Design Management in H&M Essay

Analysis on the significance of quality manuals

Organisations’ long-term sustainability is dependent on the management teams’ commitment in formulating and implementing feasible operational strategies. The strategies, policies, and procedures implemented determine an organisation’s ability to achieve business excellence (Chase & Aquilano 2006).

The contemporary business environment has undergone remarkable developments over the past few years due to diverse macro environmental forces. Some of these forces include economic, social, technological, legal, and political forces. For example, the high rate of development in Information Communication Technology [ICT] has led to the emergence of the information age.

Thus, consumers have become knowledgeable, as evidenced by their acumen in the decision-making process. Moreover, the rate of economic growth has enhanced organisations’ production and manufacturing capacity, hence presenting consumers with a wide range of products (Curtis & Cobham 2008).

Despite the market changes, organisations are established based on long-term existence. Therefore, the significance of organisations ensuring that their products and services offered are in line with the market demand cannot be underestimated. Furthermore, it is essential for organisations to ensure that their products and services lead to a high level of satisfaction amongst customers (Doumpos & Zopounidis 2002).

One of the aspects that can enhance an organisation’s sustainability entails product quality. The significance of quality is evidenced by the improvement in quality management approaches such as the total quality management, business excellence, and the introduction of the European Foundation of Quality Management [EFQM] (Doumpos & Zopounidis 2002).

Furthermore, the significance of linking strategic management approaches to quality has increased significantly over the past decades. However, there are divergent views on the relationship between quality management processes and the final product outcome. Subsequently, organisations experience hurdles in their quest to enhance their commitment to product quality.

Some of the most common hurdles include lack of commitment amongst the top and the lower levels of management, poor leadership, and lack of or inadequate employee involvement. This section entails an evaluation of the view that formulation of quality manuals is wastage of time and it does not add value to quality of the final product. This assertion is evaluated in the context of H&M.

Company profile

H&M is a private limited company, which was established in 1947 in Vasteras, Sweden. Since its establishment, the firm has been focused at the implementation of aggressive strategic and operational management practices, which has enhanced its market penetration. The firm has established over 3,000 retail outlets in over 55 countries.

Its commitment to achieving market dominance is evidenced by its strategic plan, which entails increasing its sales revenue and the number of retail outlets by an annual rate of 10% to 15% (H&M 2014). The firm’s success in the global market is evidenced by the introduction of well-recognised brands such as the H&M, Cheap Monday, Other Stories, H&M Home, and Weekday.

The firm’s success has also been necessitated by the adoption of optimal business concept, which entails the provision of high quality and fashionable products at an attractive price.

The firm’s operational efficiency is enhanced by its strong workforce, which is comprised of over 116,000 employees. H&M has appreciated the significance of ICT in achieving competitive advantage. Consequently, the firm has adopted the concept of online marketing (H&M 2014).

Analysis; significance of quality manuals at H&M

Winchell (2006) argues that it is imperative for organisations to formulate and implement optimal management systems in order to remain competitive. Prajogo (2003, p.120) defines management system as ‘an outline of processes and procedures used to certify that an institution can fulfil all tasks required to achieve its goals’.

Different management system standards have been formulated in an effort to provide businesses with effective guidance in implementing diverse processes. Quality management is one of the most essential management systems.

Organisations’ quality management systems aim at enhancing products and services in order to meet the consumers’ expectations. Therefore, it is imperative for organisational leaders to ensure that they have implemented an effective in-house quality system. One of the core components of the quality system entails the quality manual.

Nankervis, Miyamoto, and Milton-Smith (2005) argue that the quality manual outlines the project-independent elements of an organisation’s quality system, which the personnel are required to follow.

Prajogo (2003) further emphasises that the quality manual aims at achieving the specified quality assurance goals. Furthermore, quality manual ensures that the organisational unique features such as the structure and size are taken into account.

H&M outsources the production activities from independent suppliers. Despite the view that H&M does not have its own production factories, the firm is committed to providing customers with high quality fashion products, which makes quality one of the firm’s core issues. H&M ensures that the concept of quality is taken into account from the idea generation until when the product reaches the intended customers.

