Ch 5

© 2008 Prentice Hall, Inc. 6 – 1

Operations ManagementChapter 5 – Chapter 5 – Managing QualityManaging Quality

PowerPoint presentation to accompany PowerPoint presentation to accompany Heizer/Render Heizer/Render Principles of Operations Management, 7ePrinciples of Operations Management, 7eOperations Management, 9e Operations Management, 9e


OutlineOutline Global Company Profile: Arnold Global Company Profile: Arnold

Palmer HospitalPalmer Hospital Quality and StrategyQuality and Strategy Defining QualityDefining Quality

Implications of QualityImplications of Quality Malcolm Baldrige National Quality Malcolm Baldrige National Quality

AwardAward Cost of Quality (COQ)Cost of Quality (COQ) Ethics and Quality ManagementEthics and Quality Management


Outline – ContinuedOutline – Continued International Quality StandardsInternational Quality Standards

ISO 9000ISO 9000 ISO14000ISO14000


Outline – ContinuedOutline – Continued

Total Quality ManagementTotal Quality Management Continuous ImprovementContinuous Improvement Six SigmaSix Sigma Employee EmpowermentEmployee Empowerment BenchmarkingBenchmarking Just-in-Time (JIT)Just-in-Time (JIT) Taguchi ConceptsTaguchi Concepts Knowledge of TQM ToolsKnowledge of TQM Tools


Outline – ContinuedOutline – Continued Tools of TQMTools of TQM

Check SheetsCheck Sheets Scatter Diagrams Scatter Diagrams Cause-and-Effect DiagramsCause-and-Effect Diagrams Pareto ChartsPareto Charts FlowchartsFlowcharts HistogramsHistograms Statistical Process Control (SPC)Statistical Process Control (SPC)


Outline – ContinuedOutline – Continued

The Role of InspectionThe Role of Inspection When and Where to InspectWhen and Where to Inspect Source InspectionSource Inspection Service Industry InspectionService Industry Inspection Inspection of Attributes versus Inspection of Attributes versus

VariablesVariables TQM in ServicesTQM in Services


Learning ObjectivesLearning ObjectivesWhen you complete this chapter you When you complete this chapter you should be able to:should be able to:

Define quality and TQMDefine quality and TQM Describe the ISO international Describe the ISO international

quality standardsquality standards Explain Six SigmaExplain Six Sigma Explain how benchmarking is used Explain how benchmarking is used Explain quality robust products and Explain quality robust products and

Taguchi conceptsTaguchi concepts Use the seven tools of TQMUse the seven tools of TQM


Quality and StrategyQuality and Strategy

Managing quality supports Managing quality supports differentiation, low cost, and differentiation, low cost, and response strategiesresponse strategies

Quality helps firms increase sales Quality helps firms increase sales and reduce costsand reduce costs

Building a quality organization is Building a quality organization is a demanding taska demanding task


Two Ways Quality Two Ways Quality Improves ProfitabilityImproves Profitability

Improved Improved QualityQuality

Increased Increased ProfitsProfits

Increased productivity Lower rework and scrap costs Lower warranty costs

Reduced Costs via

Improved response Flexible pricing Improved reputation

Sales Gains via

Figure 6.1Figure 6.1


The Flow of ActivitiesThe Flow of ActivitiesOrganizational Practices

Leadership, Mission statement, Effective operating procedures, Staff support, TrainingYields: What is important and what is to be

accomplishedQuality Principles

Customer focus, Continuous improvement, Benchmarking, Just-in-time, Tools of TQMYields: How to do what is important and to be

accomplishedEmployee Fulfillment

Empowerment, Organizational commitmentYields: Employee attitudes that can accomplish

what is importantCustomer SatisfactionWinning orders, Repeat customersYields: An effective organization with

a competitive advantage



Defining QualityDefining Quality

The totality of features and The totality of features and characteristics of a product or characteristics of a product or

service that bears on its ability to service that bears on its ability to satisfy stated or implied needssatisfy stated or implied needs

American Society for QualityAmerican Society for Quality


Different ViewsDifferent Views

User-based – better performance, User-based – better performance, more featuresmore features

Manufacturing-based – Manufacturing-based – conformance to standards, conformance to standards, making it right the first timemaking it right the first time

