QUALITY IN

ORGANIZATIONS

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 QUALITY IN
MANUFACTURING

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 QUALITY DIMENSIONS OF
MANUFACTURED PRODUCTS
1. Performance a products primary
operating characteristics.

2. Features the bells and whistles of a

product.

3. Reliability the probability of a products

surviving over a specified period of time
under stated conditions of use.
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 QUALITY DIMENSIONS OF
MANUFACTURED PRODUCTS
4. Conformance the degree to which
physical and performance
characteristics of a product match
pre-established standards.

5. Durability the amount of use one

gets from a product before it
physically deteriorates or until
replacement is preferable.
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 QUALITY DIMENSIONS OF
MANUFACTURED PRODUCTS
6. Serviceability the ability to repair a
product quickly and easily.

7. Aesthetics how a product looks,

feels, sounds, tastes, or smells.

8. Perceived Quality Subjective

assessment resulting from image,
advertising, or brand names.
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QUALITY IN
SERVICES

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 DEFINITION OF SERVICE

Any primary or complimentary activity

that does not directly produce a
physical product that is, the non-
goods part of the transaction between
buyer (customer) and seller
(provider).

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DEFINITION OF SERVICE (cont.)

A service might be as simple as

handling a complaint or as complex
as approving a home mortgage loan.

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 SERVICE ORGANIZATIONS
INCLUDE:
1. Hotels and restaurants
2. Legal, engineering, and other
professional services
3. Educational institutions
4. Financial services
5. Healthcare providers
6. Transportation e.g. airline
7. Public utilities
8. Real estate
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 SERVICE ORGANIZATIONS
INCLUDE (cont.)
Pure service businesses deliver
intangible products. Examples would
include a law firm, whose product is
legal advice, and a health care
facility, whose product is comfort and
better health.

However, service is a key element for

many traditional manufacturing
companies. 10
 DIMENSIONS OF
SERVICE QUALITY

1. Time: How much time must a

customer wait?
2. Timeliness: Will a service be
performed when promised?
3. Completeness: Are all items in the
order included?
4. Courtesy: Do frontline employees
greet each customer cheerfully?
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 DIMENSIONS OF
SERVICE QUALITY (cont.)

5. Consistency: Are services

delivered in the same fashion for
every customer and every time for
the same customer?
6. Accessibility and convenience: Is
the service easy to obtain?
7. Accuracy: Is the service
performed right the first time?
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 DIMENSIONS OF
SERVICE QUALITY (cont.)

8. Responsiveness: Can service

personnel react quickly and
resolve unexpected problems?

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IMPLICATIONS FOR
MANAGING QUALITY

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 DIFFERENCES:
SERVICE VS. GOOD

The production of services differs

from manufacturing in many ways,
and these differences have important
implications for managing quality.

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 MOST CRITICAL
DIFFERENCES

1. Customer needs and performance

standards are often difficult to
identify and measure, primarily
because the customers define
what they are, and each customer
is different.

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 MOST CRITICAL
DIFFERENCES (cont.)
2. The production of services typically
requires a higher degree of
customization than does manufacturing.

Doctors, lawyers, insurance salespeople,

and food service employees must tailor
their services to individual customers.

In manufacturing, the goal is uniformity.

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 MOST CRITICAL
DIFFERENCES (cont.)
3. The output of many service systems is
intangible, whereas manufacturing
produces tangible, visible products.

Manufacturing quality can be assessed

against firm designed specifications, but
service quality can only be assessed
against customers subjective, indefinable
expectations and past experiences.

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 MOST CRITICAL
DIFFERENCES (cont.)
4. Services are produced and consumed
simultaneously, whereas manufactured
goods are produced prior to
consumption.

In addition, many services must be

performed at the convenience of the
customer.

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 MOST CRITICAL
DIFFERENCES (cont.)

5. Customers often are involved in the

service process and present while it is
being performed.

Whereas, manufacturing is performed

away from the customer.

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 MOST CRITICAL
DIFFERENCES (cont.)

6. Services are generally labor intensive,

whereas manufacturing is more capital
intensive.

The quality of human interaction is a vital

factor for services that involve human
contact.

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 MOST CRITICAL
DIFFERENCES (cont.)

7. Many service organizations must handle

very large numbers of customer
transactions.

The larger the volume of transaction, the

greater the possibility of error.

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 COMPONENTS OF
SERVICE SYSTEM QUALITY

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 THE TWO
COMPONENTS

Employees

Information Technology

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 EMPLOYEES

Customers evaluate a service

primarily by the quality of the human
contact.

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 EMPLOYEES (cont.)
Survey shows that the biggest complaints about
service employees

are of delivery people or salespeople who fail

to show up when you have stayed home at a
scheduled time;

salespeople who are poorly informed; and

salesclerk who talk on the phone while at the

same entertaining a customer.
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 EMPLOYEES (cont.)

In many companies, UNFORTUNATELY,

the front-line employees (salesclerks,
receptionists, delivery personnel, and so
on, who have the most contact with
customers)
1. Receive the lowest pay,
2. Provided minimal training,
3. Given little decision-making authority,
and
4. Less empowered
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 EMPLOYEES (cont.)
High-quality service employees require -

reward systems that recognize customer

satisfaction results and customer-focused
behaviors,

appropriate skills and abilities for

performing the job, and

supervisors who act more as coaches

and mentors than as administrators. 28
 EMPLOYEES (cont.)

Training is particularly important, because

services employees need to be skilled in
handling every customer interaction, from
greeting customers to asking the right
questions.

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 EMPLOYEES (cont.)

FedEx credo

People, Service, Profits

All potential decisions in the company

are evaluated on their effects on the
employees (people), on their customers
(service), and the companys financial
performance (profits).
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 EMPLOYEES (cont.)
Ritz-Carlton credo

We are Ladies and Gentlemen Serving

Ladies and Gentlemen.

All employees are treated as guests would

be treated. The companys focus is to
develop a skilled and empowered workforce
operating with pride and joy by ensuring that
everyone knows what they are supposed to
do, how well they are doing, and have
authority to make changes as necessary. 31
 INFORMATION TECHNOLOGY

Information technology incorporates

computing, communication, data
processing, and various other means of
converting data into useful information.

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 INFORMATION TECHNOLOGY

In todays competitive business

environment, information technology

Is no longer a differentiation strategy,

Instead, it is a necessity.

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