Eurasia International: Total Quality Management in the Shipping Industry

Eurasia International: Total Quality Management in the Shipping Industry

Eurasia International is a wholly owned subsidiary with a mandate to operate as a competitive third party ship manager. It provides suite of services that covers end-to-end solution for the shipping industry. As highlighted in this case report, the key issue confronting Eurasia International is being able to maintain the necessary HR focus while controlling the ship's cost structure, staying in tune with customer requirements and anticipating the competition. The company’s mantra of success is “Being the best, not necessarily the biggest”; this explains the utmost importance of quality in Eurasia’s work culture. Unlike other ship management companies, Eurasia believes in providing customer centric services rather than product oriented services. Due to this attitude company is able to offer a customized range of services to its customers. Eurasia has been able to provide the top quality service to its customers by implementing the model of continuous improvement, Total Quality Management. Till date, the company has proven itself as a world leader in Ship management. It has now reached a crossroads in its development where it may want to take certain proactive steps to retain its position in the future while ensuring that it meets its other strategic commitments.

I have examined three criteria in an attempt to formulate a viable recommendation. The key factors for success are cost efficiency, high quality and personalized service. While it meets the above mentioned criteria, Eurasia also has to ensure that it has enough resources to maintain its Strategic goal of creating value for shareholders, customers and human resources in the rapidly evolving shipping industry.

In order to deal with the issue of whether or not Eurasia should take a step ahead of time to prepare itself for the demand arising due to innovations in shipping business later in the future, I have developed the following three alternative course of action:

• Maintain Status Quo: This is the simplest of all the options as it requires the company to take no action and continue running the firm as it has in the past. In the present situation Eurasia is very successful and is heavily dependent on its huge and geographically diverse human resource group that is geared towards achieving the company’s success using the tools of Total Quality Management. Due to the company’s effort on providing high employee satisfaction by providing lucrative incentives, high quality of training and regular salary appraisals the employee turn-over ratio is at its minimum. In addition, the company has its organizational structure grouped into two major categories: the Shore-based teams and the Ship-board teams. Eurasia ensured that both teams work as a cohesive unit to perform the specific tasks assigned them. Furthermore, the company has also instituted a management structure to monitor and control quality of the service offered to its clients –self-check, cross-check, and external-check- at different managerial levels. All these different modules are inter-related to each other and their streamlined functioning plays a vital role in making Eurasia International one of the most successful company in the Ship management business.

The company may choose to continue running its business with its successful current strategy of relying upon its human resources, however, by doing so the firm might go against its own business model of continuous improvement in the company. As a result, in future, if the company’s rivals develop a business model for partial or completely automatic ship trading, the company will lose its competitive advantage that it currently holds because of its huge and well trained manpower resource. As a consequence, Eurasia might have to face a tremendous pressure to maintain its strategic goal of providing a cost effective and high quality service to its customers while ensuring that it is able maximize its shareholder’s profits and is able keep its employees satisfied.

• Complete automation: This option sounds great in theory and may have great appeal for those business customers of Eurasia who are planning to launch unmanned ships in the market in the due course of time. By implementing this idea Eurasia would be able to provide a much faster, cost-effective solutions to these ship owners in future, however, this might not be a good news for the company’s shareholder’s and its huge manpower resources. This option has a high level of financial risk associated with it. Since there hasn’t been any research done in past on developing a business model that would be able to provide the shipping management service with unmanned ships, Eurasia will have make a huge investment in order to set up a R&D department that could develop such a model and strategy for it. Secondly, there are currently no ship owners who possess any