Productivity and Quality Improvement Check Do Act Plan Time Quality level

Four Stages in Service Firm Competitiveness 1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery 1. 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 synonymous Customers 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 service firm 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; it performance. reputation for meeting doesn’t just satisfy customers; it customer expectations delights them and thereby expands customer expectations delights them and thereby expands customer expectations to levels its customer 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 fast Operations 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 provides fashion. management and systems service delivery process and provides that support an intense capabilities that are superior to that support an intense capabilities that are superior to customer focus. competitors. customer focus. competitors. SERVICE QUALITY SERVICE QUALITY Is subsidiary to cost, Meets some customer Exceeds customer Raises customer expectations and Is subsidiary to cost, Meets some customer Exceeds customer Raises customer expectations and highly variable. expectations; consistent expectations; consistent seeks challenge; improves highly 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.) 1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery BACK OFFICE Counting 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 generates an 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.CUSTOMER 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. understood. understood. INTRODUCTION OF NEW TECHNOLOGY 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 your competitors can’t do. competitors can’t do.WORKFORCE Negative constraint. Efficient resource; disciplined; Permitted to select among Innovative; creates procedures. follows procedures. alternative procedures. follows procedures. alternative procedures. FRONT-LINE MANAGEMENT Controls workers. Controls the process. Listens to customers; coaches Is listened to by top management and facilitates workers. as a source of new ideas. Mentors workers to enhance their career. and facilitates workers. as a source of new ideas. Mentors workers to enhance their career.

Continual Improvement as a Competitive Strategy ä Analogy with Just-in-Time Manufacturing ä Inventory and Waiting Line Analogy ä Continual Improvement as a Service Organization Culture ä Management Implications

Inventory and Waiting Line Analogy Feature Inventory Waiting line Costs Opportunity cost of capital Opportunity cost of time Space Warehouse Waiting area Quality Poor quality hidden Negative impression Decoupling Promotes independence of Allow division of labor and production stages specialization Utilization Work in process keeps machines busy Waiting customers keep servers busy Coordination Detailed scheduling not necessary Avoids matching supply and demand

Traditional vs World-Class Service Organizations Dimension Traditional World-class System assumption Closed system Open system Job design premise Division of labor Flexibility Structure Rigid Fluid Relation to others Individual Team player Employee orientation Task Customer Management Supervisor Coach and facilitator Technology Replace human effort Assist service delivery Information Efficiency Effectiveness

Deming’s Foundations of Quality Improvement Program ä Customer Satisfaction ä Management by Facts ä Deming’s Wheel ä Respect for People

Mega Bytes Restaurant ä How is the Seven Step Method (SSM) different from Deming’s PDCA cycle? ä Prepare a cause-and-effect diagram for “Why customers have lone waits for coffee” ä How would you resolve the difficulties that study teams have experienced when applying SSM?