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Busi 650-ILP Final Essay

Table of Contents
I. Abstract
II. Organizational Setting
III. Key Concepts
a. Quality
b. Total Quality Management
c. Innovation
d. Strategy Map
e. Balanced Scorecard
f. Six Sigma
g. Bench Marking
h. Inventory Management
IV. Conclusion
V. References

Abstract

The main purpose of the Integrative Learning Project (ILP) is to introduce an authentic or fabricated company/industry to research. The company’s organizational setting includes the mission statement of the company, who the internal/external customers are, what aspects can be contributed to achieve the organizations mission, and what role Christianity has with the organization. The research includes using eight different concepts learned throughout the course, explaining in detail how these concepts relate to the organization and the benefits the concepts offer to the organization, and what needs to be done to implement these concepts into the organization successfully. This ILP will prove that a successful business can be run effectively and efficiently when implementing the key concepts.

Organizational Setting

Dover Saddlery, Inc. is a leading specialty retailer in the English-style horseback riding industry in the United States. The company offers a large selection of quality and premium equestrian products to care for, ride, train, and compete a horse. Founded in 1975 by Jim and David Powers, the company has grown to be the largest multi-channel marketer of premier equestrian products by selling through direct and retail sales. The company serves the English rider through Dover Saddlery and the western rider through Smith Brothers. The company sells their products using catalogs, the internet, and retail stores. The product line includes a variety of items such as tack, horse clothing, horse health, footwear, and specialized apparel. Dover Saddlery, Inc. is headquartered in Littleton, MA, including a warehouse and call center facility. The company has 18 retail locations in Colorado, Delaware, Georgia, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, North Carolina, Pennsylvania, Rhode Island, Texas, and Virginia. The company’s third quarter 2013 total revenues were $63.6 million, a 6.4% increase from the $59.7 million achieved in the corresponding period. Dover Saddlery, Inc. stock trades on the NASDAQ Stock Market under the symbol DOVR.

The company’s mission is to grow the business by providing a broad variety of quality and most advanced equestrian apparel, equipment, stable, and horse care products to all equestrians, while operating efficiently and being profitable. The company carries 5,800 items comprising of approximately 28,000 different SKU’s. The company carries entry-level price points to the premium high-end price points to meet the wide range of customer needs and expectations. The company carries a distinctive and broad selection of need-based and high quality products at competitive prices with prompt order fulfillment ability. The company differentiates itself from competitors by their large inventory consisting of non-branded products, private label products, and premium brands. The current equestrian products market is estimated by the American Horse Council at $7.6 billion with an estimated 9.2 millions horses in the United States. American Sports Data estimates that over 16.8 million people ride horses. The equestrian industry has many indicators that the equestrian products industry will continue to grow.

The company is known for their excellence in customer service and large comprehensive selection. The company promotes a culture of courteous, knowledgeable, and prompt customer service representatives. 90% of the sales and customer service representatives are horse enthusiast. The company offers customers a 100% satisfaction guarantee. The company has one of the largest detailed customer databases. The database consists of customers that have purchased items with the last 12 months and their demographic information. The use of the catalog, internet, and retail stores has enabled the company to capture customer information, cross-market products, and provide a convenient shopping experience for customers. The company’s customers are primarily females with a passion for the riding sport. The customers are affluent and luxury oriented who tend to choose to buy from the company for the high quality and premier products. The customer base shows high repurchase rates and has been very loyal customers.

The role Christianity has in this organization is customer service is essential and Matthew 10:31 states, “Fear not, therefore; you are more value than many sparrows” (ESV). In the service industry, customer satisfaction is key and the company has to recruit the right people and reward them for there expertise. Colossians 3:23-24 states, “23 Whatever you do, work at it with all your heart, as working for the Lord, not for human masters, 24 since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving” (New International Version). Another verse that can be applied in this organization is 1 Peter 4:10, “As each has received a gift, use it to serve one another, as good stewards of God’s varied grace”. The company uses the gifts God gives us and pass them on to consumers to benefit from. The role of Christianity plays a great role in this company.

