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Quality Management – Prof. Schmitt Lecture 12

Quality Management in Service Industries L 12 Page 0

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Lecture Quality Management

12 Quality Management in Service Industries

Prof. Dr.-Ing. Robert Schmitt



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Page 1© WZL/Fraunhofer IPT

Contents

� Definition of Service, Attributes and Potentials of Service

� Life Cycle and Characteristics of Service

� The Quality of Service

� Techniques of Quality Management in the Service Sector

Literature:

Quartapelle, A.; Larsen, G.: Kundenzufriedenheit. Berlin u.a.O.: Springer, 1996

Ramaswamy, R.: Design and Management of Service Processes. Reading (MA): Addison-Wesley, 1996

Statistisches Bundesamt (Hrsg.): Bruttowertschöpfung nach Wirtschaftsbereichen, http://www.destatis.de/indicators/d/vgr310ad.htm (Zugriff: 02.11.2001); Erwerbstätige nach Wirtschaftsbereichen, http://www.destatis.de/indicators/d/vgr010ad.htm (Zugriff: 02.11.2001)

Zeithaml, V.; Bitner, M.: Service Marketing. New York u.a.O.: McGraw-Hill, 1996

Zeithaml, V.; Parasurman, A.; Berry, L.: Qualitätsservice. Frankfurt a.M. u.a.O.: Campus, 1992

Deutsches Zentrum für Luft- und Raumfahrt (DLR), Projektträger für das Bundesministerium für Bildung und Forschung (BMBF)

Luczak H., Reichwald R., Spath, D. (Hg.): Service Engineering in Wissenschaft und Praxis. Die ganzheitliche Entwicklung von Dienstleistungen, Wiesbaden (Gabler Edition Wissenschaft), 2004

Herrmann, T., Kleinbeck, U., Krcmar, H. (Hrsg.): Konzepte für das Service Engineering, Heidelberg (Physica-Verlag), 2005

Vogel-Weyh, F.; Röhm, A.: „Dienstleistung - von der Renditefalle zum Wettbewerbsvorteil“, Verbesserung der Dienstleistungskompetenz hessischer Umweltunternehmen, Leitfaden für die betriebliche Praxis, TechnologieStiftung Hessen GmbH (TSH), Wiesbaden, 2002

Nitu, B.: ServCHECK: Diagnosetool für Serviceorganisationen, Zeitschrift “Unternehmen der Zukunft, 2006

Sommerlatte, T.: Relevante Wettbewerbsfaktoren im Innovations- und Wissenszeitalter. In: Energiewirtschaftliche Tagesfragen, Vol. 49, No. 12 (1999), p. 806-809.

Jonash, R. S.: The innovation premium. How next ompanies are achieving peak performance and profitability. Reading, Mass.: Perseus 1999.



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Contents

� Definition of Service, Attributes and Potentials of Service

Life Cycle and Characteristics of Service

The Quality of Service

Techniques of Quality Management in the Service Sector

Literature:

Biermann, T.; Dehr, G.: Kurswechsel Richtung Kunde. Frankfurt a.M.: FAZ, 1996

Bisgaard, S.: Service Quality. In: Belz, Christian; Bieger, Thomas: Dienstleistungs-kompetenz und innovative Geschäftsmodelle. St. Gallen: Thexis, 2000

Bruhn, M.: Qualitätsmanagement für Dienstleistungen. Grundlagen, Konzepte, Methoden. Berlin u.a.O.: Springer-Verlag, 1997

Deutsches Institut für Normung e.V. (Hrsg.): Service Engineering: Entwicklungsbegleitende Normung (EBN) für Dienstleistungen. Berlin u.a.O.: Beuth, 1998

Friedli, T. / Gebauer, H.: Erfolgsfaktoren für professionelles Dienstleistungsmanagement in produzierenden Unternehmen; Industrie Management 19: GITO-Verlag, Berlin, (2003) H. 5, S.74-77

Fourastié, J.: Die große Hoffnung des Zwanzigsten Jahrhunderts. Köln: Bund-Verlag, 1954

Kleinaltenkamp, M.: Der deutsche Maschinenbau im Spannungsfeld zwischen Standardisierung und Individualisierung. Aus: Widmaier, U. (Hrsg.): Der deutsche Maschinenbau in den neunziger Jahren.Kontinuität und Wandel einerBranche. Frankfurt a.M.: Campus, 2000, S. 409 - 454.

Kleinaltenkamp, M.: Service-Blueprinting – Nicht ohne den Kunden. In: technischer vertrieb, April, 2(1999), S.33-39

Hoeth U.; Schwarz, W.: Qualitätstechniken für die Dienstleistung. München u.a.O.: Hanser-Verlag, 1997

Lehman, A.: Dienstleistungsmanagement. Strategien und Ansatzpunkte zur Schaffung von Servicequelität. Stuttgart, Zürich: Schäffer-Poeschel, 1995

Luczak, H. et al.: Service Engineering. Der systematische Weg von der Idee zum Leistungsangebot. München: Transfer-Centrum. 2000

Mayers, B. / Pfeifer, T. / Steins, D. Wie man ein Produkt erfolgreich entwickelt – Die Conjointanalyse als Verfahren zur kundenorientierten Produktinnovation. QZ 42 (1997), H. 3, S. 290-292

Meffert, H.; Bruhn, M.: Dienstleistungsmarketing. Wiesbaden: Gabler, 2000



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From the „Service-Desert“ via the „Jungle of Service“ up to the „Garden of Service“

Time

Contribution of

Services

-

Turnover-Profit-Customer loyalty

Producing Service Providers /

Hybrid Producers

Garden of Service

Increase the

degree of professionalism in

Service Management

Source: Friedli / Gebauer (2003)

Pure producer

Service Desert

Service Jungle

-Small allocatabilitiy

-Large range of services offered

Low awareness level-

Low cost transparency

In press and media, for some years now, a rising meaning is attached to the topic Service.

