2-1 Introductionandchapterobjectives 2-2 Serviceindustriesandtheircharacteristics 2-3 Modelforservicequality
2-4 W.EdwardsDeming’sphilosophy 2-5 PhilipB.Crosby’sphilosophy 2-6 JosephM.Juran’sphilosopy 2-7 Thethreephilosophiescompared
Summary
2-1�INTRO�DUC�TION�AND�CHAPT�ER�OBJE�CTIVE�S
Severalpeoplehavemadesignificantcontributionsinthefieldofquality control.In this chapterwelookatthephilosophiesofthreepeople:W.EdwardsDeming,PhilipB.Crosby, andJosephM.Juran.Pioneersinthefieldofqualitycontrol,theyarelargelyresponsiblefor theglobaladoptionandintegrationofqualityassuranceandcontrolinindustry.
Managementcommitmentiskeytoasuccessfulprograminquality.Thisoftenrequiresa changeincorporateculture.Theideaofanongoingqualitycontrolandimprovementprogram isnowwidelyaccepted.Oneofourobjectivesistodiscusssomeuniquequalitycharacteristics intheserviceindustry.Asecondobjectiveistostudythevariousphilosophiesonquality.In thischapterweexamineDeming’sphilosophyindepth.Deming’s�14�points�for�manage
ment�arefundamentaltotheimplementationofanyqualityprogram.Thesepoints,which constitute a “road map,” should be understood thoroughly by all who undertake the implementationofsuchprograms.WealsodiscussCrosby’sandJuran’sphilosophiesand comparethethree.Thegoalisthesameinall threephilosophies:creatingandadoptinga world-classqualitybusinessculture.Althoughthepathstheydescribeareslightlydifferent, companiesshouldlookcloselyateachapproachbeforeembarkingonaqualityprogram.
2-2�SERV�ICE�INDU�STRIES�AND�THE�IR�CHARA�CTER�ISTICS
Today,serviceindustriesdominateoureconomy.Theservicesectoraccountsformore than 80% of jobs, and the number continues to grow. Quality improvement looms large in
Fundamentals of Quality Control and Improvement,Fourth Edition. Amitava Mitra
2016 John Wiley & Sons, Inc. Published 2016 by John Wiley & Sons, Inc.
Companionwebsite:www.wiley.com\go\mitra\QualityControl4e
47
the ongoing success of this sector of the economy. However, major differences exist in the quality characteristics of manufacturing and service (Fitzsimmons and Fitzsimmons 1994;
Patton 2005; Zeithaml 2000). Accordingly, both the measurement process and manage
ment’s focus differ. In service industries, not only must the product meet the functional requirements of the customer, but also employee behavior must meet high standards. The total service concept is a combination of technical and human behavioral aspects, and the latter are much more difficult to quantify, measure, and control.
Let’s consider the airline industry. A quantifiable goal is to transport people between two cities in a desirable time. Achieving this is dependent on aircraft design that enables certain speeds to be attained to cover the distance within the required time and on proper scheduling of flights. Data on these factors are clearly quantifiable. However, customer satisfaction is often influenced by factors that are not so easy to quantify. For instance, the manner in which stewardesses and ticket agents treat customers is very important. Courteous and friendly, and warm and caring are not so obviously quantified. Thus, the manner in which service is performed is an important concern that might not be considered in manufacturing industries. Of course, we should realize that even manufacturing industries have to deal with service functions (e.g., payroll and accounting, customer relations, product service, personnel, purchasing, marketing). The importance of the service industry should not, therefore, be underestimated.
In this section we discuss quality characteristics unique to service industries.
Fundamental differences between manufacturing and service are noted. The customer is, of course, the focal point of quality control and improvement, and customer feedback is essential. Wefind service industries in all facets of our society. Functions performed by service industries include education, banking, governmental services (such as defense, municipal services, and welfare), health care, insurance, marketing, personal services (such as hotels and motels), restaurants, traveling and tours, public utilities (including electricity, gas, and telephone service), and transportation (airlines, railroads, and buses). As shown in the preceding example from the airline industry, service industries provide both a tangible productandan intangible component that affects customer satisfaction.
