Ryanair and GE Total Quality Management (TQM)

Quality Management : History and Purpose

All companies are worried about quality, usually because they attended to understand that high quality can provide a significant competitive gain. [2] Good quality products and services decrease the costs of rework, waste materials, complaints and dividends and, most importantly, create satisfied customers. [1] It really is noticed that quality is considered as one of the most important factor as a competitive tool.

Total Quality Management (TQM) that became popular with all sorts of business in the late 1970s and 1980s has its roots in earlier work by several management thinkers. Feigenbaum popularized the word 'total quality management' in 1957. Then it originated through the task of several 'quality gurus' including Deming, Juran, Ishikawa, Taguchi and Crosby. TQM can be viewed as a logical expansion of the way in which quality-related practice has progressed. [2]

Originally quality was attained by inspection - verification out problems before customers found them. Then the 'quality control' (QC) strategy developed a more systematic method of not only detecting but also resolving quality problems. 'Quality confidence' (QA) widened the duty for quality to add functions other than direct businesses, such as Human Resources, Accounting and Marketing[2]. Quality management in addition has made increasing use of advanced statistical quality techniques since 1980's through Six Sigma process input-output improvement to deliver quality. Some organisations such as Ryanair, Toyota etc. suggests and favour TQM as an outstanding turn around strategy where as some organisations such as GE, GM, Honeywell etc. has gained success through laying down Six Sigma in every its practical chains and processes and they securely consider and live Six Sigma.

Executive Summary

This report employs my conclusions and understanding from readings and abstract from various reliable resources mentioned in the headers, footers and the dedicated referencing part of the report. The record introduces us to the quality approaches followed by Ryanair and GE who are from different industry having different orientations. The article also suggests why Ryanair has tag on TQM and how innovations, changes in business environment and competitiveness are influenced and later it is critically talked about that improvement is essential in Ryanair's quality management to remain competitive. Since the stylish maximum of TQM and Six Sigma, on the whole there has been some decrease in its status, yet, many of its ideas included in this report, have become accepted quality practice. [2]

Reflection in the Statement:

My notion before I started out my studies and research into this subject material, the product quality, was that "the product quality is available only in the expensive and branded products and that the product quality Control is the out put centered single method of quality management. " My teacher, Mr. Sotunde, the guide to Procedures and Process Management by Slack N. and co writers, various readings from Quality and Business journals have clarified me the idea of quality and exactly how it can be managed effectively.

Firstly, I learnt that the product quality is a value in product and/or service and it can be founded by the customers' targets that should be matched up with the actual product and/or service. Second of all, quality cannot be assessed with price by itself as price is the major factor of companies' strategy to exploit or even to compete in the market which is the financial factor to have an effect on the success. But, quality can be found in low price products or services as well such as in Value for Money goods and services or it is available as a value that a company can deliver in its product or services for a justifiable price.

I learnt that the product quality function is not limited to the out put but it can be practised through out the organisation directly into all its operations to produce or provide goods and services of the steady quality as per the prospects of the customers. As it has to be practised universally it's the responsibility of all and the value of the quality should be grasped and communicated within and outside the organisation for example to the suppliers and vendors.

Additionally, there are varieties of approaches to the Quality that are practised by different organisations. Though having similar functions, organisations in the same industry or in direct competition, it sometimes appears that two different organisations follow different quality management way and both are successful in terms of the quality goods and services it produce or provide.

Establishing quality specifications and pursuing/meeting them sincerely is insufficient for the organisations to remain much longer on the advantage because they may be copied or imitated by our opponents or new entrants or customers' quality expectation might change. So, it's very much needed for organisations that they remember to improve their quality aspect. I've also learned that the quality methodology developed within the company such as TQM by Toyota and formalised Six Sigma by Motorola are difficult to be copied exactly over night and if ideas followed completely than too one can't defeat them in their own game because they're constantly bettering their functions and process to excel the clients perceptions, keeping them always a step forward. Additionally it is seen that quality criteria are formalised by organisations such as ISO and ISI and organisations help one another by affiliations such as EFQM to enhance the quality aspects in production or provision of goods and services.

RYANAIR:[3]

Ryanair, presently, Europe's original and still most significant low-fare, no frills airline with labor force of over 5, 000 employees, around fleet of 250 aircrafts including new Boeing 737-800 aircrafts provide services to around 12m travellers every year to over 1, 100 low-fare routes across 26 Europe.

