Quality Management
BUS 424
Second semester
2013
• Instructor:
Dr. Mohammed A. Nasseef
• Email:
manassief@kau.edu.sa
• Website:
www.nasseef.info
Contact Number:
0540627773 ( SMS and whatsApp)
note: mobile number is for urgent calls, please if you call consider a appropriate time.
Grading Policy
• Midterms
20
• One Team Project Written Report 15
(team members all receive same grade)
• One Team Project Presentation
15
• Class Participation
10
• Final Exam
40
• TOTAL
100
Quality Evolution
Evolution of Quality I
Finding mistakes/errors 
External assessment/control 
Culture of mistrust 
Inspecting 
the past
Evolution of Quality II
avoid mistakes 
personal responsibility /
ownership

culture of trust

Looking 
into
the past
and
plan for the
future
Evolution of Quality III
 Systematic fulfillment of
customer requirements
Evolution of Quality IV
 Participation of all members of
an organization
Quality is Everywhere
people deal with the issue of quality
continually in their daily lives
We all apply a number of criteria when making a
purchase
To understand quality as a consumer-driven
concept
How will you judge the quality of the restaurant?
Service
Response time
Food preparation
Atmosphere
Price
Selection
What is Quality
• Fred Smith. CEO of FedEx defines
quality as “ performance to the
standard expected by customer “
• Boeing “ providing our customer
with products and services that
consistently meet their needs and
expectations”
So Quality Is …
• Although there is no universally accepted
definition of quality. There are some similarity
among among quality definition:
• Quality involves meeting or exceeding
customer expectations.
• Quality applies to products, services, people,
processes, and environments.
• Quality is ever changing state (i.e., what
consider quality today may not good enough
to be considered quality tomorrow).
W. Edwards Deming
• Born on October 14, 1900
• Was an American
statistician, professor,
author, lecturer, and
consultant
• Widely credited with
improving production in
the United States during
the Cold War
• Best known for work in
Japan
• Taught top management
(1950 onwards)
W. Edwards Deming
Quality keys:
• Understanding
customer needs
• Process improvement
• Statistical analysis
• Expertise of workers
• PDCA cycle
DEMING
1.
2.
3.
4.
5.
14
POINTS
Create constancy of purpose
Adopt a new philosophy
Stop dependence on inspection
Don’t focus on price tag
Improve constantly & forever
DEMING 14 POINTS
6. Institute training
7. Institute leadership
8. Drive out fear
9. Break down barriers
10. Eliminate slogans, exhortations
DEMING
14
POINTS
11. Eliminate quotas; use leadership
12. Remove barriers to workmanship
13. strong education program
14. Involve everybody
• The Deming cycle, or PDSA cycle,
is a continuous quality
improvement model consisting
of a logical sequence of four
repetitive steps for continuous
improvement and learning: Plan,
Do, Study (Check) and Act.
• It is also known as
the Deming circle/cycle/wheel,
Shewhartcycle, control
circle/cycle, or plan–do–study–
act (PDSA)
• W. Edwards Deming in the 1950's proposed
that business processes should be analyzed
and measured to identify sources of variations
that cause products to deviate from customer
requirements.
• He recommended that business processes be
placed in a continuous feedback loop so that
managers can identify and change the parts of
the process that need improvements.
• Example :
• At Toyota this is also known as "Building people
before building cars.“
• Toyota and other Lean companies propose that
an engaged, problem solving workforce, using
PDCA, is better able to innovate and stay ahead of
the competition through rigorous problem solving
and the subsequent innovations. This also creates
a culture of problem solvers using PDCA and
creating a culture of critical thinkers.
• PLAN establish the objectives and processes
necessary to deliver results in accordance
with the expected output (the target or
goals). By establishing output expectations,
the completeness and accuracy of
the specification is also a part of the targeted
improvement. When possible start on a
small scale to test possible effects.
• DO Implement the plan, execute the process,
make the product. Collect data for charting
and analysis in the following "CHECK" and
"ACT" steps.
• CHECK Study the actual results
(measured and collected in "DO" above)
and compare against the expected results
(targets or goals from the "PLAN") to
discover any differences. Look for
deviation in implementation from the
plan and also look for the
appropriateness and completeness of the
plan to enable the execution, i.e., "Do".