It is pointed out that the so-called tertiary sector is assumed to have an obvious potential for further growth, which is limited for production industries.

Generally, it is assumed that in the long run, the companies of some production industries will no longer diversify themselves over the actual physical product but the services offered with it.

In this context, Germany is often regarded as fallow land for the service sector (“Service Desert Germany").

In the course of companies broadening their range of goods, which in the beginning happened in a non-systematic way and without exact ‘pricing’, the term ‘Service Jungle’ came up. In this case unclearly defined ranges of services as well as a lack of organisational preconditions pose a barrier to the professional service offer (Friedli/Dietrich/Gebauer, 2001).

Finally, the systematic and professional expansion of services is aimed at (‘Garden of Service‘) including transparent service portfolios and adequate pricing strategies.



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Constitutional Characteristics of Services

� Integration of the customer (resp. external factor*)

- the customer is tightly integrated into the service-process

- the customer is present during the delivery of service

� Individuality of the service

- the customer exerts influence on service procedure and results

- each customer has own preferences and wishes

� Simultaneousness of production and consumption- „Uno-actu-principle“ at the production of service

- No warehousing, no transportability

� Process characteristics

- the process of adding value is the service itself

- the customer buys a process

� Immateriality

- Immaterial goods are delivered (tertiary sector)

- Difficult description of immaterial product

- Difficult measurability of service quality

*external factor =

customer and those

objects

(e.g. car to repair) Sourc

e: D

IN F

achbericht75

: S

erv

ice E

ngin

eeri

ng

DIN ISO 8402 (Terms and Definitions of Quality Assurance and Quality Management) and DIN ISO 9004-2 (Quality Management- and Elements of Quality Assurance Systems. Guideline for Services) offer very universal definitions of service. But in the case of Service Design and Service Management, specific characteristics are important and define the differences between services and material products:

- Integration of the external factor

- Individuality of services

- Simultaneousness of production and consumption

- Process characteristics

- Immateriality



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Forms of Service in the Business-to-Business (B2B) Field

Services

Person oriented Services (B2C)

Demanded by private (groups) of people

Business oriented Services (B2B)

Demanded by organisations/companies

Joint Services

Provider = producingcompanies

Pure Services

Provider = service companies

Product Accom-panying Services

Provider = service providingproducer

Performance Contracting

Provider = producing serviceprovider Source: Kleinaltenkamp (2000)

Industrial Services

Examples:

Pure Services:

- Financial Service Provider, Logistic Service Provider

Joint Services

a) Product Accompanying Service:

- The Manufacturer sells his primary product and offers additional services such as „financing“

and „maintenance “.

b) Performance Contracting:

- Type1: The Manufacturer lets the actual main product including Full-Service for a specific period

of time at a fixed price to the customer. The manufacturer provides the service of the product

carefree; he is not responsible for the usage of the service, i.e. for the operation and thus the

personnel.

- Type 2: The manufacturer is responsible not only for the "technical side" of the contribution of

equipment, but also for the operation, i.e. the personnel. He "operates" the Service for the

equipment completely.



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Product-Related Services Represent the Bulk of Industrial Services

Product-related services 2002

broken down by types of service

Share of sales in turnover

27%

26%

19%

7%

6%3% 4%

8%

maintenance, repair

assembly and commissioning

planning, consulting and project planning

generation of software

documentation

professional training

Leasing, renting, financing

miscellaneous

Source: Statistisches Bundesamt (2004)

1

23

4

1

2

3

4

In the year 2002 the classical industrial/technical services were offered as product-related services most frequently. The turnovers of maintenance and repair amount to 28% of the total turnovers of product-related services; assembly and commissioning realize 26% of the total turnovers. So these both types of service constitute more than half of the offer of product-related services and can be assumed amongst the traditional services of companies from the manufacturing sector, the industrial/ technical services.

Planning, consulting and project planning follow, with a turnover of 19%, on third position. Together with maintenance and repair as well as assembly and commissioning, planning, consulting and project planning form the „Big Three“ of the product-related services. Almost three quarters of the offer are accounted by them.



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What Are Industrial Services?

