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Quality and Productivity Improvement. Check Do Act Plan. Quality level. Time. Learning Objectives. Identify the stage of competitiveness for a service firm. Discuss the analogous roles of inventory and queuing. Perform a Walk-Through-Audit.

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quality and productivity improvement

Quality and Productivity Improvement

Check Do

Act Plan

Quality level


learning objectives
Learning Objectives
  • Identify the stage of competitiveness for a service firm.
  • Discuss the analogous roles of inventory and queuing.
  • Perform a Walk-Through-Audit.
  • Lead a Plan-Do-Check-Act (PDCA) process improvement initiative.
  • Use quality tools for analysis and problem solving.
  • Discuss the corporate programs for quality improvement.
  • Conduct a data envelopment analysis (DEA).
four stages in service firm competitiveness
Four Stages in Service Firm Competitiveness

1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery

Customers patronize service Customers neither seek Customers seek out the firm The company’s name is synonymous

firm for reasons other than out nor avoid the firm. on the basis of its sustained with service excellence. Its service

performance. reputation for meeting doesn’t just satisfy customers; it

customer expectations delights them and thereby expands

customer expectations to levels its

competitors are unable to fulfill.

Operations is reactive, Operations functions in a Operations continually excels, Operations is a quick learner and fast

at best. mediocre, uninspired reinforced by personnel innovator; it masters every step of the

fashion. management and systems service delivery process and provides

that support an intense capabilities that are superior to

customer focus. competitors.


Is subsidiary to cost, Meets some customer Exceeds customer Raises customer expectations and

highly variable. expectations; consistent expectations; consistent seeks challenge; improves

on one or two key on multiple dimensions. continuously.


four stages in service firm competitiveness cont
Four Stages in Service Firm Competitiveness (cont.)

1. Available for service 2. Journeyman 3. Distinctive competence 4. World-class service delivery


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.


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.



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.


Negative constraint. Efficient resource; disciplined; Permitted to select among Innovative; creates procedures.

follows procedures. alternative procedures.


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 works to enhance their career.

continual improvement as a competitive strategy
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
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
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

walk through audit
  • Service delivery system should conform to customer expectations.
  • Customer impression of service influenced by use of all senses.
  • Service managers lose sensitivity due to familiarity.
  • Need detailed service audit from a customer’s perspective.
quality and productivity improvement process
Quality and Productivity Improvement Process
  • Foundations of Continuous Improvement - Customer Satisfaction - Management by Facts - Respect for People
  • Plan-Do-Check-Act (PDCA) Cycle
  • Problem Solving (10 steps)
quality tools
Quality Tools
  • Check Sheet
  • Run Chart
  • Histogram
  • Pareto Chart
  • Flowchart
  • Cause-and-Effect Diagram
  • Scatter Diagram
  • Control Chart
check sheet
Check Sheet

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

cause and effect chart for flight departure delay fishbone chart
Cause-and-Effect Chart for Flight Departure Delay (Fishbone Chart)



  • Gate agents cannot process passengers quickly enough

Too few agents

Aircraft late to gate

Agents undertrained

Late arrival

Agents undermotivated

Gate occupied

Agents arrive at gate late


Mechanical failures

Late cabin cleaners

Late pushback tug


Late or unavailable cabin crews

Air traffic

Late or unavailable cockpit crews




Poor announcement of departures

Weight and balance sheet late

Delayed checkin procedure

Late baggage to aircraft

Confused seat selection

Late fuel

Passengers bypass checkin counter

Late food service

Checking oversize baggage

Issuance of boarding pass

Acceptance of late passengers

Cutoff too close to departure time

Desire to protect late passengers


Desire to help company’s income

Poor gate locations


control chart of departure delays
Control Chart of Departure Delays


Lower Control Limit



corporate programs for quality improvement
CorporatePrograms for Quality Improvement
  • Marriott Personnel Programs
  • Zero Defects (Crosby)
  • Deming’s 14 Point Program
  • Malcolm Baldrige Quality Award
  • ISO 9000
  • Benchmarking
topics for discussion
Topics for Discussion
  • Could firms in the “world-class service delivery” stage of competitiveness be described as “learning organizations?”
  • Contrast the philosophies of “continuous improvement” and “process reengineering.” Is there a role for both points of view in services?
  • Compare the philosophies of Deming (i.e 14-point) and Crosby (i.e. Zero Defects).
  • What are the limitations of “benchmarking?”
the museum of art and design
The Museum of Art and Design
  • Critique the WtA gap analysis. Awareness of Exhibits Information Experience Visitor Habits Facilities Language
  • Could there be other explanations for the gaps?
the museum of art and design1
The Museum of Art and Design
  • Make recommendations for closing the gaps found in the WtA.
  • How can the servicescape help in self-selecting customers and employees?
mega bytes restaurant
Mega Bytes Restaurant
  • How is the Seven-Step Method (SSM) different from Deming’s PDCA cycle?
  • Prepare a cause-and-effect or fishbone diagram for a problem such as “Why customers have long waits for coffee.” Use Figure 18.17 as a guide.
  • How would you resolve the difficulties that study teams have experienced when applying the SSM?
the seven step method
The Seven-Step Method
  • Step 1: Define the project
  • Step 2: Study the current situation
  • Step 3: Analyze the potential causes
  • Step 4: Implement a solution
  • Step 5: Check the results
  • Step 6: Standardize the improvement
  • Step 7: Establish future plans