Fishbone and Pareto Fishbone and Pareto Analysis.Analysis.

Prepared By:Prepared By:Dipinder Singh TibDipinder Singh TibM.ShashikantM.ShashikantManish BansalManish BansalAtreyee BanerjeeAtreyee Banerjee

What is service quality ?What is service quality ?Product based approachUser based approach Manufacturer based approachValue based approach

Measuring and improving Measuring and improving service qualityservice qualitySoft measure of service quality ? These measure can not be easily

observed and must be collected by talking to customers, employees or others

Hard measures of service quality ? These relate to those

characteristics and activity that can be counted, timed or measured thru audits

Tools for analyzing and Tools for analyzing and addressing service quality addressing service quality problems: problems: : : • Root cause analysis : Root cause analysis :

Fishbone diagramFishbone diagram• Pareto analysis Pareto analysis

Root-cause analysis:-Root-cause analysis:-fishbone diagram fishbone diagram What is it ?The Fishbone diagram (sometimes

called the Ishikawa diagram) is used to identify and list all the factors that are conditioning the problem at hand.

The process is called Fishbone Analysis because of the way in which the information gathered is arranged visually – like the skeleton of a fish.

Fishbone Diagram Fishbone Diagram (cause and (cause and effect)effect)

Largest Influence

2nd Largest InfluenceLeast Influence

3rd Largest Cause

Factors and/or categories of factors

Effect

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Cause

Root cause analysis Root cause analysis cont…cont…

In this group of managers and staff brainstorm all the possible reason that might cause a specific problem.

Then these are plotted on the cause and effect chart know as fishbone diagram.

Example : (Aircraft delay)Example : (Aircraft delay)Reasons for delay can be :1.If passenger tries to board at the

last minute 2.Gate agent can not process the

passenger quickly enough.3.Late cabin clearance4.Late food service etc …

Productivity & Quality 9

Aircraft late to gate- Late arrival

- Gate occupied

- Mechanical Failures

- Late Pushback Tug

Late food service

Late baggage to

aircraft

Late fuel

Gate agents cannot process passengers fast enough

- Too few agents- Agents undertrained

- Agents undermotivated- Agents arrive late at gate

Late/unavailable cockpit crews

Late/unavailable cabin crews

Late cabin cleaners

Poor announcement ofdepartures

Weight and balance sheet late

DelayedDepartures

Delayed check-in procedure- Confused seat selection

- Boarding pass problems

Acceptance of late passengers- Cutoff too close to departure time

- Desire to protect late passengers

- Desire to help company’s income

- Poor gate locations

Arrive late

Oversize bags

Bypass ticket counter

Weather

Air Traffic

Facilities,Equipment

Front-StagePersonnel

Procedures

Materials,Supplies

BackstagePersonnel

Customers

Other Causes

Pareto AnalysisPareto Analysis

“80:20 Rule”

Named after Vilfredo Pareto Named after Vilfredo Pareto -an Italian economist -an Italian economist

•He observed in 1906 that 20% of the Italian population owned 80% of Italy's wealth

•He then noticed that 20% of the pea pods in his garden accounted for 80% of his pea crop each year

The Pareto PrincipleThe Pareto PrincipleA small number of causes is responsible

for a large percentage of the effect--usually a 20-percent to 80-percent ratio.

This basic principle translates well into quality problems - most quality problems result from a small number of causes.

Addressing the most troublesome 20% of the problem will solve 80% of it.  

The 80-20 rule can be The 80-20 rule can be applied to almost anythingapplied to almost anything80% of the customers complaints arise

from 20% of your products and services.80% of the delays in schedule arise from

20% of the possible causes of the delays.20% of your products or services account

for 80%of your profit.20% of your sales-force produces 80% of

your company revenues20% of a systems defects cause 80% of

its problems.

Pareto AnalysisPareto Analysis Creating an array of representative

sample data that ranks the parts to the whole

with the objective to use the facts to find the highest concentration of quality improvement potential in the services.

ExampleExample

A Pareto chart has the A Pareto chart has the following objectives: following objectives: Separate the few major problems from the

many possible problems so that one can focus on improvement efforts.

Arrange data according to priority or importance.

Determine which problems are most important using data, not perceptions.

Shows where to focus efforts.

A New Quality Goal: A New Quality Goal: Zero DefectionsZero DefectionsReichheld and Sasser popularized the

term Zero Defections which they define as keeping every customer the company can serve profitably.

Keep a track on the use of the service on an individual account basis.

Root of the problem is customer loyalty.Building and maintaining loyalty is a

system wide challenge.So its necessary to get into the bottom of

the problem and make sure they don’t occur.

How Backstage Changes May How Backstage Changes May Impact CustomersImpact CustomersFor Example:

At a bank for instance, the decision to install new computers and printers may improve the internal quality controls and reduce the cost of preparing monthly statements.

Front stage Efforts To Front stage Efforts To Improve QualityImprove Quality

Conduct market research first to determine how customers may respond.

Communicate the change to the customers through marketing communication explaining the benefits and rationale behind the change.

Front stage Efforts To Front stage Efforts To Improve Quality…ExampleImprove Quality…Example

• When Boeing 707’s replaced propeller-driven aircraft on Transatlantic routes in 1957, both passengers and airlines benefitted.

A Caution on Cost Reduction A Caution on Cost Reduction StrategiesStrategies

Efforts to eliminate waste and reduce labour costs may prove harmful.

For example-Cutbacks in front stage staffing either mean that the remaining employees have to work harder and there are insufficient personnel to serve customers promptly at busy times.

Customer driven approaches Customer driven approaches to improve productivity.to improve productivity.• Changing the

timing of customer demand

Involving customers more actively in the production process

Asking customers to use third parties.

Changing the timing of Changing the timing of customer demandcustomer demand

• Customers often complain that the services they use are crowded and congested, reflecting time-of-day, seasonal , or other cyclical peaks in demand.

• During the off peak period in those same cycles, managers often worry that there are too few customers and that their facilities and staff are not fully productive.

• By shifting demand away from peaks, managers can make better use of their productive assets and provide better service.

Involve customers more in Involve customers more in productionproduction

• When customers perform self service both the parties get benefitted.

• Encourage customers to place orders through the web.

Ask customers to use third Ask customers to use third partiesparties

• Delegating one or more marketing support functions to third parties.

• Purchase process often breaks down into four components: information, reservation, payment and consumption.

• Services of intermediaries can be availed such as travel agencies.

Sensitivity to customers’ Sensitivity to customers’ reluctance to changereluctance to change

• Develop customer trust

• Understand customer’s habit and expectations.

• Pretest new procedures and equipment.

• Publicize the benefits.

• Teach customers to use innovations and promote

trial.

• Monitor performance and continue to seek

improvements .

ConclusionConclusion• Enhancing service quality and

improving service productivity are often two sides of the same coin, which is why we treat them jointly as a component of the 8Ps of integrated service management.

• Together, they offer powerful potential to improve value for both customers and the firm.