Continuous Improvement Strategy and Quality Management on Virgin Atlantic Airlines - Case Study Example

Table of Contents Introduction 2 Organization Profile 2 Quality Imperatives 3 The Economic Imperative 3 The Social Imperative 4 The Environmental Imperative 4 Strategic Importance of Quality 5 Quality Philosophies 7 Quality Tools 8 Management of Quality 11 Quality Issues in Virgin Atlantic Airlines 13 Conclusion 13 References 14 The Analysis of Quality Management on Virgin Atlantic Airlines Introduction Top quality management in an organization or company, is reflected on the response of customers to the goods and services provided by a company. According to Beckford (2010) quality is the key attribute that defines a substance or service. Thus the quality of a product or service will be determined by the amount of effort in terms of the finances and time invested in producing it (Gryna, 2001). Beckford (2010) further argues that for a company to maintain quality in its services, it is vital for the management of the company to evaluate any quality problems arising in production and prevent them. By implementing a strategy that will enable a company to evaluate any quality issues arising early enough, an organization is likely to reduce on the costs, time and quality implications that may occur (Gryna, 2001). This report is going to focus on Virgin Atlantic Airlines. In this report, the quality management of the services and products offered at Virgin Airlines will be analyzed and identify in what ways the company has managed to sustain corporate success and top organizational performance. The study will further examine the philosophies and strategies that Virgin Airlines has implemented to achieve quality management. Organization Profile Virgin Atlantic Airlines, is a UK based airline that was founded by Richard Branson in the year 1984. The airline currently serves customers in 30 different destinations worldwide, with 375 jets that fly across 240 cities globally and owns over 38 airplanes. Virgin Atlantic Airlines, serves over six million customers on an annual basis and is considered as the second largest airline in the UK and the third largest around Europe that flies all through the North Atlantic. The level of quality in services and management of Virgin Airline is quite high as compared to other airlines since the company mainly targets consumer whose financial status is above average. Since its creation the airline has employed over 32000 employees and earns up to $ 10 million revenue income out of the $ 8.7 billion it accumulates in sales. The airline has further forged partnerships with other airlines globally such as Singapore airlines in Asia thus increasing its market coverage around Europe and Asia. Virgin Airlines’ success in the airline markets is attributed to the commitment of its founder Richard Branson in brand recognition and promotion. The company is highly committed in ensuring that their customers receive excellent services while using their brand. Thus its management mainly focuses on quality customer care services (Virgin Atlantic Airways, 2010). Quality Imperatives According to Beckford (2010) for the purpose of achieving an effective management and organizational performance, the three core aspects of quality must be evaluated. They include; the economic imperative, the social imperative, and the environmental imperative. The Economic Imperative The evolution of the economic trends around the world has greatly contributed to the various changes experienced in the management of an organization. Beckford (2010) states that the rapid growth of the global economic stature, has greatly contributed to the growing markets, as a results the number of goods in the market place are easily equitable among consumers. The rapid increase in the growing markets, Virgin Atlantic Airlines has implemented a cost reduction strategy as a means to hold a strong position in the very competitive airline markets. To achieve this Virgin Airlines has opted to contract out its services, conduct regular maintenance as well as offer its consumers subsidiary brands at lower costs. This strategy has enabled the company in managing staff, production and marketing costs and increase its consumer base. As a result the Airline Company continues to sustain its brand in the market place as well as overcome the challenges posed by the changing economic status. The Social Imperative The recent technology advancements over the decades, provides managers with the opportunity to maximize on the employee potential by encouraging growth and development in the workplace through social cohesion (Beckford, 2010). Beckford (2010) affirms that by recognizing the different social aspects in the society, and appreciating the importance in organizational development, managers are likely to have a satisfied and committed workforce. Consequently, the organization is likely to attain consumer satisfaction and loyalty through appreciating the different social aspects that shape the market place. The HRM at Virgin Atlantic Airlines, ensures that its employees receive a modesty salary which is accompanied by promotions and rewards