According to the CEO, Michael O' Leary, 'Our customer service is about the most well defined in the world. We guarantee to offer the lowest air travel. You get a safe airline flight. You get a normally on-time air travel. That's the bundle. We don't, and won't, give you any other thing more. Are we going to say sorry for our insufficient customer service? Absolutely not. If a airplane is cancelled, will we put you up in a hotel immediately? Absolutely not. In case a plane is delayed, will we give you a voucher for a restaurant? Definitely not. '

[The other key information about Ryanair Ltd. , please refer to Appendix 1]

GE: [9]

GE is a varied infrastructure, financing and marketing company dealing with the world's toughest difficulties. From aircraft machines and power era to financial services, medical imaging, and television programming, GE works in more than 100 countries and utilizes more than 300, 000 people worldwide. Their businesses gas the global economy and improve people's lives. Their global research team with an increase of than 2, 500 experts working towards another breakthrough, GE is positioned to regularly innovate, invent and reinvent.

General Electric (GE) says that its commitment to quality is based on the ideas of globalization and access immediately to information, and products and services that continue to change just how its customers execute business.

Their quality objective statement reads, partly, "Today's competitive environment leaves no room for problem. We should meet our customers' needs and relentlessly look for new ways to go beyond their prospects. "

Ryanair v/s GE

Quality Idea and approach:

For both Ryanair and GE, quality means the constant conformance to customers' prospects by setting up the concepts of service quality, process management, quality assertion and quality excellence, but, their approach to quality management is quite different.

Ryanair and TQM:

Ryanair offers value for money, point-to-point flights and aims nothing near luxurious service. Quality provision at Ryanair is intended from their point of view giving adequate account to the expectations and perceptions with their targeted segment for the fare it offers which is seen that Ryanair is providing these targets by its on time journeys, traveler and baggage safety, good appearance and attitude of crews, the way it satisfies the industry problems and resolves the service failures. Since 1997, it offers followed and living the full total quality management to provide its quality goals through its Lowest Fares and Traveler Service Charter. [6] The current shows (non-exhaustive, for complete list please follow Appendix 1) from this charter proclaiming their significant commitments are:

  • To provide lowest fares whatsoever time on all routes.
  • To notify people of known delays, cancellations and diversions.
  • To allow booking changes.
  • To answer quickly to passenger grievances and provide fast refunds.
  • To take procedures to speed up check-in.

The success and progress that Ryanair is currently enjoying is due to providing the cost effective for money service as right first-time in all its functions from choosing the ticket to the baggage handling. It is universally understood within the organisation that little extra effort provides big results and these initiatives do not need a huge investment in training. The Ryanair control its functions and processes through its industry benchmarking and setting its own interior quality expectations. It uses Servicemail and other performance statistics to judge their position in their highly competitive aviation industry.

GE and Six Sigma:

Most of the GE business sections are involved in large scale developing activities at a larger extent. In 1988 with an application called Work-Out, GE started focusing on quality conditions that has helped these to open its commercial culture to proven ideas from any one fourth regarding quality management that later created a host that eventually resulted in Six Sigma. Work-Out was used to recognize and eliminate unneeded processes and responsibilities by development teams from multiple departments to find a solution to a problem. Now, Six Sigma is embedding quality considering into every level of operation around the globe. These uses statistical tools and systems to keep an eye on and control processes and functions to obtain outputs near zero problems.

The three key elements that GE concentrates with their quality initiatives are customers, procedures and employees. Everything the company does indeed in its search for world-class quality focuses on these three essential elements. Customers are at the centre of GE world and they determine quality by their anticipations of performance, trustworthiness and other factors. To achieve the quality level that their customers require, GE conducts what it calling "Outside-In Thinking".

Outside-In Thinking phone calls on GE to look at its business from its customers' point of view. "By understanding the transaction lifecycle from the customer's needs and operations, we can discover what they are seeing and sensing. With this knowledge, we can identify areas where we can add significant value or improvement using their perspective, " GE's quality assertion reads.

The employees are a key to the quality approach and at GE, quality is inserted as the duty of every employee. Keeping this at heart, all GE employees are provided training in the strategy, statistical tools and techniques of Six Sigma Quality. Selection of training courses are offered at different levels including basic recognition to Six Sigma; basic tool launch to equip employees to get involved on Six Sigma teams; Master Dark Belt, Dark colored Belt and Green Belt Training for head managers; and Design for Six Sigma training.

Summing-up:

Both, Ryanair and GE want to deliver exceeding quality products and services to both their inside and exterior customers, clearly knowing that quality is a regular versatile activity having both quantitative and non-quantitative qualities such as re-visiting customer? Yes/No. They may have emphasised and communicated throughout the organisation that quality is the responsibility of every specific and through these responsibility they ensures that all processes, inputs and outputs, maintain and produce regular confirmative quality level products and services.

Is TQM excellent for Ryanair?

Ryanair's business strategy is situated upon the product orientation because of its air travel and quality strategy as the customer orientation. Ryanair is continually seeking to keep its costs only possible to copy benefits of cost benefits to it's passenger in the form of low fares. The common misconception is the fact that the quality comes for price. Critically, it can be argued that quality can be delivered for the reduced price service as well, somewhat again to state simply, "Quality in cost".