Charting data can make this much easier
to see trends over several PDCA cycles
and in order to convert the collected data
into information. Information is what you
need for the next step "ACT".
• ACT Request corrective actions on
significant differences between actual
and planned results. Analyze the
differences to determine their root
causes. Determine where to apply
changes that will include improvement
of the process or product. When a pass
through these four steps does not result
in the need to improve, the scope to
which PDCA is applied may be refined
to plan and improve with more detail in
the next iteration of the cycle, or
attention needs to be placed in a
different stage of the process.
Joseph M. Juran
Quality keys:
• Features that satisfy
customers
• Freedom from
deficiencies
• Juran Trilogy®
– Quality planning
– Quality control
– Quality improvement
Joseph M. Juran
• Dr. Juran was born on December 24, 1904 in Braila,
Romania. He moved to the United States in 1912 at
the age of 8.
• Juran holds degrees in both engineering and law. The
emperor of Japan awarded him the Order of the
Sacred Treasure medal,
in recognition of his efforts to develop quality In
Japan.
• Juan's teaching and consulting career spanned more
than seventy years, known as one of the foremost
experts on quality in the world.
Joseph M. Juran
Juran is best known for the following contributions to
the quality philosophy:
• Juran's Three Basic Steps to Progress
• Juran's Ten Steps to Quality Improvement
• The Juran Trilogy
Juran's Three Basic Steps to
Progress
Juran's Three Basic Steps to Progress are broad steps
to achieve world-class quality
• I. Achieve structured improvements on continual
basis combined with dedication and a sense of
urgency.
• II. Establish an extensive training program.
• III. Establish commitment and leadership on
the part of higher management
Juran's Ten Steps to Quality
Improvement
1.Build awareness of both the need for
improvement and opportunities for improvement
2. Set goals for improvement.
3.Organize to meet the goals that have been set.
4.Provide training.
5.Implement projects aimed at solving problems.
6.Report progress.
Juran's Ten Steps to Quality
Improvement
7.Give recognition.
8.Communicate results.
9.Keep score.
10.Maintain momentum
by building improvement into the company's
regular systems
JURAN TRILOGY
JURAN TRILOGY
• Juran's prescriptions focus on
three major aspects of quality called the Quality
Trilogy.
• Quality planning
the process for preparing to met quality goals,
• Quality control
the process for meeting quality goals during
operations, and
• Quality improvement
the process for breaking through to
unprecedented levels of performance
JURAN TRILOGY
• Quality Planning:
Quality planning involves developing the
products, systems, and process
needed to meet or exceed customer
expectations.
The following steps are required
JURAN TRILOGY
Quality Planning
1. Determine who the customers are.
2. Identify customers' needs.
3.Develop products with features that respond
to customer needs.
4.Develop systems and processes that allow the
organization to produce these features.
5.Deploy the plans to operational levels
JURAN TRILOGY
Quality Control
1. Assess actual quality performance.
2. Compare performance with goals.
3.Act on differences between performance and
goals
JURAN TRILOGY
Quality Improvement
1. Develop the infrastructure necessary to make annual quality improvements.
2. Identify specific areas in need of improvement, and implement improveme
nt projects.
3. Establisha project team with responsibility for completing each
improvement project.
4. Provide teams with what they need to be able to diagnose problems
to determine root causes develop solutions, and
establish control that will maintain gains made
Announcement
• Midterm exam 12 March 2013
• http://manassief.kau.edu.sa
• Group project
• Baldrige Award Recipients
• http://www.baldrige.nist.gov/Contacts_Profiles.htm
FUNDAMENTALS OF
TOTAL QUALITY
• Total quality a comprehensive, organizationwide effort to improve the quality of products and
service
applies not only to large manufacturers, but to small
companies alike.
• All organization large and small, manufacturing and
service, profit and not-for-profit
can benefit from applying the principles
of total quality.
Principles of Total Quality
• Total Quality (TQ) is a people focused management system
that aims at continual increase in customer
satisfaction at continually lower real cost.