Two parties are involved in providing a service. The one that assists or provides the service is the vendor, or company, and the party receiving the service is the vendee, or customer. Certain service functionsare found in both the manufacturing and service sectors. In the manufacturing sector, these are staff functions and are preformed by staff personnel, rather than by line personnel.
Staff personnel provide expertise to the operating departments and to customers to enable them to get the most value out of a product. Customer services and warranties are examples of this. In addition, clerical and administrative operations such as accounting, purchasing, payroll, and personnel are service functions that play a supportive role in a manufacturing organization.
Research and development activities are also viewed as service functions, because their goal is to devise better product or process designs that will facilitate line operations.
A unique service industry is that of health care. For a health care facility, there exists a variety of customers whose needs are quite distinct from each other. Patients are the primary customers, whose needs span a safe, effective, and efficient method of treatment (McGlynn et al. 2003). Physicians, who perform services in a health care facility, are secondary customers who desire the availability of an adequate supporting staff, which includes nurses and laboratory technicians, as well as adequate facilities such as an examination room, operating room, and supporting equipment. Unique to the health care industry is a set of payers that includes federal and state governments, insurance companies, and health maintenance organizations (HMOs) (Rosenthal et al. 2004). Payment standards are often set by these entities. Employees of the health care facility are also customers who desire an
SERVICE INDUSTRIES AND THEIR CHARACTERISTICS 49 adequate compensation and an enriching work environment. Finally, the community and families and friends of patients are customers in the broader sense.
Web-based customer services are experiencing expanded coverage. Business organiza
tions maintain quality websites that address many of the frequently asked questions by customers. Ease of use, aesthetic design, processing speed, and security are some of the important attributes in this context. In health care, conceptual scales have been developed to assess perceived quality of electronic (e) health services (Hadwich et al. 2010; Isaac et al.
2010).
Differences in the Manufacturing and Service Sectors
Basic differences in the manufacturing and service sectors are noted in Table 2-1. The manufacturing sector makes products that are tangible, whereas services have an associated intangible component: A caring attitude with a smile from servers leads to customer satisfaction. In manufacturing, in periods when product demand exceeds supply, back orders can eventually right the imbalance. However, services cannot usually be back ordered; there is an associated time constraint. If a service is not provided within the necessary time frame, it cannot be used at a later time. An example of this is the empty seats in a mass transportation system from 10:00 to 11:00A.M. These empty seats cannot be saved for use during the 5:00 to 6:00P.M. rush hour.
Another distinguishing feature concerns the relationship of the provider and customer. In the health care industry, the doctor or nurse, the provider, interacts with the patient, the customer, to provide service. Responses from the patient influence how a service is delivered.
In the manufacturing industries, the producer or manufacturing company alone influences the process through which a product is made. The customer affects the product in the sense that the product is designed to meet customer requirements, but once a satisfactory product has been achieved, the customer does not influence the product quality during production. Manu
factured products can be resold; the same is not true of services.
Customers usually have a direct impact on creating formal product specifications in a manufacturing environment. Quality characteristics that influence customer satisfaction are identified and are incorporated into the product at the design phase. In some service industries, TABLE 2-1 Differences in the Manufacturing and Service Sectors
Manufacturing Sector Service Sector
Product is tangible. Service consists of tangible and intangible Back orders are possible.
Producer or company is the only party involved in the making of the product.
Product can be resold.
components.
Services cannot be stored; if not used, they are lost.
Producer and consumer are both involved in delivery of a service.
Services cannot be resold.
Customer usually provides formal specifications for the product.
Customer acceptance of the product is easily quantifiable.
Ownership of a product changes hands at a specific point in time.
Formal specifications need not be provided
by the consumer. In fact, in monopolies involving public utilities (e.g., electricity, gas, telephone), federal and state laws dictate the requirements.
Customer satisfaction is difficult to quantify because a behavioral component is involved associated with the delivery of the service.
