Quality Service Management

Meaning of Quality:
Consumer’s Perspective
§ Fitness for use
§ how well product or
service does what it is
supposed to
§ Quality of design
§ designing quality
characteristics into a
product or service
§ A Mercedes and a Ford are
equally “fit for use,” but with
different design dimensions
 Dimensions of Quality:
Manufactured Products
§ Performance
§ basic operating characteristics of a product; how
well a car is handled or its gas mileage
§ Features
§ “extra” items added to basic features, such as a
stereo CD or a leather interior in a car
§ Reliability
§ probability that a product will operate properly
within an expected time frame; that is, a TV will
work without repair for about seven years
 Dimensions of Quality:
Manufactured Products (cont.)
§ Conformance
§ degree to which a product meets pre–established
standards
§ Durability
§ how long product lasts before replacement
§ Serviceability
§ ease of getting repairs, speed of repairs, courtesy
and competence of repair person
 Dimensions of Quality:
Manufactured Products (cont.)
§ Aesthetics
§ how a product looks, feels, sounds,
smells, or tastes
§ Safety
§ assurance that customer will not suffer
injury or harm from a product; an
especially important consideration for
automobiles
§ Perceptions
§ subjective perceptions based on brand
name, advertising, and the like
 Dimensions of Quality:
Service

§ Time and Timeliness

§ How long must a customer wait for service,
and is it completed on time?
§ Is an overnight package delivered overnight?
§ Completeness:
§ Is everything customer asked for provided?
§ Is a mail order from a catalogue company
complete when delivered?
 Dimensions of Quality:
Service (cont.)
§ Courtesy:
§ How are customers treated by employees?
§ Are catalogue phone operators nice and are
their voices pleasant?
§ Consistency
§ Is the same level of service provided to each
customer each time?
§ Is your newspaper delivered on time every
morning?
 Dimensions of Quality:
Service (cont.)
§ Accessibility and convenience
§ How easy is it to obtain service?
§ Does a service representative answer you calls quickly?
§ Accuracy
§ Is the service performed right every time?
§ Is your bank or credit card statement correct every month?
§ Responsiveness
§ How well does the company react to unusual situations?
§ How well is a telephone operator able to respond to a
customer’s questions?
 Meaning of Quality:
Producer’s Perspective

§ Quality of Conformance
§ Making sure a product or service is
produced according to design
§ if new tires do not conform to specifications, they
wobble
§ if a hotel room is not clean when a guest checks
in, the hotel is not functioning according to
specifications of its design
 Meaning of Quality:
A Final Perspective

§ Consumer’s and producer’s

perspectives depend on each other
§ Consumer’s perspective: PRICE
§ Producer’s perspective: COST
§ Consumer’s view must dominate
 Meaning of Quality
Meaning of Quality

Producer’s Perspective Consumer’s Perspective

Quality of Conformance Quality of Design

Production • Conformance to • Quality characteristics Marketing

specifications • Price
• Cost

Fitness for
Consumer Use
 Total Quality Management

w Commitment to quality throughout organization

w Principles of TQM
§ Customer Focus and Delight

§ Process Approach

§ Continuous Improvement and

Learning
§ Empowerment and Teamwork

§ Leadership and Strategic Planning

 Evolution of Quality Management

Inspection Salvage, sorting, grading, blending, corrective

actions, identify sources of non-conformance
Develop quality manual, process performance
Quality data, self-inspection, product testing, basic
Control quality planning, use of basic statistics,
paperwork control.
Quality systems development, advanced quality
Quality
planning, comprehensive quality manuals, use of
Assurance quality costs, involvement of non-production
operations, failure mode and effects analysis, SPC.

TQM Policy deployment, involve supplier & customers,

involve all operations, process management,
performance measurement, teamwork, employee
involvement.
 What does Total Quality Management
encompass?
TQM is a management philosophy:
• continuous improvement
• leadership development
• partnership development

Technical
Tools
(Process Analysis,
Cultural Stat Process
Alignment Customer Analysis, Quality
Function
Deployment )
 Developing quality specifications

Design Design quality

Input Process Output

Dimensions of quality
Conformance quality
 TQM and…

w … Partnering
n a relationship between a company and
its supplier based on mutual quality
standards
w … Customers
n system must measure customer
satisfaction
w … Information Technology
n infrastructure of hardware, networks,
and software necessary to support a
quality program
 Cost of Quality

w Cost of Achieving Good Quality

n Prevention costs
l costs incurred during product design
n Appraisal costs
l costs of measuring, testing, and analyzing
w Cost of Poor Quality
n Internal failure costs
l include scrap, rework, process failure, downtime,
and price reductions
n External failure costs
l include complaints, returns, warranty claims,
liability, and lost sales
 Prevention Costs

w Quality planning costs w Training costs

n costs of developing and n costs of developing and
implementing quality putting on quality training
management program programs for employees
w Product-design costs and management
n costs of designing w Information costs
products with quality
characteristics n costs of acquiring and
w Process costs maintaining data related
to quality, and
n costs expended to make
sure productive process development of reports on
conforms to quality quality performance
specifications
 Appraisal Costs

w Inspection and testing

n costs of testing and inspecting materials, parts, and
product at various stages and at the end of a
process
w Test equipment costs
n costs of maintaining equipment used in testing
quality characteristics of products
w Operator costs
n costs of time spent by operators to gar data for
testing product quality, to make equipment
adjustments to maintain quality, and to stop work to
assess quality
 Internal Failure Costs

w Scrap costs w Process downtime costs

n costs of poor-quality n costs of shutting down
products that must be
discarded, including labor, productive process to fix
material, and indirect costs problem
w Rework costs w Price-downgrading costs
n costs of fixing defective
products to conform to n costs of discounting poor-
quality specifications quality products—that is,
w Process failure costs selling products as
n costs of determining why “seconds”
production process is
producing poor-quality
products
 External Failure Costs

w Customer complaint costs w Product liability costs

n costs of investigating and n litigation costs
satisfactorily responding to a resulting from product
customer complaint resulting liability and customer
from a poor-quality product
injury
w Product return costs
n costs of handling and replacing
w Lost sales costs
poor-quality products returned n costs incurred
by customer because customers
w Warranty claims costs are dissatisfied with
n costs of complying with poor quality products
product warranties and do not make
additional purchases
Quality is a Journey,
not a Destination