Mod-01 Lec-13 Competing Through Service Quality

Mod-01 Lec-13 Competing Through Service Quality

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00:19
good afternoon we continue with the series of our lectures on Six Sigma we have a special topic today this has to do with quality and services almost 2/3 of our economy today is driven by various forms of services and but there are many examples if you see the kind of people who are involved in providing services we have people in health care they certainly are there and they have to make sure that their hospitals work
00:50
correctly the medical practitioners they get their help dentistry I care all of these are they fall in the category of service provision in the area of health care then we are professional services that's also very large area in our economy our counters accounting legal architecture work even IT all this again all these again fall under the umbrella of professional services then we've got financial services which are like banking investment advising assurance and so on these are also categorized now
01:21
under services hospitality this has become a new sort of area this is a very large area that is certainly grown and because of movement of people a lot of transactions taking place overseas and so on people are required to travel and there are also lifestyles are changing a lot of people they eat out therefore we've got restaurant businesses we've got hotels or motels a lot of arrangements are there for bread and breakfast type of thing then ski resort rafting and number of other tourist services these all come under
01:53
hospitality that's like another area where you got services involved travel and that would be like Airlines for example that's like a large area where again we have people who are engaged in providing services travel agencies they do a marvelous job many times and of course sometimes they found up theme parks they also come under services and many other services which you probably do not even notice for example hairstyling pest control plumbing lawn
02:23
maintenance counseling services and health care these are also categorized under services and in fact each of these business entities were survived only if customers come back to them otherwise they would not be there so this is something that's very important for us to realize services exist because there are customers and service is something where there is instant delivery if you see the march of quality this is this is the theme that I've been using from the beginning of this lecture if you see for
02:54
example if you see the interaction of various tools and techniques something needs that the the users of our economy they have come up with in back in the old days we had inspection as the only method for checking quality or assuring quality then of course we got into SPC statistical process control that grew into a design of experiments that then go into Taguchi methods then we had quality management systems we already obtained a glimpse of that TQM ISO 9000
03:26
IQs 9000 those come under quality management system and the latest one on the frontier is Six Sigma that's like another major initiative that's now it's bearing its troops so that is there now in all this if you look at the state of services where a dual services belong in all this they are stuck right at the inspection stage so most of services their quality assurance fee is being done by inspection only the moment of truth this is something we got to
03:57
realize that the moment of truth occurs when there's a contact with the customer when you actually deliver the service that is the moment of truth the moment of truth is when the customer is there in front of you and you're providing the service that's the moment of truth you know your business can be broken right there or the business can actually pick up some needs to go on to a bigger bigger sort of domain you can grow and you can thrive and it can expand your market share and everything can happen if that if you acted right at the moment
04:28
of truth this is very important what happens at the moment of truth you end up with the ability to either satisfied or dissatisfied a customer this is actually very very important this is this is the event that takes place at the moment of truth when you got to the customers and suppose you failed somehow then many people many services the engagement because service recovery which is like it's basically trying to satisfy someone who's who was previously
04:58
dissatisfied and as a result of the service that I provided and the idea here is even if someone is not satisfied try to see if you could make him a loyal customer so that's actually service recovery let's take a look at some of the some of the other areas in this something that you got to remember that is true for services it is not so true for other areas for example it is not true for manufacturing and that is the perishability of service it is difficult
05:29
actually to a synchronized service the supply of service with its delivery it's very difficult to do that because you cannot store service you cannot actually store haircutting or something like that it happens at the instant when there is a contact with the customers and services also cannot be returned you cannot put your hair back which I try sometimes of course when I go completely bald when I am at a at a place where they give me a haircut and if it is if they come too close to this there is no
06:00
way I can put some hair back unless I use a topi of course now services therefore cannot be returned or resold once you provided someone a service he's done really consumed it so there is no question of reselling that service and something else we have got to remember today the customer is looking for the total experience what is this total experience let's take a look at the automotive sector for example what we have here is we have the product aspect we have the product aspect of the automotive business and if