Rendering a service takes place over an interval of time.
however, the customer does not providedirectinput on the quality characteristics for services.
Public utilities such as electricity, gas, and telephone are regulated by federal and state laws;
thus, the services they provide and the prices they charge are mandated by governing bodies such as public service commissions. The customer’s involvement isindirect: that is, they elect the public officials who make the regulations and they go before governmental committees to make their desires known, which may or may not influence the regulations.
The behavioral aspect associated with the delivery of services also differs for the manufacturing and service sectors. In manufacturing companies, the degree to which a product is accepted can be quantified: say, in terms of the proportion of unacceptable product. In service industries, the degree of customer satisfaction is not as easily quantified because of the human factors involved with delivery of a service. The behavioral traits of both the provider and the customer influence service delivery. Customer dissatisfaction can be the result of many intangible factors. On the other hand, in a manufacturing company, if a product is not accepted because a characteristic falls outside certain specifications, the reason for customer dissatis
faction can readily be found and remedial measures taken.
Service Quality Characteristics
In this subsection we consider features of quality characteristics in the service sector. The quality characteristics are grouped into four categories (see Table 2-2). Although exceptions to these groups exist, the categories generally summarize factors common to service functions and industries.
TABLE 2-2 Service Quality Characteristics and Their Measures
Service Quality Characteristic Measures of Service Quality
Human factors and behavioral Number of customer complaints based on behavioral factors characteristics (or lack thereof) of persons involved in the service process
Number of complimentary responses based on human traits in delivery of service
Timeliness characteristics Waiting time in a bank prior to transaction Time to process a transaction
Waiting time to see a physician Time to check in at an airport
Waiting time before receiving baggage at an airport
Time to hear from an insurance company regarding a payment Service nonconformity Number of errors per 1000 transactions in banks,
characteristics insurance companies, and payroll departments
Number of billing errors per 1000 accounts by utility companies Proportion of income tax returns prepared by an agency
that have errors
Facility-related Number of complaints due to:
characteristics An uncomfortable bed in a hotel room Unavailability of a swimming pool in a hotel Insufficient legroom in an aircraft
Inadequate temperature control in a convention meeting room Shabby appearance of a receptionist in a hotel or bank Lack of certain indoor activities (such as table tennis) in
a recreation facility
Lack of adequate parking for visitors of patients in a hospital
SERVICE INDUSTRIES AND THEIR CHARACTERISTICS 51 The quality of a service can be broken down into two categories: effectiveness and efficiency.Effectivenessdeals with meeting the desirable service attributes that are expected by the customer. For example, the décor and available facilities in a hospital room, the quality and quantity of food served in a restaurant, and the types of checking and savings accounts available in a bank are related to service effectiveness.Efficiency, on the other hand, concerns the time required for the service to be rendered.
Human Factors and Behavioral Characteristics Service quality is influenced by the attitude and behavior of the provider (Lefevre 1989; Normann 1991). Since providers and customers arepartof the product (the service), their behavior affects the quality of the service.
Human factors thus include intensity, eagerness to help, thoughtfulness, complacency, courtesy, and so on. Some of these traits can be developed through adequate training; some are inherent in the person. Proper screening of employees and appropriate job assignment are ways to achieve desirable quality characteristics. A primary source of customer complaints is discourteous behavior.
On the other hand, the attitude of the customer is largely beyond the control of the service provider. For instance, a customer’s mood when purchasing a service can influence perceived quality; the quality may be good but it is not perceived as such because the customer is angry about something totally unrelated to the service or the provider. However, companies can influence customers’expectations through advertisement and reputation. Customers’mind- sets are often a function of what they expect to receive. Thus, the company affects the behavioral patterns of its customers by molding their expectations. If a bank advertises that in addition to providing its regular services it now providesfinancial management services, customer expectations are raised. Customers will no longer be satisfied if questions related to financial management are not answered adequately. On the other hand, if the bank does not claim to providefinancial management services, the customer will not expect such questions to be answered and will thus not be disappointed. Unfortunately, measurement of attitudes and behavioral characteristics is not as simple and well defined as for tangible criteria.
