TQM Chapter 6: Quality in Customer-Supplier Relationships

TRUE

"Achieving strong profitability and market share requires loyal customers"

TRUE

"Business have recognized that supply chain management is crucial for effective operations and meeting customer needs"

TRUE

"Developing strong and positive relationships with customers and suppliers within the supply chain is a basic principle of TQ"

TRUE

"From the TQ perspective, every company is part of a long chain of customers and suppliers. Each company is a customer to its suppliers and a supplier to its customers"

TRUE

"If a supplier's performance is of consistently high quality, its customers can decrease or eliminate costly incoming inspections that add no value to the product"

TRUE

"In business today, operations are often highly decentralized and dispersed around the world"

TRUE

"It costs at least five times more to find a new customer than to keep an existing one happy"

TRUE

"Many employees don't think that it's their 'job' to serve customers beyond their job descriptions"

TRUE

"Poor-quality products and service leads to customer dissatisfaction in the form of complaints, returns, and unfavorable WOM publicity"

Customer Relationship Management (CRM)

-(software) designed to help organizations increase customer loyalty, target their most profitable customers, and streamline customer communication processes -provide a variety of useful

Managing Customer Relationships

-Set and Use Service Standards -Manage Complaints -Exploit Technology -Don't Ignore Internal Customers

Collect Customer Information

-comment cards and formal surveys -focus groups -direct customer contact -> talk to them -field intelligence -> mystery shoppers -compliant analysis -> gives you opportunity to fix it -internet monitoring -> sucks sites are monitored, social media, FB, twitter,

Net Promoter Score

-developed by Fred Reichheld, Bain & Company, and Satmetrix -claimed to correlate strongly with market and revenue growth -based on the question 'What is the likelihood that you would recommend us?' -the difference in the percentage of promoters and detractors

okyakusama

-means both "customer" and "honorable guest"

Service Standards

-measurable performance levels or expectations that define the quality of customer contact -might include technical standards such as response time or behavioral standards

Measure Customer Satisfaction, Loyalty, and Engagement

-one way to evaluate customer satisfaction and use it effectively is to collect info on both the importance and performance of key quality characteristics

Commonly used factors to measure customer loyalty and engagement

-overall satisfaction -likelihood of a first-time purchaser to repurchase -likelihood to recommend -likelihood to continue purchasing the same products or services -likelihood to purchase different products or services -likelihood to increase frequency of purchasing -likelihood to switch to a different provider

3 Governing Principles describe CSR under TQ

-recognition of the strategic importance of customers and suppliers -development of 'win-win' relationships between customers and suppliers -establishing relationships based on trust

Customer Engagement

-refers to customers' investment in or commitment to a brand and product offerings -goes beyond loyalty and is an important outcome of a customer-focused culture and the organization's listening, learning, and performance excellence strategy -influenced by an organization's integrity and the relationships it builds with its customers

Disseminate Customer Information

-share information with empoloyees -provide data to product designers and service managers

Loyal customers

-those who stay with a company and make positive referrals -place a priority on doing business with a particular organization, will often go out of their way or pay a premium to stay with the company -spends more, are willing to pay higher prices, refer new clients, and are less costly to do business with

Kano Model

1) *dissatisfiers*: expected requirements 2) *satisfiers*: expressed requirements 3) *exciters/delighters*: unexpected features

Practices for Dealing with Suppliers

1) base purchasing decision on quality and cost 2) reduce the number of suppliers 3) establish long-term contracts 4) measure and certify supplier performance 5) develop cooperative relationships and strategic alliances

Practices for Dealing with Customers

1) collect information constantly on customer expectations 2) disseminate this information widely within the organization - to the people that need it 3) use this information to design, produce, and deliver the organizations products and services 4) measure customers' perceptions of satisfaction and their levels of loyalty and engagement

Guiding Principles in Supplier Relationships

1) recognizing the strategic importance of suppliers in accomplishing business objectives, particularly minimizing the total cost of ownership 2) deveoping win-win relationships through partnerships rather than as adversaries, 3) establishing trust through openness and honesty, thus leading to mutual advantages

TRUE

The foundation of the TQ approach to management is focus on customers, rather than internal issues

Use Customer Information

from feedback

Supply Chain

materials and other inputs purchased from suppliers, their use in the production of goods and services, and distribution and service to customers

Internal customers

those who contribute to the company's mission and depend on the department's or function's products or services to ultimately serve consumers and external customers