06:31
you look at the total acceptance criteria this is like the criteria that customers would use to continue to do business with you if you are in the auto sector for example there's the product aspect and you can actually see as far as the product is concerned we really view the auto itself to be the auto mile itself as the product performance is there certain aspects of it have to be there in the right order for exam with a car everything should work fit and the finish should be top-notch right
07:02
should be good handling of the vehicle should be good and the grade of the material used for example cheaper and so on they also have to be top-notch this is like something that we expect to expect the product we have this is the product aspect of performance there is of course something that goes beyond just owning the car we also have to from time to time get to take it back for repair or we or some other care for example and then I go to an auto repair
07:32
shop and what all things are expected there as far as the service component is concerned we will be expecting that all work will be done as agreed at a price that also has been agreed upon so there is some reference there to the contract the contract is actually when I sort of say that I require these services and I'm quoting a price and if I like the deal then of course I ask him go ahead with it how will that that part is taken care of and then in addition I would also like to see friendliness and the people who are there their courtesy for
08:04
example and their competency in doing the job and quickness with which they do the job these are now attributes of service attributes of service as far as performance is concerned these are the performance attributes of the service that goes along with the product which is there if you look at aesthetics obviously a lot of things would like to make sure the vehicle that I purchased has for example interior design soft touch and so on these are aesthetics they go beyond just the functional requirements as far as aesthetics in the
08:36
work area is concerned or the auto shop I'd like the workplace to be clean I would like the waiting area also to be clean this is like something that are like I do not want to go to a place where the walls are greasy and so on suppose if I touch something I get a stain of oil on my hand that's not really a place I would like to go back to so there's like some are aesthetics there when when you look at the service component there are certain aesthetics that are also involved there special features these special features actually convenience for example what kind of
09:06
things do I want to see in a vehicle as convenience these are special features certain gauges and their control there their placement there's something very very important you also might like to have a cell phone in the car you might like to have a CD player in the car these are special features and these come in addition to the basic basic features that come with the vehicle what about special features regard to in regard to the service of the app of the vehicle location where is it located that's also very important call when
09:37
ready I should be able to call in and walk in and kind of drive in with my vehicle that is something that I would like to be able to do and also something that says special feature that's a major convenience is computer diagnostics or the availability of computer diagnostic you can clearly see this is not a feature of the product this is a feature of the guy who is providing that service that goes along with the vehicle and I'm look at the total experience safety what about safety in the vehicle itself anti-lock brakes air bags these are clearly safety features of the product
10:08
itself and what about the service area well there's a separate service area I'm not really around the vehicle when my vehicle is being worked upon and it has been you know jacked up on a on a on a some sort of a platform and there's there's a beam that raises the car and they are working underneath the car it should not be such that I'm exposed to any kind of danger there either something falling on my head on or kind of damaging some property or my limbs and so on that is not something I'd like to hear I'd like to have a safe area that's probably enclosed neither noises
10:40
they're not smoke in there and probably I can even rest there properly so that's like an area where I feel safe you have gone in there first service let's also take a look at one or two other areas for example reliability and we all know where there are certain things we require when we buy a vehicle would like to have as few breakdowns as possible and they should not be too frequent that's a product feature what about reliability in terms of the work done on my vehicle work done correctly so that I do not really come back and get get the thing done again get the repair done
11:11
again and also reliability in regard to time so there is the quality of that service and also ready well promised this gives me the time dimension and both of these things if they are done right I respond regarde that auto repair shop to be a reliable one then we'll look at reliability and then of course we can it's very easy for us to see that we for the vehicle we must have useful life in miles or kilometers and also it should resist rust formation and corrosion that's something I would like to have
11:42
the vehicle itself to have that's the product feature on the service side the work holds up over time it's not that I take it home and again I have the same problem when I Drive it for a week and then again I've got the same nagging problem that's actually is telling me that the repair that was done was not durable so that's the service component then of course perceived quality how is that how is my car perceived and as far as the product is concerned I obviously clearly would be much happier if he drove the top-rated car like the Toyo