Key Concepts

The first key concept that is applicable to Dover Saddlery is Quality. Quality has a huge impact on the quality of products and the success of the organization. According to Dinh, Igel, & Laosirihongthong (2010), “quality, considered a key strategic factor in achieving business success, is more than ever required for competing successfully in today’s global marketplace and it has become the key slogan as organizations strive for a competitive advantage in markets characterized by liberalization, globalization, and knowledgeable customers” (p. 931). The design and performance of the product are two very important concepts of quality. Quality should start with the customer, the experience the customer has with the product or service will impact the customer’s satisfaction with the total experience. The management and control of the quality of the products and services is very important to the success of the organization. It is very important for organizations to implement a quality assurance program (QAP) to ensure the quality of the products and services. According to Rouse (2007): In developing products and services, quality assurance is any systematic process of checking to see whether a product or service being developed is meeting specified requirements. Many companies have a separate department devoted to quality assurance. A quality assurance system is said to increase customer confidence and a company’s credibility, to improve work processes and efficiency, and to enable a company to better compete with others. Quality assurance was initially introduced in World War II when munitions were inspected and tested for defects after they were made. Today’s quality assurance systems emphasize catching defects before they get into the final product (Quality Assurance). There are many advantages for the company to have a QAP in place, include a competitive advantage, increase in sales and market share, increased customer satisfaction, better management control, clearly defined organizational tasks, structure, and responsibilities, more effective recalls, and price premium (Aramyan, Meuwissen, Oude Lansink, van der Vorst, van Kooten, & van der Lans, 2009, p. 624). According to Yang (2006) “several studies on quality management have demonstrated that delivering superior service quality enhances productivity, reduces costs, increases customer loyalty, improves market share, and brings other general benefits to a service organization (p.1129). The QAP helps fulfill the needs and expectations of the customers and improves the quality of the products and services.

The second key concept that is applicable to the company is total quality management (TQM). According to Richards (2012), TQM can be defined as an integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques that the end result is higher quality of goods and services (p. 37). TQM is an organizational-wide concept of continuous improvement to ensure the products and services exceed their customers’ expectations. According to Richards (2012), “this kind of quality management requires the company to always check to make sure that product or service is at the standard that both the company and customer wants is maintained” (p. 37). Exceeding the internal and external customers satisfaction is a key focus of TQM. According to Talib, et al. (2011), TQM “has received a great attention due to its effectiveness in achieving sustainable competitive advantage and enhanced business performance” (p. 1331). TQM is “a total look at the quality of the organization” (Richards, 2012, p. 41). “All service industries should seek to adopt and implement TQM so that proactive identification and response to needed changes can lead to continuous improvement” (Talib, et al. 2011). “Quality-conscious companies normally have a strong quality culture, which is helpful for achieving customer satisfaction” (Delgado-Hernandez & Aspinwall, 2008, p.1016). The practice of TQM can grow a company to have a sustainable advantage in local and international markets (Richards, 2012, p. 36).

The third key concept that is applicable to the company is innovation. “In the modern business world, innovation is just as important as quality, so they must go hand and hand and one complements each other” (Perodomo-Ortiz, et al. 2009, p.5088). Innovation is one if the driving forces of a successful business and allows an organization to introduce new and improve products in the market place. According to Bigliardi (2013), innovation is a complex phenomenon that involves the production, diffusion and translation of knowledge in new or modified products or services, or the development of new production processing techniques. Innovation is very important to the success of an organization, it creates jobs and promotes the growth of organizations.

