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Chapter 14 Improving Service Quality and Productivity - Coggle Diagram
Chapter 14 Improving Service Quality and Productivity
The relationships between service quality, productivity, and profitability
Quality and productivity are twin paths to creating value for both customers and companies
Quality focuses on the benefits created for customers; productivity addresses financial costs incurred by the firm
Marketing, operations and human resource managers need to work together for quality and productivity improvement
Different perspectives of service quality
Dimension of Service Quality
Tangibles: Appearance of physical elements
Reliability: Dependable and accurate performance
Responsiveness: Promptness; helpfulness
Assurance: Competence, courtesy, credibility, security
Empathy: Easy access, good communication, understanding of customer
The Gaps Model
Gap 1: The Knowledge Gap
Educate management about what customer expect
Gap 2: The Policy Gap
Establish the right service processes and specify standards
Gap 3: The Delivery Gap
Ensure that performance meets standards that are based on customer needs and expectations
Gap 4: The Communication Gap
Ensure the communications promises are realistic and correctly understood by customers
Gap 5: The Perception Gap
Tangibilize and communicate the service quality delivered
Gap 6: The Service Gap
Close gaps 1 to 5 to consistently met customer expctations
Differentiate between hard and soft measures of service quality
Soft measures—not easily observed, must be collected by talking to customers, employees or others
Hard measures—can be counted, timed or measured through audits
Objectives of effective customer feedback systems
Assessment and benchmarking of service quality and performance
Customer-driven learning and improvements
Creating a customer-oriented service culture
Key customer feedback collection tools
Total market surveys
Annual surveys
Transactional surveys
Service feedback cards
Mystery shopping
Unsolicited customer feedback
Focus group discussions
Service reviews
Hard measures of service quality and control charts
Service quality indexes
Embrace key activities that have an impact on customers
Control charts to monitor a single variable
Offer a simple method of displaying performance over time against specific quality standards
Enable easy identification of trends
Are only good if data on which they are based are accurate
Select suitable tools to analyze service problems
Fishbone diagram
Cause-and-effect diagram to identify potential causes of problems
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)
Blueprinting
Visualization of service delivery, identifying points where failures are most likely to occur
Return on quality and determine the optimal level of reliability
Assess costs and benefits of quality initiatives
ROQ approach is based on four assumptions:
Quality is an investment
Quality efforts must be financially accountable
It’s possible to spend too much on quality
Not all quality expenditures are equally valid
Implication: Quality improvement efforts may benefit from being related to productivity improvement programs
To see if new quality improvement efforts make sense, determine costs and then relate to anticipated customer response
Determine optimal level of reliability
Diminishing returns set in as improvements require higher investments
Know when improving service reliability becomes uneconomical
Define and measure service productivity
Productivity measures amount of output produced relative to the amount of inputs
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
Productivity, efficiency, and effectiveness
Efficiency: involves comparison to a standard, usually time-based
Productivity: involves financial value of outputs to inputs
Effectiveness: degree to which firm meets goals
Recommend the key methods to improve service productivity
Generic Productivity Improvement Strategies
Typical strategies to improve service productivity
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
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 Websites
Ask customers to use third parties
Delegate delivery of supplementary service elements to intermediary organizations
How productivity improvements impact quality and value
Front-stage productivity enhancements are especially visible in high contact services
Backstage changes may impact customers
A Caution on Cost Reduction Strategies
Integrate all the tools
Determine priority processes for improvement and redesign
For the shortlisted processes, set targets for (1) customer satisfaction
(2) defects
(3) cycle time
(4) productivity improvements
Identify key elements of quality in priority service processes and determine customer needs and expectations
Assess process performance
Identify performance shortfalls and quality gaps
Identify root causes of quality gaps
Improve process performance
Control and continuously fine tune the process to improve it further
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Systems
TQM
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
favoured by service firms that have high-volume processes to reduce defects and cycle times and improve productivity
Malcolm Baldrige National Quality Award
promote the best practices in quality management and recognize and publicize quality achievements among U.S. firms