© 2011 Pearson Education, Inc. publishing as Prentice Hall Defining Quality The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs Quality is defined by customer expectations American Society for Quality

© 2011 Pearson Education, Inc. publishing as Prentice Hall Different Views of Quality  Consumer/User-based  Consumer/User-based: better performance, more features, right price.  Product-based  Product-based: specific and measurable attributes of the product.  Manufacturer-based  Manufacturer-based: conformance to standards, making it right the first time.

© 2011 Pearson Education, Inc. publishing as Prentice Hall Key Dimensions of Quality  Performance  Features  Reliability  Conformance  Durability  Serviceability  Aesthetics  Perceived quality  Value

Key Dimensions of Quality (continued) Durability Amount of use before it must be replaced Serviceability The speed, the ease of repair, courtesy, competence Aesthetics How a product looks, feels, sounds, tastes, smells Perceived quality Quality inferred by the sellers reputation © 2011 Pearson Education, Inc. publishing as Prentice Hall

Key Dimensions of Quality (continued) Performance Clarity of TV, prompt delivery of an express package Features Special characteristics that increase the satisfaction Reliability The probability of failure Conformance Meeting the established standards © 2011 Pearson Education, Inc. publishing as Prentice Hall

Implications of Good Quality 1.Company reputation  Perception of new products  Employment practices  Supplier relations 2.Product liability  Reduce risk 3.Market implications  Improved ability to compete

© 2011 Pearson Education, Inc. publishing as Prentice Hall Quality and Strategy  Quality Management helps firms increase sales and reduce costs  Leads to result of “Quality is free”

© 2011 Pearson Education, Inc. publishing as Prentice Hall Quality Improves Profitability in 2 ways Improved Quality Increased Profits  Increased productivity  Lower rework and scrap costs  Lower warranty costs Costs reduce from  Improved response  Flexible pricing  Improved reputation Sales increase from Figure 6.1

© 2011 Pearson Education, Inc. publishing as Prentice Hall © 2011 Pearson Education Costs of Quality  Prevention costs  reducing the potential for defects (eg training, maintenance)  Appraisal costs  evaluating products, parts, and services (inspection costs)  Internal failure costs  producing defective parts/service before delivery (materials, time, energy)  External failure costs  defects discovered after delivery (refund, complaint handling, reputation damage)

© 2011 Pearson Education, Inc. publishing as Prentice Hall External Failure Internal Failure Prevention Costs of Quality & Quality failure Appraisal Total Cost ($) Quality Total Cost low high

© 2011 Pearson Education, Inc. publishing as Prentice Hall TQM In Services  Service quality is more difficult to measure than the quality of goods  Service quality perceptions depend on  Intangible differences between products  Intangible expectations customers have of those products

© 2011 Pearson Education, Inc. publishing as Prentice Hall Service Quality The Operations Manager must recognize: 1.The tangible component of services is important 2.The service process is important 3.The service is judged against the customer’s expectations 4.Exceptions will occur

© 2011 Pearson Education, Inc. publishing as Prentice Hall Determinants of Service Quality ReliabilityConsistency of performance and dependability ResponsivenessWillingness or readiness of employees CompetenceRequired skills and knowledge AccessApproachability and ease of contact CourtesyPoliteness, respect, consideration, friendliness CommunicationKeeping customers informed CredibilityTrustworthiness, believability, honesty SecurityFreedom from danger, risk, or doubt Understanding/ knowing the customer Understand the customer’s needs TangiblesPhysical evidence of the service Table 6.5

© 2011 Pearson Education, Inc. publishing as Prentice Hall Service Recovery Strategy  Managers should have a plan for when services fail  Marriott’s LEARN routine  Listen  Empathize  Apologize  React  Notify

Time Studies method 1.Define the tasks to be measured. 2.Divide task into very small elements (a few seconds for each element)* (* we will use minutes) 3.Set sample size. 4.Collect data on times for each element 5.Calculate averages. 6.Calculate any performance factors (using existing benchmarks) 7.Add element times to find total task time 8.Compute standard time (using allowance factors)

Kitchen context and variation Which appliances ? Floor area? Bench area? Layout? Separate furniture? Type of clean - daily / weekly/ monthly / special.

How to measure the quality ? It’s a service. Measures of ‘clean’? Measuring_Cleanliness Measuring_Cleanliness Measures of ‘service’?