12:14
tires of the Honda's or the Mercedes or the BMW that's what we would like to be able to drive that's like that's a product image of the car itself that's perceived quality on the service front I'd like to go to a place who have been recognized for award-winning service that actually gives me such assurance that these people they are good people to do business with and that's not a service component so I've got a product component and then I also have a service component in regard to my vehicle's perceived quality and their service
12:44
after sale as far as the product is concerned I would like to know if I have a problem with my vehicle if I call him how are they handling the complaints what what what kind of things do they have in terms of information management if I have it complained do they write things down and so on do they do a follow up and so on that's a feature of the product on the service side again handling of complaints if I'm not happy with the service that was provided do I see a follow-up notice here I've got both the product component and I've got
13:16
the service component and I'm looking at the total satisfaction okay and the total experience to derive my satisfaction therefore not only the product but also service has become part and parcel of doing good business and we got to ensure ensure quality in both looking specifically into services and if we look at look into for example reliability if you look at something that we got to remember is when it comes to reliability performing the product promise service that's something that is regarded to be
13:46
reliability the service facility provided me some service and dip they provided exactly what the problem is then of course I'd rather regard them to be a regard the approval level and they do it dependably and also they do it accurately for example let's take an example I receive my mail at the same time every day and that's a reliable service that's a reliable service it's not that I'm waiting for it or there's a surprise for me it should not be like that if it is like that I cannot
14:18
do my planning so if there's a if there say for example you talk of FedEx they have a specified pickup time and there's no confusion about it then of course responsiveness this is also very important dimension of service quality that is the willingness to help customers promptly they respond exactly when we need them this is very important because this avoids keeping customers waiting for no no apparent reason this is also something that is very important in terms of managing a service if you
14:49
want to really if you want to be known as one who provides excellent service do make sure you are reliable and also you are responsive there are some other aspects also for example assurance I should be to assure I should will to convey trust and confidence when the customer comes and deals with me I should be able to convey trust and confidence to him this is very very important and also an example is being polite and showing respect for the customer this actually is a kind of a nurturing thing that you know trust me
15:20
I'll take care of you and you know I respect your business I respect you as a person and I'll take care of you know this actually shows that I'm trying to build trust and this gives the customer also some reason to do business with me instead of going out to it way to a competition for example empathy which is like I'm approachable if I'm providing service I'm approachable if something has gone wrong I can listen I'm willing to listen this is also something very very important in the provision of services then there are occasions when I
15:50
provide not just service also provides some tangible things in addition and I got to make sure whatever tangibles I provide the physical facilities I provide for example or other goods that I provide they are clean for example and there are there are reasons to believe when it's a combination of a product and a service people will view both of them people would like to evaluate both of them before they really just to tell me that yes this is it this is a business that I would like to do business with this is a
16:20
business entity that I'd like to continue to do business with so tangibles are also important right if you look at if you look at the mix of tangible products and if you look at the mix of some parts of intangible products it turns out most services most services comprise some tangible components and some intangible components of course there is a full spectrum there are there are some businesses which are purely tangible and there are some businesses
16:51
that are purely intangible let's take a look at that you go to the slide there soft drinks or detergents and so on they tend to be they are also providing me some sort of satisfaction they are provisions that I used and they are tangible dominant the tangent product itself is the dominating thing as you slowly move toward the right you'll find cosmetics care and so on fast-food outlets the moment you come to fast food outlets it's a combination of the tangible product and also the service that is provided the quickness with your
17:22
service is provided the accuracy with which they they check your change and so on both and the care that they show when you show up at the counter for example or you could be driving and you just wind down your window and then you sort of you know place your order and you count out the money you give it to them and you drive out there and you go to the counter that is to pick up counter and you can again you wind down your window and you grab the thing and you move off this is very important for us to realize there is a there is a product component obviously the food that you obtain and also the service that is going with it so as far as fast food is
