Productivity and Quality Improvement

Productivity and Quality Improvement

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Four Stages in Service Firm CompetitivenessFour Stages in Service Firm Competitiveness

1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery

Customers patronize service Customers neither seek Customers seek out the firm The company’s name is synonymousCustomers patronize service Customers neither seek Customers seek out the firm The company’s name is synonymous

firm for reasons other than out nor avoid the firm. on the basis of its sustained with service excellence. Its servicefirm for reasons other than out nor avoid the firm. on the basis of its sustained with service excellence. Its service

performance. reputation for meeting doesn’t just satisfy customers; itperformance. reputation for meeting doesn’t just satisfy customers; it

customer expectations customer expectations delightsdelights them and thereby expands them and thereby expands

customer expectations to levels itscustomer expectations to levels its

competitors are unable to fulfill.competitors are unable to fulfill.

Operations is reactive, Operations functions in a Operations continually excels, Operations is a quick learner and fastOperations is reactive, Operations functions in a Operations continually excels, Operations is a quick learner and fast

at best. mediocre, uninspired reinforced by personnel innovator; it masters every step of the at best. mediocre, uninspired reinforced by personnel innovator; it masters every step of the

fashion. management and systems service delivery process and providesfashion. management and systems service delivery process and provides

that support an intense capabilities that are superior tothat support an intense capabilities that are superior to

customer focus. competitors.customer focus. competitors.

SERVICE QUALITYSERVICE QUALITY

Is subsidiary to cost, Meets some customer Exceeds customer Raises customer expectations andIs subsidiary to cost, Meets some customer Exceeds customer Raises customer expectations and

highly variable. expectations; consistent expectations; consistent seeks challenge; improveshighly variable. expectations; consistent expectations; consistent seeks challenge; improves

on one or two key on multiple dimensions. continuously.on one or two key on multiple dimensions. continuously.

dimensions.dimensions.

Four Stages in Service Firm Competitiveness (cont.)Four Stages in Service Firm Competitiveness (cont.)

1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery

BACK OFFICEBACK OFFICE

Counting room. Contributes to service, plays Is equally valued with front Is proactive, develops its ownCounting room. Contributes to service, plays Is equally valued with front Is proactive, develops its own

an important role in the total office; plays integral role. capabilities, and generatesan important role in the total office; plays integral role. capabilities, and generates

service, is given attention, opportunities.service, is given attention, opportunities.

but is still a separate role.but is still a separate role.

CUSTOMERCUSTOMER

Unspecified, to be A market segment whose A collection of individuals A source of stimulation, ideas,Unspecified, to be A market segment whose A collection of individuals A source of stimulation, ideas,

satisfied at minimum cost. basic needs are understood. whose variation in needs is and opportunity.satisfied at minimum cost. basic needs are understood. whose variation in needs is and opportunity.

understood.understood.

INTRODUCTION OF NEW TECHNOLOGYINTRODUCTION OF NEW TECHNOLOGY

When necessary for When justified by cost When promises to enhance Source of first-mover advantages,When necessary for When justified by cost When promises to enhance Source of first-mover advantages,

survival, under duress. savings. service. creating ability to do things yoursurvival, under duress. savings. service. creating ability to do things your

competitors can’t do.competitors can’t do.

WORKFORCEWORKFORCE

Negative constraint. Efficient resource; disciplined; Permitted to select among Innovative; creates procedures.Negative constraint. Efficient resource; disciplined; Permitted to select among Innovative; creates procedures.

follows procedures. alternative procedures.follows procedures. alternative procedures.

FRONT-LINE MANAGEMENTFRONT-LINE MANAGEMENT

Controls workers. Controls the process. Listens to customers; coaches Is listened to by top managementControls workers. Controls the process. Listens to customers; coaches Is listened to by top management

and facilitates workers. as a source of new ideas. Mentors and facilitates workers. as a source of new ideas. Mentors workers to enhance workers to enhance their career.their career.

Continual Improvement as a Competitive StrategyContinual Improvement as a Competitive Strategy

Analogy with Just-in-Time ManufacturingAnalogy with Just-in-Time Manufacturing Inventory and Waiting Line Analogy Inventory and Waiting Line Analogy Continual Improvement as a Service Continual Improvement as a Service

Organization CultureOrganization Culture Management ImplicationsManagement Implications

Inventory and Waiting Line AnalogyInventory and Waiting Line Analogy

Feature Inventory Waiting line

Costs Opportunity cost of capital Opportunity cost of timeSpace Warehouse Waiting areaQuality Poor quality hidden Negative impressionDecoupling Promotes independence of Allow division of labor and production stages specializationUtilization Work in process keeps machines busy Waiting customers keep servers busyCoordination Detailed scheduling not necessary Avoids matching supply and demand

Traditional vs World-Class Service OrganizationsTraditional vs World-Class Service Organizations

Dimension Traditional World-class

System assumption Closed system Open systemJob design premise Division of labor FlexibilityStructure Rigid FluidRelation to others Individual Team playerEmployee orientation Task CustomerManagement Supervisor Coach and facilitatorTechnology Replace human effort Assist service deliveryInformation Efficiency Effectiveness

Deming’s Foundations of Quality Improvement ProgramDeming’s Foundations of Quality Improvement Program

Customer SatisfactionCustomer Satisfaction Management by FactsManagement by Facts Deming’s WheelDeming’s Wheel Respect for PeopleRespect for People

Mega Bytes RestaurantMega Bytes Restaurant

How is the Seven Step Method (SSM) How is the Seven Step Method (SSM) different from Deming’s PDCA cycle?different from Deming’s PDCA cycle?

Prepare a cause-and-effect diagram for Prepare a cause-and-effect diagram for “Why customers have lone waits for “Why customers have lone waits for coffee”coffee”

How would you resolve the difficulties that How would you resolve the difficulties that study teams have experienced when study teams have experienced when applying SSM?applying SSM?