Total Quality Management: U.S Postal Service
Total quality management is a tool that is used by organizations, projects, and businesses to evaluate and come up with improvement techniques. The management approach originated in the 1950s and has since become a popular performance tool in many organizations. On the other hand, total quality defines attitude, culture, and organization of a company that dedicates its objectives and goals in providing customers with products and services matching their needs. A good culture depicts good quality in all aspects of organization’s activities, with mistakes being avoided and defects eradicated the moment they happen. Through the TQM, employees and management can be involved in a continuous improvement of goods and services production. Further, it involves the use of quality and management tools to improve businesses and reduce the overall losses as a result of poor practices.
The Six Sigma philosophy is an aspect of total quality management for different organizations. It is a method driven by data and knowledge to achieve quality in management and in businesses. Also, it can focus on any element of production but has a strong basis on statistical analysis in customer-oriented activities, design, and production. It has three levels of definition, as a methodology, metric, and as a management system. Six Sigma as a business improvement technique focuses an organization on driving sustainable improvement in business activities, managing customer requirements, using data analysis to minimize mistakes in processes, and aligning all processes to achieve end results. This paper aims at evaluating the operations of the United States Postal Services in terms of management, financial aspects, and customer satisfaction. Further, it illustrates how this organization has applied, and should continue to apply, the TQM tool and Six Sigma philosophy to improve its operations.
The United States postal agency has grown to be a big organization since 1977 when Benjamin Franklin was appointed as the first general. It delivers approximately half of the international mails. The organization employs almost 656,000 employees and has a fleet of over 260,000 vehicles that help in mail delivery. It operates a total of 38,000 postal facilities nationwide making it the second largest employer of civilians in the United States after Wal-Mart (Carbaugh & Tenerelli, 2011). The organization would be ranked 28th if it was a private company in the 2009 Fortune. It is faced with the mandate of providing quality and uniform prices to all the citizens and equal rights to all employees. The USPS is an independent branch of the federal government and not a government–owned cooperation (Carbaugh & Tenerelli, 2011).
The management and leadership of the organization involve total control by a board of governors. It is regulated by the Postal Regulatory Committee and also has a postal master general. The USPS is designed to operate like a business where it finances its entire operations through sale of postal products and it does not receive any direct taxpayer subsidies (Hartung, 2016). It has experienced subsequent gains over the years as seen in the speed of the employees to sort mails. For example, it would take 70 employees one hour to sort 40,000 letters, but nowadays, only two employees are required to do the same amount of work. Efficiency is further illustrated in the aspect that even though the number of mailing addresses has increased by thousands, the number of employees has decreased significantly. Further, it has reached high levels of on-time performance nationally and a 94 percent total score in customer satisfaction (Carbaugh & Tenerelli, 2011).
However, the company is at a tipping point due to combined effects of decline in total revenue, which is approximated to extend into the future. This will come along with increases in operation costs as less people are using the postal mailing services as a result of advance in technology. Although the organization has a wide selection of cost-cutting activities and revenue-generating ideas, they might not be efficient to eliminate the gap that already exists between costs and total revenue. In this case, a problem is identified in that the business model might crumble, which would result in the taxpayer supporting the operations of the organization. Thus, the economic issues in USPS and changes in its structure by evaluating its performance becomes some of the keys issues to be discussed.
Initially, the government of the United States provided postal services by use of its U.S Post Office Department. It was an agency that got annual and heavy subsidies from the Congress. The operations of the organization were highly influenced by the Congress such as selection of managers and pricing of postal services and products. However, the Congress replaced the Postal Department with the U.S Postal Service that was an independent agency of the executive branch and a commercial entity. It is classified as a commercial entity that relies on the sale of mail products and postal services for revenue (Hartung, 2016).
