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- Introduction to Operations Management of Products and Services: Overview and Resources
In many ways, quality is very expensive. There are multiple categories of costs associated with quality management. Understanding these costs is the first step in designing an argument of why the investment is an important one. Complete this assessment of your understanding of Cost of Quality concepts. The activity is self-graded.
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Also, it is easy to read and full of interesting, best practice examples. I recommend this book to everyone working in a service organization. Jan Swartz President, Princess Cruises Winning in Service Markets provides a set of useful frameworks and prescriptions rooted in both practice and research. As such, it represents a refreshing alternative to the prevailing literature available to managers who are looking for insights rooted in sound theory.
A must read for any practicing manager in the service economy. Leonard A. Schlesinger Baker Foundation Professor, Harvard Business School The relationship between productivity and customer satisfaction is more complex. Service Quality and Productivity Management describes that the quality and productivity are twin paths in creating value for both customers and organizations.
The relationships between service quality, productivity and proitability will also be examined in detail in this book. This book is the 12th book in the Winning in Service Markets series by services marketing expert Jochen Wirtz to cover the key aspects of services marketing and management based on sound academic evidence and knowledge.
WS Professional www. The books in this series is written by services marketing expert Jochen Wirtz, author of globally leading textbook for Services Marketing. Each book in the series covers diferent themes in the study of services marketing and management, is accessible, practical and presented in an easy-to-read format for busy practitioners and eMBA students.
You capture the market with lower price and better quality. You stay in business and you provide jobs. Edwards Deming Engineer, statistician, professor, and management consultant Father of the Total Quality Management movement Our mission remains inviolable: Offer the customer the best service we can provide; cut our costs to the bones; and generate a surplus to continue the unending process of renewal. Service Quality, Productivity, and Proitability1 he individual relationships between service productivity, customer satisfaction i.
When examining the individual links, one can see that, everything being equal, higher customer satisfaction should improve the bottom line through higher repeat purchases, share-of-wallet, and referrals. Likewise, everything being equal, higher productivity should lead to higher proitability as costs are reduced. However, although the relationships between productivity, service quality and proitability can conlict, there are examples where productivity gains and customer satisfaction are aligned.
This will avoid the problem where the sale teams focus exclusively on generating sales e. Make sure the advertising content relects service characteristics most important to customers. Let them know what is and is not possible, and why. It will be closed when Gaps 1 to 5 have been addressed. Source: Adapted and extended from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. The remaining prescriptions were developed by the authors. Certainly, measurement determines whether goals for improvement are met ater changes have been implemented.
Sot standards and their measures are those that cannot be easily observed and are typically gathered by talking to customers. Sot standards provide direction, guidance and feedback to employees on how to achieve customer satisfaction, and they can be quantiied by measuring customer perceptions and beliefs. A variety of other customer feedback tools are discussed later in this volume. Hard standards and measures, in contrast, are typically process activities and outcomes that can be counted, timed or measured.
Satisfaction Index; Index, typically at the irm-level; benchmarking over time and against competition, and the lower-level tool allows us to identify what ratings go up or down, and generate insights and ideas on how the service can be improved. Instead, the company decided to approach quality measurement from the baseline of zero failures Service Insights 2. For us the trick was to express quality failures in absolute numbers.
Customer satisfaction was measured by the percentage of on-time deliveries, which referred to the number of packages delivered on time as a percentage of total package volume. However, as things turned out, the percentage of on-time delivery was an internal standard that was not synonymous with customer satisfaction. Like a golf score, the lower the index, the better the performance. However, unlike golf, the SQI involves substantial numbers — typically six igures — relecting the huge numbers of packages shipped daily.
In addition to the SQI, which has been modiied over time to relect changes in procedures, services, and customer priorities, FedEx uses a variety of other ways to capture feedback. Customer Satisfaction Survey. Targeted Customer Satisfaction Survey. FedEx Center Comment Cards. Online Customer Feedback Surveys. FedEx has commissioned regular studies to get feedback for its online services, such as package tracking, as well as ad hoc studies on new products.
For this, control charts are a simple method of displaying performance over time against speciic quality standards. Since they are visual, trends are easily identiied. Of course, control charts are only as good as the data on which they are based. Figure 8: Control chart for departure delays showing percentage of flights departing within 15 minutes of schedule.
It separates the important from the trivial and helps a service irm to focus its improvement eforts on the most important problem areas. By combining the ishbone diagram and Pareto analysis, we can identify the main causes of service failure.
In fact, more than half of the delays were caused by a single factor: acceptance of late passengers i. On such occasions, the airline made a friend of the passenger who was late — possibly encouraging a repeat of this undesirable behavior on future occasions — but risked alienating all the other passengers who were already onboard, waiting for the aircrat to depart.
