Transcript Productivity and Quality Improvement

Quality level
Quality and Productivity
Improvement
Check
Act
Time
Do
Plan
Learning Objectives
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Identify the stage of competitiveness for a service firm.
Discuss the analogous roles of inventory and queuing.
Perform a Walk-Through-Audit.
Lead a Plan-Do-Check-Act (PDCA) process improvement
initiative.
Use quality tools for analysis and problem solving.
Discuss the corporate programs for quality improvement.
Conduct a data envelopment analysis (DEA).
Customer Value Equation
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Re sults Pr oduced  Pr ocessQuality 
Value 
Price  CostsofAcquiringtheService
Four Stages in Service Firm
Competitiveness
1. Available for service
2. Journeyman
3. Distinctive competence
4. World-class service delivery
Customers patronize service
firm for reasons other than
performance.
Customers neither seek
out nor avoid the firm.
Customers seek out the firm
on the basis of its sustained
reputation for meeting
customer expectations
The company’s name is synonymous
with service excellence. Its service
doesn’t just satisfy customers; it
delights them and thereby expands
customer expectations to levels its
competitors are unable to fulfill.
Operations is reactive,
at best.
Operations functions in a
mediocre, uninspired
fashion.
Operations continually excels,
reinforced by personnel
management and systems
that support an intense
customer focus.
Operations is a quick learner and fast
innovator; it masters every step of the
service delivery process and provides
capabilities that are superior to
competitors.
Meets some customer
expectations; consistent
on one or two key
dimensions.
Exceeds customer
expectations; consistent
on multiple dimensions.
Raises customer expectations and
seeks challenge; improves
continuously.
SERVICE QUALITY
Is subsidiary to cost,
highly variable.
Four Stages in Service Firm
Competitiveness (cont.)
1. Available for service
BACK OFFICE
Counting room.
2. Journeyman
Contributes to service, plays
an important role in the total
service, is given attention,
but is still a separate role.
CUSTOMER
Unspecified, to be
A market segment whose
satisfied at minimum cost. basic needs are understood.
INTRODUCTION OF NEW TECHNOLOGY
When necessary for
When justified by cost
survival, under duress.
savings.
WORKFORCE
Negative constraint.
3. Distinctive competence
4. World-class service delivery
Is equally valued with front
office; plays integral role.
Is proactive, develops its own
capabilities, and generates
opportunities.
A collection of individuals
whose variation in needs is
understood.
A source of stimulation, ideas,
and opportunity.
When promises to enhance
service.
Efficient resource; disciplined; Permitted to select among
follows procedures.
alternative procedures.
FRONT-LINE MANAGEMENT
Controls workers.
Controls the process.
Listens to customers; coaches
and facilitates workers.
works to enhance their career.
Source of first-mover advantages,
creating ability to do things your
competitors can’t do.
Innovative; creates procedures.
Is listened to by top management
as a source of new ideas. Mentors
Continual Improvement as a
Competitive Strategy
Analogy with Just-in-Time Manufacturing
 Inventory and Waiting Line Analogy
 Continual Improvement as a Service
Organization Culture
 Management Implications
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Inventory and Waiting Line
Analogy
Feature
Inventory
Waiting line
Costs
Space
Quality
Decoupling
Opportunity cost of capital
Warehouse
Poor quality hidden
Promotes independence of
production stages
Work in process keeps machines busy
Detailed scheduling not necessary
Opportunity cost of time
Waiting area
Negative impression
Allow division of labor and
specialization
Waiting customers keep servers busy
Avoids matching supply and demand
Utilization
Coordination
Traditional vs World-Class
Service Organizations
Dimension
Traditional
World-class
System assumption
Job design premise
Structure
Relation to others
Employee orientation
Management
Technology
Information
Closed system
Division of labor
Rigid
Individual
Task
Supervisor
Replace human effort
Efficiency
Open system
Flexibility
Fluid
Team player
Customer
Coach and facilitator
Assist service delivery
Effectiveness
Walk-Through-Audit
Service delivery system should conform to
customer expectations.
 Customer impression of service influenced
by use of all senses.
 Service managers lose sensitivity due to
familiarity.
 Need detailed service audit from a
customer’s perspective.