Industrial Services

� are produced by an industrial company

� are linked to industrial goods

� bring on a non-technical potential of differentiation

� may lead to an expansion of market shares, customer

loyalty and the generation of additional sources of earnings

Quelle: ABB GmbH, www.abb.de, Stand:

20.04.2004

Source: Klapper/ Stegner (1991)

Technical potential of differentiation

Potential of cost reduction

Homogenisation material goods

Non-technical potential of differentiation by

Industrial Services

Pote

ntial of com

petition

Life cycle of new products

� Starting with high technical potential

of differentiation

� Followed by potential of cost

reduction

� Services increase the potential of

competition additionallyTime

The more homogenous or standardised material goods are, the lower the costs of production are. But the technical potential of differentiation, which adds unique selling propositions to non-cash benefits and makes them interesting compared to products of competitors, decreases. A cost-effective alternative to reach potential of differentiation is promised by the offering of industrial services.



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Development to a Hybrid Producer

Hybrid product

Physical

product

Services

„integrated“

Product business

Source: Spath / Demuß (2006).

Services

Physical

product Physical

product

Services

System business

„additional“„side by side“

As a synonym for the hybrid manufacturer the path from the producer passing the service providing producer up to the producing-service-provider is mentioned (see slide 6: Gebauer, 2004). The more the development proceeds, the higher the content of service becomes. In parallel, turnover, benefit and customer loyalty increase by individualising the offered service proposal.

The concept of the hybrid manufacturer acts on the assumption that the core product is only offered in connection with customised service. Therefore every hybrid product is unique and cannot be copied by a competitor. Pre-condition for developing customer specific products is that the customer is well known to the provider of the process.



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Company-Oriented Service Offers –From the Supplier to the Production Service Provider

Pro

du

cts

Ad

din

gvalu

e

Supplier Packager Integrator Outsourcer Operator

CustomerCustomer Customer Customer Customer

Integration

Maintenance

Production

Distribution

Integration

Maintenance

Production

Distribution

Maintenance

Production

Distribution

Production

Distribution

Integration

Maintenance

Distribution

Integration Integration

Maintenance

Production

= own products

= products from other Manufacturers

Sourc

e: K

lein

alte

nkam

p (

2000)

Different degrees of development of companies are shown:

- Step 1: Supplier

The company is a pure product supplier for its customer.

- Step 2: Packager

The company integrates its product with the one of another manufacturer and delivers the partial system to its customer.

- Step 3: System supplier

The company integrates its products and the ones of further suppliers into a complete system and delivers this sample to its customer.

- Step 4: Outsourcer

By order of the customer the company takes the responsibility for the maintenance of the supplied product.

- Step 5: Operator

The company takes over the operation of the product (Production) by order of the customer.

Principle: Taking on processes, that are not core competencies of business customers -> make products of others to your own products!



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Contents

Definition of Service, Its Attributes and Potentials

� Life Cycle and Characteristics of Service





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Service creation

Life-Cycle of Services

Service Engineering Service Management

Imp

lem

en

tatio

n

Se

rvic

e p

rovid

ing

Eva

lua

tio

n

Re

pla

ce

me

nt/

Re

cyclin

g

Se

rvic

e

de

sig

n

Asse

ss

cu

sto

me

rn

ee

ds

Ge

ne

rate

& a

sse

ss

se

rvic

eid

ea

s

Ide

ntify

se

rvic

ed

em

an

d

Customer orientation

Cutomer satisfaction

Increase quality Increase loyalty

Regarding the entire life-cycle of services, from Service Creation over Service Engineering to Service Management, the customer influences each phase in different ways.

This life cycle is roughly divided into two sections: the Service Engineering and the Service Management.

While Customer orientation is important during the Service Creation and the Service Engineering, customer satisfaction is essential for the supply and management of services.

The aim is to reach customer’s loyalty, to understand one’s customers and to improve service quality continuously.



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Product design & Process planning

Marketing & Sales

After-SalesProduction

CompanyCustomer Customer

Co

re p

roc

es

se

sServices in Production Industries

Facility-Management

Se

rvic

es P

roc

es

sd

ep

en

de

nt

Pro

ce

ss

es

ind

ep

en

de

nt

Procurement/Disposition

Toolmaking/Production facilities

Disposalof waste

Logistics Mainte-nance

Forwarding/Distribution

Personnel affairs, Training

Customer careand services

The value adding core processes of a production company can be typically separated in:

Marketing and sales, product development and production process planning, production and After-Sales-Services (customer care).

Beside the conventional After-Sales-Services, company internal services make up an important area. Those internal services are also named “support processes”.

Support processes can be divided into services being independent or dependent on the core processes, i.e. the physical product.

The depending services are e.g.: Tool-making, production facility supply, logistics and maintenance, disposal of waste etc.

The independent services are e.g.: Personnel affairs, training or facility management.



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Maturity Degrees For the Description of Companies‘ Fitness in the Service Sector

Vogel-Weyh / Röhm (2002)

Improvisation: no strategy, objectives or processes

Orientation: planning & wording of objectives

Definition: rules, implementation, organisation

Realisation: integrated application & measurement

Improvement: holistic Service Management

Nitu (2006)

Sommerlatte (1999)

Maturity degrees are used for:

� Analysis of potentials to reach target states

� Presentation of requirements to the Service

Provider

� Deriving actions to optimize the Service

Quality-Activated guarantee

- Assistance with

commissioning

Service as aAdd-On

Product Quality

-Customer focus

- After-Sales Support-Adjustment

assistances

-Transmission

securing

Service as a

Support

Utility Quality

-Application

Consulting

-Troubleshooting

approach

-Configuration

assistances

-Software-Tailoring

-Result securing

- Individual servicepackage

Service as a

consulting

System Quality

-Insourcing

-Value-Chain-

Partnering

- Marketing of

process-related and

functional skills

Know-How Quality

Service as aStand-alone

offer

Continuous Improvement

controlled by key figures

Introduction of a Management

System controlled by key figures

Service offer is configurated efficiently

by products and process models

Service offer is configurated customer

oriented, continuously and effective

Services are unstructured, „grow organically“, no

strategic orientation, no documented processesStep 1:

Step 2:

Step 3:

Step 4:

Step 5:

Maturity degree models often afford an approach to analyse companies in terms of potencials to reach a specific target state.

