© 2006 Prentice Hall, Inc.6 – 1 Managing Quality Ch6 Production Planning and Control

© 2006 Prentice Hall, Inc. 6 – 1

Managing Quality Ch6Managing Quality Ch6

Production Planning and Production Planning and ControlControl


Quality and StrategyQuality and Strategy

Managing quality supports Managing quality supports differentiation, low cost, and differentiation, low cost, and response strategiesresponse strategies

Quality helps firms increase sales Quality helps firms increase sales and reduce costsand reduce costs

Building a quality organization is a Building a quality organization is a demanding taskdemanding task


Ways Quality Improves Ways Quality Improves ProductivityProductivity

Improved Improved QualityQuality

Increased Increased ProfitsProfits

Increased productivity

Lower rework and scrap costs

Lower warranty costs

Reduced Costs

Improved response

Higher Prices

Improved reputation

Sales Gains


The Flow of Activities The Flow of Activities Necessary to Achieve TQMNecessary to Achieve TQM

Organizational PracticesLeadership, Mission statement, Effective operating procedures, Staff support,

TrainingYields: What is important and what is to be accomplished

Quality PrinciplesCustomer focus, Continuous improvement, Benchmarking, Just-in-time,

Tools of TQMYields: How to do what is important and to be accomplished

Employee FulfillmentEmpowerment, Organizational commitmentYields: Employee attitudes that can accomplish what is important

Customer SatisfactionWinning orders, Repeat customersYields: An effective organization with a competitive advantage


Defining QualityDefining Quality

The totality of features and The totality of features and characteristics of a product or characteristics of a product or

service that bears on its ability to service that bears on its ability to satisfy stated or implied needssatisfy stated or implied needs

American Society for QualityAmerican Society for Quality

Quality Definition


Different ViewsDifferent Views

User-basedUser-based – better performance, more – better performance, more featuresfeatures

Manufacturing-basedManufacturing-based – conformance to – conformance to standards, making it right the first timestandards, making it right the first time

Product-basedProduct-based – specific and – specific and measurable attributes of the product measurable attributes of the product


Implications of QualityImplications of Quality

1.1. Company reputationCompany reputation Perception of new productsPerception of new products

Employment practicesEmployment practices

Supplier relationsSupplier relations

2.2. Product liabilityProduct liability Reduce riskReduce risk

3.3. Global implicationsGlobal implications Improved ability to competeImproved ability to compete


Key Dimensions of QualityKey Dimensions of QualityKey Dimensions of QualityKey Dimensions of Quality PerformancePerformance FeaturesFeatures ReliabilityReliability ConformanceConformance DurabilityDurability ServiceabilityServiceability Aesthetics (Aesthetics (es-thet-ik) Perceived qualityPerceived quality ValueValue


Malcolm Baldrige National Malcolm Baldrige National Quality AwardQuality Award

Established in 1988 by the U.S. Established in 1988 by the U.S. governmentgovernment

Designed to promote TQM practicesDesigned to promote TQM practices

Recent winnersRecent winnersThe 2013 Baldrige Award recipients—listed with their category

—are:Pewaukee School District, Pewaukee, Wis. (education)Baylor Regional Medical Center at Plano, Plano, Texas

(health care)*Sutter Davis Hospital, Davis, Calif. (health care)


Baldrige CriteriaBaldrige Criteria

Applicants are evaluated on:Applicants are evaluated on:

Categories PointsLeadership 120Strategic Planning 85Customer & Market Focus 85Information & Analysis 90Human Resource Focus 85Process Management 85Organizational Results 450


Costs of QualityCosts of Quality

Prevention costsPrevention costs - reducing the - reducing the potential for defectspotential for defects

Appraisal costsAppraisal costs - evaluating - evaluating products, parts, and servicesproducts, parts, and services

Internal failureInternal failure - producing defective - producing defective parts or service before deliveryparts or service before delivery

External costsExternal costs - defects discovered - defects discovered after deliveryafter delivery


External Failure

Internal Failure

Prevention

Costs of QualityCosts of Quality

Appraisal

Total Cost

Quality Improvement

Total CostTotal Cost


Leaders in QualityLeaders in Quality

W. Edwards DemingW. Edwards Deming 14 Points for 14 Points for ManagementManagement

Joseph M. JuranJoseph M. Juran Top management Top management commitment, fitness for commitment, fitness for useuse

