MQM 335 TEST 2 STUDY GUIDE

Availability of Data.

Because services attributes are often intangible, it is sometimes difficult to obtain hard data relating to services.

Series Reliability

Components in a system are in series if the performance of the entire system depends on all of the components functioning properly.

Customer-Driven Approach Quality

Customer driven quality represents a proactive approach to satisfying customer needs that is based on gathering data about our customers to learn their needs and preferences and then providing products and services that satisfy the customer.

Passively Solicited Customer Feedback

Customer initiated contact, such as filling out a restaurant complaint card, calling a toll-free complaint line, or submitting an inquiry via a company's Web site. Examples: -Customer research cards -Customer response line -Web site inquiries

Kano's Model of Customer Needs

Dissatisfiers Satisfiers Exciters/delighters

Product Liability

In services, liability issues often relate to malpractice, whereas in manufacturing liability issues typically related to safety concerns.

Actively Solicited Customer Feedback

Includes all supplier initiated contact with customers.

Component Reliability

Is defined as the propensity for a part to fail over a given time.

Customer Contact

Leads to an increase in the variability in the service, a high degree of customization and great variability in the time required to perform the service.

Validity

Measure what you want

Failure Modes and Effects Analysis (FMEA)

Method for systematically considering each component of a system, identifying, analyzing, and documenting the possible failure modes within a system and the effect of each failure on the system.

Design of Services

Must take into account variables such as customer moods and feelings.

WHY CONTINUE RELIABILITY ANALYSIS?

NOT AT THE "STATE OF THE ART" LEVEL. COMPETITION MAY BE BETTER. COSTS ARE HIGH DUE TO LOW RELIABILITY. CONSEQUENCES OF PRODUCT FAILURE MAY BE HIGH - LOSS OF LIFE, PROPERTY, ETC. CUSTOMERS MAY BE DISSATISFIED.

Passively Solicited Customer Feedback Approaches

Passively Solicited Customer Feedback

Inherent Reliability

Potential Reliability of the Design.

Service Blueprinting Steps

Identify processes Isolate fail points Establish a timeframe Analyze profitability

SERVQUAL

A survey instrument for assessing quality along five service dimensions. -Tangible -Reliability -Responsiveness -Assurance -Empathy Has two parts: -Customer expectations -Customer perceptions

Customer benefits package (CBP)

-A customer benefits package consists of both tangibles that define the service and intangibles that make up the service. -Tangibles are also known as goods-content. -Intangibles are referred to as service-content.

Gap analysis

-A marketing research method that measures the difference between a customer's expectation of a service quality and what actually occurred -The SERVQUAL instrument is used to perform gap analysis.

Actively Solicited Customer Feedback Approaches

-Actively Solicited Customer Feedback -The three most common areas -Types of data

How Are Service Quality Issues Different from Those of Manufacturing?

-Availability of Data. -Simultaneous Production and Consumption -Customer Contact -Design of Services -Product Liability

Customer Relationship Management

-Complaint Resolution -Feedback -Guarantees -Corrective Action

Design for Maintainability Concepts

-Components that are easily replaced. -Components that are easily removed with standard tools. -Adequate space to perform the maintenance function. -Nondestructive disassembly. -Safe maintenance. -Available adequate owners manuals and documentation.

Managing Customer Retention and Loyalty

-Customer Retention -Customer Loyalty

Customer Loyalty

-Customer loyalty can be instilled by offering specialized service not available from competitors. -This can take many forms including high customer contact or technology advancements.

Customer Retention

-Customer retention is measured as the percentage of customers that return for more service. -Customer retention will increase by application of the service tools and concepts contained in this chapter such as tools for data gathering and analysis.

Quality Function Deployment (QFD)

-Describes a method for translating customer requirements into functional design. -Sometimes this process translation is referred to as the voice of the customer.

Product Life Cycle and Related Topics

-Design for Maintainability -Design for Maintainability Concepts

5w2h concept

A business process benchmarking project should results in answers to seven questions What? Why? Where? When? Who? How? How much?