• TQ is a total system approach
(not a separate area or program) and an integral part of high
level strategy; it works horizontally across functions and
departments, involves all employees, top to bottom, and
extends backward and forward to include the supply chain
and the customer chain.
TQ stresses learning and adaptation to continual change as
keys to organizational success
Principles of Total Quality
• The foundation of total quality is philosophical
: TQ includes systems, methods, and tools. The
systems
• permit change; the philosophy stays the same.
TQ is anchored in
values that stress the dignity of the
• individual and the power of community action
Principles of Total Quality
• There probably are as many different
approaches to TQ as there are businesses.
However, most share basic elements:
(1) customer focus, (2) a process orientation,
(3) continuous improvement and learning,
(4) empowerment and teamwork,
(5) management by fact, and
(6) leadership and strategic planning.
Leadership for Quality
• Leadership is fundamental to management and
organizational behavior and is on just about everyone's
short list of basics for organizational success.
• Thus it is not surprising that leadership plays crucial role in
the total quality organization. Virtually every article and
book written about quality emphasizes leadership.
• is the first category in the Malcolm Baldrige
National Quality Award and is recognized as the "driver“
of successful quality systems.
Leadership for Quality
• Leaders establish unity of purpose and direction
of the organization.
• They should create and maintain
the internal environment in which people
can become fully involved in achieving the
organization's objectives.
• Leaders communicate a vision that turns selfinterest into commitment to the job
Leadership VS. Manager
Leadership VS. Manager
The roles of a Quality Leader
• Underlying the concept of quality leadership
are some clear imperatives for managers who
aspire to quality leadership.
• First, they must establish a vision.
• Second, they must live the values.
• Third, they must lead
the improvement efforts.
Establish a Vision
• A vision is
a vivid concept of what an organization could be
• It is a dream, both in the sense of being desirable and
in the sense of being a long way from the
current reality,
but it is not an "impossible dream."
A vision should be clear and exciting to an
organization's employees.
• It should be linked to customers' needs and convey a
general strategy for achieving the mission.
Live the Values
• All of the vision and values in
the world are worthless if
the organization is not continuously making
strides to improve its performance in
the eyes of customers
• Visions of worldclass quality and competitiveness can only be
achieved if an organization keeps finding ways to
do things a little better and a little faster.
Leaders must be at the center of these efforts
Lead Continuous Improvement
• Manager's actions can symbolize their commitment to
quality-oriented values in many concrete ways.
• For example, they can attend training programs on
various aspects of quality, instead of just sending
• others.
• They can practice continuous improvement in
processes that they control, such as strategic
planning and capital budgeting.
Perhaps most importantly, they can provide adequate fun
ding for quality efforts. So that TQ will not be
the "poor cousin" to other business issues.
EMPOWERMENT FOR TQ
• Empowerment means giving someone powergranting the authority to do whatever is
necessary to satisfy customers, and trusting
employees to make the right choices without
waiting for management approval.
• By empowering employees, organizations
drive decision making down to its lowest possible
level
EMPOWERMENT FOR TQ
• Empowerment allows organizations to flatten
their organizational structure because fewer
managers are needed to "direct and control“
employees
• It represents a high degree of involvement in
which employees make decisions themselves
and are responsible for their outcomes
EMPOWERMENT FOR TQ
• For empowerment
to occur, managers must undertake tow major
initiatives:
• Identify and change organizational conditions
that make people powerless, and
• Increase people's confidence that their efforts to
accomplish something important will be
successful
Empowerment Process
Determining the skill level of the employee
Providing for employee training as needed
Coaching tasks with which the employee has some
skills but is lacking experience or motivation
Supporting tasks where the employee knows what to
do but is still lacking confidence in their abilities
Delegating tasks where the employee is motivated
and fully capable.
CASE STUDY TO DISCUSS
TEAMWORK CULTURE FOR TQM
• Teams could be everywhere in TQ organizations: at
the top and bottom and in ever function and department
• The TQ philosophy recognizes the interdependence
of the organization and uses teams as
a way to coordinate work.
• Teamwork enables various parts of
the organization work together in meeting
customer needs that can seldom be fulfilled
by employees limited to one area of expertise
TEAMWORK CULTURE FOR TQM
• Teams promote equality among individuals,
encouraging a positive attitude and trust.