Armand FeigenbaumArmand Feigenbaum Total Quality ControlTotal Quality Control

Philip B. CrosbyPhilip B. Crosby Quality is FreeQuality is Free


Ethics and Quality Management

Operations managers must deliver Operations managers must deliver healthy, safe, quality products and healthy, safe, quality products and servicesservices

Poor quality risks injuries, lawsuits, Poor quality risks injuries, lawsuits, recalls, and regulationrecalls, and regulation

Organizations are judged by how they Organizations are judged by how they respond to problemsrespond to problems


TQM

Encompasses entire organization, from Encompasses entire organization, from supplier to customersupplier to customer

Stresses a Stresses a commitmentcommitment by management by management to have a to have a continuingcontinuing, companywide , companywide drive toward excellencedrive toward excellence in all aspects in all aspects of products and services that are of products and services that are important to the customerimportant to the customer


Deming’s Fourteen Points

1.1. Create consistency of purposeCreate consistency of purpose

2.2. Lead to promote changeLead to promote change

3.3. Build quality into the product; stop depending Build quality into the product; stop depending on inspectionon inspection

4.4. Build long term relationships based on Build long term relationships based on performance, not priceperformance, not price

5.5. Continuously improve product, quality, and Continuously improve product, quality, and serviceservice

6.6. Start trainingStart training

7.7. Emphasize leadershipEmphasize leadershipTable 6.1Table 6.1


Deming’s Fourteen Points

8.8. Drive out fearDrive out fear

9.9. Break down barriers between departmentsBreak down barriers between departments

10.10. Stop lecturing workersStop lecturing workers

11.11. Support, help, improveSupport, help, improve

12.12. Remove barriers to pride in workRemove barriers to pride in work

13.13. Institute a vigorous program of education and Institute a vigorous program of education and self-improvementself-improvement

14.14. Put everybody in the company to work on the Put everybody in the company to work on the transformationtransformation

Table 6.1Table 6.1


Seven Concepts of TQM

Continuous improvementContinuous improvement

Six SigmaSix Sigma

Employee empowermentEmployee empowerment

BenchmarkingBenchmarking

Just-in-time (JIT)Just-in-time (JIT)

Taguchi conceptsTaguchi concepts

Knowledge of TQM toolsKnowledge of TQM tools


Continuous Improvement

Represents continual improvement of Represents continual improvement of all processes all processes

Involves all operations and work Involves all operations and work centers including suppliers and centers including suppliers and customerscustomersPeople, Equipment, Materials, ProceduresPeople, Equipment, Materials, Procedures


2. DoTest the

plan

3. CheckIs the plan working?

4. ActImplement

the plan

1.PlanIdentify the

improvement and make

a plan

Shewhart’s PDCA ModelShewhart’s PDCA Model


Six SigmaSix Sigma

Originally developed by Motorola, Six Originally developed by Motorola, Six Sigma refers to an extremely high Sigma refers to an extremely high measure of process capabilitymeasure of process capability

A Six Sigma capable process will return A Six Sigma capable process will return no more than 3.4 defects per million no more than 3.4 defects per million operations (DPMO)operations (DPMO)

Highly structured approach to process Highly structured approach to process improvementimprovement


What is Six Sigma?What is Six Sigma?What is Six Sigma?What is Six Sigma?

Six Sigma is about helping organization make more money by improving customer value and efficiency. This is accomplished by producing products and services that are cheaper, faster, and better, thus reducing waste.

Waste is defined as the difference between potential and actual quality


Core Philosophy of Six SigmaCore Philosophy of Six Sigmais based on the Key Concepts is based on the Key Concepts Core Philosophy of Six SigmaCore Philosophy of Six Sigmais based on the Key Concepts is based on the Key Concepts

• Think in terms of key Think in terms of key business processes, business processes, customer requirements, and overall strategic customer requirements, and overall strategic objectivesobjectives..

• Focus on Focus on corporate sponsorscorporate sponsors responsible responsible for championing projects, support team for championing projects, support team activities, help to overcome resistance to activities, help to overcome resistance to change, and obtaining resources.change, and obtaining resources.

• Emphasize quantifiable measures such as Emphasize quantifiable measures such as defects per million opportunities (dpmo)defects per million opportunities (dpmo) that that can be applied to all parts of an can be applied to all parts of an organizationorganization


Core Philosophy of Six SigmaCore Philosophy of Six Sigmais based on the Key Concepts (Cont.)is based on the Key Concepts (Cont.)