The fourth key concept that is applicable to the company is the strategy map. As a strategic part of the Balanced Scorecard (BSC), a strategy map provides an organization “with a tool that helps them better monitor important details about their strategic business processes, thereby enhancing their employees’ understanding of the strategy interactions, which in turn facilitates implementing the business strategy” (Meredith and Shafer, 2013, pg. 99). According to Kaplan and Norton (2004), “the strategy map provides the visual framework for integrating the organization’s objectives in the four perspectives of a Balanced Scorecard” (pg.45). According to Markiewicz (2013), a strategy map is a tool integrating the developed strategy with operating activities of various organizational units operating in an organization. A specific feature of strategy map is that it describes in a clear manner the process of creating values in organization by indicating a number of cause and effect relationships between four perspectives (learning and growth, intemal-business-processes, customer, financial) and goals adopted within these perspectives. (pg. 161-162) The four perspectives a strategy map addresses include the financial perspective, the customer perspective, the internal business process perspective, and the learning and growing perspective. According to Markiewicz (2013), a strategy map “enables illustration of cause-and-effect relationship between the processes in all four perspectives and performance indicators at the organizational level. Strategy map and performance indicators at the organizational level constitute the basis for different departments when preparing their individual effectiveness indicators” (pg. 160). The top of a strategy map is the goal that has been specified by management, the next step is how the goal be accomplished, and the remainder of the map shows the cause-and-effect relationships that management has developed on how the goal can be accomplished.

The strategy map is used very frequently by all organizations as a simple strategy development tool by management to report the progress of the strategy implemented in their organization to achieve its vision or mission. The strategy map is a powerful technique that can be applied to any type of business from a public sector organization to a non-profit organization. It is very important to organizations because it encourages its managers to think logically about the elements of their strategy and how the strategic elements interact. This effective tool ensures the managers understand the role of the strategy and how the effective strategy embraces all of the organization’s activities. According to Umayal Karpagam and Suganthi (2012), the strategy map describes “how the four perspectives: financial, customer, internal process, learning and growth are linked and how they create a balance between the more tangible outcomes through intangible resources” (pg. 7).

The fifth key concept that is applicable to the company is the balanced scorecard. Kaskey (2013) says the balanced scorecard “provides an organization with ways to develop and evaluate strategic objectives and goals” (pg. 22). The balanced scorecard uses financial and nonfinancial strategic information and is “an accounting report that includes the firm’s critical success factors in four areas: financial performance, customer satisfaction, internal processes, and learning and growth” (Blocher, Stout, Juras, & Cokins, 2013, pg. 11). The benefits of the scorecard include ability to implement strategy, ability to track the process of the organization in their achievement of the strategic goals, the organization’s ability to determine manager’s compensation, achieving organizational change, and the ability to achieve the critical success factors. According to Werner and Fuyuan (2012), “when the score card is adopted, employees become aware that their performance will be judged based on these measures and targets. Accordingly, employees will act to achieve the established performance targets” (pg. 92). The balanced scorecard is a critical tool for organizations in todays challenging and competitive business environment. It is very important for organizations to achieve its critical success factors to help the overall performance of the organization and to stay competitive.

The sixth key concept that is applicable to the company is Six Sigma. This concept is a strategy to increase employee engagement that will then increase customer satisfaction. According to Meredith and Shafer (2013), six sigma is a comprehensive and flexible system for achieving, sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business processes. (Page 129) This method is an inspiring factor for employees and employees have to be completely engaged in the program for it to be successful and impact employee satisfaction. Six Sigma has been embraced by many organizations, that drive’s improvements in processes, products, and services. When implementing the Six Sigma approach, first provide necessary leadership and resources, implement a reward system, provide ingoing training, select early projects, break up difficult projects, and avoid employee layoffs. “Six sigma’s popularity and success is catching fire throughout the service industry across the globe as no other process improvement (PI) movement before (Sunder, 2013, pg. 34).

