1. Service Quality

2. Learning Objectives  Describe the five dimensions of service quality.  Use the service quality gap model to diagnose quality problems.  Illustrate how Taguchi methods and poka-yoke methods are applied to quality design.  Perform service quality function deployment.  Construct a statistical process control chart.  Develop unconditional service guarantees.  Plan for service recovery.  Perform a walk-through audit (WtA)

3. Moments of Truth  Each customer contact is called a moment of truth.  You have the ability to either satisfy or dissatisfy them when you contact them.  A service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.

4. Dimensions of Service Quality  Reliability: Perform promised service dependably and accurately. Example: receive mail at same time each day.  Responsiveness: Willingness to help customers promptly. Example: avoid keeping customers waiting for no apparent reason.

5. Dimensions of Service Quality  Assurance: Ability to convey trust and confidence. Example: being polite and showing respect for customer.  Empathy: Ability to be approachable. Example: being a good listener.  Tangibles: Physical facilities and facilitating goods. Example: cleanliness.

6. 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)

7. Service Quality Gap Model

8. Scope of Service Quality  Content : are standard procedures being followed?  Process : Is the sequence of events in the service process appropriate ?  Structure : Are the physical facilities and the organisational design adequate for the service ?  Outcome : What change in status has the service effected ? Is customer satisfied ?  Impact : what is the long range effect of the service on the customer?  Example : BMTC ?

9. Quality Service by Design  Taguchi Methods- cost of poor quality measured by the square of deviation from target, quadratic loss function  Poka-yoke (fail-safing) – use checklists or manual methods that do not let employee make mistakes. Task (measuring cup), treatment (weight) and tangible  Quality Function Deployment – house of Quality. Moved from manufacturing to service.  Benchmarking – process of comparing the business process of one organisation with the best in the field.  Walk-through Audit – customer focused survey to uncover areas of improvement, a diagnostic tool to evaluate gaps in perception between customers and managers

10. Walk through Audit Customer being part of the service process, his impression of service quality is influenced by many observations. WtA is a customer focused survey to uncover areas for improvement, in the entire service experience

11. W-t-A (contd..) Service delivery system should conform to customer expectations. Customer impression of service influenced by use of all senses. Service managers lose sensitivity due to familiarity. Need detailed service audit from a customer’s perspective.

12. Hospital – parking, registering, consulting with doctor, tests and treatments, cleanliness, hygiene, canteen facilities, pay- ward facilities, paramedics' attitude, housekeeping staff, paying bills, pharmacy, general ambience, final health updates

13. Quality Service by Design  Quality in the Service Package Budget Hotel example  Taguchi Methods (Robustness) Notifying maids of rooms for cleaning  Poka-yoke (fail-safing) Height bar at amusement park  Quality Function Deployment House of Quality

14. Classification of Service Failures with Poka-Yoke Opportunities Server Errors Task: Doing work incorrectly Treatment: Failure to listen to customer Tangible: Failure to wear clean uniform Customer Errors Preparation: Failure to bring necessary materials Encounter: Failure to follow system flow Resolution: Failure to signal service failure

15. House of Quality

16. Achieving Service Quality  Cost of Quality (Juran)  Service Process Control  Statistical Process Control (Deming)  Unconditional Service Guarantee

17. Costs of Service Quality (Bank Example) Failure costs Detection costs Prevention costs External failure: Process control Quality planning Loss of future business Peer review Training program Negative word-of-mouth Supervision Quality audits Liability insurance Customer comment card Data acquisition and analysis Legal judgments Inspection Recruitment and selection Interest penalties Supplier evaluation Internal failure: Scrapped forms Rework Recovery: Expedite disruption Labor and materials

18. Service Process Control Resources Identify reason for nonconformance Establish measure of performance Monitor conformance to requirements Take corrective action Service concept Customer input Customer output Service process

19. Control Chart of Departure Delays expected Lower Control Limit 1998199 9

20. Problem : Time to make beds at a hotel differs with diff maids and is listed below. (time in secs.) Maidmornnoonevening Ann12090150 Linda130110140 Marie200180175 Michael165155140 Determine UCL and LCL for Xbar and R chart. ( hint : record variation among employees and not of an employee across a day) After preparing the chart, new 4 obs. 185, 150, 192, 178 are recorded. Does it warrant corrective action ?

21. Traffic lights in Mumbai are computer controlled. The traffic pile up at 1000 intersections on a monthly basis in 2008 in Mumbai is reported here. Jan14 Feb18 Mar14 Apr12 May16 Jun8 Jul19 Aug12 Sep 14 Oct7 Nov 10 Dec8 Do a p chart. New values for Jan, Feb and Mar at 15,9 and 11 are recorded at these 1000 intersections. Should the computerised system be modified?

22. Unconditional Service Guarantee: Customer View  Unconditional (Reader's Digest, Canon)  Easy to understand and communicate (Philips Audio systems)  Meaningful (Domino’s Pizza)  Easy to invoke (Reader's Digest)  Easy to collect ( at the spot itself, Arya Bhavan hotel)

23. Unconditional Service Guarantee: Management View  Focuses on customers (British Airways)  Sets clear standards, unambiguous (FedEx)  Guarantees feedback  Promotes an understanding of the service delivery system  Builds customer loyalty by making expectations explicit and reducing customer risk

24. Customer Satisfaction  All customers want to be satisfied.  Customer loyalty is only due to the lack of a better alternative  Giving customers some extra value will delight them by exceeding their expectations and insure their return

25. Customer Feedback and Word-of-Mouth  The average business only hears from 4% of their customers who are dissatisfied with their products or services. Of the 96% who do not bother to complain, 25% of them have serious problems.  The 4% complainers are more likely to stay with the supplier than are the 96% non-complainers.  About 60% of the complainers would stay as customers if their problem was resolved and 95% would stay if the problem was resolved quickly.  A dissatisfied customer will tell between 10 and 20 other people about their problem.  A customer who has had a problem resolved by a company will tell about 5 people about their situation.

26. Walk-Through-Audit  Service delivery system should conform to customer expectations.  Customer impression of service influenced by use of all senses.  Service managers lose sensitivity due to familiarity.  Need detailed service audit from a customer’s perspective.

28. Service Recovery Quick resolution to service failure is an important way to create loyal customers Service failure can be turned into service delight by empowering the front-line employees with discretion to rectify Training employees in approaches to service recovery

29. 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.