INTRODUCTORY OPERATION MANAGEMENT
|
FACULTY OF BUSINESS AND
MANAGEMENT
SEMESTER JANUARY (2014)
BDPO4103
INTRODUCTORY OPERATION MANAGEMENT
MATRICULATION NO :
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LEARNING CENTRE :
TOTAL QUALITY MANAGEMENT (TQM) IN LELONG.COM
1.0 INTRODUCTION
History
Interbase Resources Sdn. Bhd. is a relatively young company that has come a
long way from its humble beginnings. Since its inception at the end of 1998,
the firm has quickly established a firm footing in the e-commerce arena. As the
founders of the pioneer auction website (http://www.lelong.com.my) in Malaysia,
Interbase has secured its position with the largest subscriber base for any
site of this genre. With a mission statement of "Serving the community and
bringing a high standard of quality into homes and businesses by providing an
avenue for on-line trading at a low cost", the staff behind Malaysia's premier
auction site continually strive to improve and develop its functionality
without levying high costs. At present, Interbase is expanding into more areas
of e-commerce and this document will allow you to better understand our
business plan and vision.
1.1
The Business
What
is Lelong.com.my ? A means of identifying Lelong.com.my is to use an
international comparison that everyone is familiar with. Styled and functioning
similar to the international auction site, eBay.com, Lelong.com.my powers a
robust and secure avenue for trading in Malaysia. The idea of an auction site
in Malaysia has taken off with tremendous response. With a local flavor,
members feel a sense of belonging and constantly keep in contact with the
Lelong Development Team to give feedback, be it positive or negative. As our
members are extremely valuable to us, we go to great lengths to accommodate for
their needs and wants. With the experience we have gained from running the site
for the past years, our team are well poised to deliver a site that is full of
quality content to the members. Starting based on Consumer-to-Consumer (C2C)
transactions, Lelong.com.my is now moving to becoming a channel for
Business-to-Consumer (B2C) relationships. Many distributors have realized the
power of using the auction system and are now using our site to trade and grow
their business.
1.2
How They
Works
What
are the attractions of using Lelong.com.my ? Many of us have lots of items
lying around the house that are not currently in use; whether second hand or
new items that we have not gotten around to disposing of. This is a major
compelling factor that have brought many users to Lelong.com.my. The track
record for selling items is extremely good. Approximately 70% of all items
posted for auction on our site are sold. Hence, users stand a good chance of
obtaining a successful transaction. The interface is very user-friendly and
easy to use. At a glance, most users get the hang of the system. We do focus
heavily on customer support and in the event of any problems or queries arising,
any e-mails / phone calls directed to us are responded to almost
instantaneously. Problems that arise can also be posted in the forum and many
users play a major role in replying and helping out others. With all our
on-going efforts, a community of auction users has formed which are extremely
diverse, and who actively interact amongst one another. This causes them to
feel at home and comfortable trading with other members.
Since the
establishment lelong.com.my from 2000, millions of traders from all over
Malaysia have been using the platform to market their products. Interestingly,
lelong.com.my always keeps the needs of their customers by ensuring that all
services provided are satisfactory.
This assignment
is written to discuss the problem faced by lelong.com.my TQM in their business
and solutions that can be taken to overcome these problems making lelong.com.my
among the most successful e-commerce company in Malaysia
2.0 TOTAL QUALITY MANAGEMENT
Total Quality
Management (TQM) is a comprehensive and structured approach to organizational
management that seeks to improve the quality of products and services through
ongoing refinements in response to continuous feedback. TQM requirements may be
defined separately for a particular organization or may be in adherence to
established standards, such as the International Organization for
Standardization's ISO 9000 series. TQM can be applied to any type of
organization; it originated in the manufacturing sector and has since been
adapted for use in almost every type of organization imaginable, including
schools, highway maintenance, hotel management, and churches. As a current
focus of e-business, TQM is based on quality management from the customer's
point of view.
In order to get
a core understanding of the logistics of total quality management, also known
as TQM, it is important to understand what TQM really is, and the processes,
tools, and protocol involved in effective total quality management. At its
core, TQM is an approach to quality assurance that will foster long term
satisfactory customer relationships. All the members of a business will
participate in a successful total quality management campaign in order to
ensure its success. Using specific data, strategies, and clear communications
skills, a higher standard of service can be effectively achieved.
2.1 Customer
Focus and Communications
This
is really a two part principle, but they are so heavily interchanged, that they
fit together. Essentially, the key to effective customer focused quality control
is effective communication between the supplier and the client as well as the
internal organization at the supplier level. At the core of TQM, the customer
ultimately drives the quality and any improvements that need to be made. An
organization can take certain internal measures to determine quality, but
ultimately; it is the "customer is always right rule" that takes
precedence over everything else. Bringing this point full circle is the
necessity of engaging in regular customer contact and establishing an open line
of communication in order to fulfill this process.