Product-based – specific and Product-based – specific and measurable attributes of the measurable attributes of the product product


Implications of QualityImplications of Quality1.1. Company reputationCompany reputation

Perception of new productsPerception of new products Employment practicesEmployment practices Supplier relationsSupplier relations

2.2. Product liabilityProduct liability Reduce riskReduce risk

3.3. Global implicationsGlobal implications Improved ability to competeImproved ability to compete


Key Dimensions of QualityKey Dimensions of Quality

PerformancePerformance FeaturesFeatures ReliabilityReliability ConformanceConformance

DurabilityDurability ServiceabilityServiceability AestheticsAesthetics Perceived qualityPerceived quality ValueValue


Malcom Baldrige National Malcom Baldrige National Quality AwardQuality Award

Established in 1988 by the U.S. Established in 1988 by the U.S. governmentgovernment

Designed to promote TQM practicesDesigned to promote TQM practices Recent winnersRecent winners

Premier Inc., MESA Products, Sunny Premier Inc., MESA Products, Sunny Fresh Foods, Park Place Lexus, North Fresh Foods, Park Place Lexus, North Mississippi Medical Center, The Bama Mississippi Medical Center, The Bama Companies, Richland College, Texas Companies, Richland College, Texas Nameplate Company, Inc.Nameplate Company, Inc.


Baldrige CriteriaBaldrige CriteriaApplicants are evaluated on:Applicants are evaluated on:

Categories PointsLeadership 120Strategic Planning 85Customer & Market Focus 85Measurement, Analysis, and Knowledge Management 90Workforce Focus 85Process Management 85Results 450


TakumiTakumi

A Japanese character A Japanese character that symbolizes a that symbolizes a broader dimension broader dimension than quality, a deeper than quality, a deeper process than process than education, and a more education, and a more perfect method than perfect method than persistencepersistence


Costs of QualityCosts of Quality

Prevention costs - reducing the Prevention costs - reducing the potential for defectspotential for defects

Appraisal costs - evaluating Appraisal costs - evaluating products, parts, and servicesproducts, parts, and services

Internal failure - producing defective Internal failure - producing defective parts or service before deliveryparts or service before delivery

External costs - defects discovered External costs - defects discovered after deliveryafter delivery


External Failure

Internal Failure

Prevention

Costs of QualityCosts of Quality

Appraisal

Total Cost

Quality Improvement

Total CostTotal Cost


Leaders in QualityLeaders in Quality

W. Edwards DemingW. Edwards Deming 14 Points for 14 Points for ManagementManagement

Joseph M. JuranJoseph M. Juran Top management Top management commitment, commitment, fitness for usefitness for use

Armand FeigenbaumArmand Feigenbaum Total Quality Total Quality ControlControl

Philip B. CrosbyPhilip B. Crosby Quality is Free, Quality is Free, zero defectszero defects


Ethics and Quality Ethics and Quality ManagementManagement

Operations managers must deliver Operations managers must deliver healthy, safe, quality products and healthy, safe, quality products and servicesservices

Poor quality risks injuries, lawsuits, Poor quality risks injuries, lawsuits, recalls, and regulationrecalls, and regulation

Organizations are judged by how Organizations are judged by how they respond to problemsthey respond to problems

All stakeholders much be All stakeholders much be consideredconsidered


International Quality International Quality StandardsStandards

ISO 9000 series (Europe/EC)ISO 9000 series (Europe/EC) Common quality standards for products Common quality standards for products

sold in Europe (even if made in U.S.)sold in Europe (even if made in U.S.) 2000 update places greater emphasis on 2000 update places greater emphasis on

leadership and customer satisfactionleadership and customer satisfaction ISO 14000 series (Europe/EC)ISO 14000 series (Europe/EC)


ISO 14000ISO 14000Environmental StandardEnvironmental Standard

Core Elements:Core Elements: Environmental managementEnvironmental management AuditingAuditing Performance evaluationPerformance evaluation LabelingLabeling Life cycle assessmentLife cycle assessment


TQMTQM

Encompasses entire organization, Encompasses entire organization, from supplier to customerfrom supplier to customer

