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Week 10 - Designing Quality Service (Ch.8)

Service vs. Manufacturing, Customer wants, SERVQUAL,

Customer benefits, Globalization, Supply chain in service operations

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Topics – (1)

Differences between services and manufacturing

What do services customers want?SERVQUALDesigning and improving the services transaction

The customer benefits package

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Topics – (2)

Globalization of Services Improving Customer Service in

Government Quality in Health Care A Theory for Service Quality

Management

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Manufacturing vs. “Service”

Factor Manufacturing

Service

Output Tangible Intangible

Customer interaction

Limited Fairly high

Labor content Fairly Low Fairly high

Input uniformity High Low

Output uniformity High Low

Productivity measure

Easy Difficult

Quality improvement

Fairly easy Difficult

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Employment by Economic Sector Adapted from: Metters, Service Operations Management,

2003

1800 1850 1900 1950 2000

Extraction

83% 60%

45% 10% 3%

Manufacturing

7% 15% 25% 35% 15%

Service 10%

20% 30% 55% 80%

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Key Differences

Many service attributes are intangible. Customer contact Customer co-production Internal versus external services Voluntary versus involuntary services

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Quality Issue Differences

How are service quality issues different from those of manufacturing?

In manufacturing, dimensions are available for measurement

In services, such measurable dimensions are often unavailable

Simultaneous production and consumption means you have to get it right the first time

Product liability

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Similarity of Quality Issues

How are service quality issues similar to those of manufacturing?

For both, the customer is the core of the business

By focusing on the customer many manufacturers and services firms have come to view themselves as service providers

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Dimensions of Quality (Service) (Parasuraman, Zeithamel, and Berry)

Tangibles Service

Reliability Responsiveness Assurance Empathy

What do customers want?

Availability Professionalism Timeliness Completeness Pleasantness

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SERVQUAL An off-the-shelf approach that can be

used in many service situations Developed for assessing quality along

the first five service quality dimensions. Standardized, reliable, simple tool Two parts (assess the gap between the

two) Customer expectations Customer perceptions

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SERVQUAL Survey The SERVQUAL survey has 22

questions:

Tangibles – Questions 1 – 4 Reliability – Questions 5 – 9 Responsiveness – Questions 10 – 13 Assurance – Questions 14 – 17 Empathy – Questions 18 – 22

Gap Analysis (see Fig. 8-4)

The SERVQUAL survey is useful for gap analysis

Gaps in communication and understanding between the provider employees and the customer have a serious effect on customer perceptions of quality

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Gaps Gap 1: Management perceptions of

customer exceptions and expected service Gap 2: Service quality specifications and

managers perceptions of customer expectations

Gap 3: Service delivery and service quality expectations

Gap 4: Service delivery and external communications to customers

GAP 5: Expected service and perceived service

Key is to close gaps 1-4 first

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Map of Strengths & Weaknesses (Example 8.1)

The SERVQUAL survey is useful for gap analysis

By averaging the difference between perception and expectation a two dimensional map can be created identifying strengths and weaknesses

Designing and improving the services transaction

One way to improve perceptions of quality is

… Improve the process of delivery through:

Blueprinting Moment of truth concept Poka-yoke

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Services Blueprinting

1. Identify processes2. Isolate fail points3. Establish a time frame4. Analyze profits

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“Moments of Truth”

Fail Points .. Moments of truth.

These are times at which the customer expects something to happen.

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Poka-Yoke Also known as mistake-proofing

or fail-safing Fail safe device classification

Warning methods Physical contact methods Visual contact methods

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Poka-Yoke

Fail safe devices – “The Three T’s”1. Tasks to be performed2. Treatment provided to customer3. Tangibles provided to customer

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Poka-Yoke(Mistake-Proofing)

Developed by Shigeo Shingo An approach for mistake-proofing

processes using automatic devices or methods to avoid simple human or machine error, such as forgetfulness, misunderstanding, errors in identification, lack of experience, absentmindedness, delays, or malfunctions

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Poka-Yoke Examples (from John Grout’s Poka-Yoke Page)(refer to www.campbell.berry.edu/pokayoke) mod. 09/15/02 DAB

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Customer Benefits Package

Definition: Tangibles that define the service Intangibles that make up the service

Four stages1. Idea/concept generation2. The definition of a service package3. Process definition and selection4. Facilities requirements definition

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Customer Benefits Package

Objectives Make sure the final CBP attributes you

are using are the correct ones Evaluate the relative importance of each

attribute in the customers mind Evaluate each attribute in terms of

process and service encounter capability Figure out how to best segment the

market and position CBPs in each market Avoid CBP duplication and proliferation

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The Globalization of Services

Economies in Europe and Asia are following the lead of the United States by transferring labor and GDP into the services sector

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Improving Customer Service in Government

By1998 the federal government had established a searchable list of 4,000 customer service standards for 570 federal departments and agencies

By 2002 - 41 states had established quality award programs

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Change driven by…

People want and desire to do good work Quality management is associated with

improved employee satisfaction Government leaders are mandating

standards, strategic plans and new levels of performance

Demand for government services is growing at a faster rate than funding for them

Threat of privation in government has led to an improvement in service

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Quality in Health Care Health care is facing the same “cost

squeeze that government is facing A move to HMOs is causing hospitals

to streamline operations There is increased diversity in

health care Calls for a nationalized health care

system

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A Theory for Service Quality Management

(Sampson)

4 Propositions: Unified services theory The unreliable supplier dilemma Capricious Labor Everyone presumes to be an expert

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Strategic Quality PlanningDesigning Quality Service Summary

Because services involve intangibles they are different from manufacturing

Lack of hard measures, statistical Quality Control techniques are not always successful

The bottom line is a satisfied customer