In this slide, different approaches are illustrated to describe the maturity degrees, the Service Management and the service offer.

The basis often is the Capability Maturity Model Integration (CMMI) originating from software developmentprojects. Here the steps are adapted to the perspective of analysis of companies which set out on hybrid producer/ fulfilment service provider.

In order to reach the next higher maturity, the compliance of specific requirements is important: e. g. Process orientation, mechanisms to verify the service quality. Below methods are introduced, which areable to take up the customer requirements systematically, to illustrate the service processes, to evaluateand to improve.

Steps according to Vogel-Weyh & Röhm:

Stufe 1: Services are unstructured „grow organically“, no strategic orientation, no documentedprocesses

Stufe 2: Service offer is configurated customer oriented, continuously and effective

Stufe 3: Service offer is configurated efficiently by products and process models

Stufe 4. Introduction of a Management System controlled by key figures

Stufe 5: Continuous Improvement controlled by key figures



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Contents



� The Quality of Service




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Reasons for customer migration:

63 %

Quelle: Bruhn (2003), Kundenorientierung

63 %Bad service quality

14 %Bad product quality

9 %Price changes

5 %Changing

consumer habits

4 %Misc.

Service quality:Level of satisfaction, that may be reached

for demands, expectations and wishes of a

targeted customer segment.

Service quality:Competency of a provider

to generate the character of a serviceaccording to the customers expectations

on a certain level of request.

Level of request:

Results from the sum of the attributes/

characteristics of service.

Quelle: Bruhn (2006): Qualitätsmanagement für Dienstleistungen

Quelle: Quartepelle & Larsen (1996)

Bad Service quality is the chief cause of customer migration to competitors

Key Factor Service Quality – Reasons For Customer Migration

In the first definition by Quartepelle and Larsen the customer ranks first with his subjective necessities.

In the second definition objective (level of request) and subjective (customer expectations) criteria are considered.



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Customer Expectations and Service Quality

Sourc

e: Z

eitham

l/ B

itner

(199

6)

Service quality

in accordance withcustomer expectations

Desired service

Adequate service

Perfect service

Enthusiastic customer

Zone of tolerance

Frustrated customer

max.

min.

Factors of influence III

Transitory service alternatives

in case of emergencies or

service problems

Perceived service

alternatives (competition)

Self-perceived consumer role

Situational factors

Factors of influence II

Advertising & public relations

Price

Word of mouth

Past experiences with services

Personal needs

Factors of influence I

Surprising the customer, and

delighting him.

The customer demands a service as it ”could be” or rather “has to be” according to his knowledge.

The research on the subject “service quality” started in the USA in the early 1980’s. In 1983, an extensive research program started at the Marketing Science Institute, Cambridge (MA), out of which the result was the so called GAP-Model of service quality.

The GAP-Model is based on empirical examinations and concentrates on the customer’s expectations towards a service:

- How do customer expectations arise?

- What kind of factors influence this process?

The core of this model is the distinction between desired and acceptable service. Between those two levels lies the zone of tolerance. This range of customer expectations has a dynamical character. Especially the level of acceptable or adequate service quality changes according to:

- Service-level itself (luxurious dinner vs. fast-food-meal)

- Competitors’ service (fast-food-restaurant that offers free refill.)

- Frequency or availability of service supply (normal opening hours vs. 24 hours)

Following measures can influence the perceived Service Quality:

- Market research in order to learn about customer needs

- Customer survey in order to hear opinions on offered services

- Availability of Service Guarantee in order to propose stability for immaterial good

- Secure Service-Supply, even in busy times

- High performance level to underline price premium



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GAP-Model of Service Quality

Sourc

e: Z

eitham

l, P

ara

sura

man,

Berr

y (1

992)

Gap 1:

� Insufficient determination

of the customer wishes

Gap 2:

� Insufficient transfer of customer

wishes into service specifications

Gap 3:

� Insufficient performance of the

employees in supplying the

service

Gap 4:

� Insufficient matching between

pronounced and perceived

service quality

Gap 5:

� „The customer finally defines,

what quality means!“

Specification ofservice(-quality)

Determined customer

expectations

Influence

facotors I

Influence

factors II

Influence

factors III

Expected service

Cu

sto

me

rS

erv

cie

pro

vid

er

Gap 5

Gap 4

Gap 3

Gap 2

Gap 1

Supplied service

Perceived service

Marketing, Sales

Pronounced service

The focus on customer expectations is completed in the GAP-Model by the contact between customer and service provider as well as an internal view on the service processes. The whole model includes five gaps, that can arise between the perception of customer needs, Service Design, Service Engineering and Service Supply.