In these previous 25 years, Ryanair has well balanced the targets and perceptions by presenting revolutionary and impressive means of providing low fare flights. Keeping its marketplace in centre, they have got defined and communicated the grade of their services in their own terms. Ryanair's customers really know what they will get and their job is to deliver these goals at its best by taking care of each and every, direct and indirect techniques that are related to the travellers which can be later judged by passenger's experience. Ryanair's method of its quality management as not the same as other successful organisations such as GE has serious implications on its innovations, changing business environment and competition.

Innovations in Ryanair:

Putting an innovative thought into quick action is the center competence of Ryanair. Most of the Ryanair progressive ideas have helped bring the revolution in the manner people perceived travelling by air. For many successful companies such as GE, enhancements has cost them bundle of money and these costs were recovered from customers in the higher prices, but, for Ryanair enhancements were implementing a straightforward ideas providing additional revenues that subsequently benefiting customers in least expensive price tickets.

Firstly, using its change strategy of mid 1990s, Ryanair, aside from no frills has created no class, one model air crafts. These fleets of a huge selection of aircrafts were bought often and purchased at much discount. The overhead cost of training and cleaning were helped bring right down to nominal because of the standardised aircrafts. The target and resources were diverted to expose new routes, increasing customer bottom and harnessing quality factors in its provision of services.

From 2000 and onwards it began using the e-commerce tools and websites for online reservation, check-in and informing customers about the special offers on its tickets. Ryanair was first to market third parties advert on its boarding go away and flights. The client service were improved upon by intro of web program, Bing, that posts air fares directly to its customer's computer and by utilizing a Servicemail, a spot of contact and response for customers. Servicemail is then extended to acquire data regarding customer choices, preferences, trend research and calculating KPIs.

In future:

The fare recharged by Ryanair reflects the price of visiting from point A to B. It provides other ancillary services such just as flight meals, beverages, baggage costs etc. at a charge for those who want to buy. The long lasting visionary CEO, O'Leary has a eyesight that in arriving years travel by Ryanair will be free and everything its earnings will be streamed by giving ancillary services, alternative party advertisements, holiday seasons, insurance, hotels and links bookings sold through Ryanair website.

Change:

TQM approach used by Ryanair is a flexible approach to a big change in exterior circumstances as it must just target 'do new thing at its best but at lower cost'.

Customers:

Ryanair is a focused cost leader and available to customer fatigue so that it has to understand that in the long run it must move along with the taste of the client that could be influenced by pressure groups, regulators, European union and other regional governments. Presently, Ryanair is supervised by an extreme approach to take market and in future it might require tactical rethinking, but, its method of quality can stay the same to lure and satisfy people.

[Please refer to #1 1 Customer Services Reports in the Appendix 4][8]

Suppliers:

The gain to Ryanair is that within UK and European countries, each major region of the countries has more than one air port, which can hold Ryanair at competitive rates on landing and handling fees, giving Ryanair with the upper palm. The traffic at these extra airports is low increasing the quality level of airport terminal handling services and on-time departures appreciated by the travellers. The other suppliers are caterers, maintenance and repair contractors. It is natural that Ryanair must be managing its suppliers' romance through service level agreements with a backed hefty payment for the breach of service term(s).

EU and Local Governments:

The expansion of the Ryanair rooted anticipated to EU's deregulation of the aviation industry. European union court decision can negatively impact upon the way Ryanair is functioning. For instance, Ryanair was pressured to refund against its non-refund policy for air travel cancellations credited to Icelandic volcanic eruptions and was billed 3m Euros by Italian Administration for not assisting passengers following its flight cancellations. In which to stay business and steer clear of fines Ryanair must comply with such unavoidable regulations but it could not impair its quality strategy as others too have to comply.

Quality and Competitiveness:

Of course, quality products and services will be the competitive edge and Ryanair keenly has laid down this aspect involved with it air flights and routes. The key to success of Ryanair is employing different marketing strategies over a time period to make it through the cut neck competition in the aviation industry. Ryanair is recognised as the utmost punctual airfare from Dublin to London and Ryanair is top rated against its close competitors such as EasyJet, Virgin and English Airways.

"People made it possible" statement is true for Ryanair because the success of Ryanair is behind its crew members because they are in the immediate connection with the travellers. Ryanair has not spent much on the training but is paying modestly to its team which has encouraged these to behave as pleasantly as you possibly can on the plane tickets.