The seventh key concept that is applicable to the company is benchmarking. According to Cruceru (2013), benchmarking is “viewed as a continuous process of evaluation of products, services, processes and performance of competitors in order to obtain competitive advantage, benchmarking involves knowledge of all elements occurring when implementing in practice” (pg. 6). Benchmarking is a strategy where the desire to be competitive is a challenge for managers to become knowledgeable and analyze their competitors in the industry and implement competitive strategies to be successful. According to Meredith and Shafer (2013), benchmarking is used for a variety of purposes, including the following: Comparing an organization’s processes with the best organization’s processes. Comparing an organization’s product and services with those of other organizations. Identifying the best practices to emulate.

Projecting trends in order to be able to respond proactively to future challenges and opportunities. (pg.133) Benchmarking involves three steps: the first step is concerned with preparing the study, the second step is collecting the data, and the third and final step is what was learned to improve the organization. This process has become one of the most valuable processes to identify performance improvement areas. Benchmarking allows an organization to analyze and improve performance, profitability, business processes, and market share. There are many types of benchmarking including: process benchmarking-compares business processes and operations, product benchmarking-compares products and services, strategic benchmarking-compares organizational structures, internal benchmarking-internal comparison, competitive benchmarking-comparison of direct competitors, functional benchmarking- comparison of organizations in the same field, and generic benchmarking- comparison of the best competitor in other fields. According to Cruceru (2013), “those competitors who will know to focus on benchmarking implementation in management and marketing activities of the organization will achieve increased performance and competitiveness in terms comparable to the best competitors of the time” (pg. 9).

Appendix A
In order to implement benchmarking in Dover Saddlery the following steps are needed: 1. Understand the company’s current process performance gaps. 2. Obtain support and approval from the executive leadership team 3. Document benchmarking objectives and scope; document the original process. 4. Agree on the primary metrics and put them in writing.

5. Agree on what to benchmark.
6. Develop a data collection plan.
7. Identify research sources and initiate data gathering.
8. Determine how to contact and screen companies.
9. Design a detailed survey to gather information.
10. Decide if gathered information meets original objectives. 11. Conduct a site visit.
12. Apply the learning to performance gaps.
13. Communicate to the executive leadership to ensure continued support. 14. Develop a recommended implementation plan with process owner. 15. Know when to update and recalibrate.

The eighth key concept that is applicable to the company is inventory management. Inventory management is extremely important for the success of a organization and having the correct number of items in inventory that is necessary for operation is vital for inventory management. According to Chen
(2011), “the inventory in an organization may contain a large amount of items. A logical inventory classification is necessary for managers to have efficient plan and control of the items” (pg. 1702). Inventory management can be a challenge for any business, but can be even more important for businesses with changing product life cycles or product needs. The development of information systems, has eased some challenges faced with inventory management. The introduction of advanced information system, which aim at better performance than manual product identification and inventory data-keeping procedures, hold much promise for the reduction of inventory inaccuracies. Inventories include work-in-process, raw materials, finished goods, component parts, and so on. By eliminating storage space to business is not only saving on space but also removing defective parts from being hidden until no one knows who had made them (Meredith & Shafer, 2013, p. 176). Appendix B

Inventory

An additional way that we differentiate ourselves from our competition is through our breadth and depth of inventory. We believe our inventory is deeper than our competitors with $10.1 million in on-hand inventory as of December 31, 2005 and more than 5,800 items comprising approximately 28,000 different SKUs. With our extensive inventory position and rapid fulfillment capability, we have historically been able to fill approximately 95% of the items ordered within an average of 1.5 business days. Based on our inventory management systems, continuous monitoring of the products we carry and the fact that we carry very few fashion products, we have historically had very little obsolete inventory. Despite the high level of inventory we have historically maintained, we have turned inventory approximately four times per year and we historically have had no material inventory write-downs.

All of the products that are presented in our catalogs are available online and customers can use our websites to enter orders, shop online and check order status and inventory availability. On average, our retail stores stock inventory items represent over 70% of the merchandise sales we make available through our direct sales channel. All items are available to customers entering our stores by either direct shipment to a customer’s home or for in-store pickup.

