Service Quality MD854 Management of Service Operations Professor Joy Field

Dimensions of Service Quality Reliability  Perform promised service dependably and accurately. Examples: delivered home heating oil on schedule, correct diagnosis and treatment of a medical problem. Responsiveness  Willingness to help customers promptly. Example: avoid keeping customers waiting for no apparent reason. Assurance  Knowledge and courtesy of employees. Ability to convey trust and confidence. Example: being polite and showing respect for customer. Empathy  Providing caring, individualized attention to customers. Example: being a good listener. Tangibles  Physical facilities and facilitating goods. Example: cleanliness.

Perceived Service Quality Word of mouth Personal needs Past experience Expected service Perceived service Service Quality Dimensions Reliability Responsiveness Assurance Empathy Tangibles Service Quality Assessment 1. Expectations exceeded ES<PS (Quality surprise) 2. Expectations met ES~PS (Satisfactory quality) 3. Expectations not met ES>PS (Unacceptable quality)

Service Quality Gap Analysis

Quality Service by Design Quality in the Service Package  Supporting facility  Facilitating goods  Information  Explicit services  Implicit services Taguchi methods (robust design) Poka-yoke (fail-safing)  Example: Height bar at amusement park Quality Function Deployment  House of Quality Walk-Through Audit

Quality Service by Design Exercise How can healthcare services be redesigned to jointly optimize safety, effectiveness, and cost? Currently, malpractice law is intended to ensure doctors provide appropriate care and incompetent doctors are weeded out. It has the unintended consequence of incentivizing doctors to "over-service" patients to minimize liability.  Some statistics - over 90% of medical malpractice cases are decided in favor of the doctor, 20%-30% of tests and procedures are done primarily to minimize the doctor's liability risk, 15% of initial diagnoses are incorrect. Issues to address:  What is the service concept (i.e., how is value being created for the patient)? Quality of care vs. quality of service  How does a gap analysis inform the healthcare services design process? (Patients are good at assessing the quality of service but less so the quality of care.)  How can expectations be better managed?

Achieving Service Quality Cost of Quality Cost Categories (in order of cost increase)  Prevention (to prevent failures from occurring)  Detection (to determine the condition of a service and whether it conforms to standards)  Internal Failure (costs incurred to correct problems prior to delivery to the customer)  External Failure (costs incurred to correct problems after delivery to the customer) Tradeoff between prevention/detection and internal failure/external failure costs goal is to minimize sum of these costs Examples in healthcare services?

Achieving Service Quality Statistical Process Control Statistical process control (SPC) is implemented via control charts that are used to monitor the output of the process over time and indicate the presence of problems requiring further action. A control chart consists of a centerline based on the process average and two control limits to indicate whether action needs to be taken. It is intended to reflect only common (random) causes of variation in order to detect special (assignable) causes of variation. The control limits are set to strike a balance between the following competing priorities:  Usually detect when the process has gone out of control (narrow control limits work better), but increases producer’s risk  Usually not overreact to random variation (wider control limits work better), but increases consumer’s risk

Control Chart Example

Achieving Service Quality Unconditional Service Guarantee: Customer View Unconditional (L.L. Bean) Easy to understand and communicate (Bennigan’s) Meaningful (Domino’s Pizza) Easy to invoke (Cititravel) Easy to collect (Bennigan’s and Domino’s)

Achieving Service Quality Unconditional Service Guarantee: Management View Focuses on customers (British Airways) Sets clear standards (FedEx) Guarantees feedback (Manpower) Promotes an understanding of the service delivery system (Bug Killer) Builds customer loyalty by making expectations explicit

Approaches to Service Recovery Case-by-case addresses each customer’s complaint individually but could lead to perception of unfairness. Systematic response uses a protocol to handle complaints but needs prior identification of critical failure points and continuous updating. Early intervention attempts to fix problem before the customer is affected. Substitute service allows rival firm to provide service but could lead to loss of customer.

Service Recovery Framework Patronag e Loyalty Satisfactio n Retention Severity Of Failure Perceived Service Quality Psychological -empathy -apology Tangible -fair fix -value add Psychological -apology -show interest Follow-up Service Recovery Tangible -small token Service Recovery Expectations Service Recovery Customer Loyalty Service Guarantee Speed of Recovery Frontline Discretion Service Failure Occurs Provider Aware of Failure Fair Restitutio n Pre-recovery Phase Immediate Recovery Phase Follow-Up Phase