INTRODUCTORY INDUSTRIAL RELATIONS (BDHI4103)

FACULTY OF BUSINESS AND MANAGEMENT

SEMESTER JANUARY (2014)

BDPO4103

INTRODUCTORY OPERATION MANAGEMENT

MATRICULATION NO :

IDENTITY CARD NO. :

TELEPHONE NO. :

E-MAIL :

LEARNING CENTRE :

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103

TOTAL QUALITY MANAGEMENT

(TQM) IN LELONG.COM

1


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

2

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103 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.

3


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

4


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

5

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103 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

6


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

7


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,

8


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

9

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103 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

10

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103 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

11

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103 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.

i. 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.

ii. 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

12


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

13

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103 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:

14


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

15

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103 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.

16


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

17

INTRODUCTORY INDUSTRIAL RELATIONS BDHI4103 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.

18


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

19


REFERENCES

Schneider G.P. (2003), “Electronic Commerce – Fourth Annual

Edition”, Thomson Course Technology

Osama M. R. and Fawaz A. M.(), “Key Factors for Developing a

Successful E-commerce Website”, Journal of International

Business Information Management Association (IBIMA), Vol.

2010, Article ID 763461, pp 1-9.

Aashit S. and Parveen N.(2005), “Legal Issues of E-

Commerce”, Nishith Desai Associates, pp 3-19

Grossman T., Fitzmaurice G. (2009), “A Survey of Software

Learnability: Metrics, Methodologies and Guidelines”,

Conference on Human Factors in Computing Systems CHI

Metrics, pp 649-658

20


Lawrence J.E, Tar U.A.(2010), “Barriers to E-Commerce in

Developing Countries”, Information Society and Justice, Vol.

3 (1), pp 23-35

Total quality management. (2014, June 6). Wikipedia.

Retrieved June 11, 2014, from

http://en.wikipedia.org/wiki/Total_quality_management

Total Quality Management (TQM). (n.d.). TQM. Retrieved June

11, 2014, from http://asq.org/learn-about-quality/total-

quality-management/overview/overview.html

21

http://asq.org/learn-about-quality/total-quality-management/overview/overview.html

http://asq.org/learn-about-quality/total-quality-management/overview/overview.html

http://en.wikipedia.org/wiki/Total_quality_management

INTRODUCTORY INDUSTRIAL RELATIONS (BDHI4103)

Documents

Transcript of INTRODUCTORY INDUSTRIAL RELATIONS (BDHI4103)