Moreover, core values like continuous improvement, entrepreneurship, and cost-consciousness drive H&M. However, the element of quality is one of the core aspects that the firm is concerned about in the production process.

In line with its commitment at ensuring that its products are of high quality, H&M has formulated a comprehensive quality manual. The Quality manual is focused at ensuring that the firm meets and exceeds the customers’ product expectations and requirements (H&M 2012).

Furthermore, the quality manual also outlines the processes that the firm should undertake to ensure that the process of monitoring and measuring the level of customer satisfaction are executed effectively. The manual is comprised of a number of components, which aim at fostering a high level of customer satisfaction (H&M 2012).

Quality policy and customer focus

In order to meet the customers’ requirements, H&M has formulated a comprehensive quality polity, which stipulates the organisation’s values with reference to quality. The quality policy also states the organisation’s commitment to continuous improvement.

The quality policy outlines the H&M’s framework for achieving the formulated quality objectives, set of guidelines for quality control, and production processes [commonly referred to as the GPQ]. The guidelines are focused at fostering a high level of customer satisfaction.

Some of the elements that are considered in the GPQ include the issues that should be taken into account in the garment production process such as quality of raw materials, the production process, garment trimming, finishing packing and inspection.

Quality management approaches

Nankervis, Miyamoto, and Milton-Smith (2005) are of the opinion that the quality of a product or service plays a fundamental role in determining the effectiveness with which the firm achieves the desired level of competitiveness.

However, organisations’ management teams experience challenges in their pursuit to foster competitive advantage through the provision of high quality products and services due to the complexities associated with managing the diverse stakeholders in the supply chain.

Theodorou, Florides, and Tassou (2010, p.7785) assert that it is ‘imperative for organisational leaders to involve customers in the operational processes in order to enhance the effectiveness with which the firm improves quality of its products and services’.

Moreover, organisational leaders should adopt effective strategic management approaches in order to sustain the quality of their products. In an effort to ensure that the quality of its fashion products are of high quality, H&M has incorporated a number of quality approaches in the process of designing its quality manual. Some of these approaches are evaluated herein.

Quality assurance

This approach entails ensuring that the various organisational processes are organised effectively in order to minimise the occurrence of errors during the production process. Subsequently, H&M has adopted the ‘Zero Defects’ approach in its production processes. To ensure that the products developed align with the customers’ expectations, H&M has formulated a comprehensive quality assurance process.

The process is not only concerned with the final product, but also the product planning and design processes. The firm’s quality manual highlights the importance of relying on market research in the product-planning phase. By relying on market research data, H&M has been successful in focusing on diverse elements such as product quality and reliability.

The second element that the firm incorporates during its quality assurance at the product development stage includes design. Siegle (2014, par.3) argues that design ‘is an extremely important process for ensuring high reliability of a product’. In order to improve the quality of the product, H&M ensures that the employees involved in the garment product process understand the importance of being customer focused.

In a bid to ensure that the final product produced is of high quality, H&M has taken into account the diverse stakeholders in the supply chain in its quality assurance processes. For example, the firm has formulated a comprehensive criterion outlining the procedures considered in the selection of suppliers and subcontractors. The firm’s suppliers are selected based on their capacity to provide the firm with high quality raw materials.

Furthermore, the firm subjects its suppliers to a comprehensive quality assurance process. In an effort to maintain the quality of its products, H&M monitors its suppliers’ performance continuously in order to determine their commitment to quality. The assessment aims at determining the suppliers’ suitability.

Continuous improvement

The contemporary business environment is experiencing remarkable changes arising from diverse macro environmental forces. One of the macro environmental forces affecting firms in the retail industry relates to change on consumer behaviour (Charantimath 2007). One of the forces affecting the firm’s operations relates to change in consumer tastes and preferences.

H&M is cognisant of the impact of market changes on an organisation’s long-term success. In its pursuit to align its operations with the market changes, H&M has integrated the concept of continuous improvement in its quality manual. The firm’s quality manual states that the continuous improvement process must be based on the findings of the firm’s market research.

Consequently, the firm undertakes market research occasionally in an effort to identify gaps that can be exploited. For example, the market research provides H&M research and development department on possible product non-conformities to the quality policy. Thus, the effectiveness with which the firm undertakes product improvement is enhanced.