that aim at motivating employees’ performance. The company’s HRM evaluates each employee’s performance curve in order to identify their abilities and talents in serving the organizational and consumer needs. By promoting employee based on their performance, Virgin Airline encourages personal growth, nurtures talents and skills thus promoting employee commitment and loyalty. The Environmental Imperative According to Beckford (2010) the environmental imperative mainly addresses issues pertaining conserving the environment. Therefore environmental imperative seeks to promote environmental friendly ways in which organization can promote quality in their management and service to consumers. Beckford (2010) argues that both employers and employees have the duty to ensure that during production the amount of waste is relatively low to minimize on environmental pollution. The actual waste existing at Virgin Airlines is the fumes from the airplanes and jets due to the use of engine and machine oils. This could be avoided by using alternative sources of energy such as hydrogen so as to avoid air pollution. Nonetheless, the company can encourage the use of recyclable materials in packaging food stuffs and snacks for passengers so as to decrease the amount of plastic and paper disposed. Strategic Importance of Quality Beckford (2010) discusses four main branches of level management as; operational, administrative, strategic, and normative. All these management categories influence the decision making process within an organization. Operational management mainly focuses on the daily activities within an organization that impact the development of the organization in terms of achieving its objectives Beckford (2010). Therefore the current aim of an organization dictates its day to day operations. The daily activities at Virgin Airlines is to ensure that customers are able to book their flights, buy tickets and flights are scheduled on time for passengers to board and alight at their destinations. Additionally, Virgin Airlines, ensure that the employees are readily available to respond to customers’ inquiries and needs appropriately. The operational management at Virgin Airlines is mainly focused on quality customer care services so as to achieve the mission of the company and increase revenue income. For instance the mission statement at Virgin Airlines is committed to providing excellent customer services to their passengers and also increase profitability through customer commitment. Beckford (2010) affirms that the main objectives of operational management in any organization is to deliver exceptional goods or services. The role of administrative management in an organization is to ensure that resources within an organization are well equitable and allocated appropriately. Therefore administrative management is focused on using the available operational resources to achieve a company’s goals Beckford (2010). The administrative management at Virgin Airlines, is mainly responsible for dictating the functions of the operational management. The administrative management team take part in collaborative leadership to ensure that each department in the airline has the necessary resources to smoothly conduct their operations and ensure that customers receive excellent services and products. Virgin Airlines’ administrative management closely monitors the performance of their employees and their commitment in service delivery and organizational mission statement. This way the airline is able to assess employee work output and offer rewards as a means to motivate them. According to Beckford (2010) strategic management is the ability of an organization or company to implement policies that will enable it to effectively adjust to any internal and external changes that may be experienced in the future. As a result strategic management functions as a tool for an organization to gain a competitive advantage in a given industry Beckford (2010). In its mission statement Virgin Atlantic Airline strictly maintains that excellent customer care service is the stronghold of the company. This is evident in the in how the airline handles complaints and compliments from its customers. Feedback from Virgin’s passengers is crucial for the airline to implement change and enhance the quality of its brand. Action is promptly taken against flight attendants or customer care attendants who have been complained about by customers. The achievements attained by Virgin Airlines over the past decade is attributed to its commitment to constantly provide quality and excellent services to customers. Beckford (2010) affirms that normative management decisions is a reflection on the values, cultural and business practices of an organization. Therefore the commitment of an organization to quality in its production is evident if the senior management of the organization exhibit practical commitment when it comes to the quality of performance and employee work output Beckford (2010). The senior management of virgin airlines is very strict when it comes to ensuring that the employees offer excellent service to customers. Thus employees are often provided with employee