Business at work

data.

There are also new rules to prevent organisations sending data to a country

outside the European Union in an attempt to avoid complying with

legislation on data protection. There are new provisions which can lead to

individuals being held personally responsible for not abiding by the rules.

Communication within Tesco plc.

An illustration of communication within Tesco plc.

Figure 2.0: Example of vertical and lateral communication within Tesco.

I have analysed the communication within Tesco plc. and now I can say that

Tesco uses relevant and accurate information to plan and manage efficient

development, marketing, distribution and cost control. Information,

vertical and lateral, communicated within Tesco very efficiently at the all

levels. Every single person who works in Tesco is sure about from whom he

should receive information and instructions.

But apart of internal communications Tesco has very good external

communications as well. The company communicates with customers and

suppliers very well. The quality of Tesco’s external information is very

high. Tesco has many communication channels which allow customers easy

access to the company, for example, Tesco advertises a customer care free

telephone number and e-mail address on its packaging literature.

E6

Production.

Production involves activities, which combine inputs in order to bring

about the physical changes that eventually produce the desired output – the

product. The product may be goods for consumers and households or parts and

machinery for other producers and manufacturers. Production can create a

physical change through:

. Processing

. Manufacturing

. Assembly

. Craft-based processes.

Value added

A common feature of all forms of production is that they are the means by

which organisations add value to their operations. Put simply, all

organisations add value to the externally sourced materials and other

inputs that contribute to their output. Value added is the difference

between the value of an organisation’s output, as measured by sales

revenue, and the costs of its inputs bought in from outside which

contribute to output.

The relative importance of the input costs incurred by a producer depend

upon the nature of the business. Most businesses generally consume a

combination of:

. Raw materials

. Parts and components

. Energy

. Business services.

Quality

Quality has always been an important competitive factor in some markets,

but during the 1980s an increasing number of UK producers began to devote

more attention to quality improvement. The rise in the spending power of

the average household meant that consumers’ choice of goods and services

was no longer so dependent on price. At the same time, consumers were being

offered a wider choice obliged producers to improve and complete on

quality. Because firms producing consumer goods and services sought to

raise quality, their suppliers – companies producing materials, parts,

machinery and business services – were also forced to improve quality.

A growing number of organizations now operate in markets where product

differentiation is rapidly decreasing. For example, advances in technology

mean that there is now very little difference between personal computers

offered by the different manufacturers in particular price range. A PC

producer must therefore strive to gain a competitive advantage by

establishing a reputation as a company with high quality and good customer

care. Consider training shoes as another example. Manufactures of trainers

periodically introduce new features into their shoes in an effort to create

a greater degree of product differentiation, but they all remain

essentially the same design and product. If the identifying logos are

removed, the average buyer might find it difficult to distinguish between

brands.

Producers of both consumer goods and consumer durables must therefore place

more emphasis on quality when marketing their products.

The increasing importance of quality can also be seen in the market for

consumer services. The main features of services provided by airlines,

banks and fast food chains are often virtually identical, and product

differentiation can only really be achieved by improvements in quality.

Another factor in changing business attitudes to quality was the success of

Japanese manufacturing companies. It was perceived that quality played an

important role in helping Japanese companies succeed in European and US

markets. By the end of the Second World War very little manufacturing

capacity remained in Japan, and in the immediate post-war period Japanese

products generally had a reputation as being cheap but inferior quality

versions of products manufactured by US and European producers. However by

the early 1980s Japanese companies had become closely associated with high-

quality products for which they were able to charge premium prices. In the

early 1980s, Japan had 18 per cent of the world trade in the manufactured

goods, substantially more than the UK’s 5 per cent share.

Quality control

Quality control involves an organisation using some kin of inspection

system for identifying materials, parts, components and finished products

which do not meet the company’s specifications. Inspection or testing may

be carried out at various stages of production to ensure that faulty items

do not remain in the production chain.

The operative or inspection department may check every item or just a

sample of production. Processing industries, such as the brewing and

chemical industries, also test regular samples of their products. Quality

inspection is supported by highly sophisticated monitoring, measuring and

testing equipment. This allows organisations to make adjustments to machine

settings and control devices to improve quality.

There are some drawbacks to a quality inspection system. Using an

inspection system to control quality encourages employees to take it for

granted that some output is bound to be defective. Less attention is paid

to preventing errors and defects in the first place as they will be picked

up later by the inspection system.

A quality control system must ensure that there is regular contact between

those departments that have a particular interest in quality matters. The

marketing department, for example, may identify issues raised by customers,

while the design research and development departments should work with

production on developing the product so that current defects are eliminated

when work is being processed.

Quality assurance schemes

A quality assurance scheme is the means by which an organisation implements

its commitment to quality. It helps firms to do the job properly the first

time, because the scheme is designed to prevent failures rather than

detecting errors once they have occurred. In this way a quality assurance

scheme (QAS) differs radically from quality control systems which involve

inspection procedures at various stages of production. The design of a QAS

recognises that defects do not just happen; they are caused by people.

Assuring quality

Once an organisation has identified the reasons why people are responsible

for defects and errors, it can develop a system which eliminates the causes

of defects. In this way, quality is assured. There is no single format for

a QAS, and an organisation chooses a system which is most appropriate to

its particular product or service. What it must do is to insure that every

stage of production (or in the provision of a service) that materials,

equipment, methods and procedures are used in exactly the same way, every

single time.

All employees should be aware of what is expected of them, and should know

how their own particular performance has to meet certain clearly identified

requirements.

Product Evaluation and Quality Assurance within Tesco plc.

What product evaluation and quality assurance in Tesco plc.

Tesco products are continually monitored and tested for their quality and

customer acceptability; this is product evaluation. Tesco staff and

management procedures are also monitored to ensure that they maintain the

highest standards; this is quality assurance.

Why does Tesco carry out product evaluation?

Product evaluation is carried out for a variety of reasons. These include:

testing new products under development

testing existing products when a change of supplier is being considered

testing Tesco products against those of competitors

to update information on the packaging

to monitor quality and safety standards.

Changing of packaging information

Even when a product remains the same, packaging information may have to be

altered because of a change in legal requirements, changes in nutritional

concepts, or advances in food preservation and cooking. For example, a

product might have its packaging altered to indicate that it could be

suitable for microwave cooking. It will therefore be necessary to test the

product in company’s laboratory. Here Tesco inserts fibre optic probes into

the product. This allows us to monitor the temperature of the product

whilst it is cooking, in order to ensure that it reaches a high enough

temperature for it to be consumed with safety.

Tests on existing products

Quality control tests are conducted regularly on all existing own-brand

products at Head Office, in Consumer Advice Centres, and in specialist

laboratories. These include tests on food safety.

Consumer Advice Centre

The purpose of five Consumer Advice Centres in Sandhurst, Shoreham,

Southport, Cheshunt and Perth is to carry out practical research with

customers into new and existing products. Each centre is staffed by two

consumer service officers who are qualified home economists. Their most

important role is to conduct consumer acceptability tests and sensory

analysis. Over a four-day period, six to eight products will be tested.

Their role also includes being available to the customer for any queries

concerning diet, health and nutrition, PR work at a local and national

level, quality control, and giving talks and demonstrations to local

community groups.

Organising a taste panel

Market researchers will recruit customers who are shopping in the store.

These customers take part in the test only if they fulfil the recruitment

criteria that have been established for the product being tested. For

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