Quality control

Chao (2007) asserts that the quality of the final product has a significant impact on the consumers’ continued usage, and hence the repeat purchase behaviour. Therefore, it is imperative for organisational leaders to ensure that the final product introduced in the market is of high quality.

H&M is committed to ensuring that the final product contributes to a high level of customer satisfaction. Consequently, the firm has integrated the concept of quality control as one of its approaches to quality. The firm undertakes quality control through quality inspection of every product produced.

In its quest to foster a high level of customer satisfaction, H&M has established a number of laboratories, which are located in some of the markets that the firm has ventured. The firm’s decision to establish the laboratories was informed by the need to ensure that the products distributed in various markets across the markets are of high quality.

Furthermore, the firm has instituted a number of standards in the quality manual that the laboratories should check during the quality control process. Through quality inspection, the firm has been in a position to minimise the availability of faulty products in the market. The firm donates the faulty fashion products identified during the inspection process to charitable organisations such as UNICEF (Timmons 2013).

In summary, H&M’s commitment to adhering to the various elements stipulated in its quality manual has played a fundamental role in enhancing its competitiveness.

The firm’s commitment to various quality approaches such as continuous improvement, quality assurance, and quality control as played an essential role in ensuring that it produces high quality fashion products. Therefore, the assertion that the formulation of quality manual is a waste of time and it does not have any impact on the quality of the product is misguided.

Considering the prevailing market changes, it is critical for H&M to invest in effective design and development projects through the integration of the Deming Cycle, which is an effective problem solving and change management strategy.

The cycle is comprised of four main stages, which include Plan-Do-Check-Act. This cycle will improve the effectiveness with which H&M sustains and improves the quality of its products, and thus improve its competitiveness.

Simple Multi-Attribute Rating Technique

The Simple Multi-Attribute Rating Technique [SMART] is a decision-making tool that has been applied extensively in making decisions in various situations. The technique is based on the concept of rating various attributes that the decision maker identifies as significant in the decision-making process (Belton & Stewart 2002).

For example, the most important attribute may be assigned a score of 100 while the least important attribute is assigned a score of 10. However, the model does not have an explicit upper limit, which means that the decision maker has the discretion in assigning the scores.

Furthermore, the decision making process is achieved through normalisation of the sum total of the points scored by each of the attribute identified. The SMART decision making tool can be applied in making decisions related to issues that affect the environment.

Application of the Simple Multi-Attribute Rating Technique

Exan Limited is a private limited company that specialises in the extraction of uranium from the earth’s crust as an alternative form of energy in the US. The firm’s decision to venture into the alternative energy market was motivated by the identification of the high rate at which organisations in different sectors were increasingly adopting renewable and clean sources of energy (Konidari & Mavrakis 2007a).

The firm’s core business entails the exploration and extraction of uranium from different parts of the world in an effort to satisfy the market demand. However, one of the major issues facing the firm relates to the disposition of the waste materials from the mines and the firm’s operations.

This aspect arises from the view that the waste materials have a high potential of being radioactive, which poses significant environmental, health, and safety risk (Shen, Chou & Chiyang 2011).

Diakoulaki and Karangelis (2007) assert that decision making with regard to various environmental projects are intractable and complex due to the diverse trade-offs amongst the various ecological, socio-political, environmental, and economic factors.

Despite the issue faced, Exan Limited is focused at achieving sustainability. Consequently, the firm has an obligation to make an effective decision on the most effective way to dispose the radioactive waste.

In order to ensure that the organisation selects the most optimal decision with regard to waste disposal, Exan Limited should adopt effective decision-making techniques. One of the techniques that the firm should consider includes the Simple Multi-Attribute Rating Technique [SMART].

Adopting the SMART technique will improve the firm’s ability to take into account diverse aspects, which might be affected adversely by how the firm disposes the waste materials (Loken 2007). Subsequently, Exan Limited will be required to take into account diverse dimensions in the decision making process.

Some of these dimensions relate to the risk involved, costs, benefits, human values, and safety. In order to be effective in applying the SMART model in the decision-making process, Exan Limited will be required to take into account a number of steps as illustrated below.