Core Philosophy of Six SigmaCore Philosophy of Six Sigmais based on the Key Concepts (Cont.)is based on the Key Concepts (Cont.)

• Ensure that Ensure that appropriate metricsappropriate metrics are are identified early and focus on business identified early and focus on business results, thereby providing incentives and results, thereby providing incentives and accountability.accountability.

• Provide Provide extensive trainingextensive training followed by followed by project team deployment project team deployment

• Create highly qualified process improvement Create highly qualified process improvement expertsexperts (“green belts,” “black belts,” and (“green belts,” “black belts,” and “master black belts”) who can apply “master black belts”) who can apply improvement tools and lead teams.improvement tools and lead teams.

• Stretch objectives for improvementStretch objectives for improvement..


What Is Six Sigma? – Sigma ScaleSix Sigma Is A Statistical Unit Of Measure That Reflects Process CapabilitySix Sigma Is A Statistical Unit Of Measure That Reflects Process Capability

DPMODPMO

6 3.4

5 230

4 6,210

3 66,800

2 308,000

1 697,672

ProcessCapability

Errors/Defects Per Million Opportunities

6e

Most Service Organizations Are

~ 3 Sigma


Classical View of PerformanceClassical View of Performance

Practical Meaning of “99% Good”:Practical Meaning of “99% Good”:

20,000 lost articles of mail per hour20,000 lost articles of mail per hour

15 minutes of unsafe drinking water each day15 minutes of unsafe drinking water each day

5,000 incorrect surgical operations per week5,000 incorrect surgical operations per week

2 short or long landings at most major airports each day2 short or long landings at most major airports each day

200,000 wrong drug prescriptions each year200,000 wrong drug prescriptions each year

No electricity for almost 7 hours each monthNo electricity for almost 7 hours each month

3 Sigma

4 Sigma

6 Sigma

93.32%

99.38%

99.9999%

HistoricalStandardCurrent

StandardNew

Standard

CapabilityLong-Term

YieldStandard


Impact of Six SigmaImpact of Six SigmaImpact of Six SigmaImpact of Six Sigma

• Difference between 4 and 6 sigma:

• Phone without service 4 hours vs 9 sec/month

• 1 non-confirming package in 3 truck loads vs 5,000

• From 3 to 4 sigma improvements 10 folds




Six SigmaSix Sigma

1.1. Define critical outputs Define critical outputs and identify gaps for and identify gaps for improvementimprovement

2.2. Measure the work and Measure the work and collect process datacollect process data

3.3. Analyze the dataAnalyze the data

4.4. Improve the processImprove the process

5.5. Control the new process to Control the new process to make sure new performance make sure new performance is maintainedis maintained

DMAIC ApproachDMAIC Approach


Six Sigma ImplementationSix Sigma Implementation

Emphasize DPMO as a standard metricEmphasize DPMO as a standard metric Provide extensive trainingProvide extensive training Focus on corporate sponsor support Focus on corporate sponsor support

(Champions)(Champions) Create qualified process improvement Create qualified process improvement

experts (Black Belts, Green Belts, etc.)experts (Black Belts, Green Belts, etc.) Set stretch objectivesSet stretch objectives

This cannot be accomplished without a major commitment from top level management


Employee EmpowermentEmployee Empowerment

Getting employees involved in product and Getting employees involved in product and process improvementsprocess improvements 85% of quality problems are due to process and 85% of quality problems are due to process and

materialmaterial TechniquesTechniques

Build communication networks that include Build communication networks that include employeesemployees

Develop open, supportive supervisorsDevelop open, supportive supervisors Move responsibility to employeesMove responsibility to employees Build a high-morale organizationBuild a high-morale organization Create formal team structuresCreate formal team structures


Quality CirclesQuality Circles

Group of employees who meet regularly Group of employees who meet regularly to solve problems (brainstorming to solve problems (brainstorming sessions)sessions)

The group members are trained in The group members are trained in planning, problem solving, and planning, problem solving, and statistical methodsstatistical methods

Often led by a facilitatorOften led by a facilitator

Very effective when done properlyVery effective when done properly


Use internal

benchmarking

if you’re big

enough

BenchmarkingBenchmarking

Selecting Selecting best practicesbest practices to use as a to use as a standard for performancestandard for performance

Determine what to benchmarkDetermine what to benchmark Form a benchmark teamForm a benchmark team Identify benchmarking partnersIdentify benchmarking partners Collect and analyze benchmarking informationCollect and analyze benchmarking information Take action to match or exceed the benchmarkTake action to match or exceed the benchmark