Stresses a commitment by Stresses a commitment by management to have a continuing, management to have a continuing,

companywide drive toward companywide drive toward excellence in all aspects of products excellence in all aspects of products

and services that are important to and services that are important to the customerthe customer


Deming’s Fourteen PointsDeming’s Fourteen Points1.1. Create consistency of purposeCreate consistency of purpose2.2. Lead to promote changeLead to promote change3.3. Build quality into the product; stop Build quality into the product; stop

depending on inspectiondepending on inspection4.4. Build long-term relationships based on Build long-term relationships based on

performance, not priceperformance, not price5.5. Continuously improve product, quality, Continuously improve product, quality,

and serviceand service6.6. Start trainingStart training7.7. Emphasize leadershipEmphasize leadership

Table 6.1Table 6.1


Deming’s Fourteen PointsDeming’s Fourteen Points8.8. Drive out fearDrive out fear9.9. Break down barriers between Break down barriers between

departmentsdepartments10.10. Stop haranguing workersStop haranguing workers11.11. Support, help, improveSupport, help, improve12.12. Remove barriers to pride in workRemove barriers to pride in work13.13. Institute a vigorous program of Institute a vigorous program of

education and self-improvementeducation and self-improvement14.14. Put everybody in the company to work Put everybody in the company to work

on the transformationon the transformationTable 6.1Table 6.1


Seven Concepts of TQMSeven Concepts of TQM Continuous improvementContinuous improvement Six SigmaSix Sigma Employee empowermentEmployee empowerment BenchmarkingBenchmarking Just-in-time (JIT)Just-in-time (JIT) Taguchi conceptsTaguchi concepts Knowledge of TQM toolsKnowledge of TQM tools


Continuous ImprovementContinuous Improvement

Represents continual Represents continual improvement of all processes improvement of all processes

Involves all operations and work Involves all operations and work centers including suppliers and centers including suppliers and customerscustomersPeople, Equipment, Materials, People, Equipment, Materials,

ProceduresProcedures


2. DoTest the

plan

3. CheckIs the plan working?

4. ActImplement

the plan

1.PlanIdentify the

improvement and make

a plan

Shewhart’s PDCA ModelShewhart’s PDCA Model



Six SigmaSix Sigma Two meaningsTwo meanings

Statistical definition of a process that Statistical definition of a process that is 99.9997% capable, 3.4 defects per is 99.9997% capable, 3.4 defects per million opportunities (DPMO)million opportunities (DPMO)

A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction


Two meaningsTwo meanings Statistical definition of a process that Statistical definition of a process that

is 99.9997% capable, 3.4 defects per is 99.9997% capable, 3.4 defects per million opportunities (DPMO)million opportunities (DPMO)

A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction

Six SigmaSix Sigma

Mean

Lower limits Upper limits

3.4 defects/million

±6

2,700 defects/million

±3

Figure 6.4


Six Sigma ProgramSix Sigma Program

Originally developed by Motorola, Originally developed by Motorola, adopted and enhanced by adopted and enhanced by Honeywell and GEHoneywell and GE

Highly structured approach to Highly structured approach to process improvementprocess improvement A strategyA strategy A discipline - DMAICA discipline - DMAIC 66


Six SigmaSix Sigma

1.1. Define critical outputs Define critical outputs and identify gaps for and identify gaps for improvementimprovement

2.2. Measure the work and Measure the work and collect process datacollect process data

3.3. Analyze the dataAnalyze the data4.4. Improve the processImprove the process5.5. Control the new process to Control the new process to

make sure new performance make sure new performance is maintainedis maintained

DMAIC ApproachDMAIC Approach


Six Sigma ImplementationSix Sigma Implementation Emphasize defects per million Emphasize defects per million

opportunities as a standard metricopportunities as a standard metric Provide extensive trainingProvide extensive training Focus on corporate sponsor support Focus on corporate sponsor support

(Champions)(Champions) Create qualified process improvement Create qualified process improvement

experts (Black Belts, Green Belts, etc.)experts (Black Belts, Green Belts, etc.) Set stretch objectivesSet stretch objectives

This cannot be accomplished without a major commitment from top level management


Employee EmpowermentEmployee Empowerment Getting employees involved in product Getting employees involved in product

and process improvementsand process improvements 85% of quality problems are due 85% of quality problems are due

to process and materialto process and material TechniquesTechniques

Build communication networks Build communication networks that include employeesthat include employees