• The diversity inherent in tams
often provides unique perspective on work,
spontaneous thought, and creativity.
• teams develop a greater sense of responsibility for
achieving goals and performing tasks.
• teams provide a variety of benefits that are not derived
from individuals working alone
TEAMWORK CULTURE FOR TQM
• TQ organizations recognize that the potential contributions of
employees are much greater than in
the traditional organization, an teams are an attempt to take
advantage this potential.
• The competitive environment of modern business
requires flexible, fast reaction to changes in customer
demands or technological capacity.
• Teams can provide the capacity for rapid response
Types of TQ Teams
• Some common types of teams include :
• Steering committees (or quality councils)
management teams that lead an organization and
provide direction and focus.
• Problem-solving teams teams of workers and
supervisors that met to address workplace
problems involving quality and productivity, or
ad-hoc teams with a specific mission such as
• organizational design teams that act a architects
of change.
Steering Committees
•
•
•
•
•
•
•
Most organizations practicing total quality have a steering
committee, called a quality council or a quality improvement team .
Steering committees are responsible for establishing policy
for TQ and for guiding the implementation and evolution of
TQ throughout the organization.
The top manager of the organization is usually on the steering
committee, for example, the Vice President /Director of Total quality.
The steering committee may meet fairly often when a TQ effort is getting started.
This group makes key decisions about the quality process how
quality should be measured and what structures and approaches should be used
to improve quality.
steering committee also frequently reviews the status of TQ and
makes the adjustment necessary to ensure customer satisfaction and
continuous improvement.
In general, the steering committee has
overall responsibility for the progress and success of the TQ effort
Problem-Solving Teams
• The second, and probably most common, type o team
used in TQ is the problem-solving team.
• As the name implies, problemsolving teams work to improve quality by identifying
and solving specific qualityrelated problems facing the organization.
Such teams are sometime referred to as corrective
• action teams, or quality circles, although many organiz
ations have created their own names for them.
• Two basic types of problemsolving teams are departmental and cross-functional.
Cross-Functional Teams
• Cross functional teams are not unique
to total quality they are commonly used in new product
development
• teams come from several departments or
functions, deal with problems that involve a variety
of functions, and typically dissolve
after the problem is solved
Cross-Functional Teams
• Cross-functional teams make a
great deal of sense in
an organization devoted to process
improvement.
• If a process is to be comprehensively
To be effective, cross
functional teams should include people
from several departments
Criteria for Team Effectiveness
1.
Clarity in team goals. As a sound basis, a team agrees on a mission, purpose, and goals.
2.
An improvement plan. A plan guides the team in determining schedules and mileposts by
helping the team decide what advice, assistance, training, materials, and other resources it may need.
3.
Clearly defined roles. All members must understand their duties and know who is responsible for what issues and tasks.
4.
Clear communication. Team members should speak with clarity, listen actively, and share information.
5.
Beneficial team behaviors. Teams should encourage members to use effective skills and
practices to facilitate discussions and meetings.
6.
Well-defined decision procedures. Teams should use data as the basis for decisions and
learn to reach consensus on important issues.
7.
participation. Everyone should participate, contribute their talents, and share commitment to the team's success.
8.
Established ground rules. The group outlines acceptable and unacceptable behaviors.
9.
Awareness of group process. Team members exhibit sensitivity to nonverbal communication, understand group dynamics,
and work on group process issues.
10.
Use of the scientific approach. With structured problem-solving processes, teams can more easily find root causes of
problems.
Customer Relationship
Management (CRM)
Why CRM is a Customer
and Competitive Necessity
• It typically costs 5-10 times as much to acquire a
new customer as it does to retain an existing one.
• “Some companies can boost profits by almost 100%
by retaining just 5% more of their customers.”
Harvard Business Review (Reicheld & Sasser)
• A recent McKinsey study showed that the average
new customer spends $24.50 at a given web site in
the first 3 months as a shopper. The average repeat
customer spends $52.50 every 3 months.