Best Practices for Resolving Best Practices for Resolving Customer ComplaintsCustomer Complaints

Make it easy for clients to complainMake it easy for clients to complain Respond quickly to complaintsRespond quickly to complaints Resolve complaints on first contactResolve complaints on first contact Use computers to manage complaintsUse computers to manage complaints Recruit the best for customer service jobsRecruit the best for customer service jobs


Just-in-Time (JIT)Just-in-Time (JIT)

Relationship to quality:Relationship to quality:

JIT cuts the cost of qualityJIT cuts the cost of quality

JIT improves qualityJIT improves quality

Better quality means Better quality means less inventory and less inventory and better, easier-to-employ JIT systembetter, easier-to-employ JIT system


Just-in-Time (JIT)Just-in-Time (JIT) ‘‘PullPull’ system of production scheduling ’ system of production scheduling

including supply managementincluding supply management Production only when signaledProduction only when signaled

Allows reduced inventory levelsAllows reduced inventory levels Inventory costs money and hides process and Inventory costs money and hides process and

material problemsmaterial problems

Encourages improved process and product Encourages improved process and product qualityquality


Just-In-Time (JIT) ExampleJust-In-Time (JIT) Example

ScrapUnreliable Vendors

Capacity Imbalances

Work in process inventory level

(hides problems)


Just-In-Time (JIT) ExampleJust-In-Time (JIT) Example

Reducing inventory revealsReducing inventory revealsproblems so they can be solvedproblems so they can be solved

ScrapUnreliable Vendors

Capacity Imbalances


Taguchi ConceptsTaguchi Concepts

Experimental design methods to Experimental design methods to improve product and process designimprove product and process design Identify key component and process Identify key component and process

variables affecting product variationvariables affecting product variation

Taguchi ConceptsTaguchi Concepts Quality robustnessQuality robustness

Quality loss functionQuality loss function

Target-oriented qualityTarget-oriented quality


Quality RobustnessQuality Robustness

Ability to Ability to produce products uniformlyproduce products uniformly in in adverse manufacturing and environmental adverse manufacturing and environmental conditionsconditions Remove the effects of adverse conditionsRemove the effects of adverse conditions

Small variations in materials and process do Small variations in materials and process do not destroy product qualitynot destroy product quality


Quality Loss FunctionQuality Loss Function Shows that Shows that costs increasecosts increase as the product as the product

moves away from what the customer moves away from what the customer wantswants

Costs include customer dissatisfaction, Costs include customer dissatisfaction, warranty and service, internal scrap and warranty and service, internal scrap and repair, and costs to societyrepair, and costs to society

Traditional conformance specifications Traditional conformance specifications are too simplisticare too simplistic


Unacceptable

Poor

Good

Best

Quality Loss FunctionQuality Loss FunctionHigh lossHigh loss

Loss (to Loss (to producing producing organization, organization, customer, customer, and society)and society)

Low lossLow loss

FrequencyFrequency

LowerLower TargetTarget UpperUpper

SpecificationSpecification

Target-oriented quality Target-oriented quality yields more product in yields more product in the “best” categorythe “best” category

Target-oriented quality Target-oriented quality brings product toward brings product toward the target valuethe target value

Conformance-oriented Conformance-oriented quality keeps products quality keeps products within 3 standard within 3 standard deviationsdeviations

L = DL = D22CCwherewhere

L =L = loss to loss to societysocietyD =D = distance from distance from target valuetarget valueC =C = cost of cost of deviationdeviation


Tools of TQMTools of TQM Tools for Generating IdeasTools for Generating Ideas

Check sheetsCheck sheetsScatter diagramsScatter diagramsCause and effect diagramsCause and effect diagrams

Tools to Organize the DataTools to Organize the DataPareto chartsPareto chartsFlow chartsFlow charts

Tools for Identifying ProblemsTools for Identifying ProblemsHistogramHistogramStatistical process control chartStatistical process control chart


Seven Tools for TQMSeven Tools for TQM(a)(a) Check SheetCheck Sheet: An organized method of recording data: An organized method of recording data