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Quality and Productivity
Improvement Process
Foundations of Continuous Improvement
- Customer Satisfaction
- Management by Facts
- Respect for People
 Plan-Do-Check-Act (PDCA) Cycle
 Problem Solving (10 steps)
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Quality Tools
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Check Sheet
Run Chart
Histogram
Pareto Chart
Flowchart
Cause-and-Effect Diagram
Scatter Diagram
Control Chart
Check Sheet
Month
January
February
March
April
May
June
July
August
September
October
November
December
Total
Lost
Departure Mechanical Overbooked Other
Luggage
Delay
1
2
3
3
1
3
3
0
1
0
2
5
3
2
3
5
4
4
0
2
4
7
2
3
0
3
8
1
1
1
6
6
3
0
2
7
9
0
3
0
4
7
3
0
2
3
11
2
3
0
2
10
1
0
0
4
12
2
0
1
44
84
24
16
12
Run Chart
14
12
Departure Delays
10
8
6
4
2
0
1
2
3
4
5
6
7
Months
8
9
10
11
12
Histrogram of Lost Luggage
3.5
3
Frequency
2.5
2
1.5
1
0.5
0
1
2
3
4
5
Occurrences per Month
6
7
Cause-and-Effect Chart for Flight
Departure Delay (Fishbone Chart)
Equipment
Personnel
Aircraft late to gate
Late arrival
Gate occupied
Other
Weather
Air traffic
Mechanical failures
Late pushback tug
Gate agents cannot process passengers quickly enough
Too few agents
Agents undertrained
Agents undermotivated
Agents arrive at gate late
Late cabin cleaners
Late or unavailable cabin crews
Late or unavailable cockpit crews
Poor announcement of departures
Weight and balance sheet late
Late baggage to aircraft
Late fuel
Late food service
Delayed checkin procedure
Confused seat selection
Passengers bypass checkin counter
Checking oversize baggage
Issuance of boarding pass
Acceptance of late passengers
Cutoff too close to departure time
Desire to protect late passengers
Desire to help company’s income
Poor gate locations
Material
Procedure
Delayed
Flight
Departure
Pareto Analysis of Flight
Departure Delay Causes
Cause
Percentage of Incidents
Cumulative Percentage
Late passengers
53.3
53.3
Waiting for pushback
15.0
68.3
Waiting for fuel
11.3
79.6
Late weight and
balance sheet
8.7
88.3
Flowchart
Passenger
Arrives
Ticket
For Flight
Yes
Check
Luggage
Yes
Excess
Carry-on
No
Issue
Boarding Pass
Passenger
Boards Airplane
No
Wait for
Appropriate
Flight
Scatter Diagram
12
Departure Delays
10
8
6
4
2
0
0
1
2
3
4
Late Passengers
5
6
7
Percentage of flights on
tim e
Control Chart of Departure Delays
100
expected
90
Lower Control Limit
80
70
60
1998
p(1  p
UCL  p  3
n
1999
p(1  p
LCL  p  3
n
Corporate Programs for Quality
Improvement
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Marriott Personnel Programs
Zero Defects (Crosby)
Deming’s 14 Point Program
Malcolm Baldrige Quality Award
ISO 9000
Benchmarking
Topics for Discussion
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Could firms in the “world-class service delivery”
stage of competitiveness be described as “learning
organizations?”
Contrast the philosophies of “continuous
improvement” and “process reengineering.” Is
there a role for both points of view in services?
Compare the philosophies of Deming (i.e 14point) and Crosby (i.e. Zero Defects).
What are the limitations of “benchmarking?”
The Museum of Art and Design
Critique the WtA gap analysis.
Awareness of Exhibits
Information
Experience
Visitor Habits
Facilities
Language
 Could there be other explanations for the
gaps?
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The Museum of Art and Design
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Make recommendations for closing the gaps
found in the WtA.
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How can the servicescape help in selfselecting customers and employees?
Mega Bytes Restaurant
How is the Seven-Step Method (SSM)
different from Deming’s PDCA cycle?
 Prepare a cause-and-effect or fishbone
diagram for a problem such as “Why
customers have long waits for coffee.” Use
Figure 18.17 as a guide.
 How would you resolve the difficulties that
study teams have experienced when
applying the SSM?
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The Seven-Step Method
Step 1: Define the project
 Step 2: Study the current situation
 Step 3: Analyze the potential causes
 Step 4: Implement a solution
 Step 5: Check the results
 Step 6: Standardize the improvement
 Step 7: Establish future plans
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