17:54
concerned there is a tangible component and also there is an intangible component it's the combination that we are looking at and in many cases it's about 50 15 such businesses then you got advertising agent which in most cases it is not much tangible most of it is most of it is actually it turns out to be intangible is the feeling that we have how the message was conveyed how convincing it was and swans foot that's an intangible thing and it's very possible that if we look at Airlines investment management
18:24
consulting and so on and certainly when it comes to teaching you hardly deliver anything that's physical I do not provide pens and papers in every class I do not do that so there's hardly anything tangible that is passed on to passed on to my students when I am teaching most of it is intangible that's coming across it's coming across you can't touch it you can't you can feel it but you can't touch it you can't store it you can't do anything with it as far as teaching is concerned that is knowledge that is practically information and
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knowledge that is passed on and it is unintelligible so if you look at the full spectrum we again start with variety of businesses are there some are totally tangible and many are totally intangible and many businesses of course they're in this full spectrum they go from left to right as you increase the share of intangibles you move from left to right that's for you work so most businesses they will have to then worry about some part of the intangibles also it is very very important for us to realize now what what is the exactly
19:26
determines customer satisfaction all customers truly want to be satisfied I do not know any customer if you are spending some time here paying someone for some product or service I do not do anyone who do not like to be satisfied I walk in with a certain need in mind and I'd like to walk away having that need satisfied this what I'd like to be able to do in fact customers are loyal only because they cannot go somewhere else either for price or for the quality of service or for the quality of the goods
19:57
they would not go somewhere else because they get value which maybe which they cannot get somewhere else if I would not be able to provide the value that somebody else offers obviously the customers aren't going to come to it this is something you got to remember so in fact it's very very important for us to find a way to provide customers some extra value this will delight or even exceed their expectations a disparate caused them to come back and this is exactly what we're after we had after customers coming back to us not only they themselves come back
20:28
but they also tell others their friends and relatives and so on that this is one good place if you go there I think they'll take care of you I think they'll give you a good value that's something that we have to do now how do we find out how do we find out exactly what things are satisfying what things are delighting and what things are just basic needs there's a there's a model that was formulated by gentlemen is professor Connell a Japanese he was actually student of Ishikawa he came up with this Carnot model it's a great way to approach this issue of satisfaction
20:59
and we'll catch a glimpse of that as we go along in this talk here how serious is one particular thing which is called the customer feedback and word-of-mouth how serious is this a couple of things I would like to be able to mention here the average business rule here is only about 4% from 4% of their customers who are dissatisfied very few people would actually bother complaining even if they are not satisfied they would not bother complaining they'd probably just live
21:30
with it 96 percent do not really bother complaining and actually aura out of them the 96 percent who are not satisfied 25 percent probably have pretty serious problems with what I've given them either internship with product or a service four percent complainer someone like to stay with the supplier only 4 percent then the 96 percent who do not complain so you know you looking at a different spectrum you're looking at all those people who have not complained but they're not
22:01
satisfied for some reason if somebody has complained only 4 percent of these people they would stay with it it's very very unfortunate that without that we really would have a big big you know the big problem p.m. first of all very few people complain and those who complained very a very very few of them actually continue to do business with me 60 percent complainers would stay as customers if the problem was solved and 95
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would stay if the problem was resolved with you that's all that sort of something that we got to remember those who have complained if the problem was resolved quickly 60% of them would stay with us and if the problem was resolved quickly not only it was resolved it was resolved quickly than 95% people we actually had a complaint they would not mind staying and doing business with me but if you have a dissatisfied customer that means someone who did not get satisfied he is going to tell between 10 and 20 other people that this is not a
23:04
good place to go for your service or your purchase your product and remember even if you are doing retain purchasing there's a lot of human contact a lot of intangibles going on in fact that's the game of sales people say people offer these intangibles the experience of purchasing and they make you feel like you made the best decision ever possible that's the kind of thing that we are looking at if you are able to combine that along with your product you're the winner and the customer who's actually got a problem will probably go