Design for Maintainability

A concept that states that products should be designed in a way that makes them easy for consumers to maintain.

Benchmark

-A benchmark is an organization recognized for its exemplary operational performance. -There are many benchmarks in the world including Toyota for processes, Intel for design, Motorola for training, Scandinavian Airlines for service, and Honda for rapid product development.

Business Process Benchmarking

Based on the concept of 5w2h developed by Alan Robinson.

Product Reliability

"The ability of an item to perform a required function under stated conditions for a stated period of time."

Organizing the Design Team

- Perform design steps sequentially - Perform design steps simultaneously

Quality Function Deployment (QFD)

-"House of quality," -Translates customer wants into a finished product design

SERVQUAL Instrument (Gap Models)

-Gap 1 shows that there can be a difference between actual customer expectations and management's idea or perception of customer expectations. -Manager's expectation of service quality may not match service quality specifications. This mismatch is demonstrated in gap 2. -Inadequate training, communication, and preparation of employees who interact with the customer, referred to as contact personnel, can lower the quality of service delivered. This mismatch is represented as gap 3. -Gap 4 shows the differences between services delivery and external communications with the customers. -Gap 5 is the difference between perceived and expected service. The key to closing this gap is to first close gaps 1 through 4 through thoughtful system design, careful communication with the customer, and a workforce trained to provide consistently outstanding customer service.

Benefits of FMEA

-Improvement of product safety, quality, and reliability. -Improvement of a company's image and competitiveness. -Increased satisfaction from a user standpoint. -Reduction in product development cost. -Record of action taken to reduce a product risk.

The Pitfalls of Reactive Customer-Driven Quality

-One of the difficulties in satisfying customer requirements is that, in a dynamic environment customer needs are constantly changing -Problems occur when customer requirements increase at a faster rate than quality and service improvement. This places the firm in reactive mode and may signal the need for major process and service redesign

Prototyping Methodologies

-Organizing the Design Team -Concurrent Engineering

Types of data

-Soft data -Hard data -Ordinal data

Zeithamel, Parasuraman, and Berry's List of Dimensions of Service Quality.

-Tangibles -Reliability -Responsiveness -Assurance -Empathy

The three most common areas

-Telephone customers -Conducting focus groups -Sending out surveys

BENEFITS OF BENCHMARKING

-The best industry practices may be creatively incorporated into a company's operations. -Benchmarking is motivating -Resistance to change may be less if ideas come from other industries -Useful technical breakthroughs from other industries can be identified early. -Benchmarking broadens peoples' experience base and increases knowledge

Moments of truth

-The fail points in the service blueprint are also referred to as moments of truth. --These are times at which the customer expect some things to happen.

Concurrent Engineering

-The simultaneous performance of product design and process design. -Typically, concurrent engineering involves the formation of cross-functional teams. This allows engineers and managers of different disciplines to work together simultaneously in developing product and process designs.

Computer-Aided Design (CAD) System

-These systems are used in designing anything from an ultralight airplane, to a hamburger, to a home, or to a new intersection that can handle higher volumes of traffic. -Greatly improve the ability of designers to generate new and varied designs. -Simplify the design process -Help to develop more reliable and robust systems.

Training

-Training is the key to success in quality management approaches. -This is especially true for benchmarking. -Participants must have project management skills and be familiar with benchmarking approaches and protocols.

Two-Dimensional Differencing

-Very useful for evaluating responses when there is enough variation in different dimensions. -The vertical axis reflects the expectations score and the horizontal axis relates to the perceptions score.

Service Generalizations

1. Everyone is an expert on services. 2. Services are idiosyncratic. 3. Quality of work is not quality of service. 4. Most services contains a mix of tangible and intangible attributes. 5. High-contact services are experienced, whereas goods are consumed. 6. Effective management of services requires an understanding of marketing and personnel, as well as operations. 7. Services often take the form of cycles of encounters involving face-to-face, phone, internet and/or mail interactions.