The mission of the organization is to provide the American Citizens with a trusted mailing service at affordable prices. Some of the universal services include quality of service, uniform prices, access to services, and a six-day delivery to all parts of the nation. It enjoys a statutory monopoly for every delivery of first class mail. The U.S Supreme Court, however, ruled that it is illegal for anyone who is not an employee of USPS to deliver mails to boxes marked “U.S Mail.” The organization declared that eliminating the monopoly would have a negative effect on the ability to provide affordable services that the citizens enjoy (Carbaugh & Tenerelli, 2011). However, the organization faces competition from FedEx and United Parcel service in delivery of urgent letters and packages. Further, it competes with various electronic alternatives.
The U.S Postal Service tries to be as efficient as possible. However, operational efficiency alone is insufficient to maintain a business success in today’s competitive industry. It has a very strict value proposition, sending a person to every business place and residence to deliver mail nationwide 6 days per week hoping there will be demand for the service (Carbaugh & Tenerelli, 2011). The organization offers discounts to customers with large volume and billions of mails are processes every week, which shows its improvement in operations.
Total Quality Management Methodologies
Total Quality Management tends to look at continuous improvement at work from decision making to strategic planning and detailed execution of work principles. It approaches the concept that mistakes can be avoided initially and all defects can be prevented (Paladino, 2010). However, in the case of USPS, there are defects that cannot be prevented due to scenarios such as change in technology that lowers the total revenue generated from the organization’s operations. Thus, it is essential to use the tool for continuously improving results, in all areas of management and work design, by improving processes, technology, capabilities, people, and machine capabilities. A continuous improvement does not only deal with improving results but also improving capabilities for better results at the end. There are five major areas should be focused on when it comes to capability improvement. These are, supply generation, demand generation, people capability, operations, and technology (Dressler, 2004).
These aspects of TQM can be applied in the case of USPS to improve its operations in terms of efficiency, employees, competition, and operations (Kaplan, 1990). One principle of TQM is that mistakes are made by people in an organization but also by faulty systems. As such, it means that the initial cause of a business failure can be identified early and eliminated and then prevented by choosing a different process. There are three major techniques for preventing mistakes from happening which include mistake proofing, inspection by next operation in a value-added chain, and revaluating entire activities (Kanji, 2012).
After assessing the organizations current situation, the next step in evaluating and improving performance is to analyze relevant preconditions. This is done by checking the organization’s history, its needs, employee quality of work, and financial performance. If the realized situation does not include important preconditions, the implementation of TQM should be delayed until when the organization is able to succeed (Jeston & Nelis, 2010). For example, the United States postal service is faced with different challenges such as competition, lower revenues, and poor operations. As such, it should involve an entire change of the management system. An organization that has a record of effective responses towards change is more efficient in adopting TQM tools.
The US Postal service is faced with the challenge of becoming irrelevant. For example, the faxing technique in 1980s was the first attack on snail mail (Hartung, 2016). Later, the big market shifted with the availability of free mail. Today, mobile devices and electronic gadgets are providing email services, which are shifting the target away from physical letters. Less people write letters or pay their bills through physical mail (Carbaugh & Tenerelli, 2011). In this case, it is easy to track if the organization has had a record of effective responsiveness to its competitive environment and thus to know the tools to apply for improvement. However, if an organization has had negative responses towards challenges, it would experience employee skepticism and limited change agents who are skilled. In this case, it would be good to implement a comprehensive program to evaluate leadership and management development. A management audit helps in assessing and identifying the current levels of an organization’s current functions and the areas in need of change (Dressler, 2004).
A TQM would be inappropriate for an organization with unstable financial base, lack of effective managerial skills, weak administrative system and poor employee morale. However, there is a certain level of stress that is required to initiate the quality management tool. This aspect is considered as a building block for an effective organizational change. Other forces that can be integrated into the change tool include galvanizing event, strategic decisions, and departure from the normal traditions (Brocke & Rosemann, 2014). In this case, departures from tradition can be explained as activities taken at the lower levels of organization when entrepreneurs decide to shift from the normal way of solving a problem. People should be mobilized to act, which in the case of TQM could be a threat in terms of funding cut or demands from stakeholders to improve performance (Jeston & Nelis, 2010).