23:36
around telling other people also and that statistics also there and we can't really deny this if you look at the ratings these ratings go from one to ten and the degree of severity with which a customer is going to complain about something the if if severe it is pretty low which is like 1 then the customer is not at all observed there is a problem with it and then likelihood of that particular complaint happening is very remote that's also there then of course
24:06
they come in in rating to this like a level of dissatisfaction that is rising because will experience some slight discomfort but again it is something he can probably live with and then of course we've got customers will experience some annoyance because of some degradation is there in performance and so on if you move on this chart for example I just leave it for you to read there are occasions where the customer is going to be downright dissatisfied like for example rating fight customer
24:36
is uncomfortable and this is a moderate rate of failure and I may have some documentation for it and it can actually lead to what we call potential failure this is like something that would not we would not be able to would not be able to sort of live with then of course I've got something called warranty repairs one repairs actually means that the product says product has failed or perhaps even the service had some problem with it this is of course a fairly serious situation
25:08
it's what halfway to going out of business then I've got even higher degree of customer dissatisfaction when perhaps I've done some damage to the customers own operations perhaps I've inflicted some damage on him or his property at severity rate ain't I really caused a very high degree of customer dissatisfaction then of course I've caused some negative impact of the customer and that's going to be a treating 9 and at rating 10 of severity
25:39
a poor service that would mean a negative impact on the customer people and society and this is going to guarantee failure for you and actually this is like a situation when perhaps the controls that you have in place they are not able to detect that there is going to be a potential failure because they intentionally would not cause it caused a situation like this so most likely you're not able to detect so this third fourth column here is the ability for you to be able to detect if you're providing that service let's take a look
26:09
at some of the other things that can be done first of all we got to recognize that there are five dimensions in which quality is being looked at and particularly if you do service people are looking for liability people are looking at responsiveness people are looking at empathy people look at assurance and people also look at tangibles compounded with combined with packaged with or bundled with a service that you're offering something you also have to recognize when we're trying to design a facility to provide good services we've got to recognize the
26:41
quality gap this say bring up in the next slide the next slide talks about this that's very important for us to be able to diagnose the problem what do I fix where is the gap and what do I fix that's something that's going to be clear once we get into that gap analysis and something else we can do we can also do qfd you remember de fois product design and also we did it for process design here we are trying to bring in qfd first service design for example there are a lot of services that are being provided now with your cell
27:12
phone cell phones are now providing a lot of services and now what kind of services will you provide you can design that using qfd that's also like a great way to make sure you maximize the satisfaction with your service you can also use the Cana model which I'm going to mention as we go into it a little later and that can help you prioritize the different services that would be providing the customers which are in that taking care of certain types of requirement I could I could also collect
27:45
some data and I could construct what we call it process control chart which is like a chart that we monitor how performance is going on that's something I could do I could also in case something does go wrong I could do something that is called service recovery which is like I take a dissatisfied customer and I do some special things so that he turns into a loyal customer I do something maybe I do a refund without question unconditional return and an unconditional guarantee to everything I extend something that is
28:15
beyond that because I I do not really worry so much about the the business that I've lost just at this moment I want to make sure that he comes back to me and another thing I could do when I'm trying to improve quality quality of services is I do a walk through the full chain of service from the time I have input of materials and goods and so on smooth provisions and then I've got the customer entering the system I trace it all the way from the beginning to the end till the customer leaves my premises I do this walk
28:47
through that also is going to it's like an audit that can bring out a lot of things which probably would stay hidden otherwise let's take a look at this quality gap model notice here the beginning is of course is customer expectation that is the that is the beginning of everything so I've got that yellow box there customer expectation that is the start of everything where do I find this out of this is done of course so marketing research market research will find this out so customer research and you try to what is your effort you try to understand the
29:18
