Introduction: After much debate on a topic for this paper, it became quite clear that I would be taking from this course a newfound Love of (TQM) Total Quality Management. While we have covered many aspects of production management over this semester, I have become a huge advocate of this management philosophy. I find my self-using the principle of TQM in my daily life at work. I have even taken out my textbook in meetings several times.
As for a case I had another dilemma and I was struggling a lot with my choice of a case, and then it happened, right before my eyes on CNBC was the President & CEO (Chris McCormick) of L.L Bean Co. After watching the interview with Mr. McCormick and seeing video footage from inside of their production facility it was a sign that this should be my case study. Mr. McCormick spoke of all three elements of TQM in the interview.
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After visiting their website and reading about the company and its history I believe that this company is the textbook image of a company that lives and breaths TQM. This Company possesses all three major components that embody the essence of TQM, Continuous improvement, the involvement of everyone in the organization, and a goal and guarantee of total customer satisfaction.
What is (TQM) Total Quality Management? TQM Can is classified as a management philosophy where the needs of the customer are not only met but also exceeded, where there is a culture or an environment created that encourages all employees to pursue never-ending improvement in the quality and productivity of products and services of the company. “TQM expands the traditional view of quality (which looks only at the quality of the final product or service) -to a level of quality that encompasses every aspect of the process that produces the product or service. TQM is a system that is intended to keep poor quality from happening in the first place.”(1)
Implementing TQM results in greater customer satisfaction, reducing operating costs, and enhancing the company’s bottom line. The concept behind the philosophy is that in most companies the cost of doing business has a large potential for waste. If we think about how much time is spent on customer problems, re-doing work, tracking down information, or waiting on other people or suppliers we can see how waste can happen company-wide. This type of waste has a huge impact on a company’s net profit.
For some companies, this waste is greater than the profits realized. For an organization to enhance its bottom line it could increase sales, which quite often is not an easy task, or it could drive out the waste, problems, and increase customer satisfaction. The increase in customer satisfaction combined with decrees in cost could result in significant enhancements to the company’s bottom line.
The History of the LL Bean Co. “Leon Leonwood Bean, or “L.L.,” who was born in the small township of Greenwood, Maine in 1872, founded the Company in 1912. L.L. was raised to believe that Nature was something to be revered. Family ties were a priority. Being neighbourly was a matter of course. And “do unto others” was not just a saying but also a way of life. When L.L. launched his company with the first Maine Hunting Shoe (The Bean Boot) in 1912, he believed so strongly in the Golden Rule that he made it the foundation of his business”. (2)
How it all began
“An avid outdoorsman, L.L.Bean decided he could improve on the typical hunting shoe by stitching a pair of waterproof shoe rubbers to leather tops crafted by a local cobbler. After field-testing them himself in the fall of 1911, L.L. sold 100 pairs of his Main Hunting Shoes. To each pair sold, he attached a tag guaranteeing 100% satisfaction. Within a matter of weeks, the shoes began coming back.
Ninety pairs were returned, the rubber bottoms separated from the tops. With a small loan, L.L. quickly refined the shoe, making it stronger – and making good on his promise. He replaced all 90 pairs and in the process established a business and a guarantee that are still going strong.
The Guarantee as it looked in a 1912 L.L.Bean circular. “ (3)
LL Bean Today: Spanning nearly a century in business, the L.L.Bean Co. now has annual sales of more than $1 billion. A one-man direct mail-order business has expanded to a 4,700 man operation with retail facilities in Freeport, Maine, Tyson’s Corner Center in McLean, Virginia, and (The Mall in Columbia) in Columbia, Maryland; Outlet Stores on the east and west coasts; a Web site that draws visitors from all corners of the earth; a worldwide catalogue business and more than 20 retail stores in Japan. (5)
Customer Service is at the heart of the L.L.Bean Co. The L.L.Bean Flagship Store remains on the site of the original store, built in 1917. To improve service, L.L Bean himself, removed the locks on the store’s front door 50 years ago and threw away the key’s– since then, customers have been able to come and go at all hours of the day and night, every day of the year. The Customer Satisfaction Department was created in the same spirit, and field’s calls 24 hours a day 7 days a week. The Companies state-of-the-art Order Fulfillment Center can process up to 27 million items a year, ensuring prompt delivery to customers.