GAP 5 represents the most important gap, because this gap is a value for the perceived service quality by the customer. The clue to avoid Gap 5 is to close the gaps 1 to 4.

The GAP-Model can be used as a tool for bottom-up analysis, as a tool for identifying existing gaps and taking actions as well as a tool for eliminating internal and company-wide defects.



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Interim Conclusion – Service Quality

� The customer provides the basis of service quality by

expressing his needs and wishes.

� The factors of influence, which affect the customer,

generate, in combination with his wishes and needs, the

expected service quality.

� The company analyses and interprets the determined

customer expactations, wishes and needs and attempts

to realise this corresponding service quality.

� Adequate implementation of methods and tools is

necessary in all phases of Service Engineering and

Service Management in order to achieve the best

possible service quality.

Customer

Factors of influence

Company

Methods

The special characteristics of services, esp. their immateriality and the degree of customer integration, result in the demand for other Quality Management approaches than in the production of material goods.

Relevant for service quality are always the individuality of customers expectations and their experiences of process-like services.

In this context the behaviour of the employee towards the customer is the key factor. The service personnel must be able to adapt to each customer and has to reflect attitudes constantly.

This does not only apply to the relationship between external customers and service providers but also in principle to the internal customer-supplier-relationship.



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Contents




� Techniques of Quality Management in the Service Sector



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Company focusedCustomer focusedCustomer focusedCompany focused

Objective evaluation methodsSubjective evaluation methods

Overview of Methods For Service-Quality-Evaluation

Source: Bruhn (1997) p.61

� Statistic quality control

� Quality awards

� Quality audits

� Benchmarking� Quality Function

Deployment

(Service-QFD)

� Service-FMEA� Poka-Yoke

� Expert sighting� Silent Shopper

Method

� Product testing

� Contact-Point-Analysis

� Vignette-Technique

� Servqual� Conjoint-Analysis

Feature orientedmethods

� Blueprinting� Critical-Incident-

Technique

Event oriented methods

Problem oriented methods

� Complaint-

Analysis� Problem-

Detecting-

Method

There are several methods to evaluate the service quality. Those can be summarized in different groups according to effort, focus and customer influence.

An exception is the Contact-Point-Analysis being customer focused but supporting objective but also subjective results and thereby being classified as a feature as well as an event oriented method.

Benchmarking: Comparison of company processes and results. Evaluation by certain reference parameters.

The Critical-Incident-Technique deals with strengths and weaknesses of the service process. Acquiring and evaluating so called critical events.

Poka-Yoke: Rules to avoid failures/defects. Prevention of unintended and random failures/defects, reaching for the goal of realising the zero-defect-principle.

Problem-Detecting-Method: Centers the questioning of customers for specific problems and their judging.

Silent Shoppers are test shoppers, which simulate “realistic” service situations, without the awareness of the employees.



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Pro

cess o

rie

nta

ted

Qua

lity M

an

ag

em

ent

Quality Tools For Service Engineering and Service Management

ServiceEngineering

Service

Management

Quality Function

Deployment

Service

Blueprinting

Vignette-Technique,

Conjoint Analysis

Service-

FMEA

Problem orientated

procedures

Servqual

CIP-

Projects

� Transfer customer expectations in service functions

� Modelling of function fulfilling service processes

� Assessment of service options according to

customer satisfaction

� Preventive detection and avoidance of failures

� Management of complaints

� Appraising customer satisfaction

� Continuous improvement processes

Pro

ject

man

ag

em

ent/

Qua

lity-G

ate

s-C

once

pt

SLA � Specification of the scope of services

Quality Management for Service Engineering and Service Management

The development of services is similar to the development of technical products. Various QM-methods can be derived from of the product development and can be adopted or used in a similar way.

Furthermore special methods and tools for services exist, e.g. Service Blueprinting or the Vignette-Technique.

While supplying services, the Quality Management focus lies on the assessment of the service quality. Through this, it can be assessed, if

- customer’s expectations really are identified and fulfilled.

- defects, that have to be eliminated, still exist.

- customer’s expectations changed and customisation becomes necessary.

Quality Management offers various methods and procedures for all of these tasks, which are primarily used in the production of goods, but can also be applied to the service sector.



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Determined

service-levels

Deployment of Customer Demands in Service Functions

Determine target group

Pre-survey

Acquire

customer needs

Essential

service functions

Assess

customer needs

Correlation matrix

“conflicts between

service functions“New service idea

Assessed

customer needs

Comparison

with competitors for

customer’s purposes

Comparison with competitors

for service providers’ purposes

Significance of

service functions

Design-

team

Critical quality

characteristics

Correlation matrix

„service functions–

customer demands“

Service functions for

fulfilling customer

demands

The Service QFD Method

Objective:

The systematical transfer of the acquired customer expectations into service functions can be performed by the method “Quality Function Deployment” (QFD). (q.v. L/ E 8)

Procedure:

It is functional for a service provider to:

- Realise several concrete projects with quantifiable quality objectives,

- Determine the available resources

- Select employees and customers, which should be involved in the project.

In this connection it makes sense to involve all these employees which work on service processes which are closely related to the quality and project objectives.