Conclusion

Dover Saddlery is a company that prides on their success and always providing 100% customer service to their customers. Utilizing these eight key concepts, along with successful implementation into the company’s initiatives, they will produce overall success and a winning organization.

References
Aramyan, L. H., Meuwissen, M. M., Oude Lansink, A. M., van der Vorst, J. J., van Kooten, O., & van der Lans, I. A. (2009). The perceived impacts of quality assurance systems on tomato supply chain performance. Total Quality Management & Business Excellence, 20(6), 633-653.

Bigliardi, B. (2013). The effect of innovation on financial performance: A research study involving SMEs. Innovation: Management Policy & Practice, 15(2): 245-256.

Blocher, E. J., Stout, D. E., Juras, P. E., and Cokins, G. (2013) Cost Management: A Strategic Emphasis (6th Ed). McGraw Hill: New York, NY.

Chen, J. (2012). Multiple criteria ABC inventory classification using two virtual items. International Journal Of Production Research, 50(6), 1702-1713.

Cruceru, A. (2013). Benchmarking – a method of improving organizational competitiveness. Romanian Journal Of Marketing, (1), 6-9.

Delgado-Hernandez, D., & Aspinwall, E. (2008). A framework for building quality into construction projects – Part I. Total Quality Management & Business Excellence, 19(10), 1013-1028.

Dinh Thai, H., Igel, B., & Laosirihongthong, T. (2010). Total quality management (TQM) strategy and organizational characteristics: Evidence from a recent WTO member. Total Quality Management & Business Excellence, 21(9), 931-951.

Inventory. (2011). Appendix B of Dover Saddlery, Inc. Retrieved from http://www.hotstocked.com/companies/d/dover-saddlery-inc-DOVR-description-52723.html

Kaplan, R. S., & Norton, D. P. (2004). How Strategy Maps Frame an Organization’s Objectives. Financial Executive, 20(2), 40-45.

Kaskey, V. L. (2013). The Balanced Scorecard: A Comparative Study of Accounting Education and Experience on Common Measure Bias. Advances In Management, 6(7), 22-25.

Markiewicz, P. (2013). Methodical Aspects of Applying Strategy Map in an Organization. Business, Management & Education / Verslas, Vadyba Ir Studijos, 11(1), 153-167.

Meredith, J. R., & Shafer , S. M. (2013). Operations management for MBAs (5th ed.). Hoboken, NJ: John Wiley & Sons.

Perdomo-Ortiz, J., Gonzalez-Benito, J., & Galende, J. (2009). The intervening effect of business innovation capability on the relationship between Total Quality Management and technological innovation. International Journal Of Production Research, 47(18), 5087-5107.

Richards, J. (2012). Total Quality Management. Business Management & Strategy, 3(2), 36-42.

Rouse, M. (2007, Feb). Quality Assurance (QA). Retrieved from http://searchsoftwarequality.techtarget.com/definition/quality-assurance.

Sunder, V. (2013). Six Sigma— A Strategy for Increasing Employee Engagement.
Journal for Quality & Participation, 36(2), 34-38.

Talib, F., Rahman, Z., & Qureshi, M. N. (2011). Prioritising the practices of total quality management: An analytic hierarchy process analysis for the service industries. Total Quality Management & Business Excellence, 22(12), 1331-1351.

Umayal Karpagam, P. L., & Suganthi, L. L. (2012). A Strategy Map of Balanced Scorecard in Academic Institutions for Performance Improvement. IUP Journal Of Business Strategy, 9(3), 7-16.

Werner, M. L., & Fuyuan, X. (2012). Executing Strategy with the Balanced Scorecard. International Journal Of Financial Research, 3(1), 88-94.

Yang, C. (2006). Establishment of a Quality-Management System for Service Industries. Total Quality Management & Business Excellence, 17(9), 1129-1154.


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