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.

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.

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