• Most companies lose 50% of their customers in 5
years (Harvard University)
Why CRM is a Customer and
Competitive Necessity
• On average only 15% of a site’s customers
consider themselves loyal to it. The loyalty
rating among people who had experienced a
problem was only 6%. Customers who had not
experienced problems indicated a customer
loyalty rating of 19%. The loyalty rating among
customers who had experienced problems but
were satisfied with the way they were handled:
21%. (Digital Idea)
• 70% of repeat purchases are made out of
indifference to the seller, NOT loyalty. (eLoyalty)
• The web customer is ‘only 1 click away from
your competition’.
Customer Relationship Management
(CRM)
• A business philosophy and set of
strategies, programs, and systems that
focus on identifying and building loyalty
with a retailer’s most valuable
customers.
CRM
• All customers are not equally profitable, and
more or less profitable customers need to be
treated differently
• Retailers now concentrate on providing more
value to their best customers using targeted
promotions and services to increase their
share of wallet – the percentage of the
customers’ purchases made from the retailer
Customer Loyalty
• Committed to purchasing merchandise and
services from a retailer
• Resist efforts of competitors to attract the
loyal customer
• Emotional attachment to retailer
– Personal attention
– Memorable positive experiences
– Brand building communications programs
Can Offering Price Discounts Achieve
Customer Loyalty?
No!
Retail strategies like these
can be copied by
competitors
These strategies encourage
customers to be always
looking for the best deal
rather than developing a
relationship with a retailer
McGraw-Hill Companies, Inc./Gary He, photographer
CRM Process Cycle
Collecting Customer Data:
Customer Database
• Transactions – a complete history of purchases
– Purchase date, price paid, SKUs bought, whether or not the
purchase was stimulated by a promotion
• Customer contacts by retailer (touch points) -visits to web site, inquires to call center, direct
mail sent to customer
• Customer preferences
• Descriptive information about customer
– Demographic and psychographic data
• Customer’s responses to marketing activities
Collecting Customer Data:
Identifying Information
Approaches that store-based retailers use:
• Asking for identifying information
– Telephone number, name and address
• Offering frequent shopper cards
– Loyalty programs that identify and provide
rewards to customers who patronize a retailer
– Private label credit card (that has the store’s name
on it)
• Connecting Internet purchasing data with the
stores
Privacy Concerns
• Control over Collection
– Do customers know what information is
being collected?
– Do customers feel they can decide upon
the amount and type of information
collected by retailers?
• Control over Use
– Do customers know how the information
will be used by the retailer?
– Will the retailer share the information with
third parties?
Steve Cole/Getty Images
Heighten Privacy Concerns
When Using Electronic Channel
• Information collected
without the awareness of
customers
• Collecting click stream
data using cookies
Similar to an invisible person
videotaping a customer as
they walk through a store
Stockbyte/Punchstock Images
Protecting Customer Privacy:
Differences between U.S. and EU
United States
European Union
• Limited protection in specific
areas
•
–
–
–
–
– Information only can be collected for
specific purposes
– Purpose must be disclosed to customer
– Information can only be used for specific
purpose
– Information cannot be exported to
countries with less stringent regulations
Credit reporting
Video rentals
Banking
Medical records
• Opt out: Consumers must
explicitly tell retailers not to use
their personal information
Stringent consumer privacy laws
•
Opt in: Consumers own their personal
information, and retailers must get
consumers to explicitly agree to share
this personal information
Customer Value
• Customers seek to maximize value by:
– estimating which offer (product/firm) delivers the most
value
– forming an expectation of value and acting upon it
(purchase)
– evaluating their usage experience against the expectations
Customer Value
Determinants of Customer Delivered Value
Customer Satisfaction
• Satisfaction is defined as . . .
“a person’s feelings of pleasure or
disappointment resulting from comparing a
product’s perceived performance (or outcome)
in relation to his or her expectations.”
– i.e., Performance - Expectation
• Satisfaction results when expectations are
equaled or surpassed.
Customer Satisfaction
• To maximize satisfaction . . .
– Don’t exaggerate the product / service’s
capabilities in advertising or other
communications
• Dissatisfaction will result
• FTC may become involved
– Don’t set expectations too low
• Market size will be limited
High Performance Businesses
High Performance Businesses
Porter’s Generic Value Chain
Customer Retention
• Reducing customer churn (defection) is highly
desirable
– Define and measure retention rate
– Identify causes of attrition
– Estimate profit lost from customer defection (customer
lifetime value)
– Estimate cost to reduce defection; take appropriate action
Customer Development Process
Strong Customer Bonds?