training to ensure that they retain the values of the airline in providing quality services to customers to meet consumer expectations. This kind of leadership is translated down from the senior management to the junior management and further to the supervisors. Quality at Virgin Airline is created and sustained on the values instilled in the workforce by the senior managements. Quality Philosophies According to Beckford (2010) there are different quality philosophies exhibited within an organization depending on the founder of an organization. Beckford (2010) discusses different quality gurus one of them being Philip W. Crosby, who describes quality in three tenets; a belief in quantification, leadership by management, and prevention rather than cure. Virgin Airlines has implemented the ‘leadership by management’ philosophy as a quality tenet as described by Crosby. Since the airline was founded, Richard Branson focused the airline’s resources, time and money in managing the staff in order to maximize on employee commitment. This philosophy works to see that the leadership skills and values are instilled from the senior manager down to the staff members. According to Richard Branson leadership management has seen the company prosper and grow from 200 employees to over 10, 000 employee and still maintain the same values and practices in the airline (Virgin Atlantic Airways, 2010). In his arguments, Crosby clearly states that management is a vital element to achieve quality. Therefore if the management of a given organization does not conform to the rules of quality within in the organization then the quality of the products or services will not be achieved. This factor is evident in the management of Virgin Airlines whereby emphasis is put on excellent customer care service from the senior management to all staff members and is vivid in the consistent customer loyalty witnessed by the airline. Quality Tools Quality tools are mainly categorized in seven units. Namely; statistical process control, benchmarking, house of quality, Pareto charts, Baldrige awards, six sigma, and structural or HRM influences. All these tools are adopted into the management of an organization so as to measure the quality of products or services. According to Besterfield et al (2003) statistical process control is a measuring toll that is used for controlling the production process as well as improve the process. In implementing the use of the statistical process chart, Virgin Airlines has incorporated the use of the Pareto diagram as a control unit tool. The Pareto diagram is used in identifying the defects and in product and service management and further improve on them at Virgin Airlines. Customer feedback is used to track any shortcomings in service delivery and the Pareto diagram is used as a tool to monitor the modification process of services at Virgin Airlines. Besterfield et al. (2003) affirms that the Pareto diagram follows five distinct steps as shown below. 1. Determine the method of classifying the data: by problem, cause, nonconformity, and so forth 2. Decide if dollars, frequency, or both are to be used to rank the characteristics 3. Collect data for an appropriate time interval or use historical data 4. Summarize the data and rank order categories from largest to smallest 5. Construct the diagram and find the vital few Figure 7. Pareto diagram’s five-step construction Benchmarking approach uses a systematic method that aims at evaluating the operating procedure in an organization in terms of best practices, innovation and effectiveness (Besterfield et al. 2003). The benchmarking technique employed by Virgin Airlines is the emphasis placed on best practices and effective operating procedures. Since the airline is mainly committed to customer satisfaction, Virgin Airline is consistent in reviewing its business practices and operations so as to gain a competitive advantage in the market place. This process is effective as it reduces on cost and time through imitation and adaptation, thus reducing the shortcomings at Virgin Airlines and improve on the strengths. On the other hand House of quality is the key element in the process of planning and implementation. As a result Virgin Airlines heavily relies on customer feedback in order to modify their products and services so as to meet consumer expectations and needs. The diagram below shows how the ‘house of quality’ structure works. Figure 2. House of Quality Besterfield et al (2003) proposed the Malcolm Baldrige National Quality Award (MBNQA) as a tool that most organization implement in monitoring the total quality management of their operations. This tool is used in monitoring and assessing the operations of an organization and make improvements. Virgin Airlines has maintained a transparent relationship between its operations and customers so as to ensure that consumer wants are vividly reflected in their service and brand management. The Six Sigma tool is viewed as a TQM process that focuses on the process of evaluating the potential, skills and capabilities of an organization in monitoring organizational progress and readiness. Virgin Airlines uses flow charts and