Designing Quality Services Chapter 8 Designing Quality Services

Strategic Quality Planning Designing Quality Services Chapter 8 Differences between services and manufacturing What do services customers want? SERVQUAL Designing and improving the services transaction The customer benefits package

Strategic Quality Planning Designing Quality Services Chapter 8 Service Transaction Analysis Improving Customer Service in government Quality in Health Care Supply Chain Quality in Services A Theory for Service Quality Management

Strategic Quality Planning Designing Quality Services Chapter 8 Power of satisfied customers Profit Growth over Time

Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing Many service attributes are intangible Output of service are heterogeneous Customer contact Customer coproduction Internal versus external services Voluntary versus involuntary services

Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing How service quality issues different from those of manufacturing? In manufacturing, dimensions are available for measurement In services, such measurable dimensions are often unavailable Simultaneous production and consumption means you have to get it right the first time Product liability

Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing How service quality issues similar to those of manufacturing? For both, the customer is the core of the business By focusing on the customer many manufacturers and services firms have come to view themselves as service providers

Strategic Quality Planning Designing Quality Services What do Services Customers want? Chapter 1 listed dimensions of quality: Tangibles Reliability Responsiveness Assurance Empathy

Strategic Quality Planning Designing Quality Services SERVQUAL Developed for assessing services quality. An off-the-shelf approach that can be used in many service situations

Strategic Quality Planning Designing Quality Services SERVQUAL Advantages are: It is accepted as a standard for assessing different dimensions of services quality It has been shown to be valid for a number of service situations

Strategic Quality Planning Designing Quality Services SERVQUAL Advantages are: It has been demonstrated to be reliable It is parsimonious in that it only has 22 items It has a standardized analysis procedure

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey has two parts: Customer expectations Customer perceptions If we understand them both, we can assess the gap in these areas

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

SERVQUAL Expectations Survey

SERVQUAL Perceptions Survey

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.

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

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

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 3 Service delivery and Service quality expectations

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 4 Service delivery and External communications to customers

Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 5 Expected service and Perceived service

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

Strategic Quality Planning Designing Quality Services SERVQUAL

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

Strategic Quality Planning Designing Quality Services SERVQUAL Two-Dimensional Differencing Plane

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

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Services Blueprinting Identify processes Isolate fail points Establish a time frame Analyze profits

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Services Blueprinting Example in a Hair Salon

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.

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Poka-yoke Fail safe devices Warning methods Physical contact methods Visual contact methods

Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Poka-yoke Fail safe devices – “The Three T’s” Tasks to be performed Treatment provided to customer Tangibles provided to customer

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

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Four stages of the service benefit package… Idea/concept generation The definition of a service package Process definition and selection Facilities requirements definition

Strategic Quality Planning Designing Quality Services The Customer Benefits Package CBP Design Process

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Make sure the final CBP attributes you are using are the correct ones

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Evaluate the relative importance of each attribute in the customers mind

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Evaluate each attribute in terms of process and service encounter capability

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Figure out how to best segment the market and position CBP’s in each market

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Avoid CBP duplication and proliferation

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… 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.

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives… Maximize customer satisfaction and profits.

Strategic Quality Planning Designing Quality Services The Customer Benefits Package Services Package Unique services package Selective services package Restricted services package Generic services package

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

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

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government 32 states have established quality award programs

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: People want and desire to do good work

Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Quality management is associated with improved employee satisfaction

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

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

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

Strategic Quality Planning Designing Quality Services Quality in Health Care 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

Strategic Quality Planning Designing Quality Services Supply Chain Quality in Services Bi-directional Services Supply Chain

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

Strategic Quality Planning Designing Quality Services Summary 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

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