For example, if the project objective would be „waiting time reduction at the counter about 10 % “, it makes sense to involve employees of the front office, back office and IT-department as well as bank manager and concerned customers in the QFD-project.

After the QFD-project, it has to be checked in pilot projects, if the developed measures will be accepted and appreciated by the customer.

Benefit:

-Early detection of risks and benefits

-Integration of staff

Risks:

-Organisational effort for complete tracing of implied measures



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This page stays empty for technical reasons

The Service QFD Method

Advantages:

- Clear and logical structured steps bring a high level of arrangement and discipline to the project team. Often, only the formalism makes clear complex processes and reveals weak points.

- Early detection of conflicts of objectives (costs vs. quality)

- Increase of motivation will be more probable by early meeting and cooperation.

- New cognitions could be integrated online.

- Furthermore a high level of cost transparency occurs.

Disadvantages:

- QFD induces high effort, especially during the time of adoption.

- The QFD requires a time- and cost intensive discussion within a team of experts from each considered department.

- Not everybody is open minded compared to the used methods (e.g. brainstorming) and qualified as a team member.

Consequent trace of QFD ensures, that the product characteristics have a high overlap with customer requirements and that the resources of the firm could be concentrated on essential, i.e. favoured attributes by the market or by the customer.



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Characteristic

€ 90,- € 180,-

(20) (0)

Occurrences

Service availability 8 am - 6 pm 8 am - 9 pm 24 h / 7 days

(0) (7) (7)

Service-response time latest next day within 6 hours within 3 hours

(0) (10) (20)

Contact person: Changing Contact persons steady Support-Team

(0) (14)

Special hotline not present present / inclusive

(0) (18)

Operating system without update of operating system with update of operating system

(0) (19)

Price service-agreement / month

€ 120,- € 150,-

(12) (8)

Derive Willingness to Pay by Using Conjoint-Analysis

Que

lle: K

lein

alte

nkam

p (

20

00)

� Based on preference values

� Often used in consumer goods industry

� Statistical evaluation complex

� Used seldomly in engineering

Key:

Numbers in brackets: Number of

nominations by preference interviews

The Conjoint-Analysis Method

Objective:

The Conjoint-Analysis goes back to a work of the psychologist LUCE and the statistician TUCKEY (1964).

With the help of a Conjoint-Analysis (CA) preference values of consumers can be determined for given characteristics (importance), for their occurrences (partial benefits) as well as for combinations of certain characteristics and/or characteristic occurrences (total benefit) for a product and/or a service. The Conjoint-Analysis allows the examination of hypothetical product or service offers by linking certain characteristics to a nearly arbitrary combination of these characteristics.

In the field of the price determination, Conjoint-Analyses are frequently used in order to supply the database for the calculation of the prospective price-sales function for a product on a given market and/or competition field.

With the data of the Conjoint-Analysis a market simulation can be realised. It is used to calculate the price for a given product that yields the optimum profit for the manufacturer.

Procedure:

1. Select characteristics and occurrences

2. List all generated combinations

3. Arrange a customer survey:

- Present the types of service

- Evaluate the types of service via paired comparison

4. Determine the favoured type of service (type of service with highest customer popularity)

Benefits:

- Quantitative method allows subjective ratings to be converted to objective indicators

- Basis for pricing and pricing transparency

Risks:

- Only usable by experts or by use of special software

- Can only include pre-articulated ideas and not new ideas in the process of rating



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The Conjoint-Analysis Method

Advantages

- Quantitative determination of the benefits and desires of internal and external customers

- Optimal controlling of R&D resources due to the knowledge of profit rates and ranges

- The influence of subjective characteristics (benefits, imageries) on objective characteristics becomes

transparent.

- By applying adequate software following disadvantages can be reduced or eliminated.

Disadvantages

- Time- and cost intensive

- Extensive statistic-mathematical knowledge necessary

- Past-oriented, conservative gathering of the product characteristics

- The profile method is applicable only for simple products with few characteristics

- The preselection of the characteristics is affected by subjectivism.



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Que

lle: H

oe

th(1

99

7)

Generate the theoretically possible number of vignettes:

Z = nk with n = number of possible values

with k = number of quality characteristics

Listing of all generated

combinations (vignettes)

1

Conduction of a customer survey:

� Presentation of all vignettes

� Assessing all vignettes

by pair wise comparison

2Availability

Promtptness

Individuality

Value 1

Normal hours

of business

3-4 days

Standard procedure

Value 2

24 h-Service

1 day

Various levels

of service

Characteristic

kValue kn=1 Value kn=2

...

...

...

vignette 1 vignette 2

Customer‘s favourite

service option

Determination of the favourite

service option

3

Assessment of Service Variants According to Customer Satisfaction

How does the customer perceive different

values of quality characteristics?

Quality

characteristics

Use of the Vignette-Technique

(or Conjoint-Analysis etc.)

The Vignette-Technique Method

Objective:

The Vignette-Technique allows to gather assessments from the customer about the quality of services, that

are still to be developed and are not offered on the market yet.

While developing services, the Vignette-Technique tries to realise the fictive services by scenarios.

