Chapter 14 Flashcards
relationship between productivity, service quality, and profitability
-quality and productivity create value for customers and companies
-quality focuses on the benefits for customers
-productivity address the financial costs incurred by a firm
-employees going faster and more efficiently increases productivity but not quality
manufacturing perspective
delivery against measurable standards within tolerance levels
user’s perspective
standard of performance that consistency exceeds or meets customer expectations
what are the 6 gaps
- knowledge gap
- policy gap
- delivery gap
- communication gap
- perception gap
- service gap
knowledge gap
-when management doesn’t understand what customers expect from a service
-must educate management on what customers expect
1.implement a customer feedback system
2. increase customer management interaction
3.increase upward communication
Policy Gap
-when a company does not have the right service products, processes, or standards aligned with customer expectations
-must establish the right service products, processes or standards based on customer expectations
1.Getting Service Processes Right: -Implement a systematic and customer-focused approach to service design and improvements.
-Standardize and automate repetitive tasks while balancing automation with human interaction (soft technology
- Setting and Reinforcing Service Standards:
-Define clear, realistic, and customer-oriented service quality goals.
-Ensure employees understand and accept service-related goals, standards, and priorities. - Developing Tiered Service Products:
-Offer premium, standard, and economy-level service options to allow customers to choose based on their needs.
-Provide different service levels at various price points to cater to diverse customer segments.
The delivery gap
-when the company fails to deliver service to the expected standard
-must ensure standards are met
1.Ensure Customer Service Teams are Motivated & Trained:
-Improve recruitment by selecting employees with the necessary skills.
-Train employees in both technical and soft skills
-empower
2.Use the Right Technology & Resources:
-Select the most suitable technologies for efficiency.
-Support internal employees (finance, IT) to ensure smooth service delivery.
- Educate Customers & Manage Service Expectations:
-Teach customers their roles in service delivery.
communication gap
-when a company make unrealistic promises or falsely advertises to customers
1.Ensure Marketing Reflects Realistic Expectations:
-Get input from front-line employees before launching new communication programs.
-Let front-line employees review ads before they are published.
2.Align Sales & Service Teams:
-Prevent over-promising by ensuring sales teams understand service limitations.
-Encourage sales and service departments to collaborate.
3.Be Honest in Marketing & Customer Communication:
-Test marketing materials to ensure they are clear and truthful.
-Explain service limitations and reasons for shortfalls.
-Document service guarantees and performance expectations.
Perception Gap
-when customers perceive service quality as lower than what was actually provided
- Make Service Quality Tangible:
-Design service environments to reflect quality.
Keep customers informed throughout the service process, especially for complex services.
The service Gap
This is the overall gap, which results from failures in any of the previous five gaps.
-Fix Gaps 1-5 to ensure customer expectations align with actual service delivery.
hard vs soft measures of quality
soft: (SERVQUAL)
-not easily measure
-must talk to customers, and employees to collect
-provides direction, feedback on how to achieve customer satisfaction
hard:
-can be measured
-measure through outcomes or operational processes
Deming cycle + 14 Points
-based on 4 stages: plan, do check, and act (PDCA)
-management methodology that aims to continually improve processes
-To adapt to market changes, improve efficiency, boost productivity, and meet the needs of your customers, having a method is required
- Create consistency of purpose for improvements of service
- Adopt the new philosophy
- Cease dependence on mass inspection
- End the practice on awarding business on price alone
- Constantly and forever improve the system of production and service
- Institute modern methods of training
- Institute modern methods of supervision
- Drive out fear
- Break down barriers between departments
- Eliminate numerical goals for the workforce
- Eliminate work standards and numerical quotas
- Remove barriers that hinder the hourly worker
- Institute a vigorous program of education and training
- Create a structure in top management that will push every day the aforementioned 13 points
Customer feedback collection tools (8)
*Total market surveys
*Annual surveys
*Transactional surveys
*Service feedback cards
*Mystery shopping
*Unsolicited customer feedback
*Focus group discussions
*Service reviews
Servqual
-SERVQUAL is a multi-dimensional research instrument designed to capture consumer expectations and perceptions of a service along five dimensions that are believed to represent service quality
Issues/dimensions:
1.Reliability
2. Assurances
3.Tangibles
4.Empathy
5.Responsiveness
-Compare customer service expectation vs service performance
-received service quality
-impact on customer satisfaction
3 types of performance reports
-chose relevant info and pass down the info for action ot take place
*Monthly Service Performance Update
*Quarterly Service Performance Review
*Annual Service Performance Report
tools to analyze service problems (3)
1.Fishbone diagram
–Cause-and-effect diagram to identify potential causes of problems
2.Pareto Chart
–Separating the trivial from the important. Often, a majority of problems is caused by a minority of causes (i.e., the 80/20 rule)
3.Blueprinting
–Visualization of service delivery, identifying points where failures are most likely to occur
Understand the difference between productivity, efficiency, and effectiveness.
*Efficiency: involves comparison to a standard, usually time-based (e.g., how long employee takes to perform specific task)
–Problem: focus on inputs rather than outcomes
–May ignore variations in service quality/value
*Productivity: involves financial value of outputs to inputs
–Consistent delivery of outcomes desired by customers should command higher prices
-Improvement in productivity means an improvement in the ratio of outputs to inputs.
