Service Quality Management

From Virbus

[edit] 1 Summary

It was in the second part of the twentieth century that ‘quality’ boomed in application by industrial and service organisations. Japan and the United States were the first countries to look at quality as an important competitive advantage. However, the quality movement can trace its roots back to medieval Europe, where craftsmen began organising into unions called guilds in the late 13th century. Until the early 19th century, manufacturing in the industrialized world tended to follow this craftsmanship model. The factory system, with its emphasis on product inspection, started in Great Britain in the mid-1750s and grew into the Industrial Revolution in the early 1800s. In the early twentieth century, manufacturers began to include quality processes in production. It was only in the late 1970s that service quality emerged as a solid management discipline and practice.

[edit] 2 Why should you use it?

Customers and companies alike recognize that quality is an important attribute in products and services. Suppliers recognize that quality can be an important differentiator between their own offerings and those of competitors (quality differentiation, also called the quality gap). In the past decades this quality gap has been greatly reduced between competitive products and services. This is partly due to the contracting (also called outsourcing) of manufacture and/or services to countries like India and China. These countries amongst many others have raised their own standards of quality in order to meet International standards and customer demands. The ISO 9000 series of standards are probably the best known international standards for quality management.

Quality management (leadership) from a national perspective has also changed over the past five to six decades. After the Second World War, Japan decided to make quality improvement a national imperative as part of rebuilding their economy, and sought the help of W. Edward Deming, Joseph M. Juran and Philip B. Crosby, amongst others. In the 1950s and 1960s, Japanese goods were synonymous with cheapness and low quality, but over time their quality initiatives began to be successful, with Japan achieving very high levels of quality in products from the 1970s onward. For example, Japanese cars regularly top the J.D. Power customer satisfaction ratings. A number of highly successful quality initiatives have since been invented by the Japanese (e.g. Toyota Production System). Many of the methods not only provide techniques but also have associated quality culture aspects (i.e. people factors). These methods are now adopted by the same western countries that decades earlier derided Japanese methods.

W. Edwards Deming is best known for his management philosophy establishing quality, productivity, and competitive position. He has formulated 14 points of attention for managers, some of these points are more appropriate for service management: Break down barriers between departments Management should learn their responsibilities, and take on leadership Improve constantly Institute a programme of education and self-improvement

There is a substantial number of literature available on quality. In recent times some themes have become more significant including quality culture, the importance of knowledge management, and the role of leadership in promoting and achieving high quality. Disciplines like systems thinking are bringing more holistic approaches to quality so that people, process and products are considered together rather than independent factors in quality management. In the same vein, marketing discipline also addressed the issue of quality (service quality marketing).

[edit] 3 Why has it been developed and who developed it?

After the United States entered World War II, quality became a critical component of the war effort: Bullets manufactured in one state, for example, had to work consistently in rifles made in another. The armed forces initially inspected virtually every unit of product; then to simplify and speed up this process without compromising safety, the military began to use sampling techniques for inspection, aided by the publication of military-specification standards and training courses in Walter Shewhart’s statistical process control techniques. However, the roots of quality can be traced even further back, to Frederick Taylor in the 1920s. Taylor is the "father of scientific management”. As manufacturing left the single craftsman's workshop, companies needed to develop a quality control department.

The quality in the United States and Europe came as a direct response to the quality revolution in Japan following World War II. The Japanese welcomed the input of Americans Joseph M. Juran and W. Edwards Deming and rather than concentrating on inspection, focused on improving all organisational processes through the people who used them. By the 1970s, industrial sectors such as automobiles and electronics had been broadsided by Japan’s high-quality competition.

In the last decades quality has been considered a fad by many business leaders. But while the use of the term quality has faded somewhat, its practices continue. In the two last decades of the twentieth century the quality movement seems to have matured. New quality systems have evolved from the foundations of Deming, Juran and the early Japanese practitioners of quality, and quality has moved beyond manufacturing into service, healthcare, education and government sectors.

It is in this context that service quality emerged as a fundamental aspect of management – service quality management. In the last three decades various authors have conceptualised service quality management, and tested its conceptualisations (e.g. SERVQUAL) in various service contexts.

[edit] 4 When should you use it?

Quality measures are intended to help customers to compare the performance of various businesses. This information can be used in evaluating and choosing the service option. Indeed, service quality is about ensuring customers, both internal and external, get what they want. As travel and technology bring markets, people and products ever closer, service quality is the single most effective and sustainable means of differentiation between competing companies.

[edit] 5 How does it work?

Service businesses like other organizations are realizing the significance of customer-centered philosophies and are turning to quality management approaches to help managing their businesses. SERVQUAL is an effective approach that has been developed by Parasuraman et al. and its role in the analysis of the difference between customer expectations and perceptions is central. SERQUAL can close one of the important service quality gaps associated with external customer services, and has the potential to be extended to close other major gaps and therefore, it can be developed in order to be applied for internal customers, i.e. employees and service providers.

There are seven major gaps in the service quality concept (Parasuraman et al. 1985).

• Gap1: Customers’ expectations versus management perceptions: as a result of the lack of a marketing research orientation, inadequate upward communication and too many layers of management.
• Gap2: Management perceptions versus service specifications: as a result of inadequate commitment to service quality, a perception of unfeasibility, inadequate task standardisation and an absence of goal setting.
• Gap3: Service specifications versus service delivery: as a result of role ambiguity and conflict, poor employee-job fit and poor technology-job fit, inappropriate supervisory control systems, lack of perceived control and lack of teamwork.
• Gap4: Service delivery versus external communication: as a result of inadequate horizontal communications and propensity to over-promise.
• Gap5: The discrepancy between customer expectations and their perceptions of the service delivered: as a result of the influences exerted from the customer side and the shortfalls (gaps) on the part of the service provider. In this case, customer expectations are influenced by the extent of personal needs, word of mouth recommendation and past service experiences.
• Gap6: The discrepancy between customer expectations and employees’ perceptions: as a result of the differences in the understanding of customer expectations by front-line service providers.
• Gap7: The discrepancy between employee’s perceptions and management perceptions: as a result of the differences in the understanding of customer expectations between managers and service providers.

The SERVQUAL instrument has been the predominant method used to measure consumers’ perceptions of service quality. It has five generic dimensions or factors as follows:

• Tangibles - Physical facilities, equipment and appearance of personnel.
• Reliability - Ability to perform the promised service dependably and accurately.
• Responsiveness - Willingness to help customers and provide prompt service.
• Assurance (including competence, courtesy, credibility and security) - Knowledge and courtesy of employees and their ability to inspire trust and confidence.
• Empathy (including access, communication, understanding the customer) - Caring and individualized attention that the firm provides to its customers.

[edit] 6 Related topics/tools

• Service Quality
• Total Quality Management
• Quality Assurance
• Quality Audit
• Quality Management System
• ISO

[edit] 7 Sources/links

• Zeithaml, V. A., Parasuraman, A. & Berry, L. L. 1990. Delivering quality service; Balancing customer perceptions and expectations. The Free Press. New York, USA.

• International Standards Organization

• American Society for Quality

• Japanese Society for Quality Control

• Japanese Society for Quality Assurance

• Australian Organization for Quality

• National Quality Institute of Canada

• European Organization for Quality

• European Foundation for Quality Management

• The Quality Management Network