TOTAL QUALITY MANAGEMENT APPROACH.

A CASE STUDY ON AMAZON.COM INC

ABSTRACT
Purpose
This paper aims to explore total quality management practices with a learning perspective and
methods applied within Amazon.com Inc to tackle the quality management process without any
hindrances.
Background
Quality is a crucial parameter which differentiates an organization from its competitors. Quality
management tools ensure changes in the systems and processes which eventually result in
superior quality products and services. Quality management methods such as total quality
management or six sigma have a common goal - to deliver a high quality product. TQM is
defined as a strategy that is essentially aimed to establish and deliver high quality products
and services that cover all customers' demands and achieve a high level of customer
satisfaction.
This paper discusses the six sigma management methods well known for smooth process of total
quality management.

INTRODUCTION
During the past two decades the business environment has been characterised by rapid changes.
Companies these days have to face external factors which are beyond their control and so the
business units must have to adapt themselves to these changes in order to survive and succeed in
business. The internal business environment comprises of factors within the company which
impact the success and approach of operations. One of such internal factors is total quality
management .unlike the external factors the company has control over internal factors which is
necessary to be handled for further success. TQM is a way of managing people and business
processes to ensure complete customer satisfaction at every stage. It emphasizes on commitment
to quality, communication of the quality message and recognition of the need to change the
culture of the organization to create total quality

TQM is defined as a strategy that essentially aimed to establish and deliver high quality
products and services that cover all customers' demands and achieve a high level of customer
satisfaction
PRINCIPLES AND THEORITICAL MODELS OF TOTAL QUALITY MANAGEMENT.
A number of key principles can be identifies in defining TQM ,
 Customer focus: quality improvement should lead to customer satisfaction.
 Executive management: top management should ensure to create the best appropriate
environment.
 Training: employees should be well known with the process.
 Company culture: the culture of company should promote activities influencing
employees work ability.

CASE STUDY: THE APPLICATION OF SIX SIGMA METHADOLOGY IN TOTAL

QUALITY MANAGEMENT WITHIN AMAZON.COM INC.
ORGANIZATION BACKGROUND:
Amazon.com, Inc. Is an American multinational technology company which focuses on e-
commerce, cloud computing, digital streaming, and artificial intelligence. It was founded by Jeff
Bezos from his garage in Bellevue, Washington, on July 5, 1994. Initially an online marketplace
for books, it has expanded into a multitude of product categories. It has gathered immense
reputation as a disruptor of well-established nation in this era of rapid changing business
environment. The company expanded rapidly in other areas. Its associates program, where other
web sites could offer merchandise for sale and amazon.com would fill the order and pay a
commission, grew from one such site in 1996 to more than 350,000 by 1999.
Despite having branched out well beyond online retailing, the bulk of the company’s revenues
continues to come through selling products online (though its most profitable division remains
AWS), and that is where much of its investment has been targeted.

LITERATURE REVIEW:
Few years back in august amazon had to face criticism stating that 60% of its product were
coming from third party sellers and amazon generally didn’t play an active role in the quality
control for these products, it was up to the individual sellers to be held responsible for any safety
issues. Currently it is not entangled with same issue as it has been practicing the six sigma
methodology which helps the company to avoid grievances related to total quality management.

OPERATIONAL PROBLEM ANALYSIS:

THE SIX SIGMA MODEL OF TQM-
Six Sigma is a mathematical and statistical calculation of data to find out the defects or the
percentage deviation for the standard of error set. In any organization, data should be treated as
an asset and not as a department’s property, especially in an era where the world runs on data
round the clock. Amazon utilized its data technology system to research consumer behavior
which analyze and expand upon offering low price product with great convenience and
personalized product recommendation, type of purchase, demand cycle of products on shelf.

The core component of six sigma methodology was the DMAIC tool kit. DMAIC is an acronym
describing five phases of this methodology which is define, measure, analyze, improve and
control.
APPLICATION OF THE SIX SIGMA METHODOLOGY IN AMAZON
Amazon experienced success in 1999 when Jeff Wilke was brought in the company as vice
president of operations who had a background in applying six sigma methodology . The
company aimed to-

1. Provide customers with options and respond to fluctuating market conditions- The
firm gave its customers a wide range of options at lowest price possible.
2. Converge interactivity- The company hoped to capture the unique individuality aspects
of its clients through personalizing their shopping preferences.
3. Respect time and space interdependency- Amazon strived to deliver products to its
customer as quickly as possible and at the lowest cost.
IMPACT OF SIX SIGMA METHODOLOGY ON AMAZONS SUCCESS:
The company has paved the way as a tech giant from being a online bookstore. Here are some
impacts,

1. Increased revenue
The company has been growing year over year to around 280 billion.

2. Amazons stock price

The companies sock price performance has been outstanding over these years.

CONCLUSION
Amazon has over the years continued to incorporate the six sigma model of total quality
management in its operations as a way of streamlining its management processes and it has made
way for the company to face and tackle the problems like identifying customer needs.
LIMITATIONS-Due to time constraints data analysis and interpretation is not presented thus
the information provided is obtained and studied from secondary sources.
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