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My name is Donny. I'm 23 years old. I'm from Indonesia. Why is difficult to synchronize supply and demand with services? Is it because we can not forecast the demand?
create a satisfied customer it will reflect many times for your company's success
Examples of Service Industries
Health Care – Hospital, medical practice, dentistry, eye care
Professional Services – Accounting, Legal, Architectural, IT
Financial Services – Banking, Investment advising, Insurance
Hospitality – Restaurant, hotel/motel, B & B, Ski resort, rafting etc.
Travel – Airlines, Travel agencies, Theme parks etc.
Other – Hair styling, Pest control, Plumbing, Lawn maintenance, Counselling services, Health club
Each will survive only if the customers come back
Evolution of QA Methods
1930s – Inspection
1950 – Statistical Process Control
1975 – Design of Experiment (DOE)
1985 – Taguchi
1990 – Quality Management Systems
1995 – Six Sigma
Service quality is stuck at inspections level.
Implications of Perishability of Service
It is difficult to synchronize supply and demand with services
Services cannot be returned or resold
Moments of Truth in Service
Each customer contact is 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
Customer Acceptance Criteria: Now it the Total Experience
Performance, Aesthetics, Special features, Safety, Reliability, Durability, Perceived quality, Service after sale
The Dimensions of Service Quality
Reliability: Perform promised service dependably and accurately. Example: Receive mail at the same time each day
Responsiveness: Willingness to help customers promptly. Example: Avoid keeping customers waiting for no apparent reason
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
See Kano model to prioritize customer needs.
Some sources of satisfaction are intangible: The Tangibility Spectrum
Tangible Dominant e.g. Salt, Soft drinks -> Intangible Dominant Consulting, Investment management
All customers want to be satisfied
Customer loyalty is only due to the lack of a better alternative
Giving customers some extra value may delight them if it exceeds their expectations to cause their return.
The Kano model is a good approach to address satisfaction.
How Serious are 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% 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.
Best "1" to Worst "10" Ratings for Failure to Serve
Rating Degree of Severity Likelihood of Occurrence Ability to Detect
But many things can be done!
Note the five dimensions of service quality – Reliability, Responsiveness, Empathy, Assurance and Tangibles
Use the service quality gap model to diagnose quality problems
Perform service quality function deployment
Use the Kano model to prioritize customer requirements
Construct a SPC control chart to monitor
Develop unconditional service guarantees
Plan for service recovery
Perform a walk-through audit (WtA)
Seek out where the Service Quality Gap exists
The best approach: Raise the Quality of Service by Design
Quality in the Service Package – Budget Hotels
Taguchi Methods (Robustness) – Customer's notifying room cleaning maids
Poka-yoke (Fail-safe methods) – Height bar at amusement rides
Quality Function Deployment and Kano model – House of Quality, Maximising satisfaction
Classification of Service Failures with Poka-Yoke Opportunities
Task – Doing work incorrectly
Treatment – Failure to listen to customer
Tangible – Failure to wear clean uniform
Preparation – Failure to bring necessary materials
Encounter – Failure to follow system flow
Resolution – Failure to signal service failure
Recall Six Sigma!!
Six Sigma business process improvement projects have two objectives:
Variability reduction – In the context of service, the customer's experience should meet or exceed her expectations and be consistent
Loss reduction – Any defective service delivery, material, time or monetary loss should be minimized.
Quality Monitoring (Control Metrics) implemented at Community Credit Union
CCU began Six Sigma with extensive customer survey:
What things did the customer want the CCU to provide?
Which of these the CCU would consider to be of strategic value to its own vision/mission
This survey determined the required Dimensions of Teller Performance (QFD used)
Technical Knowledge/Skills – 35%
Service Quality/Professionalism – 40%
Teamwork – 25%
Service Quality/Professionalism Targets
Average at least 3 on all feedbacks – 45%
No more than two controllable negative complaints from members per year – 35%
No more than one counseling session about dress code per year – 20%
No more than two legitimate peer complaints per year – 50%
No more than 6 absences (occurrences) per year – 50%
Survey led to setting performance targets for Tellers
Technical Knowledge/Skills Targets
Over/Short no more than $300 per year – 25%
No more than 12 times out per year – 25%
Balance within 30 minutes after last member has been helped and performs necessary corrections – 10%
No more than 5 controllable errors per month – 30%
Average minimum teller transactions/month including Saturdays – 10%
Controllable errors can include but are not limited to:
• Errors found on non-cash audits
• Error on logs
• Errors detected by member calls
• Errors found during "out of balance" searches
• All reversals
• Repetitive errors
• Force balancing
Some Good Practices in Management
Cost of Quality (Juran) – Think Prevention!
Service Process Control – Monitor how you are performing
Statistical Process Control (Deming – Variability reduction)
Unconditional Service Guarantee (Kano)
Costs of Service Quality (Bank Example)
Failure Costs – Detection Costs (Minimize) – Prevention Costs (Optimize)
Service Process Control – This is a continuous version of DMAIC
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