Identification of the decision maker

Exan Limited is focused at achieving corporate social responsibility. One of the core elements that the firm should take into account relates to the environment. In order to achieve environmental sustainability, the firm’s management team in collaboration with employees in the other departments should participate in making decision on the most effective method of disposing the waste materials (Lai, Bo & Cheung 2002).

The firm intends to construct a waste disposal plant within its facility in order to ensure that its operations do not affect the environment adversely.

Subsequently, the decision-making process should be a collaborative in order to improve brainstorming, which will aid in the identification of the salient attributes associated with waste disposal (Triantaphyllou 2000). Some of the salient attributes that the firm should take into account include cost, expected lives lost, civic improvement, and the degree of the involved risks.

Evaluation of alternatives

After the identification of the salient attributes, it is critical for the decision maker to undertake a comprehensive evaluation of the various attributes. This process entails the identification of the diverse aspects associated with the core attributes (Kasie 2013).

For example, a number of issues can be subdivided into a number of sub-categories such as the cost of formulating the diverse safety procedures and policies and cost of operation.

The expected lives lost attribute should take into account the system’s operators, construction of workers, and the impact of the firm’s waste disposal on the public. On the other hand, the firm should evaluate the diverse risks associated with the waste disposal plant. Some of the risks that might affect the plant include floods, the occurrence of an earthquake, and other incidents arising from natural occurrences (Wang & Yang 2007).

Finally, the decision makers should evaluate the civic improvements required in order to ensure that the firm is effective in its waste disposal processes. One of the civic improvement aspects that the firm should take into account includes making decision on whether the firm will be required to invest in public works within the area in which it operates.

Assigning relative weights to the identified attributes

The decision-making unit at Exan Limited should assign relative weights to the alternative attributed in order to measure the data. Different techniques can be adopted in assigning weights. Some of these techniques include direct rating and ranking. Ranking entails assigning the identified attributes in order of their significance. For example, the total number of points may amount to 100 points.

In the course of making decisions related to the construction of the waste disposal facility, Exan Limited should take into account the various subcategories, which include the expected lives lost subcategories, cost sub-items, and the risk subcategories.

Exan Limited intends to select the most effective site to locate the waste disposal plant. Different locations should be identified and the decision to locate the facility be based on the identified attributes as illustrated in the table below.

Column1 Risk involved Cost [in billion dollars] Expected lives lost Civic improvement
New Jersey Very low 100 140 Very high
Rock Springs low 60 40 High
Nome, AK Very High 40 60 Low
Gary, IN Low 70 80 Very high

The above table shows the differences associated with locating the facility in some locations with regard to the cost objectives, catastrophic risk categories, and the lost lives objective. The organisation should rank the objective in order of their importance.

Browne and Ryan (2010) assert some attributes considered in the decision-making process are very important while others are too unimportant. With regard to the issue at hand, Exan Limited should rank the attributes as illustrated below. The attributes are ranked in accordance with their significance.

Lives > Risk involved > Cost involved > Civic improvement

The significance of lives in the decision making process is higher as compared to the civic improvement attribute in the decision making process. However, it is essential for the Exan Limited’s management team to assign weights to the identified attributes. The firm can assign a value of 10 to the least important attribute, which is civic improvement.

Secondly, the firm should compare the other attributes to each other in order to establish the ratio of relative importance. For example, the firm can compare the cost involved to the civic improvement attribute and assign a score of 60.

Thirdly, the risk attribute may be compared to improvement and be assigned a weight of 150. Finally, the lives attribute may be compared to civic improvement and be assigned a value of 180. The table below illustrates a summary of the scores in relation to the various alternatives.

After assigning scores or weights to the various decision alternatives, it is imperative for Exan Limited to determine the average weights. The average or normalised weight is determined by calculating the total weights and dividing the weight of the respective attribute with the score or weight assigned. The table below illustrates the normalised weights of the various attributes.

Attribute Weights Normalised weights
Risk involved 150 0.38
Cost 60 0.15
Expected lives lost 180 0.45
Civic improvement 10 0.025

Normalisation of the weights enables the decision makers to quantify the significance of the various decision attributes in the decision making process. Consequently, the likelihood of improving the decision making process through the consideration of the most important attribute is increased. In this case, the firm should consider the impact of constructing the waste disposal facility on the residents’ lives.