Develop open, supportive supervisorsDevelop open, supportive supervisors Move responsibility to employeesMove responsibility to employees Build a high-morale organizationBuild a high-morale organization Create formal team structuresCreate formal team structures


Quality CirclesQuality Circles

Group of employees who meet Group of employees who meet regularly to solve problemsregularly to solve problems

Trained in planning, problem Trained in planning, problem solving, and statistical methodssolving, and statistical methods

Often led by a facilitatorOften led by a facilitator Very effective when done Very effective when done

properlyproperly


Use internal

benchmarking

if you’re big

enough

BenchmarkingBenchmarkingSelecting best practices to use as a Selecting best practices to use as a standard for performancestandard for performance

Determine what to Determine what to benchmarkbenchmark

Form a benchmark teamForm a benchmark team Identify benchmarking partnersIdentify benchmarking partners Collect and analyze benchmarking Collect and analyze benchmarking

informationinformation Take action to match or exceed the Take action to match or exceed the

benchmarkbenchmark


Benchmarking Factors for Benchmarking Factors for Web SitesWeb Sites

Use of meta tagsUse of meta tags Yes:Yes: 70% 70%, No:, No: 30% 30%

Meaningful homepage titleMeaningful homepage title Yes:Yes: 97% 97%, No:, No: 3% 3%

Unique domain nameUnique domain name Yes:Yes: 91% 91%, No:, No: 9% 9%

Search engine registrationSearch engine registration Above Above 96%96%

Average loading speedAverage loading speed 28K: 19.31, 56K: 28K: 19.31, 56K: 10.88, T1: 2.5910.88, T1: 2.59

Average number of spelling errorsAverage number of spelling errors 0.160.16

Visibility of contact informationVisibility of contact information Yes:Yes: 74% 74%, No:, No: 26% 26%

Presence of search enginePresence of search engine Yes:Yes: 59% 59%, No:, No: 41% 41%

Translation to multiple languagesTranslation to multiple languages Yes:Yes: 11% 11%, No:, No: 89% 89%

Table 6.3Table 6.3


Best Practices for Resolving Best Practices for Resolving Customer ComplaintsCustomer Complaints

Make it easy for clients to complainMake it easy for clients to complain Respond quickly to complaintsRespond quickly to complaints Resolve complaints on first contactResolve complaints on first contact Use computers to manage Use computers to manage

complaintscomplaints Recruit the best for customer Recruit the best for customer

service jobsservice jobs


Just-in-Time (JIT)Just-in-Time (JIT)

Relationship to quality:Relationship to quality:

JIT cuts the cost of qualityJIT cuts the cost of quality JIT improves qualityJIT improves quality Better quality means less Better quality means less

inventory and better, easier-to-inventory and better, easier-to-employ JIT systememploy JIT system


Just-in-Time (JIT)Just-in-Time (JIT)

‘‘Pull’ system of production scheduling Pull’ system of production scheduling including supply managementincluding supply management Production only when signaledProduction only when signaled

Allows reduced inventory levelsAllows reduced inventory levels Inventory costs money and hides process Inventory costs money and hides process

and material problemsand material problems Encourages improved process and Encourages improved process and

product qualityproduct quality


Just-In-Time (JIT) ExampleJust-In-Time (JIT) Example

ScrapUnreliable Vendors

Capacity Imbalances

Work in process inventory level

(hides problems)


Just-In-Time (JIT) ExampleJust-In-Time (JIT) Example

Reducing inventory revealsReducing inventory revealsproblems so they can be solvedproblems so they can be solved

ScrapUnreliable Vendors

Capacity Imbalances


Taguchi ConceptsTaguchi Concepts Engineering and experimental Engineering and experimental

design methods to improve product design methods to improve product and process designand process design Identify key component and process Identify key component and process

variables affecting product variationvariables affecting product variation Taguchi ConceptsTaguchi Concepts

Quality robustnessQuality robustness Quality loss functionQuality loss function Target-oriented qualityTarget-oriented quality


