ou should be able t
After completing this chapter, you should be able to:
• De!ne quality from both an internal and an external orientation.
• List the dimensions of service quality and quality for manufacturing.
• Understand how to gather customer expectations to ensure that the !rm has cap- tured the voice of the customer.
• Summarize the philosophies of W. Edwards Deming, Joseph Juran, Philip Crosby, and Genichi Taguchi.
• Explain how quality is built into a good or service.
• List and explain the components of total quality management (TQM).
• Describe the purpose and use of quality function deployment.
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Quality Management
CHAPTER 4Section 4.1 Introduction to Quality Management
4.1 Introduction to Quality Management
Price and quality are two critical dimensions when deciding to purchase a good or service because these are key elements in the value proposition. That is, what does the buyer give up versus what does the buyer receive? When value proposition is high the benefits to the buyer substantially exceed the costs. Quality is a critical element in the purchasing decision because quality involves critical factors such as the safety of an airplane flight, the effectiveness of a surgical procedure, or the performance of an automo- bile. Quality is multifaceted because the quality of a service or good is judged on several factors. For example, the quality of an airplane flight not only includes the safety factor; it also includes departing and arriving on time, the comfort of the surroundings, and bag- gage handling. For an automobile, quality is not only performance; it also includes safety and specific features such as video entertainment systems and global positioning devices.
While quality is essential for organizational success, for many companies it is difficult to use quality to differentiate their products from their competitors’ products for two reasons. First, customers may not consider products for purchase that do not have high quality. Second, competitors have recog- nized the value that customers place on quality, and are striving for high quality by continuously monitoring customer expecta- tions, investigating and imple- menting new technologies that enhance quality, and quickly imitating competitors’ improve- ments in features and perfor- mance. To use an analogy from poker, high quality has become the ante, or minimum bet, to play at the table. Despite these challenges, companies such as Apple, FedEx, and Google have been able to develop and main- tain very strong reputations for high quality while some of their competitors have not. RIM has fallen behind Apple; FedEx has taken package delivery from the U.S. Postal Service; and Google is well ahead of Yahoo!. Simply put, companies that have a strong reputation for quality have been able to inte- grate quality throughout the organization, adopting an approach that infuses quality into company decision making. This approach has a variety of names; the one used here is quality management. The purpose of this chapter is to explain the nature of quality and how an emphasis on quality can be spread throughout the organization.
When asked, customers can articulate some of the criteria that determine whether a prod- uct has high quality. For example, a hotel room should be clean and comfortable, and the guest should feel safe. A washing machine should get the clothes clean. However, defining
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CHAPTER 4Section 4.1 Introduction to Quality Management
quality is not always that simple. The factors included in quality assessment of a hotel room depends, at least in part, on its use. For a resort hotel, the pool, restaurants, beaches, and workout facilities are part of the quality decision. For a person who is stopping for one night at a hotel while driving on the interstate, the amenities included in the resort hotel do not matter. Traveling guests only care whether or not the room is clean, com- fortable, and convenient. In the earlier example of the washing machine, one customer may want a large capacity washer that minimizes water use, while another may want a small, stackable washer-drier unit that is quiet. As a result, it is not possible to fully define quality, because quality is determined by the customer and how the customer will use a product. As a result, the definition of quality has both an internal orientation—quality from the company’s perspective, and an external orientation—quality from the custom- er’s perspective.
Internally Oriented Definitions of Quality
Definitions of quality that have an internal orientation directly measure characteristics of the product, such as the number of packages delivered on time or the thickness of an engine part. Two examples of internally oriented definitions of quality are:
1. Quality is the degree to which a specific product conforms to its design character- istics or specifications. Surgeons must follow the proper procedure as the surgi- cal team closes the incision, thereby ensuring that no sponges or other items are left in the patient. Robots must place the spot welds in the proper location on the body of the automobile in order to maximize its strength.
2. Quality can be measured as the amount of a specific, desired attribute, such as window tint or cheese on a pizza.
One shortcoming of internally oriented definitions is the company’s assumption that the product specifications match what the customer wants—an assumption that may not be correct.
Externally Oriented Definitions of Quality
Quality with an external orientation focuses on the customer, and typically includes a discussion of “fitness for use.” In other words, quality cannot be effectively measured in the abstract. For example, a resort hotel with the finest food, cleanest rooms, best beaches, and friendliest staff does not meet the needs of the cross-country traveler who will spend only a few hours in the room. When quality is measured by customer wants, the resort hotel does not have the right fit for the cross-country traveler, so it is not the right quality. Quality is the capacity to satisfy customers’ needs.