customer then it come up come up with your own perception about customer expectations there are real expectations you have your own perception if there's a gap between these two we'd not be able to satisfy that customer there so this is gap number one very important then of course management has some some perception and on the basis of that the the managers they go about designing the service so you know you design that service so the first tip was you understand the customer try to understand what is what do these
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expectations are then you design the service that will take care of those requirements those expectations and there of course I I generate as a result of this I generate some standards these are service standards again if there is a gap between what the what my perception was my perception as a manager someone is good to provide that service and the service standards that I said if there's a gap between these two which is our gap number two if that gap is too wide
30:20
then the again I have the perception but I have not designed a service that will take care of taking care of those perception there is going to be gap there so my service design has been defective there that's how I get to my service standards then of course I have my service standards that's like something that is expected then I've got this major job of delivering that service that's also something very very important for us so there I go from I go from service standards to service delivery now I have to make sure that
30:52
service standards are met by the service that I deliver so this is a this is an issue of conferment if there's a difference between what I deliver and what the service standards are these are like your specifications if there's a gap there and of course there's a gap of conformance this is gap number three and again it does this gap is white I'm not good to get customer satisfaction I'm not certainly going to get customer delight then from because service delivery to customer perception I offered a service or I offer the
31:23
particular product or I offered that bundle of service and product offered that but the customer when you received it here the certain perception she was expecting something and now he's he's perceiving the quality of what I've offered to him if there's a gap between what I deliver and what he perceives it to be there's again a gap there that's gap number four and that's a matter of how am I communicated how am I communicated with him properly so his perceptions are
31:53
straight perceptions are right in fact this is when I'm trying to manage basically his perception because I've done everything possible to the extent I could I've done I try to understand the customer I've tried to try to design the service correctly I've said stand standard for it I've tried to make sure I delivered to those pecs and then of course I'm also trying to communicate and I'm trying to make sure that he his perception is exactly what I intended it to be so I deliver some service and I want to make sure that's what he
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perceives it to be if that gap is there in the end again then of course I've got again a gap to worry about and I'll not really have a delight delight delighted customer then of course the last part is customer perception versus what the customers are expecting the customers are expecting certain things when he started doing business with me he conveyed our twin through market research perhaps I found out what is it that he's after when he has received the service or the the package the package
32:56
that is the the bundle of the service and the product that I offered to him he ended up with a perception if there's a gap now between what he perceives this delivery to me and what his expectations are or work that gap again is something very serious it was the gap between what he perceived the delivery to me and what you were expecting this gap again if it is too wide I will not have a satisfied customer there again have to manage this so again there's a so there are five
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gaps here and each of these gaps for me have to be understood and we got to make sure we identify where that gap is and we try to do the air we take the steps to correct that that's something we got to do how do we do that how you actually we go about designing the kind of service that we want to begin with I've got to make sure that I designed the service package that fits the requirement for example there's a hotel in India this is the Taj group of hotels
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and most of the hotels that they manage are five-star hotels $5 or $6 in stock they really top-notch world-class hotels now a lot of travelers even if they are business travelers they do not have unlimited budget so they would like to get very good comfort no doubt but certainly they are not looking to get a five-star experience if they go to Delhi then they go to Jaipur then they go to Bombay then they go to UM the bar then they come back clearly they've done these three four city trips they are not really looking to get a five-star experience in all those places this is
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something that the Taj Group recognized and they came up with the series of hotels that are not the top of the line five start here but they also provided very good service excellent service and most of the stuff that they would do in in the five-star of trim the provided same quality of service at a lower price because they could really see there was a large market here and this could not be really taken care of by offering the offering the travellers the five-star comfort and the five-star provisions so
