Chapter 1. Differing Perspectives on Quality. Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-1

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1 Chapter 1 Differing Perspectives on Quality Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-1

2 Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-2

3 Customer Feedback and Word-of- Mouth The average business only hears from 4% of its customers who are dissatisfied with its products or services. Of the 96% who do not bother to complain, 25% of them have serious problems. The 4% complainers are more likely to stay with the supplier than are the 96% noncomplainers. About 60% of the complainers would stay as customers if their problem was resolved and 95% would stay if the problem was resolved quickly. A dissatisfied customer will tell between 10 and 20 other people about their problem. A customer who has had a problem resolved by a company will tell about 5 people about the situation. Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall.

4 Differing Perspectives on Quality Chapter 1 What does the word quality mean to you? ( Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-4

5 Quality in different areas of society Area Airlines Health Care Food Services Postal Services Academia Consumer Products Insurance Military Automotive Communications Examples On-time, comfortable, low-cost service Correct diagnosis, minimum wait time, lower cost, security Good product, fast delivery, good environment fast delivery, correct delivery, cost containment Proper preparation for future, on-time knowledge delivery Properly made, defect-free, cost effective Payoff on time, reasonable cost Rapid deployment, decreased wages, no graft Defect-free Clearer, faster, cheaper service Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall.

6 An Approach to Viewing Quality. The transcendent approach views quality as something that is intuitively understood but nearly impossible to communicate, such as beauty or love. e.g. Rolls Royce, Rolex, The Hilton. The manufacturing-based approach assumes quality is all about making or providing error-free products or services e.g. Audi s vorsprung durch technik. The user-based approach assumes quality is all about providing products or services that are fit for their purpose e.g. it does what it says on the tin! The product-based Quality is found in the components and attributes of a product. This approach views quality as a precise and measurable set of characteristics The value-based approach defines quality in terms of value quality vs. price Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall.

7 What is Quality? Garvin s Product Quality Dimensions Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived Quality Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-7

8 What is Quality? Garvin s Product Quality Dimensions Performance Feature Reliability Conformance Efficiency with which a product achieves its intended purpose how well the ( product or service does the job for which it was intended. Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-8

9 What is Quality Garvin s Product Quality Dimensions Performance Features Reliability Conformance Attributes that supplement the product s basic performance Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-9

10 What is Quality Garvin s Product Quality Dimensions Performance Features Reliability Conformance Product s propensity to perform consistently over the product s useful life. Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-10

11 What is Quality Garvin s Product Quality Dimensions Performance Features Reliability Conformance Adherence to quantifiable specifications certain numeric dimensions for the product s performance capacity, speed, size, durability.. Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-11

12 What is Quality Garvin s Product Quality Dimensions Ability to tolerate stress or trauma without failing the total useful life of the product or service Durability Serviceability Aesthetics Perceived Quality Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-12

13 What is Quality Garvin s Product Quality Dimensions The ease and low cost of repair for a product Durability Serviceability Aesthetics Perceived Quality Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-13

14 What is Quality Garvin s Product Quality Dimensions Degree to which product attributes are matched to consumer preferences sensory characteristics such as taste, feel, sound, look, and smell Durability Serviceability Aesthetics Perceived Quality Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-14

15 What is Quality Garvin s Product Quality Dimensions Quality as the customer perceives it image, recognition, word of mouth. Durability Serviceability Aesthetics Perceived Quality Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-15

16 What is Quality PZ&B s Service Quality Dimensions Tangibles Service Reliability Responsiveness Assurance Empathy Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-16

17 What is Quality PZ&B s Service Quality Dimensions Tangibles Service Reliability Responsiveness Assurance Empathy Physical appearance of the facility, equipment, personnel and communications materials Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-17

18 What is Quality PZ&B s Service Quality Dimensions Tangibles Service Reliability Responsiveness Assurance Empathy The ability of the service provider to perform the promised service dependably and accurately Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-18

19 What is Quality PZ&B s Service Quality Dimensions Tangibles Service Reliability Responsiveness Assurance Empathy The willingness of the provider to be helpful and prompt in providing service Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-19

20 What is Quality PZ&B s Service Quality Dimensions Tangibles Service Reliability Responsiveness Assurance Empathy The knowledge and courtesy of the employees and their ability to inspire trust and confidence Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-20

21 What is Quality PZ&B s Service Quality Dimensions Tangibles Service Reliability Responsiveness Assurance Empathy Caring individualized attention from the service firm Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-21

22 What is Quality? Why does it matter that different definitions of quality exist? Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-22

23 What is Quality? Differing Functional Perspectives on Quality Functional Perspectives on quality include: Supply Chain Management Engineering Operations Strategic Management Marketing Financial/Accounting Human resources Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-23

24 What is Quality? Differing Functional Perspectives on Quality Supply Chain Management Upstream activities Core processes Downstream activities Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-24

25 What is Quality? Differing Functional Perspectives on Quality Engineering Design Life cycle Applying mathematical problem-solving skills and modeling techniques Product Design Process Design Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-25

26 What is Quality? Differing Functional Perspectives on Quality Operations Management Uses the systems view that underlies modern quality management thinking Conversion System Model of Operations Management Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-26

27 What is Quality? Differing Functional Perspectives on Quality Strategic Management Firms establish a planned course of action to achieve quality objectives Course of action must be cohesive and coherent in terms of goals, policies, plans, and sequencing to achieve quality improvement Aids an organization to achieve a sustainable competitive advantage Generic strategic Planning Process Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-27

28 What is Quality? Differing Functional Perspectives on Quality Marketing Focuses on perceived quality of goods and services The primary marketing tools for influencing customers perception of quality are price and advertising The customer is the focus of marketingrelated quality improvement Marketing System Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-28

29 What is Quality? Differing Functional Perspectives on Quality Financial Deming Value Chain Relies more on quantified, measurable, results-oriented thinking Identify and measure costs of quality by conducting trade-off and break-even analysis The pursuit of quality does not safeguard a company against bad management Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-29

30 What is Quality? Differing Functional Perspectives on Quality Human Resources Employee empowerment Organizational design Job analysis Quality management flourishes where the workers and company s needs are closely aligned Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-30

31 What is Quality? What is Quality? The Three Spheres of Quality Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-31

32 What is Quality? ` Other Perspectives on Quality: Value-Added Perspective on Quality Cultural Perspective on Quality Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-32

33 What is Quality? Chapter 1 Review ` There are different perspectives on quality There is disagreement on the definition of quality Functional perspectives on quality vary greatly Quality control, quality assurance and quality management focus on different aspects of quality Quality improvement requires a complex mix of system design, organizational design, rewards design, and process design Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-33

34 ` All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall. 1-34