Quality RobustnessQuality Robustness

Ability to produce products Ability to produce products uniformly in adverse manufacturing uniformly in adverse manufacturing and environmental conditionsand environmental conditions Remove the effects of adverse Remove the effects of adverse

conditionsconditions Small variations in materials and Small variations in materials and

process do not destroy product process do not destroy product qualityquality


Quality Loss FunctionQuality Loss Function Shows that costs increase as the Shows that costs increase as the

product moves away from what product moves away from what the customer wantsthe customer wants

Costs include customer Costs include customer dissatisfaction, warranty dissatisfaction, warranty and service, internal and service, internal scrap and repair, and costs to scrap and repair, and costs to societysociety

Traditional conformance Traditional conformance specifications are too simplisticspecifications are too simplistic

Target-Target-oriented oriented qualityquality


Unacceptable

Poor

GoodBest

Fair

Quality Loss FunctionQuality Loss FunctionHigh lossHigh loss

Loss (to Loss (to producing producing organization, organization, customer, customer, and society)and society)

Low lossLow loss

FrequencyFrequency

LowerLower TargetTarget UpperUpperSpecificationSpecification

Target-oriented quality Target-oriented quality yields more product in yields more product in the “best” categorythe “best” category

Target-oriented quality Target-oriented quality brings product toward brings product toward the target valuethe target valueConformance-oriented Conformance-oriented quality keeps products quality keeps products within 3 standard within 3 standard deviationsdeviations


L = DL = D22CCwherewhere

L =L = loss to loss to societysocietyD =D = distance from distance from target valuetarget valueC =C = cost of cost of deviationdeviation


Tools of TQMTools of TQM Tools for Generating IdeasTools for Generating Ideas

Check sheetsCheck sheetsScatter diagramsScatter diagramsCause-and-effect diagramsCause-and-effect diagrams

Tools to Organize the DataTools to Organize the DataPareto chartsPareto chartsFlowchartsFlowcharts

Tools for Identifying ProblemsTools for Identifying ProblemsHistogramHistogramStatistical process control chartStatistical process control chart


//

/ / /// /// ///// ////

//////

HourDefect 1 2 3 4 5 6 7 8

ABC

////

/

Seven Tools of TQMSeven Tools of TQM(a)(a) Check Sheet: An organized method of Check Sheet: An organized method of

recording datarecording data



Seven Tools of TQMSeven Tools of TQM(b)(b) Scatter Diagram: A graph of the value Scatter Diagram: A graph of the value

of one variable vs. another variableof one variable vs. another variable

AbsenteeismAbsenteeism

Prod

uctiv

ityPr

oduc

tivity



Seven Tools of TQMSeven Tools of TQM(c)(c) Cause-and-Effect Diagram: A tool that Cause-and-Effect Diagram: A tool that

identifies process elements (causes) that identifies process elements (causes) that might effect an outcomemight effect an outcome


CauseCauseMaterialsMaterials MethodsMethods

ManpowerManpower MachineryMachinery

EffectEffect


Seven Tools of TQMSeven Tools of TQM(d)(d) Pareto Chart: A graph to identify and plot Pareto Chart: A graph to identify and plot

problems or defects in descending order of problems or defects in descending order of frequencyfrequency


Freq

uenc

yFr

eque

ncy

Perc

ent

Perc

ent

AA BB CC DD EE


Seven Tools of TQMSeven Tools of TQM(e)(e) Flowchart (Process Diagram): A chart that Flowchart (Process Diagram): A chart that

describes the steps in a processdescribes the steps in a process



Seven Tools of TQMSeven Tools of TQM(f)(f) Histogram: A distribution showing the Histogram: A distribution showing the

frequency of occurrences of a variablefrequency of occurrences of a variable


DistributionDistribution

Repair time (minutes)Repair time (minutes)

Freq

uenc

yFr

eque

ncy


Seven Tools of TQMSeven Tools of TQM(g)(g) Statistical Process Control Chart: A chart with Statistical Process Control Chart: A chart with

time on the horizontal axis to plot values of a time on the horizontal axis to plot values of a statisticstatistic


Upper control limitUpper control limit

Target valueTarget value

Lower control limitLower control limit

TimeTime


Cause-and-Effect DiagramsCause-and-Effect DiagramsMaterialMaterial

(ball)(ball)MethodMethod

(shooting process)(shooting process)

