5. Quality: Profit or Cost
Both!
Improving quality does require a company to
incur costs
Return on quality storyline:
Improved
Service
Performance
Increased
Market
Share
Improved
Customer
Satisfaction
Increased
Profitability
Improved
Customer
Retention
6. Deming’s 14 Points
1. Create constancy of purpose
2. Adopt philosophy of prevention
3. Cease mass inspection
4. Select a few suppliers based on
quality
5. Constantly improve system and
workers
7. 6. Institute worker training
7. Instill leadership among
supervisors
8. Eliminate fear among employees
9. Eliminate barriers between
departments
10. Eliminate slogans
Deming’s 14 Points (cont.)
8. 11. Remove numerical quotas
12. Enhance worker pride
13. Institute vigorous training and
education programs
14. Develop a commitment from top
management to implement
above 13 points
Deming’s 14 Points (cont.)
9. Deming Wheel: PDCA
Cycle
1. Plan
Identify
problem and
develop plan
for
improvement.
2. Do
Implement
plan on a test
basis.
3. Study/Check
Assess plan; is it
working?
4. Act
Institutionalize
improvement;
continue
cycle.
10. Quality Improvement
and Role of Employees
Participative
problem solving
employees involved in
quality management
every employee has
undergone extensive
training to provide quality
service to Disney’s guests
11. SERVQUAL Model
Compares customer expectations with their
experience of the service that was actually
delivered
Discrepancies are “gaps” in service quality
12. SERVQUAL Model
Personal Needs
Service Quality
Specifications
Management Perceptions of
Customer Expectations
Expected Service
Past Experience
External
Communications
to Customers
Perceived Service
Service Delivery
Word-of-Mouth
Communications
Customer
Provider
Gap 1
Gap 5
Gap 4
Gap 3
Gap 2
13. Gaps in Service Quality
Gap Problem Cause(s)
1. Consumer
expectation – mgmt.
perception
The service features offered
don’t meet customer needs
Lack of marketing research; inadequate upward
communication; too many levels between contact
personnel and management
2. Management
perception – service
quality specification
The service specifications
defined do not meet
management’s perceptions of
customer expectations
Resource constraints; management indifference;
poor service design
3. Service quality
specification –
service delivery
Specifications for service meet
customer needs but service
delivery is not consistent with
those specifications
Employee performance is not standardized;
customer perceptions are not uniform
4. Service delivery –
external
communication
The service does not meet
customer expectations, which
have been influenced by
external communication
Marketing message is not consistent with actual
service offering; promising more than can be
delivered
5. Expected service
– perceived service
Customer judgments of
high/low quality based on
expectations vs. actual service
A function of the magnitude and direction of the
gap between expected service and perceived
service
14. Service Quality Design
Poka-Yoke: Fool proofing mechanisms
Prevent inevitable mistakes from turning into
defects
Example: Repeating back order at Starbucks
before giving you a cup of coffee
Conceived of by Shigeo Shingo, “Mr.
Improvement”
15. Quality Attributes in
Service
Benchmark
“best” level of quality
achievement one
company or
companies seek to
achieve
Timeliness
how quickly a service
is provided “quickest, friendliest, most
accurate service
available.”