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that is something where it was recognized that the design had to be fitting the requirements so there's not like right now we are really what we are really trying to do is we are trying to make sure that the design fits the requirement then there is something called robust design and robust design is something where if something Falls up the system takes care of it now robustness is something that we always take care of one when we are looking at for example tangible products we worry about robust design but this robust
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design the robust design is also possible in services for example you've got everything there everything you provided and for some reason you know there are certain hours at which time that maids go in they tie up the bed sheets and everything else they you know change the flowers and so on they clean the ash frames and so on they do this at certain prescribed hours these our preset hours now suppose there is a customer and is expecting a small meeting to be held in his suite and he
36:03
wants the room to be tidied up now if your system was too fixed that only at certain hours like 7:30 in the morning then again probably around 11:30 then again around 5:30 then again around maybe probably 8:30 the maid would come in and shoot idea of the place if these times were fixed and suppose the visitor is coming at 10:30 and there is some ash laying in the ashtray the the the the fellow who is the guest is not going to feel very good about this so what he would like to be able to do is if he knows that the
36:34
meeting is going to start at 10:30 probably around 10:00 or maybe around 10:15 you would like to buzz the best downstairs you probably say oh could you please send the maid I would like you to be just a little tied up I've got a small meeting to be held in this suite again now here there is robustness the system is robust what happened that you know that extra ash that was there it's a noise but the system is able to take care of that noise there so I've got a robust design what is the robustness that I've provided here I've got some extra capacity I've got some extra
37:06
people exterminates who are on call and they do not do they do their routine job but in between there are some people who are assigned to attend the telephones just in case there's a house call there's there someone who is calling for some extra service in his room I've got that provided for it so there's a robustness built into the system then there is a provision called Pocoyo Pocoyo actually talks about fail saving and I'll give you a couple of examples of this for example poka-yoke is a is a thing that prevents mistakes it's really
37:38
designed it's again a Japanese procedure as you can really see from the title of it poka-yoke this is a Japanese phrase it really says that you know it the implication is that I'll make sure that a mistake is not made when the services provided for example it is done right then of course the quality of you know use of qfd quality function deployment and karna model these are also tools with which I can maximize my customer satisfaction let's take a look at okay okay
38:09
unity and I'm going to give you some very specific opportunities here for example if you've got a server he's going to be taking care of some customers and he does the the instance of an error is that the server does that work incorrectly for some reason he fails to do the job right and it's also possible that he fails to listen to the customers it's also possible this is
38:39
again a mistake that is you know that the server the person who is providing the service he is committing it's also very possible that the server or the if this is a service facility he fails to wear clean uniform that's also something that's a poka-yoke type of situation custom alerts failure to bring necessary materials at an ATM for example you walk into the ATM and you forgot your card or probably you forgot that little piece of slip on which you've written your your
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secret code you've misplaced it somewhere or it is not there you've walked in there but you do not have the necessary materials or perhaps that you'd like to probably pay a bill or something on many ATMs they take deposits but perhaps you've not brought your pen or something like that so again you've you've forgotten to bring something essential that is with you and counter it's also very possible that you are not able to follow the system flow which is there and that solves your problems sometimes and sometimes of course we are not able to resolve the
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problem so there is a if there is a problem there you are not able to signal and therefore you can't really have the other thing resolved these are opportunities where this tape proofing can be done and I'm going to give you some examples what is it that Six Sigma tries to do Six Sigma is trying to do two things two things Six Sigma is trying to do the first thing six ago I was trying to do is it is trying to reduce losses anytime you have losses loss of material loss of money loss of
40:13
time and perhaps even loss of satisfaction Six Sigma will try to remove it so you don't try to reduce that's one thing the second thing that Six Sigma tries to do is basically you can think of it he tries to reduce defects and it tries to reduce the defect certainly for hardware it tries to cut them down to the level of parts per million defects which is like you know a few defects per million parts inspected that's the level at which things think one tries to get to so there is this variability reduction
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that's like one of the goals and in the context of service of course what we have to do is we have to meet or exceed the customer's expectations and also we have to be consistent if you are doing that we are reducing variability we are meeting consistently we're meeting the expectation that like something where I'm bringing in consistency so I'm reducing variability and also losses losses are generally caused when there is delivery when there is like a failure to deliver service or failure to deliver