Stages of service design process

1. Idea/concept generation 2. The definition of services package 3. Process definition and selection 4. Facilities requirement definition

Characteristics of a Well-Defined Service System

Each element of the service system is consistent with operating focus of the firm It is user-friendly It is robust It is structured so that consistent performance by its people and systems is easily maintained It provides effective links between the back office and the front office so that nothing falls between the cracks It manages the evidence of service quality in such a way that customers see the value of the service provider It is cost effective

Commonly Benchmarked Performance Measures

Financial ratios Productivity ratios Customer-related results Operating results Human resource measures Quality measures Market share data Structural measures Supplier performance Product development and innovation performance

Key Business Processes of Three Leading Companies

IBM: Marketing information capture Marketing selection Requirements Hardware development Software development Development of services Production Customer fulfillment Customer relationship Service customer feedback Marketing Solution integration Financial analysis Plan integration Accounting Human resources IT infrastructure Xerox: Customer engagement Inventory management and logistics Product design/engineering Product maintenance Technology maintenance Production and operations management Marketing management Supplier management Information management Business management Human resources management Leases and Capital asset management Legal Financial management British Telecom: Direct business Plan business Develop processes Manage process operation Provide personnel support Market products and services Provide customer service Manage products and services Provide consultancy services Plan the network Operate the network Provide support services Manage information resource Manage finance Provide technical R&D

Line of visibility

Identifies the point beyond which activities are not seen by the customer, but still influence performance.

System Reliability

Refers to the probability that a system of components will perform their intended function over a specified period of time.

Determinants of Service Quality

Reliability - consistency of performance and dependability Responsiveness - willingness or readiness of employees to provide service Competence - possession of the required skill and knowledge to perform the service Access - approachability and ease of contact Courtesy - politeness, respect, consideration, and friendliness of contact personnel Communication - keeping customers informed in language they can understand and listening to them Credibility - trustworthiness, believability, honesty Security - freedom from danger, risk, or doubt Understanding/knowing the customer - making the effort to understand the customer's needs Tangibles - the physical evidence of service

Achieved Reliability

Reliability demonstrated by the product.

Simultaneous Production and Consumption

Service must be done right the first time.

Robert Camp's Business Process Benchmarking Process

Step 1: Decide what to benchmark. Step 2: Identify whom to benchmark. Step 3: Plan and conduct the investigation. Step 4: Determine the current performance gap. Step 5: Project future performance levels. Step 6: Communicate benchmark finding and gain acceptance. Step 7: Revise performance goals Step 8: Develop action plans. Step 9: Implement specific actions and monitor progress. Step 10: Recalibrate the benchmarks.

Simple Differencing

The averages for each dimension of service quality is computed by averaging the items pertaining to each dimension and then computing the difference.

Differencing Technique

The differencing technique is used to assess the differences between expectations and perceptions.

Poka-Yoke

The idea behind poka-yoke (or fail-safing) is to ensure that certain errors will never occur.

Benchmarking

The sharing of information between companies, so that both can improve.

The Voice of the Customer

The voice of the customer represents the wants, opinions, perceptions, and desires of the customer.

Problems With Benchmarking

There is enormous difficulty obtaining cooperation from other firms in your own industry. -The thing to remember is reciprocity. The predominance of functional benchmarking with firms in noncompeting industries makes it difficult to benchmark these firms. -Business and industry literature can be very helpful in trying to identify benchmarking firms in noncompetitive industries. Your efforts will be wasted unless you fully understand your own processes before you benchmark against someone else. -Using tools such as business process maps, it is possible to identify the exact performance measures and metrics needs from the target firm. Benchmarking is time consuming and costly. -Costs include things like time for planning, travel, documentation, and implementation. -Largest costs are associated with implementation. -The investment is lost if benchmarking data are not used to drive improvement.

Realiability

consistency

Dimension of Reliability

failure rate and time