Timeliness Characteristics A service that is not used in a given span of time cannot be stored for later use. A hospital with empty beds during certain days of a month cannot save them for use in the following month. Thus, the timeliness with which a service is performed is critical to customer satisfaction. How long did the customer have to wait before being served in a restaurant? How long did the customer have to wait in line to cash a check?
Characteristics related to timeliness are categorized by the service phase with which they are associated. Categories might include the time to order the service, the waiting time before the service is performed, the time to serve, and the post-service time. These characteristics are much more amenable to measurement than are behavioral characteristics.
Service Nonconformity Characteristics Nonconformity characteristics deal with deviation from target performance levels; a nonconformity is a deviation from the ideal level. Examples of such characteristics include the number of errors by bank employees in processing 100 vouchers, the number of errors by a data-entry operator per 1000 keystrokes, the number of billing errors per 100 accounts by a utility company, the number of complaints per 100 guests in a hotel, and so on. The target performance level for these examples is zero nonconformities. The goal of the service organization is to achieve the target level, thus meeting customer expectations, and then to exceed it through quality improvement measures. Quality characteristics in this category are well defined and are more readily measured than behavioral characteristics.
Facility-Related Characteristics The physical characteristics of the facilities associated with a service and its delivery can affect customer satisfaction. The décor of a restaurant, the waiting area in a physician’s office, and the availability of such amenities as a swimming pool or spa in a hotel are examples of quality characteristics of physical facilities that are involved in providing a service. The appearances of a waiter or waitress, a bank teller, or an insurance agent are attributes of employees performing a service. These characteristics are not as clearly defined and measurable as service nonconformity characteristics. They are, however, more quantifiable than behavioral characteristics.
Measuring Service Quality
In terms of ease of quantification and measurement, the categories identified in Table 2-2 can be ranked in the following order: service nonconformity, timeliness, facility-related, and human behavioral factors. Since the success of many service functions is determined predominantly by the interaction between the provider and the customer, measurement and evaluation of service quality are difficult because they are subjective. Defining the measure
ment unit itself is problematic.
People are not as predictable as equipment and facilities. The water temperature in a swimming pool can be stabilized by an adequate heating and recycling system, but the behavior of a check-in attendant is not always under the control of the company. Many factors influence employee behavior: family life, unforeseen personal events, and mental outlook, to name a few. Not only can these cause large performance variations but they are largely outside the influence of the company, and they cannot be predicted.
To counteract these performance variations in human behavior, procedures that generate representative statistics of performance can be devised. Randomly choosing samples of performance from the time interval under consideration is one way to eliminate bias. In situations where we know that behavioral patterns vary greatly based on the time period (e.g., if error rates are high in thefirst and eighth hours of an 8-hour workday), we can select a sampling plan that adequately reflects this. In this example, a stratified sampling plan for two strata is designed, one for the early morning and late afternoon periods and one for the remainder of the day. If 20 samples are selected daily and a proportional sampling scheme is used, 5 samples (which comprise 25% of the total daily samples) would be randomly selected from thefirst stratum: that is, early morning (8 to 9A.M.) and late afternoon (4 to 5P.M.).
The assumption is that based on an 8-hour day the time interval covered by this stratum is 2 hours, or 25% of the total daily hours worked. The remaining 15 samples will be randomly selected from the second stratum, which represents the remaining time period.
Another difficulty is that significant differences exist between individuals. Thus, even though the scheme of stratified sampling is used to select appropriate samples that reflect a person’s performance, it is not obvious whether this same scheme can be applied collectively to a group of persons. People vary in their peak performance periods: Some work best in the early morning, and others work best at night. If such differences can be identified, the sampling plan can be designed to reflect them.
Techniques for Evaluating Service Quality
As with manufacturing, achieving an appropriate design of a service system precedes any activities on control and improvement. However, in the service sector, ergonomic, anthropo
metric, and behavioral characteristics are important, as are the physical characteristics of