Month Lost Departure Mechanical Overbooked Other

Luggage Delay

January 1 2 3 3 1

February 3 3 0 1 0

March 2 5 3 2 3

April 5 4 4 0 2

May 4 7 2 3 0

June 3 8 1 1 1

July 6 6 3 0 2

August 7 9 0 3 0

September 4 7 3 0 2

October 3 11 2 3 0

November 2 10 1 0 0

December 4 12 2 0 1

Total 44 84 24 16 12


Seven Tools for TQMSeven Tools for TQM

(b)(b) Scatter Diagram:Scatter Diagram: A graph of the value A graph of the value of one variable vs. another variableof one variable vs. another variable

Late PassengersLate Passengers

De

par

ture

De

lay

sD

ep

artu

re D

ela

ys


Seven Tools for TQMSeven Tools for TQM(c)(c) Cause and Effect DiagramCause and Effect Diagram: A tool that identifies process : A tool that identifies process

elements (causes) that might effect an outcomeelements (causes) that might effect an outcome

Equipment Personnel

Procedure

Material

Other

Aircraft late to gateLate arrival

Gate occupied

Mechanical failuresLate pushback tug

WeatherAir traffic

Late food serviceLate fuel

Late baggage to aircraft

Gate agents cannot process passengers quickly enoughToo few agents

Agents undertrainedAgents undermotivated

Agents arrive at gate late

Late cabin cleaners

Late or unavailable cockpit crewsLate or unavailable cabin crews

Poor announcement of departuresWeight and balance sheet late

Delayed checkin procedureConfused seat selection

Passengers bypass checkin counterChecking oversize baggage

Issuance of boarding pass

Acceptance of late passengersCutoff too close to departure time

Desire to protect late passengersDesire to help company’s income

Poor gate locations

DelayedFlightDeparture



(d)(d) Pareto ChartsPareto Charts: A graph to identify and plot : A graph to identify and plot problems or defects in descending order of problems or defects in descending order of frequencyfrequency

Fre

qu

en

cyF

req

ue

ncy

Pe

rce

nt

Pe

rce

nt

AA BB CC DD EE

Cause Percentage of Incidents

Cumulative Percentage

Late passengers

53.3 53.3

Waiting for pushback

15.0 68.3

Waiting for fuel

11.3 79.6

Late weight andbalance sheet

8.7 88.3


Seven Tools for TQMSeven Tools for TQM(e)(e) Flow Charts (Process Diagrams):Flow Charts (Process Diagrams): A chart that describes A chart that describes

the steps in a processthe steps in a process

Passenger Arrives

Ticket No Wait for For Flight Appropriate Flight

Yes

Check Yes Excess Luggage Carry-on

No

Issue Boarding Pass

Passenger Boards Airplane


Seven Tools for TQMSeven Tools for TQM(f)(f) Histogram:Histogram: A distribution showing the frequency of A distribution showing the frequency of

occurrence of a variableoccurrence of a variable

0

0.5

1

1.5

2

2.5

3

3.5

1 2 3 4 5 6 7

Occurrences per Month

Fre

qu

en

cy



(g)(g) Statistical Process Control ChartStatistical Process Control Chart: A chart with : A chart with time on the horizontal axis to plot values of a time on the horizontal axis to plot values of a statisticstatistic

Figure 6.5Figure 6.5

Upper control limitUpper control limit

Target valueTarget value

Lower control limitLower control limit

TimeTime


Statistical Process Control (SPC)

(g) (g) Statistical Process Control ChartStatistical Process Control Chart: A chart : A chart with time on the horizontal axis to plot values with time on the horizontal axis to plot values of a statisticof a statistic

Uses statistics and control charts to tell Uses statistics and control charts to tell when to takewhen to take corrective action corrective action

Drives process improvementDrives process improvement

Four key stepsFour key steps Measure the processMeasure the process

When a change is indicated, find the When a change is indicated, find the assignable causeassignable cause

Eliminate or incorporate the causeEliminate or incorporate the cause

Restart the revised processRestart the revised process


An SPC ChartAn SPC Chart

Upper control limitUpper control limit

Coach’s target valueCoach’s target value

Lower control limitLower control limit

Game numberGame number

| | | | | | | | |

11 22 33 44 55 66 77 88 99

20%20%

10%10%

0%0%

Plots the percent of free throws missedPlots the percent of free throws missed


InspectionInspection

Involves examining items to see if an Involves examining items to see if an item is good or defectiveitem is good or defective

Detect a defective productDetect a defective product Does not correct deficiencies in process Does not correct deficiencies in process

or productor product It is expensiveIt is expensive

IssuesIssues When to inspect?When to inspect? Where in process to inspect?Where in process to inspect?