Proceeding:

The Vignette-Technique is based on the Conjoint-Analysis. The value for the cumulated degree of

satisfaction is achieved by adding up the partial results. Each vignette represents a combination of different

quality characteristics and their respective values. The customer evaluates by means of pairwise

comparison, which of the service packages represented on the vignettes is preferred by him.

Advantages:

The effort for this method is especially worthwhile for complex services, that offer different possibilities in

designing quality features.

Disadvantages:

As with all attribute-oriented procedures, the determination of the relevant quality characteristics

beforehand is of great importance, since the customer does not decide himself which Service combinations

he can have or choose from. Preceding studies such as expert interviews are inevitable. In addition a

survey participant is easily overstrained by the multiplicity of characteristics. If the chosen values are not

balanced within one quality characteristic and/or if no price/cost relation is defined, the test customers

obviously tend to select the superior value.

The differnce between Conjoint-Analysis and Vignette-Technique is the analysis of characteristics. The

Conjoint-Analysis surveys the affinity and the Vignette-Technique the difference of the particular

characteristics.



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Basic service

process

Modelling and Visualising of Service Processes

Sourc

e: K

lein

alte

nkam

p(1

999)

Onstage activities

Backstage activities

Support activities

Preparation activities

Facility activities

Line of interaction

Line of visibility

Line of internal interaction

Line of order penetration

Line of implementation

Serv

ice p

rovid

er’s a

ctivitie

s

Invis

ible

activitie

s

Secondary

activitie

s

Pote

ntial-

activitie

s

Custo

mer

induced a

ctivitie

s

Service provider’s

activities

Customer’s

activities

Specificevent

FSource of

failure

Decision

Activities’input-/output

Perceived by the

customer

Service Blueprinting

Customer activities

These levels differ in how “far” they are away from the customer.

- Customer Activities: ↑ „line of interaction“: all activities that are arranged and induced by the customer

- Onstage Activities: „line of interaction“ � „line of visibility“: all directly customer-induced activities in interaction with service provider, the customer notices

- Backstage Activities: „line of visibility“ � „line of internal interaction“: all directly customer-related activities, that have to be performed by the customer-interfaces, human or machine, but cannot be experienced by the customer.

- Support Activities: line of internal interaction“ � „line of order penetration“: customer-information is implemented to customer-deserved service by internal divisions. (e.g. IT-support)

- Preparation Activities: line of order penetration“ � „line of implementation“: all activities, that are used for the opening up of new markets or service-preparation, but are not directly depending on a concrete customer order.

- Facility Activities: ↓ „line of implementation“: all activities that provide „Facilities“ to guarantee the efficiency of the company.



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Modelling and Visualisation of Service Processes

Onstage-Activities

Backstage-Activities

Support-Activities

Line of interaction

Line of visibility

Line of internal interaction

Line of order penetration

Activitie

s d

irectly

induced b

y t

he c

usto

mer

Customer Activities

1. Call IT-Hotline: „Modem

doesn‘t work“

2. Telephone

based fault analysis

5. Internal fault analysis & repair

3. Filing of repairorder

6. Sending

modem back to customer

4. Returning

modem

4. Returning

modem

1. Call IT-Hotline: „Modem

doesn‘t work“

2. Telephone

based fault

analysis

3. Filing of repairorder

5. Internal fault analysis & repair

6. Sending

modem back to customer

… … …

The Service Blueprinting Method

Objective:

The modelling of service processes according to functionality.

Proceeding:

- Picture the service process as well as all the participating activities

- Assign all the activities – independent from the organisational unit - to different levels.

Advantages:

- Service Blueprinting enables the planning and modelling of services in special consideration of the customers point of view

- Service Blueprinting can be used for analyses (failure analysis, potentials for optimisation, calculation of time and cost, etc.)

- Involved organisational units become transparent

- Service Blueprinting is easy to understand

Disadvantages:

- Not qualified for complex processes (wanting straightforwardness)

- Inadequate documentation of requiered ressources

- There is no explicit software support for Service Blueprinting

- It is diffcult to integrate variants



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Preventive Avoidance of Failures and Critical Situations

Sourc

e: H

oeth

(199

7);

Gogo

ll(1

99

5)

Sources of information for the FMEA (examples):

Service Blueprint

a) Front-office-processes, means above the line of visibility � Online-FMEAb) Back-office-processes, means below the line of visibility � Offline-FMEA

Quality Function Deployment and Vignette-Technique

� Critical quality characteristics and their specific values

Particular importance of the FMEA for services:

1. Uno-actu-principle � Failures can’t be removed easily or can’t be removed at all.

2. Customer’s integration � What can/ could the customer do wrong?

Severity

Dete

ction

Occur-

rence

Risk-

Assessment

Severity

Dete

ction

Occur-

rence

Risk-

Assessment

Reason ActionsResponsible

person

Service

process

Possible

failures

Failure

consequence

The Service-FMEA Method

After determining the customer favourite service alternative and having modeled all necessary service

processes, possible sources of failure and critical situations must be detected and eliminated.

Therefore, the well known method “Failure Modes and Effects Analysis” (FMEA) can be used. The

particularity of the service-FMEA is its focus on the service process and especially on processes, that are

perceived by the customer (see Service Blueprinting).