However, further analysis showed signiicant variations in the reasons from one airport to another Figure Blueprinting — A Powerful Tool for Identifying Fail Points Fishbone diagrams and Pareto analyses tell us the causes and importance of quality problems.
Blueprints allow us to drill down further to identify where exactly in a service process the problem was caused. As described in Volume 6, a well-constructed blueprint enables us to visualize the process of service delivery by showing the sequence of front-stage interactions that customers experience as they encounter service providers, facilities, Figure Pareto analysis of causes of flight departure delays.
Blueprints can be used to identify the potential fail points where failures are most likely to occur, and they help us to understand how failures at one point such as the incorrect entry of an appointment date may have a ripple efect on the later stages of the process i. By adding frequency counts to the fail points in a blueprint, managers can identify the speciic types of failures that occur most frequently, and thus need urgent attention.
Knowing what and where things can go wrong is an important irst step in preventing service-quality problems. One desirable solution is to design fail points out of the system see Volume 6 for poka-yokes technique. In the case of failures that cannot easily be designed out of a process or are not easily prevented such as problems related to weather or public infrastructure , solutions may revolve around development of contingency plans and service recovery guidelines see Volume 11 on how to design service recovery policies and procedures.
A company with poor service quality can oten achieve big jumps in reliability with relatively modest investments in improvements. As illustrated in Figure 13, initial investments in reducing service failure oten bring dramatic results. At some point however, diminishing returns set in as further improvements require increasing the initial levels of investment, and can even become prohibitively expensive.
What level of reliability should be targeted then? Typically, the cost of service recovery is lower than the cost of an unhappy customer. Figure When does improving service reliability become uneconomical?
It is probably the most widely known approach to continuous improvement in manufacturing, and more recently, in service irms. Pande, Roland R. Cavanagh, Robert P. Productivity and Customer Satisfaction Quality and productivity are twin paths for creating value for customers and the irm. However, the relationship between productivity and customer satisfaction and the net efects on proitability can be positive, neutral, or negative, and therefore needs to be managed carefully.
Service Quality here are diferent deinitions of service quality. In this book, the customer-focused deinition of service quality as consistently meeting or exceeding customer expectations is used.
It is the most important gap. In order to close Gap 6, the other ive gaps have to be closed irst. Sot and Hard Measures here are both sot and hard measures of service quality. Sot measures are usually based on perceptions of and feedback from customers and employees. Hard measures relate to processes and their outcomes. Customer Feedback System Feedback from customers i. Customer-driven learning and improvement. Creating a customer-oriented service culture, and a culture for change.
Hard Measures Hard measures relate to operational processes and outcomes, and can be counted, timed, or observed. Control charts are a simple method of displaying performance on hard measures over time against speciic quality standards. Financial Implications of Service Quality Improvements here are inancial implications of service quality improvements.
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The main purpose of this study is to examine the compatibility of productivity and quality management practices in a service organization. The results of this study highlight the close association between quality and productivity performance and suggest that investments in quality should indeed result in productivity gains. The quality management variables that were found to be the strongest predictors of productivity performance were those pertaining to consistent delivery of work output in a complete fashion, internal process satisfaction, quality measurement at every step of the process, emphasis on doing things right the first time, organizational focus on process improvement, and employee involvement in the decision-making process. Key words: cost-effective production, quality performance, timely production, work output. Quality gurus such as W.
A few years ago, a major manufacturing-based conglomerate asked a gifted mathematician to join its corporate staff. He devoted many months to the assignment and also tapped the knowledge of […]. Some productivity indexes boast technical elegance and statistical precision—but have little to do with daily management decision making, or even, for that matter, the bottom line. What you need is enough good information to enable you to determine how well your company is taking a pile of raw materials, a bunch of machines, stacks of paperwork, and groups of employees, and turning out useful goods or services. As long as you stay mindful of how the perfect can get in the way of the good, a few basic guidelines can help you design a system that meets your needs.
Introduction to Operations Management of Products and Services: Overview and Resources
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated. Understanding and managing service productivity: A literature review. Managers in service industries aim to achieve high efficiency and high quality at the same time to be profitable. This dual emphasis might lead to a trade-off as a focus on efficiency often results in decreasing service quality and vice versa. Even as this trade-off is generally acknowledged, research on service performance measurement often focuses only on either operational efficiency or service quality.
Skip to search form Skip to main content You are currently offline. Some features of the site may not work correctly. Kazemi and H. Gheysari Published Business. Productivity is a major factor for operational management.
What is Operations Management OM? What Are Operations Systems? What is a System?