Secondly, the firm should also take into account the risks involved in the construction process (Petkova, Andrew & Nepal 2007). By taking into account these two attributes, Exan Limited will be in a position to enhance its future success due to the improved operational efficiency and adherence to corporate social responsibility.

Strengths and limitations of SMART

One of the core strengths of the SMART technique is that it is similar to the Cost Benefit Analysis model. Subsequently, an organisation can assess the costs and benefits associated with a particular attribute in the decision-making process.

Furthermore, the decision-making process is based on weighing the attributes. Furthermore, the SMART technique is relatively simple to use, which increases its appeal amongst the decision makers.

Despite the above strengths, the SMART technique is characterised by a number of limitations. One of the major limitations is its oversimplification of the problem faced. One of the steps in the decision analysis process entails the identification of various attributes.

In an effort to achieve environmental sustainability, Exan Limited is faced with a major decision on how to ensure that the radioactive waste materials are disposed optimally. In order to deal with this problem, the organisation is required to take into account diverse aspects that might be directly impacted by the decision make, which has led to the integration of diverse dimensions in the decision-making process.

Wong, Johnny, and Li (2008) are of the opinion that the SMART technique is very effective due to its capability to integrate qualitative and quantitative aspects in the decision-making process. The attributes are ranked in accordance with their weight. The most important alternatives are selected and assigned higher rating.

Subsequently, there is a high probability of leaving or rejecting some attributes which might be of significant value in the decision making process. In a bid to eliminate this problem, it is imperative for decision makers to integrate diverse weighing profiles in order to undertake intensive analysis.

The likelihood of identifying robust alternatives during the decision-making process is increased through the integration of diverse dimensions. Wong, Johnny, and Li (2008, p.109) further emphasises that the ‘SMART method has rather high demands on the level of detail in input data and value functions need to be assessed for each of the lowest level attributes and weights should be given as trade-offs’.

Furthermore, the SMART technique can only be applied in the process of dealing with simple issues. Therefore, its capacity to handle complex issues is limited, which has led to the development of other decision-making methods.

Analysis of Decision Models

Decision-making refers to the process of identifying and selecting from a wide range of alternatives based on the predetermined values of the decision maker. Gomez-Limon and Martinez (2006) contend that design methods deal with different issues, which include sustainability, articulation, convergence, transformation, and divergence.

The divergence aspect entails evaluating the various possibilities and constraints associated with a particular situation (Ho, Xu & Dey 2006). Subsequently, the success with which the design methods are implemented is dependent on the extent to which effective decisions are made.

Organisations’ decision-making units [DMUs] are faced by complex environmental problems that are required to be dealt with in order to enhance their organisations’ long-term success. Thus, the DMUs have an obligation to make rational decisions, hence the importance of integrating effective decision -making processes.

Gilliams, Raymaekers, Muys, and Van (2005) are of the opinion that decision-making is increasingly becoming complex due to the connection amongst diverse factors and the high rate of globalisation and the changing business environment.

Diverse tools and methodologies have been formulated in an effort to assist the decision makers during the decision-making process. However, the contribution of the decision-making process is influenced by the extent to which the formulated methodologies are applied (Geldermann & Rentz 2005). Some of these methodologies are evaluated herein.

The Analytic Hierarchy Process [AHP]

This methodology is mainly applied in the process of dealing with quantifiable aspects. The AHP methodology is mainly applied in absence of statistical and physical measures (Ishizaka & Labib 2011). Subsequently, it enables the decision maker to convert subjective assessments involved in the decision-making process into relative values. The AHP technique is based on three main principles including

  1. Decomposing the overall problem faced by identifying the most important factors.
  2. Formulating comparative judgements based on the decomposed elements.
  3. Obtaining the measures of relative importance through pairing

Olson (2001) asserts that AHP is a description decision-analysis methodology that calculates the ratio-scaled importance of alternatives through pairwise comparison of evaluation criteria and alternatives by means of the weighted sum method. The effectiveness of the AHP as a decision-making tool arises from the view that the decision makers are in a position to simplify the problem faced into its respective components.