2.2 Complete Employee Involvement
When
employees work toward a common goal and they have a deep sense of commitment to
that goal, amazing things can happen within an organization. Usually the best
way to get an entire team of individuals to pull in the same direction is to
empower them to meet a company-wide objective. It is up to upper-management to
foster this type of environment. Management should create healthy a balance
between high performance work systems and improvement efforts within the normal
day-to-day operations. Instilling a sense of self-reliance in their team of
employees is one way that management can inject this empowerment into their
workforce.
2.3 Process Centered Environment
When
it comes to total quality management, a process focused environment is
instrumental to efficiency. An example of a process that is a major part of TQM
is essentially the relationship between the supplier and the customer. The
inner-workings of this process include internal and external measures. It is
important to define the individual steps involved throughout each internal and
external measure. It is then essential to monitor every step of the process to
ensure success. This continuous attention to the finer details will point out
weak spots in the process and allow improvements to be made.
2.4 Systems Integration
This
is perhaps the most time-intensive and detail-oriented of all the facets of
total quality management. The entire TQM strategy is defined by the systems
that are implemented to control processes and micro-processes. Because of the
fact that business performance must be consistently monitored and improved
upon, an integrated business system must be able to adapt to each unique organization
and the needs that arise as a means to foster tighter standards. These types of
integrations should improve and exceed the expectations of the customer base,
employees, shareholders, and potential shareholders. Using a strategic and
organized approach to systems integration and management will facilitate the
process of technical total quality management.
2.5 Using
Facts to Make Decisions and Improve
The
entire focus of TQM is to foster continual improvement by exposing areas of
vulnerability and helping organizations capitalize upon them by turning them
into strengths. This process requires a business to be both creative and
analytical. From the standpoint of analytical improvement, facts and hard
figures must be interpreted. At the point when the facts are fully interpreted
and understood, creative problem-solving tactics can be used. A healthy balance
of these two facets can lend itself to a decision making process that should
garner favorable results.
All of these
elements would be considered vital pieces of TQM. If one of these elements is
lacking, it will adversely affect the others in the long run. In order to
ensure that the overall goal is accomplished, that goal being customer
satisfaction, a highly proficient total quality management campaign must be
implemented. Additionally, keeping employees accountable and happy can yield
highly favorable results in achieving the overall goal of keeping a client
happy. A business that finds themselves on the positive end of effective TQM
efforts should be highly attractive to not only customers, but also
shareholders (where applicable), and quality employees as well.
3.0 THE
ISSUES
3.1 Navigation
The navigation
is the browsing extensibility to which the web site’s software allows. A
concept which suggests that, using contemporary technology, the advertising
that consumers actually see can be decided by those consumers – rather than
being pushed at them, as with traditional media. Most of the time, it is very
difficult to the customer go through his actual choices on the homepage. Just
because the company has lot of promotions and products on the site, they show
all of them on homepage. In certain scenarios some products are out of the
stock, but that are cleaned from homepage. Some websites slow down the
customers by showing 10 recommendations before they get their cart page. If
customer has a short attention span and he gets overwhelmed with too much
unnecessary information, he might just leave.
The buying
confirmation process is also not standard. The final page or payment
confirmation email doesn’t show enough details to buyer not to call you at once
for certain clarifications and explanations. This creates the fear of them
getting scammed. There is no proper customer care from the company to analyze
the number of recorded aborted or doubtful transaction Another major problem of
the navigation is company don’t inform to customers on what they are buying and
then also inform them on what they have bought. This is a simple but important
E-Commerce rule. It is the only way to make them understand what they get for
their money. Whatever lelong.com.my are selling provide sufficient information
and details on what customers are buying or what they can expect to receive.
3.2 Information Asymmetry
When consumers
make the payment, a number of bad faith businesses for small and medium-sized
enterprises do not deliver goods on right time. Defraud money from customers
without sending out goods, or the good quality is less than a pre-agreed
standard. In B2C E-Commerce market for small and medium-sized enterprises,
information asymmetry can be divided into: pre-trade information asymmetry and
after-trade information asymmetry according to the time of occurrence.
- Pre-trade
information asymmetry:
- Merchants
owning the information advantage. On the one hand, the business is well
aware of the reputation and product quality themselves, but they do not
provide all information on the web site, or deliberately add or deleting
certain information, such as publishing false information. On the other
hand, consumers can obtain product information only through text, pictures
and other information that the web site include. So, merchants own the
advantaged position while consumers are in the disadvantaged place.
- After-trade
information asymmetry:
When
consumers made the payment, a number of bad faith businesses for small and
medium-sized enterprises do not delivery goods in the right time, defraud money
from customers without sending out goods, or the good quality is less than a
pre-agreed standard. After receiving the goods, the consumer requires goods to
be returned because of the goods quality is inferior or physical goods does not
consistent with the description on the web, while the fact is that consumers do
not want this product.
3.3 Payment
Issues
The
infrastructure makes payment over the Internet through credit, debit, or Smart
cards, or through online currencies. It also makes possible the distribution
and delivery whether online or physical of those products purchased over the
Internet to the consumer. Its growth further requires the establishment of
reliable and secure payment infrastructures to avoid frauds and other illegal
actions. A supportive electronic payments infrastructure is crucial to promote
E-Commerce, which exposes a key link between E-Commerce and the financial
foundation of the economy. The efficiency of the payments system itself can
help or hinder the development of E-Commerce.