There are concerns elevated from some unsatisfied customers and dissident that the ancillary services provided by Ryanair are costed high and are of poor quality. Ryanair should offer with this problem as soon as possible as the success of total quality management lies upon providing quality in all aspects of its activities. Despite all reducing corners to save on solution prices, more and more people are flying

Ryanair, which, in the end, might be the ultimate validation of O'Leary's assessment of what vacationers really want and exactly how Ryanair is providing it.

[Please refer to the Appendix 3: The Customer Feedbacks][7]

However, TQM is not the end in itself. Ryanair should continuously strive upon bettering its quality criteria that can help them to help expand reduce costs, increase earnings, reduce hazards and increase the way it helps handle claims and dissatisfied travellers.

Improving Quality in Ryanair

The ultimate goal of functions and process management is the performance improvement and Ryanair should consider this as an ultimate aim to boost its quality goals of promptly flights, rate, ancillary services and stability. Despite of most efforts to manage its quality, Ryanair is seen and blamed that this sacrifices the product quality in pursuit of minimising costs which it fails to align the hobbies of its passenger's well. These issues could be dealt with by setting the least performance standards and outperforming them, as well said, 'promise little and deliver above anticipations'. One of the ways Ryanair could gain its goal to be world's biggest and cheapest airliner is by aligning all its functions within the organisations to commit to quality levels and agreeing the quality deliverables with its companies. 'Kaizen' aka Ongoing Improvement if followed could combine well with the current TQM approach followed by Ryanair, however, this could affect the inventions, change and current competitive position in a favourable manner. Kaizen requires give attention to small but constant improvements that will become part of normal culture for everyone operations.

Innovations:

We are aware that since 1997 Ryanair's traveler base is growing at a significant 20% average yearly and it still has an appetite for progress and market to grow. It has become significantly important that Ryanair addresses the improvement concern in its quality management to satisfy this increased demand, quantity of new routes, places and growth prospects with Kaizen. Ryanair could extend or assign the responsibility towards quality improvement to the regional processes owners impacting on individuals' quality belief. These procedures owners would identify the performance spaces and recommend activities to fulfil them by ground breaking actions or add ideas for further analysis. A close contact is necessary with the team members who will bring them the stories

or experience they had with customers and exactly how they overcame the needs or problems of different customers.

We have Servicemail as a spot of customer contacts and correspondences, but, we might need a system for inside communications that might be called a Central Information System (CIS). Through CIS every team clubs, employees and contractors as a low fat system, directly send key ideas, reports, experience with their respected process owner, who subsequently filter the messages and re-post it that shall be compulsorily viewed, shared, commented and advised upon by all regional process owners for even more analysis which could require the PDCA routine or DMAIC circuit approach.

This simple CIS should not cost much as maybe it's readily available or produced upon demand by the tendering process. Assuming that majority of them are computer literate and CIS very user-friendly will require smallest amount charges for informing or training. The best contributing team or functions should be measured with process superiority index aka EPI and compensated on quarterly basis.

The other direct and simple way for improvement is to circulate a postcard size bare form on trip with two columns to list down by passenger's - good about and dissatisfied about travelling with Ryanair. The employees should be inspired to identify and forwards negative feedbacks only using CIS with a self-confidence and surety that they will not be judged regardless against negative feedbacks and that the varieties will be utilized for basic improvement of quality standards as a whole.

Change and Competitiveness:

The better quality means increased income and profits anticipated to increased turnover. The Kaizen procedure in low priced EU and UK Airline service segment will identify, distinguish and advantage Ryanair from its rivals.

If, Ryanair action now and completely implement Kaizen by Dec 2011 then they could become a cost-cum-service leader, a fully impressive airliner, with the least expensive fares simply covering quality cost of travel and chargeable ancillary quality efficient services with the very least premium for many who want them. This development can help Ryanair to become a world's popular brand and will edge Ryanair in 2012 when the amount of international passengers will increase more than double anticipated to London Olympics.

In many situations Ryanair was criticised by the regulators and opponents for not supplying any or enough quality in people' security and ancillary services. Now, with Kaizen all will be reversed and Ryanair will be looked at as the industry leader arranging the industry landmarks for benchmarking.

Ryanair has publicly declared that by 2014 it'll enter the long term destinations market and this will require them for a parallel strategic pondering as this segment provides new troubles in terms of quality management. These routes are proposed to be separately maintained, perhaps with most traditional form of plane tickets and some compulsory up to speed services that may require Ryanair to establish new service requirements. There is a opportunity of success in this segment if it can effectively increase and use of then well operating Servicemail, CIS and other critical success factors such as brand, price and more developed quality standards using Kaizen.

Word matter:

Executive Summary 121

Reflection in the Statement 493

Ryanair and GE Introductions 297

Ryanair v/s GE 732

Is TQM good for Ryanair 1, 117

Improving Quality in Ryanair 819

Total : 3, 579

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