The simplification process is achieved through the formulation of goals, alternatives, criteria, and sub-criteria (Macharis, Springael, De-Brucker & Verbeke 2004).

This aspect increases the effectiveness with which the decision maker undertakes pairwise comparison of the identified elements. The subdivision of the problem into smaller components increases the decision makers’ capability to compare the various elements (Gass & Rapcsák 2004).

In addition to the above, the effectiveness of the AHP in the decision-making process also lies in its capability to deal with both qualitative and quantitative judgements. Moreover, the AHP decision-making method enables the decision maker to screen inconsistent judgements effectively, hence resulting into reliable results (Kangas & Kangas 2005).

The AHP technique also entails the calculation of an inconsistency index, which the decision maker can use in gauging the extent to which his/her judgements align with the final decisions made (Pohekar & Ramachandran 2004).

Multi-Attribute Utility Theory

This decision-making method evaluates the utility of the diverse factors in accordance with the decision-maker’s preference. The MAUT methodology is every effective in making decisions regarding the location of a particular plant. Gade and Osuri (2014) assert that poor decisions in the process of establishing a particular facility such as a manufacturing plant can lead to substantial loss of resources.

Therefore, it is imperative for engineers to make logical decisions. However, the decision involved might be complex due to the numerous attributes involved. Thus, the decision maker is required to make a choice from a wide range of alternatives, which increases the number of possible combinations.

In order to select the most optimal combination, it is imperative for the decision makers to incorporate the utility theory, which is based on a mathematical model. Fulop (2009) emphasises that it is imperative for the decision maker to adopt the additive utility function in the process of calculating the overall utility. An example of the additive utility function is illustrated below.

U (aj) = p1u1(gj2) + ….+ pnun(gjn)

Whereby U1, U2….Un = the marginal utility of the evaluation criterions.

The MAUT decision-making methodology appreciates the importance of collaboration between the decision makers and the researchers in the process of formulating the additive utility function. The MAUT methodology increases the effectiveness with which the decision maker specifies the trade-offs between the criterions identified through the marginal utility functions.

The MAUT decision-making methodology provides the decision makers with an opportunity to gain additional knowledge and a better understanding of the problem faced through evaluation of diverse parameters (Konidari & Mavrakis 2007b). The model increases the decision makers’ capability to quantify the various alternatives.

Subsequently, the MAUT methodology enhances the decision-making capability in situations characterised by a high degree of uncertainty and risk (Figueira, Greco & Ehrgott 2004). This decision-making method is mainly applicable in the process of dealing with issues associated with renewable energy planning, assessing environmental impact of a project, and electric utility planning (Theodorou, Florides & Tassou 2010).

AMS

The AMS method is another method of evaluating alternatives in the decision-making process. The method takes into account the three main multi-criterial decision-making methods, which include the SMART, MAUT, and the AHP techniques (Ekárt & Németh 2005). A number of steps are involved in the process of utilising the AMS technique. These steps include

  1. Establishment of a criteria-tree
  2. Determining the weights coefficients of the criteria or sub criteria identified
  3. Grading the criteria of the respective instruments
  4. Formulation of an aggregate grade in relation to the three instruments

The development of the criteria tree enables the decision maker to take into account the various needs that should be taken into account in the decision-making context. Subsequently, the decision maker can identify the most important parameters and their impact on various stakeholders.

AMS is simple, flexible, and reliable. Moreover, its effectiveness also lies in its capacity to take into account the utilitarian approach in the decision analysis process. However, one of the major limitations of this decision analysis method is that it has not been applied extensively.

The above analysis shows that organisations encounter diverse situations that might affect their long-term sustainability. One of these issues relates to their impact of their operations on the society and the environment within which they operate.

Subsequently, organisations’ management teams have an obligation to ensure that they are effective in their decision-making process, which can be achieved by taking into account the needs of the diverse stakeholders. Different decision analysis tools have been formulated in an effort to assist organisations’ management teams to be effective in their decision-making process.

Some of the core decision-analysis tools identified include SMART, MAUT, AMS, and AHP. These tools are very effective in assisting decision makers to deal with complex situations. Their effectiveness arises from the view that they enable the decision maker to evaluate the various aspects that might affect their operations. Subsequently, they enhance the quality of the decision made.

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