The payment
gateway vendors and banks become obstacles to technology. Payment gateway error
rates are high (>25% of transactions fail at the gateway). B2C E-Commerce
report also specified the rules and regulations of various payment issues of
customers. Payment gateways and banks also charge way too much commission on
each transaction which is bad for the customer because if the customer gets the
benefit in price compare to actual purchase of product physically, then he can
think to purchase online otherwise not. Many time retailers force to pay first
through credit cards [10] before delivery of the product because every time
cash-on-delivery is not possible. So the complete risk shifts to customer then
why customer should take that risk?
There are some
other issues like:
a)
Companies do not offer plenty payment options:
Companies
definitely lose valuable customers because they fail to provide several payment
options. They do not analyze the buying tendency of customer niche to know the
most popular buying terms and payment options. It is certainly do no good for
customer if companies are only accepting American Express cards while most
customers mainly use Visa or MasterCard debit cards. It is highly recommended
to offer different payment options to finalize their order.
b)
Large volume of transactions in India are cash based
transactions:
A
small fraction of Indians have virtual payment instruments like credit cards or
bank accounts. Largely we are cash driven economy. Almost everyone has started
COD in India and for the right reasons. However, my thesis here is that this is
incredibly hard to scale. As humans are involved in the collection of cash etc,
fraud rates will be very high which will dip into the margin levels of the
E-Commerce players.
4.0 SOLUTIONS
To facilitate
the understanding of the reader in the reading this assignments, the proposal
that I will write will be based on the specific problem above.
4.1 A focus on customer needs
The customer is
the major judge of quality. Perceptions of value and satisfaction are
influenced by many factors throughout the customer’s overall purchase,
ownership, and service experiences. In order to complete this duty, an
organization’s efforts need to extend well beyond merely meeting
specifications, reducing errors, or resolving complaints. An organization close
to its customer knows what the customer wants, how the customer uses its
products and how to anticipate needs that the customer may not even be able to
express.
4.2
A focus on quality of service
The term of
quality of service which impact of continuous improvement of TQM. Obviously,
continuous improvement refers to the incremental changes, which are small and
gradual, and breakthrough, or large and rapid improvements. These improvements
a)
Enhancing value to the customer through new and improved
produces and services
b)
Reducing errors, defects, waste, and their related
costs
c)
Increasing productivity and effectiveness in the use of
all resources
d)
Improving responsiveness and cycle time performance for
such processes as resolving customer complaints or new product introduction.
Continuous
improvement should be a regular part of daily work; practiced at personal, work
unit, and organizational levels; driven by opportunities to affect significant
change; and focused on sharing throughout the organization.
4.3 Accuracy
Accuracy is the
provision of accurate informative texts about products and services offered, as
well as provision of thumbnails, photographs and videos presenting the services
and products available. It is the extent to which data are exact, correct, and valid.
For example, accurate data affect a program’s ability to provide reliable
transaction rates and to maintain data comparable to those from other programs.
Accuracy reflects the program’s standard to conform to agreed-upon case
definitions and requirements.
The cost of
inaccurate and poor-quality data is estimated by some data quality experts as
being from 15 to 25% of operating profit. In a recent survey of 599 companies
conducted by PricewaterhouseCoopers, an estimate of poor data management is
costing global businesses more than $1.4 billion per year in billing,
accounting, and inventory. Much of that cost is attributable to the accuracy
component of data quality.
Many times the
companies’ don’t have an idea the problem was that large. Assessment is the key
to awareness. Most of the companies can believe that the others have a larger
problem than they do and assume that the photographs or the text is similar to
the products they are going to deliver. Everyone believes that the data quality
problem they have is small and much less interesting to address than other
initiatives. They are usually very wrong in their thinking. It takes data to
change the minds of customers. This difference in accurate information loose
the faith of the company in the mind of the customers as well as creates
problems in the business transactions also.
4.4 Payment Issues
The
infrastructure makes payment over the Internet through credit, debit, or Smart
cards, or through online currencies. It also makes possible the distribution
and delivery whether online or physical of those products purchased over the
Internet to the consumer. Its growth further requires the establishment of
reliable and secure payment infrastructures to avoid frauds and other illegal
actions. A supportive electronic payments infrastructure is crucial to promote
E-Commerce, which exposes a key link between E-Commerce and the financial
foundation of the economy. The efficiency of the payments system itself can
help or hinder the development of E-Commerce.
5.0 SUMMARY
E-Commerce is considered an excellent
alternative for companies to reach new customers for business. A business that
run over the Internet is like any other business when comes to an effective
organization, product quality and customer satisfaction. The efforts should
start from finding out the quality issues in B2C E-Commerce. TQM is a focus on
process improvement, often through changing the existing systems to improve
their efficiency. The understanding of how effectively the TQM need to implement
is very important for the long existence of B2C E-Commerce companies in the
market. TQM is the best solution to understand the problems and the way how to
solve it.
3058 WORDS
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