of the customers. Further, the optimization of the features of the product should meet the requirements of the company as well as the product. In addition, development of such processes should be focused that could efficiently produce resulting in the low production cost (Slack et al. 2008).
For a detailed discussion on the adoption of new techniques resulting in low prices and superior quality products in accordance with the customer’s requirement, a meeting is required for making a proper plan in order to be competitive in the market. Hire the best assignment writer by Get Writer Help
Five Stakeholder Groups in IBM
According to Pertz (2007), the stakeholders of IBM are divided into several groups. These groups could be categorized as the employees group, customers group, community group, stockholders and overseas stakeholders group. With this, efficient grouping of stakeholders, IBM illustrates that by concentrating simply on the shareholder is not enough rather a clear communication among the entire stakeholder groups is necessary.
Financial and Other Objectives of the Stakeholders
Considering the objectives of the employees within IBM, they would surely require an effective payback system. They would look to the management for the motivation and job appraisal resulting from their tasks. Likewise, the customers of the company generally look for quality products according to the modern requirements. The customers group is highly cost sensitive requiring excellent products. It is observed that the customers of IBM are willing to pay high prices due to the brand recognition. Moreover, the objectives of the stockholders are mostly associated with the financial aspects of the business. They are mostly interested in the increased revenue, decrease costs, profits and dividend declaration by the company.
Concerning the community group, they require the company to fulfill its corporate social responsibility. Their objectives are to make possible actions for saving the energy cost and playing their part in the improvement of global climate. In addition, the overseas stakeholder requires an efficient connection of the relationships of the subsidiaries of the company as no one could prosper without integrating with the other. These stakeholders require a careful planning form the company’s strategic management for execution of their services (Pertz 2007).
It has been observed that many international companies are striving towards the use of outsourcing, supply chain management and global outsourcing for the development of durable products. These companies found the integration of global network of suppliers as a very effective tool for the production of high quality durable goods. The primary reason behind these strategies includes the reduction of operating costs, reduction in capital investments, and concentration on the core business. According to (Li 2007), the outsourcing is adopted to increase the capacity building through working with others for making better durable goods.
On the other hand, supply chain management is very effective in the overall integration of information system. The suppliers are considered as significant part of a business that supports in the innovative development of products. Durable goods are most costly as they are useable for the period of approximately three years. Therefore, the costs of production of these goods are very high. According to (Hagel& Brown 2005), the excellence of the global sourcing, supply chain management and the outsourcing of durable goods has become a key driving force for the companies. This ultimately resulted in the integration of activities from inception to the on time delivery of goods to the customers. The technique is used by many of the global organizations to have competitive edge in the consumer durable good market (Slack et al. 2008).
The five theoretical principles that should be considered by the supermarket in maintaining cost-leadership includes the supermarket considerations regarding the efficient manufacturing processes, efficient distribution channels, technological improvements, and availability of sufficient capital to be invested in the plants and equipments used for production. Moreover, supermarket should also focus on the narrow market segments rather than concentrating on large markets as the large market share. It could be viewed from the example of two big supermarkets of Europe naming Sainsbury’s and Tesco as they are practicing cost leadership through providing low cost products to capture different market segments. The supermarkets could also achieve low cost benefits through sourcing their goods.
Moreover, supermarkets could have a strong influence on a large customer segments through the encouragement of employees and its customers to perform their social responsibility. For the purpose of this, they have to incorporate the concepts of business ethics and social responsibility in the operational management of the company. It could be viewed form the case study of Tesco that it has been successful in capturing the large portion of market through the encouragement of social responsibility among them. They are promoting effective health behaviors among their customers resulting in the global recognition of the supermarket. It has been viewed that customers are more attracted toward those companies that are fulfilling the obligations of CSR and engaged in the activities that makes their contribution in the welfare and interests of society (Daft& M. 2010).
The poor customer-performance is largely related to the inaccurate customers’ predictions, large number of changes in the original order of customers, and lack of appropriate account management, leading to poor on-time delivery of suppliers and purchasing time (Slack et al., 2008). It all leads to excessive inventory due to which organization has to experience inventory write-offs and high cost of product with lower profit margins (Toomey, 2000). Therefore, in order to overcome the high cost of production and lower profit margin, it is significant to hold the inventory with different means such as accurate forecasting for the sale of the products and minor possibility for the error in the predictions. Moreover, holding inventory can benefit the organizations through the capacity of machines that are required to build the products as it can be used for other operational activity. However, inventory should not be built unless it is required, holding the inventory by the organizations can benefit as less space is required and it cannot be used earlier.
There are different views on why inventory should and should not be held, the best practice inventory management emphasizes on the least errors in the forecasting, because larger possibility of forecast error leads to higher desired customer level services and it is further required to have more inventory that can cost high to the organization. Such costs of the organization due to high inventory are often hidden cost of the organizational production contributing to increased revenue for the organization but decreased profit.
Benchmarking that refers to systematic process of comparing the organization’s business performance metrics to the best practice business process and performance in the industry is widely used to improve the performance (Slack et al., 2008). In this systematic process of comparing the performance, the quality, time and cost are measured as dimension and by identifying the best organization in the industry, the performance of the organization can be compared with the core purpose to improve the performance (Damelio, 1995). Adopting this systematic process of measuring the metrics of performance, organizations can learn how good the target performs and why that firm is successful in achieving its goals (Slack et al., 2008). However, benchmarking is not only a process of performance evaluation, but also provides opportunity to plan and implement the process for consistent flow of business to be achieved at the best level of the performance. Thus, benchmarking can be helpful in improving the access to business information and performance data in order to determine the business goals and to improve the process of business (Damelio, 1995).
As far as the potential problems and limitations of the benchmarking is concerned, the most significant problem associated with the benchmarking is the excessive consumption of time, and intense labor process involved such as skills and knowledge. The limitations associated with the benchmarking are the issues regarding the confidentiality about sharing of the information, as organizations can show the concern when it comes to comparison with other organizations. Moreover, benchmarking is effective and useful if organizations are willing to take the initiatives to introduce changes based on the results and findings of the evaluation (Damelio, 1995).