MachineMachine(hoop &(hoop &

backboard)backboard)ManpowerManpower(shooter)(shooter)

Missed Missed free-throwsfree-throws


Rim alignmentRim alignment

Rim sizeRim size

Backboard Backboard stabilitystability

Rim heightRim height

Follow-throughFollow-through

Hand positionHand position

Aiming pointAiming point

Bend kneesBend knees

BalanceBalance

Size of ballSize of ball

LopsidednessLopsidedness

Grain/Feel Grain/Feel (grip)(grip)

Air pressureAir pressure

TrainingTraining

ConditioningConditioning MotivationMotivation

ConcentrationConcentration

ConsistencyConsistency


Pareto ChartsPareto Charts

Number of Number of occurrencesoccurrences

Room svcRoom svc Check-inCheck-in Pool hoursPool hours MinibarMinibar Misc.Misc.72%72% 16%16% 5%5% 4%4% 3%3%

121244 33 22

5454

– 100100– 9393– 8888

– 7272

70 70 –

60 60 –

50 50 –

40 40 –

30 30 –

20 20 –

10 10 –

0 0 –

Freq

uenc

y (n

umbe

r)Fr

eque

ncy

(num

ber)

Causes and percent of the totalCauses and percent of the total

Cum

ulat

ive

perc

ent

Cum

ulat

ive

perc

ent

Data for OctoberData for October


Flow ChartsFlow ChartsMRI FlowchartMRI Flowchart1.1. Physician schedules MRIPhysician schedules MRI2.2. Patient taken to MRIPatient taken to MRI3.3. Patient signs inPatient signs in4.4. Patient is preppedPatient is prepped5.5. Technician carries out MRITechnician carries out MRI6.6. Technician inspects filmTechnician inspects film

7.7. If unsatisfactory, repeatIf unsatisfactory, repeat8.8. Patient taken back to roomPatient taken back to room9.9. MRI read by radiologistMRI read by radiologist10.10. MRI report transferred to MRI report transferred to

physicianphysician11.11. Patient and physician discussPatient and physician discuss

1111

1010

20%20%99

8880%80%

11 22 33 44 55 66 77


Statistical Process Control Statistical Process Control (SPC)(SPC)

Uses statistics and control charts to Uses statistics and control charts to tell when to take corrective actiontell when to take corrective action

Drives process improvementDrives process improvement Four key stepsFour key steps

Measure the processMeasure the process When a change is indicated, find the When a change is indicated, find the

assignable causeassignable cause Eliminate or incorporate the causeEliminate or incorporate the cause Restart the revised processRestart the revised process


An SPC ChartAn SPC Chart

Upper control limitUpper control limit

Coach’s target valueCoach’s target value

Lower control limitLower control limit

Game numberGame number

| | | | | | | | |11 22 33 44 55 66 77 88 99

20%20%

10%10%

0%0%

Plots the percent of free throws missedPlots the percent of free throws missed



InspectionInspection Involves examining items to see if Involves examining items to see if

an item is good or defectivean item is good or defective Detect a defective productDetect a defective product

Does not correct deficiencies in Does not correct deficiencies in process or productprocess or product

It is expensiveIt is expensive IssuesIssues

When to inspectWhen to inspect Where in process to inspectWhere in process to inspect


When and Where to InspectWhen and Where to Inspect1.1. At the supplier’s plant while the supplier is At the supplier’s plant while the supplier is

producingproducing2.2. At your facility upon receipt of goods from At your facility upon receipt of goods from

the supplierthe supplier3.3. Before costly or irreversible processesBefore costly or irreversible processes4.4. During the step-by-step production During the step-by-step production

processprocess5.5. When production or service is completeWhen production or service is complete6.6. Before delivery to your customerBefore delivery to your customer7.7. At the point of customer contactAt the point of customer contact


InspectionInspection Many problemsMany problems

Worker fatigueWorker fatigue Measurement errorMeasurement error Process variabilityProcess variability

Cannot inspect quality into a Cannot inspect quality into a productproduct

Robust design, empowered Robust design, empowered employees, and sound processes employees, and sound processes are better solutionsare better solutions


