1.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 1 Chapter 8 Designing Quality Services

2.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 2 Strategic Quality Planning Designing Quality Services Chapter 8  Differences between services and manufacturing  What do services customers want?  SERVQUAL  Designing and improving the services transaction  The customer benefits package

3.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 3 Strategic Quality Planning Designing Quality Services Chapter 8  Globalization of Services  Improving Customer Service in government  Quality in Health Care  A Theory for Service Quality Management

4.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 4 Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing  Many service attributes are intangible.  Customer contact  Customer co-production  Internal versus external services  Voluntary versus involuntary services

5.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 5 Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing How service quality issues different from those of manufacturing?  In manufacturing, dimensions are available for measurement  In services, such measurable dimensions are often unavailable  Simultaneous production and consumption means you have to get it right the first time  Product liability

6.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 6 Strategic Quality Planning Designing Quality Services Differences between Services and Manufacturing How service quality issues similar to those of manufacturing?  For both, the customer is the core of the business  By focusing on the customer many manufacturers and services firms have come to view themselves as service providers

7.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 7 Strategic Quality Planning Designing Quality Services What do Customers want? Chapter 1 listed dimensions of quality:  Tangibles  Reliability  Responsiveness  Assurance  Empathy

8.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 8 Strategic Quality Planning Designing Quality Services SERVQUAL  Developed for assessing quality along the five service quality dimensions.  An off-the-shelf approach that can be used in many service situations

9.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 9 Strategic Quality Planning Designing Quality Services SERVQUAL Advantages are:  It is accepted as a standard for assessing different dimensions of services quality  It has been shown to be valid for a number of service situations

10.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 10 Strategic Quality Planning Designing Quality Services SERVQUAL Advantages are:  It has been demonstrated to be reliable  It is parsimonious in that it only has 22 items  It has a standardized analysis procedure

11.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 11 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey has two parts:  Customer expectations  Customer perceptions If we understand them both, we can assess the gap in these areas

12.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 12 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey has 22 questions: Tangibles – Questions 1 – 4 Reliability – Questions 5 – 9 Responsiveness – Questions 10 – 13 Assurance – Questions 14 – 17 Empathy – Questions 18 – 22

13.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 13 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis Gaps in communication and understanding between employees and customers have a serious affect.

14.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 14 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 1 Management perceptions of Customer exceptions and Expected service

15.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 15 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 2 Service quality specifications and Managers perceptions of customer expectations

16.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 16 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 3 Service delivery and Service quality expectations

17.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 17 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 4 Service delivery and External communications to customers

18.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 18 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis – Gap 5 Expected service and Perceived service

19.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 19 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis The key to closing gap 5 is to first close gaps 1 through 4

20.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 20 Strategic Quality Planning Designing Quality Services SERVQUAL The SERVQUAL survey is useful for gap analysis By averaging the difference between Perception and expectation a two dimensional map can be created identifying strengths and weaknesses

21.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 21 Strategic Quality Planning Designing Quality Services Designing and improving the services transaction One way to improve perceptions of quality …Improve the process of delivery Poka-yoke

22.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 22 Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Poka-yoke – Services Blueprinting 1. Identify processes 2. Isolate fail points 3. Establish a time frame 4. Analyze profits

23.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 23 Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Poka-yoke – Services Blueprinting Fail Points.. Moments of truth. These are times at which the customer expects something to happen.

24.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 24 Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Poka-yoke – Services Blueprinting Fail safe devices  Warning methods  Physical contact methods  Visual contact methods

25.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 25 Strategic Quality Planning Designing Quality Services Designing and improving the services transaction Poka-yoke – Services Blueprinting Fail safe devices – “The Three T’s”  Tasks to be performed  Treatment provided to customer  Tangibles provided to customer

26.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 26 Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Tangibles that define the service Intangibles that make up the service

27.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 27 Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Four stages of the service benefit package… 1. Idea/concept generation 2. The definition of a service package 3. Process definition and selection 4. Facilities requirements definition

28.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 28 Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives…  Make sure the final CBP attributes you are using are the correct ones

29.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 29 Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives…  Evaluate the relative importance of each attribute in the customers mind

30.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 30 Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives…  Evaluate each attribute in terms of process and service encounter capability

31.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 31 Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives…  Figure out how to best segment the market and position CBP’s in each market

32.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 32 Strategic Quality Planning Designing Quality Services The Customer Benefits Package Customer benefits packages (CBP) Objectives…  Avoid CBP duplication and proliferation

33.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 33 Strategic Quality Planning Designing Quality Services The Globalization of Services Economies … are following the lead of the United States by transferring labor and GDP into the services sector

34.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 34 Strategic Quality Planning Designing Quality Services Improving Customer Service in Government 1998 – The government established a searchable list of 4,000 customer service standards for 570 federal departments and agencies

35.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 35 Strategic Quality Planning Designing Quality Services Improving Customer Service in Government 2002 – 41 states had established quality award programs

36.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 36 Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: People want and desire to do good work

37.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 37 Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Quality management is associated with improved employee satisfaction

38.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 38 Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Government leaders are mandating standards, strategic plans and new levels of performance

39.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 39 Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Demand for government services is growing at a faster rate than funding for them

40.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 40 Strategic Quality Planning Designing Quality Services Improving Customer Service in Government Several factors driving this change: Threat of privation in government has led to an improvement in service

41.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 41 Strategic Quality Planning Designing Quality Services Quality in Health Care  Health care is facing the same “cost squeeze that government is facing  A move to HMO’s is causing hospitals to streamline operations  There is increased diversity in health care  Calls for a nationalized health care system

42.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 42 Strategic Quality Planning Designing Quality Services A theory for Service Quality Management Proposition 1: Unified services theory Proposition 2: The unreliable supplier dilemma Proposition 3: Capricious Labor Proposition 4. Everyone presumes to be an expert

43.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 43 Strategic Quality Planning Designing Quality Services Summary  Because services involve intangibles they are different from manufacturing  Lack of hard measures, statistical Quality Control techniques are not always successful The bottom line is a satisfied customer

44.  Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 8- 44 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.