A leader intervenes strategically after a business crisis by articulating a strategic decision. He does this by drafting a new vision for the vision and directing all the organizations objectives towards it. In the case of USPS, the main challenge would be to improve the sales after it has faced stiff competition from the internet and other postal providers (Brocke & Rosemann, 2014). Implementing a TQM is a strategic decision that should be handled by the senior management team that clearly understands the overall operations of the organization. The leaders then become the prime movers in who take control in implementing the new idea. In this case, they illustrate to the rest of the employees how it will be of beneficial to them. Finally, there should be action mechanisms or structures to enhance the final change and make it institutionalized.
Another feature of TQM that is important to an organization is the focus on customers. USPS serves millions of people in the United States, which makes it crucial for it to improve its performance (Carbaugh & Tenerelli, 2011). Quality is measured in terms of how an organization meets the customer expectations. The first goal should be to identify and then work towards meeting the customer’s needs. The postal organization does this by delivering value proposition where it has employed enough employees to deliver services within the speculated time and by serving all clients regardless of location. According to TQM, a product, though produced well, has less value if it is not what the customers want. As such, it is clear to say that quality is customer driven and organizations should be keen when determining the customers’ needs as preferences always change (Weske, 2012).
The USPS should come up with a customer feedback platform where they can evaluate if they are meeting the demands. For example, due to change in technology, many customers are ceasing to use postal services. However, the organization can target more customers by diversifying its products and services. The organization should continuously do market research through market surveys, customer interviews, and focus groups to understand what customers want. A management team should understand that the organization is in operation because of customers (Paladino, 2010).
Six Sigma Tools and Techniques
The tool applies statistical methods in avoiding defects in an organization. The organization experts are required to follow a set of complex steps in using product design, process design, and statistical process control to achieve the final target of the project. The final target project in the case of the USPS is to increase revenue and reduce competition (Pande, Neuman, & Cavanagh, 2000). It can also involve any process output that may not meet customer specifications such as delayed mail. The Six Sigma approach aims at having zero defects in management and business operations. THE technique uses a five-step methodology known as DMAIC that breaks down the whole process into five phases which are defining the opportunity, measuring the current performance, analyzing all the available opportunities, improving performance, and controlling performance. The methodology is a step by step guide from the beginning to the end (Basu, 2011).
Figure 1: The Six Sigma technique for performance improvement (Basu, 2011)
Defining the opportunity
This includes proving an action plan and a charter, which is a description of the scope of the project and all the metrics that will be used to measure success. The scope of the project should be aligned with the project goals and the business unit to understand the key issues. For example, the main project towards performance improvement within USPS would be to evaluate the leadership approach. It should have potential financial benefits to the organization, benefits to customers, and team members, and their roles. In this case, possible causes and solutions should be identified (Basu, 2011).
Measuring the Current Performance
This aspect involves collecting data and evaluating the state of the entire performance improvement process. In this case, data is collected by examining the business’s trend through historical records. Further, current data is collected through observations or sampling from various data streams. Data collected is used in determining the current state of the organization to identify a baseline performance of the organization. Further, the efficiency of the entire measurement system should be analyzed to avoid solving an imaginary problem (Basu, 2011).
In this step, the objective is to use the data from measure to determine the main cause of performance failure. It helps in analyzing cause-and-effect relationships to understand different causes of variability. The main goal in this step is to evaluate the key causes of low performance, quality problems, inefficiency and waste, and customer issues. The analyzing step utilizes statistical tools such as control charts, regression analysis, designed experiments, hypothesis testing, failure modes, and confidence interval estimation such as Figure 2 (Pande, Neuman & Cavanagh, 2000).
Figure 2: Example of a statistical process control (Statistical Processes)
It is essential for an organization to evaluate its performance on the basis of customer satisfaction, financial trends, and product and service quality. In this case, there are various tools that can be utilized to achieve this such as the total quality management tool, statistical process control, and the Six Sigma philosophy. These tools work on the basis of evaluating different techniques that enhance process control, design processes, product design, and employees’ performance. It involves understanding the history of an organization by collecting data and later evaluating this data to determine the cause of lack of performance excellence. As such, evaluating the United States Postal Service organization performance helped in identifying the steps it would take to achieve excellence.