In some cases, customers may not know that they have a need for a product because cus- tomers may not imagine what is possible. A few years ago, when Ford Motor Company introduced the SYNC system to manage mobile phone, music, and other digital technol- ogy in its vehicles, it was done to satisfy a desire from car owners, but one that was not clearly articulated. SYNC set new expectations for communication and entertainment sys- tems in vehicles.
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CHAPTER 4Section 4.1 Introduction to Quality Management
Although it may appear that externally oriented definitions of quality are still somewhat vague, companies known for high-quality goods and ser- vices specifically define the parameters of quality. Quality means consistently meeting or exceeding the customer’s needs and expectations. Quality begins with an external process that identifies the customers’ needs and expectations. Then, those needs and expectations are translated into an internal process to guarantee they are met or exceeded. One way of formalizing that process is called quality function deployment, which is discussed later in this chapter. Quality function deployment takes customer expectations and transforms them into specific actions designed to meet those expectations.
Understanding Customer Expectations
It would seem that a company that wants to achieve excellent external quality would simply ask its customers what they want and provide these things to them. Asking customers what they want is useful and provides important informa- tion, however, it is not sufficient for the following reasons. First, customers often have unspoken desires. If you survey customers and ask open- ended questions such as what they want on an airplane flight, they are much more likely to say on-time arrivals and departures, faster check-in times, and better and faster security screening by
TSA. It is not likely they would say they do not want to crash. Customers assume that the airline understands safe transportation as a basic need, so it is unspoken despite that it is the most important need of the customer. Referring to the poker analogy used earlier, safety is part of the ante that every airline must have to remain in the game. Second, cus- tomers operate in the environment of what is known, and often do not think about what is possible. If a company operating 200 years ago asked its customer how they might like to communicate in the future, it is unlikely that the customers would have described voice over wire telephones. If customers were asked 50 years ago about the future of person-to-person communication, it is unlikely that customers would have mentioned wireless communication devices, the Internet, and high-speed data services. Twenty years ago, few customers would have thought to ask for the ability to download video to their wireless device. Mobile phones were large, clumsy devices that could only make phone calls and were unreliable. Organizations must go beyond asking customers what they want and understand what their customers value, such as how they do their work and what makes customers happy. If companies understand these needs, firms are able to see how new ideas and new technology may help customers do more work or enjoy a better lifestyle. Firms should ask the following questions when they want to understand customers’ expectations:
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CHAPTER 4Section 4.2 Dimensions of Quality
1. Ask customers what they want. 2. Ask customers specific questions about attributes of the product that are not
mentioned by the customer: Probing the customers with specific questions about their needs may lead to unspoken expectations.
3. Ask customers about their operations or how they will use the product: Knowing how the customer functions and how they use the product can lead to a better understanding of what and how new ideas and technologies could help them. The success of Facebook, Twitter, and Apple are based on creating services and goods that customers would use despite the customer not understanding the product and its application prior to product launch.
4. Ask customers how their customers use the products: Knowing the needs of the customers’ customers can help the organization better understand the impact of its product on the value-creation chain and, therefore, meet the needs of the final customer in this chain.
4.2
Understanding the dimensions of quality is an important step in transforming cus-tomers’ needs and expectations into internal processes. The differences between goods-based and service-based organizations have some significant impacts on the way quality is determined and measured. For example, because services are intan- gible, the quality of services will be based much more on human perception. As a result, the dimensions of service quality are somewhat different than the characteristics of qual- ity for manufactured products.
The following five dimensions of quality are often used by customers to judge service quality. Understanding these dimensions helps firms to define quality and determine what steps are needed to improve quality.
1. Reliability—ability to perform the promised service dependably and accurately. 2. Responsiveness—willingness to help customers and provide prompt service. 3. Assurance—knowledge and courtesy of employees and their ability to convey
trust and confidence. 4. Empathy—provision of caring, individualized attention to customers. 5. Tangibles—appearance of physical facilities, equipment, personnel, and communi-
cation materials, including access and effectiveness of Internet-based information.
Some examples of these five dimensions are shown in Table 4.1. The reliability and responsiveness of a service are at the core of how customers evaluate service quality. This is because customers expect the service to be performed well and to be complete at the time demanded by the customer. Most services rely on people to design the operation systems and to do the work. A hairdresser’s reliability and responsiveness clearly impacts the client served in a beauty shop. Likewise, it is people who determine how the system of service providers for mobile devices works, including the likelihood of dropped calls, clarity of voice, and speed of data downloads. If a company fails to provide reliability and
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responsiveness, it is more likely to lose a customer than if other factors or services fail. In other words, it does not matter how nice the furniture in your hotel room looks if the staff is rude.
Reliability • •
• • •
•
Assurance • • •