Source InspectionSource Inspection Also known as source controlAlso known as source control The next step in the process is The next step in the process is

your customeryour customer Ensure perfect product Ensure perfect product

to your customerto your customer

Poka-yoke is the concept of foolproof devices or techniques designed to pass only

acceptable product


Service Industry InspectionService Industry Inspection

OrganizationOrganization What is What is InspectedInspected StandardStandard

Jones Law OfficeJones Law Office Receptionist Receptionist performanceperformanceBillingBilling

AttorneyAttorney

Is phone answered by the Is phone answered by the second ringsecond ringAccurate, timely, and Accurate, timely, and correct formatcorrect formatPromptness in returning Promptness in returning callscalls

Table 6.5Table 6.5




Hard Rock HotelHard Rock Hotel Reception Reception deskdeskDoormanDoorman

RoomRoom

MinibarMinibar

Use customer’s nameUse customer’s name

Greet guest in less than 30 Greet guest in less than 30 secondssecondsAll lights working, spotless All lights working, spotless bathroombathroomRestocked and charges Restocked and charges accurately posted to billaccurately posted to bill

Table 6.5Table 6.5




Arnold Palmer Arnold Palmer HospitalHospital

BillingBilling

PharmacyPharmacy

LabLabNursesNurses

AdmissionsAdmissions

Accurate, timely, and Accurate, timely, and correct formatcorrect formatPrescription accuracy, Prescription accuracy, inventory accuracyinventory accuracyAudit for lab-test accuracyAudit for lab-test accuracyCharts immediately Charts immediately updatedupdatedData entered correctly and Data entered correctly and completelycompletely

Table 6.5Table 6.5




Olive Garden Olive Garden RestaurantRestaurant

BusboyBusboy

BusboyBusboy

WaiterWaiter

Serves water and bread Serves water and bread within 1 minutewithin 1 minuteClears all entrée items and Clears all entrée items and crumbs prior to dessertcrumbs prior to dessertKnows and suggest Knows and suggest specials, dessertsspecials, desserts

Table 6.5Table 6.5




Nordstrom Nordstrom Department Department StoreStore

Display areasDisplay areas

StockroomsStockrooms

SalesclerksSalesclerks

Attractive, well-organized, Attractive, well-organized, stocked, good lightingstocked, good lightingRotation of goods, Rotation of goods, organized, cleanorganized, cleanNeat, courteous, very Neat, courteous, very knowledgeableknowledgeable

Table 6.5Table 6.5


Attributes Versus VariablesAttributes Versus Variables AttributesAttributes

Items are either good or bad, Items are either good or bad, acceptable or unacceptableacceptable or unacceptable

Does not address degree of failureDoes not address degree of failure VariablesVariables

Measures dimensions such as weight, Measures dimensions such as weight, speed, height, or strengthspeed, height, or strength

Falls within an acceptable rangeFalls within an acceptable range Use different statistical techniquesUse different statistical techniques


TQM In ServicesTQM In Services

Service quality is more difficult to Service quality is more difficult to measure than the quality of goodsmeasure than the quality of goods

Service quality perceptions depend Service quality perceptions depend on on Intangible differences between Intangible differences between

productsproducts Intangible expectations customers Intangible expectations customers

have of those productshave of those products


Service QualityService QualityThe Operations Manager must The Operations Manager must recognize:recognize:

1.1. The tangible component of The tangible component of services is importantservices is important

2.2. The service process is importantThe service process is important3.3. The service is judged against the The service is judged against the

customer’s expectationscustomer’s expectations4.4. Exceptions will occurExceptions will occur


ServiceServiceSpecificationsSpecifications

at UPSat UPS


Determinants of Service Determinants of Service QualityQuality

ReliabilityReliability ResponsivenessResponsiveness CompetenceCompetence AccessAccess CourtesyCourtesy CommunicationCommunication

CredibilityCredibility SecuritySecurity Understanding/ Understanding/

knowing the knowing the customercustomer

TangiblesTangibles


Service Recovery StrategyService Recovery Strategy Managers should have a plan for Managers should have a plan for

when services failwhen services fail Marriott’s LEARN routineMarriott’s LEARN routine

ListenListen EmpathizeEmpathize ApologizeApologize ReactReact NotifyNotify

Ch 5

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