Productivity and Quality

Improvement
Quality level

Check Do

Act Plan

Time
 Four Stages in Service Firm
Competitiveness
1. Available for service
Customers patronize service
firm for reasons other than
performance.
Operations is reactive,
at best.
SERVICE QUALITY
Is subsidiary to cost,
highly variable.
2. Journeyman 3. Distinctive competence
Customers neither seek Customers seek out the firm
out nor avoid the firm. on the basis of its sustained
reputation for meeting
customer expectations
Operations functions in a Operations continually excels,
mediocre, uninspired reinforced by personnel
fashion. management and systems
that support an intense
customer focus.
Meets some customer Exceeds customer
expectations; consistent expectations; consistent
on one or two key on multiple dimensions.
dimensions.
4. World-class service delivery
The company’s name is synonymous
with service excellence. Its service
doesn’t just satisfy customers; it
delights them and thereby expands
customer expectations to levels its
competitors are unable to fulfill.
Operations is a quick learner and fast
innovator; it masters every step of the
service delivery process and provides
capabilities that are superior to
competitors.
Raises customer expectations and
seeks challenge; improves
continuously.
 Four Stages in Service Firm
Competitiveness (cont.)
1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery
BACK OFFICE
Counting room. Contributes to service, plays Is equally valued with front Is proactive, develops its own
an important role in the total office; plays integral role. capabilities, and generates
service, is given attention, opportunities.
but is still a separate role.
CUSTOMER
Unspecified, to be A market segment whose A collection of individuals A source of stimulation, ideas,
satisfied at minimum cost. basic needs are understood. whose variation in needs is and opportunity.
understood.
INTRODUCTION OF NEW TECHNOLOGY
When necessary for When justified by cost When promises to enhance Source of first-mover advantages,
survival, under duress. savings. service. creating ability to do things your
competitors can’t do.
WORKFORCE
Negative constraint.
Efficient resource; disciplined; Permitted to select among Innovative; creates procedures.
follows procedures. alternative procedures.
FRONT-LINE MANAGEMENT
Controls workers. Controls the process. Listens to customers; coaches Is listened to by top management
and facilitates workers. as a source of new ideas. Mentors
workers to enhance their career.
 Continual Improvement as a
Competitive Strategy
 Analogy with Just-in-Time Manufacturing
 Inventory and Waiting Line Analogy
 Continual Improvement as a Service
Organization Culture
 Management Implications
 Inventory and Waiting Line
Analogy
Feature Inventory Waiting line

Costs Opportunity cost of capital Opportunity cost of time

Space Warehouse Waiting area
Quality Poor quality hidden Negative impression
Decoupling Promotes independence of Allow division of labor and
production stages specialization
Utilization Work in process keeps machines busy Waiting customers keep servers busy
Coordination Detailed scheduling not necessary Avoids matching supply and demand
 Traditional vs World-Class
Service Organizations
Dimension Traditional World-class

System assumption Closed system Open system

Job design premise Division of labor Flexibility
Structure Rigid Fluid
Relation to others Individual Team player
Employee orientation Task Customer
Management Supervisor Coach and facilitator
Technology Replace human effort Assist service delivery
Information Efficiency Effectiveness
 Deming’s Foundations of Quality
Improvement Program
 Customer Satisfaction
 Management by Facts
 Deming’s Wheel
 Respect for People
 Mega Bytes Restaurant

 How is the Seven Step Method (SSM)

different from Deming’s PDCA cycle?
 Prepare a cause-and-effect diagram for
“Why customers have lone waits for coffee”
 How would you resolve the difficulties that
study teams have experienced when
applying SSM?