process charts as a means to use the six sigma tool to monitor the development and growth of the airline. Therefore the company identifies the setbacks it is facing through these charts and graphs, come up with a plan to implement the most effective way to overcome them. The airline uses Six Sigma process to enhance quality implementation among its staff members and the management. The diagram below shows an example of a sigma graph. Figure 3. The typical normal distribution of Six Sigma Management of Quality According to Beckford (2010) in service delivery, the suppliers of raw materials to an organization play a critical role. This is because the type or quality of raw materials supplied to an organization will determine the quality of the final product. The suppliers at Virgin Airlines include spare part suppliers for airplane parts and engine oil as well as food and snack supplements. Beckford (20100 argues that any company that is committed to producing quality items, considers supplier development as part of their business policy. The process of supplier development requires that the organization maintains strict relations with its suppliers as the implications of supplier- organizational relationship has direct impacts on the consumer behavior. Beckford (2010) presents seven steps with which supplier development takes place as shown in figure 4 below. Stage 1. Senior Management commitment to Supplier Development Stage 2. Audit & evaluation of internal standards Stage 3. Define and quantify the desirable or necessary changes Stage 4. Develop agreement with identified suppliers Stage 5. Form joint teams and develop training program (if necessary) Stage 6. Teams define precise objectives, deliverables and timescale Stage 7. Implement changes and monitor impacts Figure 4. Seven stages of supplier development. In management quality, Besterfield et al (2003) identifies Total Quality Management (TQM) as one of the most effective and oldest methods which individuals implement in their business activities. This process embraces the quantitative measures and human resource elements to enhance effective operation procedures in an organization so as to meet consumer needs (Besterfield et al. 2003). The objective of most organization in adopting the use of TQM is to ensure that their customers receive quality products and services. According to Beckford (2010), ISO 9000 is a series of management implemented so as to meet the quality standards of an industry. Virgin Atlantic Airlines is a certified company and received its ISO 9000 in the year 2000 for quality systems. The objectives of the ISO certification is to encourage organizations to be prepared for any changes in demand and supplies through four steps; resource management, process management, and measurement and analysis, improvement (Beckford 20100. Quality Issues in Virgin Atlantic Airlines Some of the issues arising at Virgin Atlantic Airlines is the issue of service in boarding, delays in flight and rude flight attendants. In several instances customers have complained of being delayed and thereafter not receiving the seat they paid for or losing their bags in the process. Other customers argue that while filing a complaint the customer care person is often rude or does not offer a lasting solution. This kind of quality issues experienced at Virgin Atlantic Airlines are a few but they tend to interfere with the reputation of the company and its services. Most customers vow not to use Virgin Atlantic flights due to the disruptions and inconveniences experienced. This quality issue is a case of quality control and exhibits a kind of neglect by supervisors and the management at Virgin Atlantic in ensuring that customers are treated well and receive excellent service. It is therefore advisable that the management should asses the complaints lodged and educate their staff on the issues raised. Conclusion According to Beckford (2010) quality is essential in creating a brand as well as maintaining consumer commitment and loyalty. The ability of organizational growth and development heavily relies on the level of emphasis they put in producing quality goods and services. To maintain an effective quality reputation the management and staff members need to closely work together in ensuring that the needs and wants of customers are effectively met. In an industry where service is essential in growing the business, customer satisfaction is achieved through quality products and excellent service. Continuous improvements are required in order to retain consumer loyalty and increase market share through monitoring the quality process in production and service delivery. References Beckford, J., (2010). Quality: A Critical Introduction (3rd ed.). Routledge, New York and London. Besterfield, D.H., & Besterfield-Michna, C., & Besterfield, G.H., & Besterfield-Sacre, M., (2003). Total Quality Management (3rd ed.). Prentice Hall, New Jersey. Gryna, F.M., (2001). Quality Planning and Analysis: From Product Development Through Use (4th ed.). McGraw-Hill, New York. Virgin Atlantic Airways (2010). Retrieved from: http://www.virgin.com/company/virgin-atlantic-airways/ Read More