Objective:

Prevention of failures and critical situations

Proceeding FMEA:

1. Preparation

2. Assembling FMEA-Team

3. Analysis

4. Function and function structure

5. Failure analysis

6. Realising risk assessment on the basis of failure analysis (pt. 5) and expressing as Risk Priority

Number (RPN)

7. Optimisation

Advantages:

- Determining of all possible potential types of failures of the product or process

- Determining of activities to prevent the occurrence of failure

- Good documentation of the product and the process

Disadvantages:

- Subjective und tedious proceeding

- Focussing on types of failure and not on the cause-and-effect chain of incidents

- Aspects of the process or the product, which could be described directly by measured values, are

ignored.



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ServiceLevel

Agreement

ServiceLevel

Agreement

Service Level Agreement as a Crucial Management Instrument

� Service development

– Definition of the service proposal

� Resource management

– Agreement on provided service

resources

� Customer-supplier relationship

– Agreement on rights and duties of

customers and suppliers (service

provider)

� Evaluation

– Determination of measurable service-

level criteria

– Agreement on evaluation methods and

intervals

• Purpose

• Contractual partner • Changelog

• Service description

• Responsibility service provider

• Responsibility service recipient • Availability of service

• Standards

• Job-Planning / -Maintenance

• Service-Level-Parameters

• Measuring-period

• Monitoring and reporting

• Miscellaneous definitions

• External contracts • Pricing

• Legal ramifications of regulation violations

• Contract duration

• Signatures

Contents

The Service Level Agreement Method

Objective:

To clarify, between customer and supplier, which service the internal service provider has to provide to what extent and costs.

Proceeding:

The so-called Service Level Agreement can be understood as the basis of the approaches introduced here: An agreement between internal customer and supplier referring to the service degree within the different service products, which is obliging.

- Referring to Service Engineering, the service offer must be described in its full range

- The service level must be expressed by indicators on availability

- Assessing the compliance of the Service Level Agreements, measurement categories of each service are to be defined and their assessment methods and frequency are to be declared.

- The activity quantity describes how much capacity is actually provided by the service provider and has to be fixed in the Service Level Agreement.



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The Service Level Agreement Method

Advantages:

- Determination of objectives and measured variables

- Better presentability of the performance of service provider:

- More transparency

- More comparability

- Reaching the balance between customer needs and the economic/technical capabilities by service provider and service customer

- Effect a better defining of performances of the service provider

- Reaching clear conceptions of the roles, responsibilities and requirements of service provider and service customer (by means of an accountability- and function delimination matrix)

- Optimise continuously the cooperation between service provider und service customer

- Put the planning on a company footing

Disadvantages:

- Expectations of the service customer are often too high:

- 99,99 % availability,

- Extremely long periods of service time,

- No data loss.

It is essential to find the balance between requirements and economic/technical capabilities!

Altogether, the Service Level Agreement comprises a lot of Quality Management elements.



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ServQual: Determination of the Customer Satisfaction

Source: Parasuraman, Zeithaml, Berry (1985)

„Tangibles“

„Reliability“

„Responsiveness“

„Assurance“

„Empathy“

Physical environment, equipment

and employees’ outside

Ability, to provide the pronounced service

reliably and accurately.

Willingness to help the customer

and to offer a prompt service.

Employee’s competence, politeness and professional

skill to build up customer’s confidence.

Best care and individual attention

towards the customer.

Service

quality

Perceived

service

Expected

service

=

–

Actual state

Target state

77

I totally agree! I do not agree at all!

114466 55 33 22

77 114466 55 33 22

Servqual - Quality dimensions

Servqual double scale

The ServQual Method

Objective:

The method SERVQUAL (SERVice QUALity) is based on perceptions of the GAP-model and focuses on GAP 5. The result is an evaluation of the service quality as difference between customer expectations towards the service and his perception of the supplied service.

The method was developed by Zeithaml, Parasuraman, and Berry. It is a multi-attributive procedure of the satisfaction research and bases on measurement techniques of the empirical social research. ServQualacquires a differentiated view of the subjective perception from the customer’s point of view by asking about goods and bads of defined quality dimensions.

Proceeding:

First the customer is asked by a standard questionnaire how the service should be ideally (expectations). Then, he is asked how the service really was perceived (perception). The difference between both values represents the necessity of improvement actions.

Example: In excellent restaurants you are never too busy to consider particular customer demands!

Expectation = 5

Perception = 2

Difference: 2 - 5= -3

Advantages:

- Diversified applicability

- Good validity

- Oblique quote request

- Survey of effective customers

Disadvantages:

- twin scale demands a qualified judgement from the test person.

- Possible “inflation of requirements” caused by exaggerated expectations

- Building the difference leads to falsifying values



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Conclusion

� Company-related services are “the” growth sectorwithin the service economy.

� Company-related services represent an important starting

point for industrial companies to achieve advantagesover market competitors.

� Customer oriented creation of performance attributes is

the key for the development of services and products.

These attributes need to be performed professionally

when it comes to serving the customer. To know about

the customers’ willingness to pay is just as important as

the knowledge of your own costs.

� A variety of methods is available to systematically

enhance the quality of services during their creation and

their provision and to safeguard their success from a

customer‘s point of view.

lecture quality management - wzl€¦ · maintenance and repair as well as assembly and...

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