When and Where to InspectWhen and Where to Inspect

1.1. At the supplier’s plant while the supplier is At the supplier’s plant while the supplier is producingproducing

2.2. At your facility upon receipt of goods from At your facility upon receipt of goods from the supplierthe supplier

3.3. Before costly or irreversible processesBefore costly or irreversible processes

4.4. During the step-by-step production During the step-by-step production processesprocesses

5.5. When production or service is completeWhen production or service is complete

6.6. Before delivery from your facilityBefore delivery from your facility

7.7. At the point of customer contactAt the point of customer contact


InspectionInspection

Many problemsMany problems Worker fatigueWorker fatigue

Measurement errorMeasurement error

Process variabilityProcess variability

Cannot inspect quality into a productCannot inspect quality into a product

Robust design, empowered employees, and Robust design, empowered employees, and sound processes are better solutionssound processes are better solutions


Source InspectionSource Inspection

Also known as source controlAlso known as source control

The next step in the process is The next step in the process is your customeryour customer

Ensure perfect product to your Ensure perfect product to your customercustomer

Poka-yoke is the concept of foolproof devices or techniques designed to pass only acceptable product


Service Industry InspectionService Industry Inspection

OrganizationOrganization What is What is InspectedInspected StandardStandard

Jones Law OfficeJones Law Office Receptionist Receptionist performanceperformance

BillingBilling

AttorneyAttorney

Is phone answered by the Is phone answered by the second ringsecond ring

Accurate, timely, and Accurate, timely, and correct formatcorrect format

Promptness in returning Promptness in returning callscalls

Table 6.4Table 6.4




Hard Rock HotelHard Rock Hotel Reception Reception deskdesk

DoormanDoorman

RoomRoom

MinibarMinibar

Use customer’s nameUse customer’s name

Greet guest in less than 30 Greet guest in less than 30 secondsseconds

All lights working, spotless All lights working, spotless bathroombathroom

Restocked and charges Restocked and charges accurately posted to billaccurately posted to bill

Table 6.4Table 6.4




Arnold Palmer Arnold Palmer HospitalHospital

BillingBilling

PharmacyPharmacy

LabLab

NursesNurses

AdmissionsAdmissions

Accurate, timely, and Accurate, timely, and correct formatcorrect format

Prescription accuracy, Prescription accuracy, inventory accuracyinventory accuracy

Audit for lab-test accuracyAudit for lab-test accuracy

Charts immediately Charts immediately updatedupdated

Data entered correctly and Data entered correctly and completelycompletely

Table 6.4Table 6.4




Hard Rock CafeHard Rock Cafe BusboyBusboy

BusboyBusboy

WaiterWaiter

Serves water and bread Serves water and bread within 1 minutewithin 1 minute

Clears all entrée items and Clears all entrée items and crumbs prior to dessertcrumbs prior to dessert

Knows and suggest Knows and suggest specials and dessertsspecials and desserts

Table 6.4Table 6.4




Nordstrom’s Nordstrom’s Department Department StoreStore

Display areasDisplay areas

StockroomsStockrooms

SalesclerksSalesclerks

Attractive, well-organized, Attractive, well-organized, stocked, good lightingstocked, good lighting

Rotation of goods, Rotation of goods, organized, cleanorganized, clean

Neat, courteous, very Neat, courteous, very knowledgeableknowledgeable

Table 6.4Table 6.4


TQM In ServicesTQM In Services

Service quality is more difficult to Service quality is more difficult to measure than the quality of goodsmeasure than the quality of goods

Service quality perceptions depend Service quality perceptions depend on on Intangible differences between Intangible differences between

productsproducts

Intangible expectations customers Intangible expectations customers have of those productshave of those products


Service QualityService Quality

The Operations Manager must The Operations Manager must recognize:recognize:

1.1. The tangible component of The tangible component of services is importantservices is important

2.2. The service process is importantThe service process is important

3.3. The service is judged against the The service is judged against the customer’s expectationscustomer’s expectations

4.4. Exceptions will occurExceptions will occur


Determinants of Service Quality

ReliabilityReliability

ResponsivenessResponsiveness

CompetenceCompetence

AccessAccess

CourtesyCourtesy

CommunicationCommunication

CredibilityCredibility

SecuritySecurity

Understanding/ Understanding/ knowing the knowing the customercustomer

TangiblesTangibles


Questions???Questions???

Documents

© 2006 Prentice Hall, Inc.6 – 1 Managing Quality Ch6 Production Planning and Control