The Companies Numbers
- 4,700 year-round employees
- Over 16,000 different items available
- 15 million customer calls
- 121/2 million packages shipped
- 3 million visitors to the Freeport, ME stores
- 137,302 customers call on the busiest day
- 131,000 packages shipped on the busiest day
Over 1 Billion $ in annual sales (6)
Peak holiday season:
- Nearly 6,000 seasonal employees
- 3,400 customer service representatives
The 3 elements of TQM @ L.L. Bean
During the television interview with the companies President, the interviewer was taking a look at the Nations’s top catalog sales company during the holiday season.
While being interviewed Mr. McCormick mentioned all 3 elements of TQM.
Exceeding Customer Expectations: From the first shipment of boots in 1912, the company has stood by its 100% satisfaction Guarantee. However, during this interview, the company’s president highlighted the products produced by the L.L.Bean Company.
He elaborated on the quality of manufacturing with the best raw materials to ensure quality products. Mr. McCormick noted that like the founder tested products, that all products are still field-tested to ensure quality. He also noted the ordering process and how thru the Internet and telephone channels the company has trained its personnel to help customers ensure that the orders are correct and that the confirmation process is diligent.
The most impressive process to guarantee quality was the checking procedures that take place prior to the packaging and shipping of each order. Through these measures, a quality product, helpful sales channels and streamlined packaging and shipping LL Bean Company have a solid model not only to meet but also exceed its customer’s demands.
Continuous improvement: Again the President elaborated on L.L. Bean’s commitment to continually improve its operations. He highlighted several different things that have happened at the company. First, he noted that the Postal Service has given L.L.Bean its own Zip Code, which has resulted in faster and more accurate mail order business.
It was also brought to attention that United Parcel Service (UPS) has recently completed construction of a plant adjacent to the company’s state of the art order fulfillment center. UPS ships 70 truckloads a day from L.L.Bean. Also stated was that the company has increased its facilities to over 119,000 square feet to add more production operations to handle growth. The company has also grown from 4000 full-time employees last year to 4700 full-time employees at present.
Involvement of Everyone
With in the Organization: This is the most impressive area of the TQM process from what I can see. It is a testament to this company to see how the employees view the company that they work for. First of all, I called the L.L.Bean Company on their 800 # and was greeted after three rings of the telephone by a polite female operator named Rita. I told her that I was writing a paper on her company and asked her if she enjoyed working there, all I can say is that she blew me away with how excited she was to talk about the environment and how wonderful it was to be employed there, and mentioned at least 10 times the word FAMILY.
Secondly, I went to the company’s web site and logged onto their live customer service platform, within about 20 seconds I was greeted in chat format by a woman by the name of Patricia. I typed in and let her know that I was writing a paper about L.L. Bean, and asked her about her how she liked her job.
Well I can only say that she again mentioned family, how great it was, how enjoyable it was, we talked about the weather, she wished me a happy holiday, and I wished her a Merry Christmas ECT. Most impressive was that she let me know that she would let the Chairman of the Company Mr. Leon Gorman, who she told me was the Grandson of L.L himself know that there was a student in N.Y. that was doing a paper on the company and that I might want to forward a copy of my paper to him.
I said you speak with the Chairman, She said yes he comes and spends some time with us quite often especially during the holiday rush. This confirmed what was the final segment of the television interview, which showed the President working on a packaging line.
You see from the day after Thanksgiving until Christmas Eve. All of the senior management team goes down to the production floor and work side-by-side, packing, sorting and answering phones, with the rest of the employees. Even the employees that retire come back each holiday season to pitch in. L.L.Bean brings back over 6,000 retired employees each year to help out with the holiday rush.
On the day of the interview, the company shipped 53,000 packages to customers. The average package contains 3 items. (WOW)
First of all, most of my family is going to receive L.L. Bean items for Christmas this year.
I found that this companies employees, kind of summed it all up. What TQM has become to me a Management philosophy that takes on the tone of culture within a company! The only way that TQM can work properly is if all are on board.
While I only communicated with 2 random employees – let me say that the tone in their voices was quite impressive. I also found it Impressive for Management to pitch in during the holiday rush, shoulder to shoulder, I think this kind of management instills the FAMILY attitude that the two employees that I spoke with have.