• Adding Financial Benefits
– Frequency programs, Club memberships
• Adding Social Benefits
– Personalize customer relationships
• Adding Structural Ties
– Create long-term contracts
– Charge less for ongoing purchases
– Link product to long-term service
Strong Customer Bonds
The U.S. Harley
Davidson site
promotes the
benefits of joining
H.O.G. (Harley
Owners Group)
Customer Profitability Analysis
Paradigm shift from acquiring
“customers” to maintaining “clients”
Quality
• Quality: totality of all features and characteristics of
product or service that satisfy stated or implied needs.
• Understanding the Role of Quality
– The core product is not enough
– Supplemental products are critical
• Delivering Superior Quality (four issues)
–
–
–
–
Understand customers’ expectations, needs, and wants
Translate customer research into specifications for quality
Deliver on specifications
Promise only what can be delivered
Quality and Total Product Offering
Summary: Retaining Customers Over the Long
Term
• Satisfaction vs. Quality vs. Value
– Expectations
• Customer Satisfaction and Customer Retention
–
–
–
–
–
–
–
Understand what can go wrong
Focus on controllable issues
Manage customer expectations
Offer satisfaction guarantees
Make it easy for customers to complain
Create loyalty programs
Make customer satisfaction measurement an ongoing priority
Examples of Satisfaction Guarantees
Creating a Company Customers
Love Doing Business With
Maintain Internal Harmony within
the Organization to Provide Quality
Service to Customers
Customer Service Philosophy
The core of customer satisfaction is COMPANY CULTURE
• Company Culture cascades from top Management
• Customers sense that your company is unique and different
• Customers know that you have their best interest at heart
A Golden Rule of Company Culture: Companies must take care of their
own people first. When that is done, the customers they service are
naturally happier.
The Customer comes Second
Build a Customer-Oriented Culture
• Employees will treat customers the way they are treated by
Management.
Those who are not served well will
not serve well.
Employee belief system
Business
Culture
Employee Relations
Customers and Suppliers
Who Companies need to Hire
Hire people who are good with people, rather than just their
technical abilities and/or product knowledge.
Hire those who possess attributes that cannot be easily taught.
•
Attitude: A fundamentally positive attitude toward work
•
Co-operation: enthusiastic of work interdependency
•
Energy: Have a “fire” to accomplish
•
Service Ethic: Doing what is right without regard for profit (If
you do the right thing, you will ultimately profit)
Employee Relations
Provide an environment where employees are happy to serve your
Company and hence, serve your customers.
•Encourage employees to look at work as a fun and personal
experience and to enjoy coming to work every morning.
• Instill ‘Company Family’ values to enhance employees’ sense of
belonging and pride. Invite family members of employees to join
corporate social activities.
• Employees must feel unafraid to make decisions impacting their
self-esteem
What’s in it for the Employee
BOSS
CUSTOMER
SALES EMPLOYEE
“The boss is getting
business, the customer is
getting what he/she wants,
so what’s in it for me?”
Managers should take an active responsibility to diversify job descriptions with sales
employees’ career goals.
Caring in Business
If you expect 100% from employees, then give them 100%.
“Without caring, there can be no quality. Caring
for customers leads to productivity,
innovativeness, comfort and initiation from the
customer.”
When employees get 100%, customers get 100%.
Vision and Mission
• Make employees aware of and involve them in setting the
company’s ongoing vision and mission of business.
• When employees can’t decide what course of action to take,
train them to go back to the company’s mission statement to help
them.
• Post the company customer service philosophy over your offices
so that employees are continually reminded of their job goals.
Every employee is part of a company’s vision for itself
Communicate for Internal Harmony
For Managers: Share company information without reservation..
•
Let employees know where the company is headed and that
they are a critical contribution to the company’s growth.
•
Encourage and regularly arrange for open dialogue between
employees and Management to find out perceptions that may
affect employee attitude and motivation.
To get desired behavior from employees, Management must
know what employees are thinking about the company they
work for.