-Intangible nature of many service elements makes it hard to measure productivity of service firms, especially for information-based services
–Difficult in most services because both input and output are hard to define
*Effectiveness: degree to which firm meets goals
–Cannot divorce productivity from quality and customer satisfaction
ways Improving service quality
–Careful control of costs at every step in process
–Reduction of wasteful use of materials or labor
–Teaching employees how to work more productively
–Providing employees with equipment and databases to work faster and to a higher quality
–Broadening variety of tasks that service worker can perform
–Installing expert systems that allow paraprofessionals to take on work previously performed by professionals who earn higher salaries
Customer-driven Ways to Improve Productivity + Caution
*Change timing of customer demand
–By shifting demand away from peaks, managers can make better use of firm’s productive assets and provide better service
*Encourage use of lower cost channels
–Get customers to self-serve
–Encourage customers to obtain information and buy from firm’s corporate Web sites
*Ask customers to use third parties
–Delegate delivery of supplementary service elements to intermediary organizations
*Caution on Cost Reduction Strategies
–Most attempts to improve service productivity seek to eliminate waste and reduce labor costs and does not involve new technology
–Reducing staff means workers try to do several things at once and may perform each task poorly
–Better to search for service process redesign opportunities that lead to
*Improvements in productivity
*Simultaneous improvement in service quality
9 tools for customer service process improvement
Step 1: Identify Priority Processes for Improvement
Use frequency counts (e.g., how often issues occur) and customer complaints to determine which processes need improvement.
Apply a prioritization matrix (ease of implementation vs. business impact) to focus on “quick wins” for immediate improvements.
Step 2: Set Targets for Shortlisted Processes
Focus on four key metrics:
Customer satisfaction
Defects
Cycle time
Productivity improvements
Benchmark against industry standards and best-in-class competitors.
Use a project charter to formalize improvement objectives.
Step 3: Identify Key Elements of Service Quality
Use blueprinting to map all customer touchpoints and understand customer perception of the process.
Analyze service quality dimensions, customer feedback, and focus groups to determine customer expectations.
Step 4: Assess Process Performance
Review operational measures such as cycle times and waiting times.
Conduct customer satisfaction surveys to measure perceptions.
Interview front-line employees to identify pain points and urgent areas for improvement.
Step 5: Identify Performance Shortfalls & Quality Gaps
Map customer needs against actual process performance to locate service gaps.
Identify the main failure points (e.g., high complaint frequency in specific areas).
Step 6: Identify Root Causes of Quality Gaps
Use the Gaps Model to analyze all possible sources of service failures.
Apply TQM tools (Total Quality Management):
Pareto charts to identify the most common service failures.
Fishbone diagrams to pinpoint root causes of those failures.
Step 7: Improve Process Performance
Apply prescriptions from the Gaps Model to close identified service quality gaps.
Use service design and redesign tools to eliminate fail points.
Plan for service recovery in cases where failures cannot be entirely eliminated.
Step 8: Monitor & Continuously Improve
Measure and track redesigned process performance using customer feedback and operational metrics.
Establish a routine process to ensure ongoing performance at a high level.
Implement Kaizen (continuous improvement) to refine processes incrementally.
Step 9: Repeat & Create a Culture of Improvement
Foster a customer-centric, learning organization by continuously refining and improving service processes.
Encourage ongoing redesign efforts to adapt to changing customer needs and industry trends.
TQM
-can help organizations to attain service excellence, increase productivity, and create value continuously through innovative process improvements
ISO 9000
-Certification comprises requirements, definitions, guidelines, and related standards to provide an independent assessment and certification of a firm’s quality management system.
Six Sigma
-is favoured by service firms that have high-volume processes to reduce defects and cycle times and improve productivity.
DMAIC
1. Define
Process Improvement:
Identify the problem within an existing process.
-Define requirements to address it.
-Set clear goals.
-Clarify scope and customer requirements.
- Measure
Process Improvement:
-Validate whether a problem truly exists within the process.
-Refine the problem and goals.
-Measure key steps and inputs in the current workflow.
-Measure how well the process currently meets requirements.
Gather efficiency data to inform the redesign. - Analyze
-Develop hypotheses about the causes of inefficiencies.
-Identify root causes using data analysis.
-Validate these hypotheses with evidence.
-Identify best practices in the industry.
-Assess existing process designs to see what works and what doesn’t.
Refine process requirements for optimal efficiency. - Improve
-Develop ideas to address root causes.
Test potential solutions.
-Measure the results of implemented changes.
-Design an entirely new process from the ground up.
Implement the new process, along with new structures and systems. - Control
-Establish long-term measures to sustain performance.
-Correct any issues that arise over time.
-Monitor the new process using review systems.
Adjust and correct issues as needed.
The Malcolm Baldrige
National Quality Award aims to promote the best practices in quality management and recognize and publicize quality achievements among U.S. firms
Twelve Critical Dimensions for Implementation
1.Top management commitment and visionary leadership
2.Human resource management
3.Technical system, including service process design and process management
4.Information and analysis system
5.Benchmarking
6.Continuous improvement – (my favorite)
7.Customer focus
8.Employee satisfaction
9.Union intervention and employee relations
10.Social responsibility
11.Servicescapes
12.Service culture
Employee has a role in service quality
*Individual development
*Training
*HR planning
*Standards of performance
*Career progression
*Opinion surveys
*Fair treatment
*Profit sharing
Seven Step Method
1.Define the project
t2.Study the current situation
3.Analyze the potential causes
4.Implement a solution
5.Check the results
6.Standardize the improvements
7.Establish future plans
