Chapter 8 Designing Quality Services Copyright 2013 Pearson

Chapter 8 Designing Quality Services Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 1

Strategic Quality Planning Designing Quality Services Chapter 8 ØDifferences between services and manufacturing ØWhat do services customers want? ØSERVQUAL ØDesigning and improving the services transaction ØThe customer benefits package Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 2

Strategic Quality Planning Designing Quality Services Chapter 8 ØService Transaction Analysis ØImproving Customer Service in government ØQuality in Health Care ØSupply Chain Quality in Services ØA Theory for Service Quality Management Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 3

Strategic Quality Planning Designing Quality Services Chapter 8 ØPower of satisfied customers ØProfit Growth over Time Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 4

Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing Many service attributes are intangible ØOutput of service are heterogeneous ØCustomer contact ØCustomer coproduction ØInternal versus external services ØVoluntary versus involuntary services Ø Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 5

Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing How service quality issues different from those of manufacturing? ØIn manufacturing, dimensions are available for measurement ØIn services, such measurable dimensions are often unavailable ØSimultaneous production and consumption means you have to get it right the first time ØProduct liability Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 6

Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing How service quality issues similar to those of manufacturing? ØFor both, the customer is the core of the business ØBy focusing on the customer many manufacturers and services firms have come to view themselves as service providers Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 7

Strategic Quality Planning Designing Quality Services What do Services Customers want? Chapter 1 listed dimensions of quality: ØTangibles ØReliability ØResponsiveness ØAssurance ØEmpathy Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 8

Strategic Quality Planning Designing Quality Services SERVQUAL ØDeveloped for assessing services quality. ØAn off-the-shelf approach that can be used in many service situations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 9

Strategic Quality Planning Designing Quality Services SERVQUAL Advantages are: ØIt is accepted as a standard for assessing different dimensions of services quality ØIt has been shown to be valid for a number of service situations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 10

Strategic Quality Planning Designing Quality Services SERVQUAL Advantages are: ØIt has been demonstrated to be reliable ØIt is parsimonious in that it only has 22 items ØIt has a standardized analysis procedure Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 11

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey has two parts: 1. 2. Customer expectations Customer perceptions If we understand them both, we can assess the gap in these areas Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 12

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey has 22 questions: Tangibles – Questions 1 – 4 Reliability – Questions 5 – 9 Responsiveness – Questions 10 – 13 Assurance – Questions 14 – 17 Empathy – Questions 18 – 22 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 13

SERVQUAL Expectations Survey Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 14

SERVQUAL Perceptions Survey Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 15

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis Gaps in communication and understanding between employees and customers have a serious negative effect on the perceptions of service quality. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 16

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 1 Difference between actual customer expectations and management’s idea or perception of customer expectations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 17

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 2 Managers’ expectations of service quality may not match service quality specifications Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 18

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 3 Service delivery and Service quality expectations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 19

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 4 Service delivery and External communications to customers Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 20

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 5 Expected service and Perceived service Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 21

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis The key to closing gap 5 is to first close gaps 1 through 4 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 22

Strategic Quality Planning Designing Quality Services SERVQUAL Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 23

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis By averaging the difference between Perception and expectation a two dimensional map can be created identifying strengths and weaknesses Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 24

Strategic Quality Planning Designing Quality Services SERVQUAL Two. Dimensional Differencing Plane Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 25

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction One way to improve perceptions of quality …Improve the process of delivery of the service Services Blueprinting Moments-of-truth Concept Poka-yoke Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 26

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Services Blueprinting 1. 2. 3. 4. Identify processes Isolate fail points Establish a time frame Analyze profits Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 27

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Services Blueprinting Example in a Hair Salon Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 28

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Moments-of-truth Concept Fail Points. . Moments of truth. These are times at which the customer expects something to happen. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 29

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Ø Ø Ø Poka-yoke Fail safe devices Warning methods Physical contact methods Visual contact methods Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 30

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction 1. 2. 3. Poka-yoke Fail safe devices – “The Three T’s” Tasks to be performed Treatment provided to customer Tangibles provided to customer Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 31

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Tangibles that define the service Intangibles that make up the service Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 32

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Four stages of the service benefit package… 1. Idea/concept generation 2. The definition of a service package 3. Process definition and selection 4. Facilities requirements definition Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 33

Strategic Quality Planning Designing Quality Services The Customer Benefits Package CBP Design Process Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 34

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Ø Make sure the final CBP attributes you are using are the correct ones Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 35

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Ø Evaluate the relative importance of each attribute in the customers mind Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 36

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Ø Evaluate each attribute in terms of process and service encounter capability Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 37

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Ø Figure out how to best segment the market and position CBP’s in each market Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 38

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Ø Avoid CBP duplication and proliferation Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 39

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Ø Bring each CBP, and associated process and service encounters, to market as quickly as possible. Use the CBP framework and final attributes to design facilities, processes, equipment, jobs, and service encounters. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 40

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Ø Maximize customer satisfaction and profits. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 41

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Services Package Ø Unique services package Ø Selective services package Ø Restricted services package Ø Generic services package Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 42

Strategic Quality Planning Designing Quality Services Service Transaction Analysis Method of identifying service transactions and evaluating them from the customer’s perspective to determine if there is a gap between service design and what the customer perceives as the service Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 43

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 44

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government The government established a searchable list of 4, 000 customer service standards for 570 federal departments and agencies Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 45

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government 32 states have established quality award programs Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 46

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: People want and desire to do good work Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 47

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Quality management is associated with improved employee satisfaction Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 48

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Government leaders are mandating standards, strategic plans and new levels of performance Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 49

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Demand for government services is growing at a faster rate than funding for them Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 50

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Threat of privatization in government has led to an improvement in service Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 51

Strategic Quality Planning Designing Quality Services Quality in Health Care Ø Ø Ø Health care is facing the same “cost squeeze” that government is facing A move to HMO’s is causing hospitals to streamline operations There is increased diversity in health care Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 52

Strategic Quality Planning Designing Quality Services Supply Chain Quality in Services Bi-directional Services Supply Chain Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 53

Strategic Quality Planning Designing Quality Services A theory for Service Quality Management Proposition 1: Unified services theory Proposition 2: The unreliable supplier dilemma Proposition 3: Capricious Labor Proposition 4. Everyone presumes to be an expert Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 54

Strategic Quality Planning Designing Quality Services Summary Ø Ø Because services involve intangibles they are different from manufacturing Lack of hard measures, statistical Quality Control techniques are not always successful The bottom line is a satisfied customer Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 55

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 8 - 56