Instilling Sales Philosophy
• Do not react negatively to negative customer behavior.
• Never say NO to a customer. Find a way to maintain contact.
• Employees must believe that the customer is the center of the
company’s universe.
• Encourage employees at every organizational level to reveal
information that could benefit the company’s growth.
Correct communication is the key to positive customers
Service in Action
Customer Service means taking someone else’s problem upon
yourself and fixing it for them. Being liked is not the only goal.
How to handle BAD CUSTOMERS (S-A-V-E):
1. Sympathize: Agree with the customer’s complaint.
2. Act: Take action so that the customer believes that he/she is
getting immediate attention.
3. Vindicate: Let them know how rare the problem is. “This is not
a normal occurrence in our company.”
4. Eat Something: Give the customer an unexpected ‘goodie’
before they leave.
Bottom-Line Thinking
• Making service possible requires being realistic. Do not expect
ideal performance, and do not create the hope of unusual
possibility.
Today, the monetary unit is not the Dollar. It is the MINUTE
• Customers make a decision based not only on price, but also on
how much time they have to invest to get benefit out of a product.
Time is a VALUE UNIT.
Customer Focus
Saturate the company with the voice of the customer
• Work as if there is a customer watches your actions all the time.
• Identify specific ways to measure customer service success.
• Conduct customer focus groups to get consumer reactions.
• Constantly rethink customer service policies to fit Company goals.
• Always express gratitude to the customers that bring business.
Re-Engineering
Better customer service is a result of enforcing quality
• Re-Engineering is complex, costly, and time-consuming.
- It is an option if the organization has a goal of long-term
change and profitability.
• This process is connected to Total Quality Management (TQM)
where procedures and protocols are revised and updated to
reduce time and cost
Applying Principles of Total Quality
Management for Improving
Customer Service
Steps to Ensure Quality in Customer
Service Processes and Policies
The 6 Steps to Customer Quality
1. Research Customer Service trends and
philosophy.
2. Get data on problems faced by customers.
3. Define BURNING ISSUES from the data.
4. Identify root processes of burning issues.
5. Modify existing processes/create new ones.
6. Indulge in Continuous Improvement.
Step 1: Education
 Get journal articles on TQM, research guiding
principles, and case-studies.
 Attend seminars on the subject and talk with
prospective consultants.
 Be committed to learning and getting TQM training.
Organize your time to accommodate this important step because only then can
subsequent steps be followed
Step 2: Assessment
Ask employees and customers:
1. What do you think should be stopped
here?
2. What should we start doing here?
3. What are the things we ought to keep
doing?
Give them an open ended survey and ask
them to track their observations for 3
weeks by completing sentences like ‘I wish
we would stop…’, ‘I hope we continue
to…’, and ‘I wish we could start…’.
Step 3. Determine Burning Issues
The WHY Technique: When faced with a problem,
don’t ask WHY just once.
Why are we getting customer complaints about our product?
Burning Issue
Because we are shipping
out the wrong product!
Why are we shipping out the wrong product?
Because it is difficult to read
the 4th copy of the order form!
Why can’t the warehouse manager read the 4th copy?
Because we are using a 150year old print wheel!
Core of the Burning
Issue
Step 4. Critical Process
Management
•
Determine CRITICAL PROCESSES related to customer
service in your organization.
• How long do these processes take?
(Are there any unnecessary steps that can be eliminated?)
•
Decide what is to be measured like response time,
aspects of service, and relevance to customers.
Know your business in terms of steps that
impact customers
Step 5. Reorganizing Customer
Service Policies and Principles
Get representatives that are affected by customer policies and a
consensus on the steps required to perform them.
Discuss whether steps are laid out in proper sequence, what takes
too long, what needs to be simplified, and what needs to be
measured to know how effective it is in terms of cost and time.
Benchmark processes in other companies to innovate within.
Get steps of critical processes down on paper
Step 6. Continuous Improvement
• Alert watching on maintaining the principles of quality
service.
• Making sure that new customer policies become part of
every employee’s everyday thinking, applying it to the work
setting.
• Celebrating the implementation of successful customer
service with all employees.
Customer Satisfaction is directly proportional to an
organization’s internal quality.