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a material or we have deviations in time or we have actually we caused some monetary loss that's like a loss again I would like to minimize that as much as possible so as far as services go I can have variability reduction by providing consistent service that's like one place I'm going to give you some examples I'm going to give you a very large example that has come from a bank that actually was still at the level of inspection only but they did certain things that approach the philosophy of Six Sigma the second thing that I would also like to
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do in a services I'd like to any kind of lost of the service may cause I would like to minimize that let's take a look at how this was done in one particular company one particular place where they their job really was to manage a credit union this particular credit union it happens to be located in Texas and the office that I interacted with when I got some of this data from they are in Dallas they're in the town of Richardson
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which is just outside Dallas the credit union is called Community Credit Union they also call themselves CCU they began their Six Sigma in quotation they were really not trying to get to parts per million defect they were not trying to get there but they were trying to adopt the philosophy Six Sigma to try to raise customer satisfaction what did they try to do what did they actually want to do the things they wanted to do was to try to
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make sure that certain things were done for the customer to assure a high level of satisfaction this is something they would like to be able to do what they did was they did an extensive customer survey they did first they did brainstorming and from that they made a long list of things perhaps all these things the customers would be looking for then they did an actual survey and the result of the survey was they wanted to make sure that they captured all those things that were valued by the customer so this would also involve
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doing a bit of qfd and what they found was there were three things people were looking for people who did you know transactions with this particular trade unit they were looking for three different things or three different angles of service delivery sorry there were certain technical things people are looking at almost a third of the people they wanted to make sure that the technical knowledge was there in the employees of this credit union which is like a bank that the skills to be able to do the job and of course their service quality was good and
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professional this was rated slightly higher than technical knowledge and they were also they came across as professionals and the third thing that customers also you know pointed out was that there should be teamwork to everything so if there's something where one particular employee struck people should be able to provide that you've got to remember that we are looking at all the stakeholders on this business and some of those stakeholders also include people who work in the back room so they certainly would appreciate if there's teamwork in the spirit of steam
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teamwork is built they'd also appreciate that so these were the things that were pulled from this service now what did they find in terms of details in terms of technical knowledge and details they found several things and they did set targets for it they wanted to make sure that they put some specs out there and these specs were such that if they were met they really have their end up having a delighted customer / or short this is like a count that the
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killer makes at the end of a date and that should not be more than $300 per year and that would be given a weight of 25 percent in terms of technical skills or knowledge no more than 12 times here the field should be out there in like something that also was important for the for the good conduct of the business here balanced within 30 minutes after the last member has been helped and and all the Corrections have been done and
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that should be done within 30 minutes so after the last customer has been helped within 30 minutes I should be able to do my balance this is also something that's the indication of good service by this Bank average minimum teller transactions per month there's a certain minimum level day they said and they said this must be this must be met and that also he's a standard then of course there were certain errors that worked controllable by the by the trailers themselves these are employees in the
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company in the credit union the error spawned on non-cash audit arrests found on non-cash audit that is something that would like to be able to errors in logging there is detected by member calls if member means the members of the trade unit they call in and they say that there is a certain mistake that I found that also should be there should be some monitoring of that and error found dealing out of the out of balance searches this also something there any kind of reversal have to do for a transaction many times you might have noticed that a bank does a reversal of a
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transaction because somebody made a mistake somebody in the bank he entered into your account when he should have probably entered the year either the amount other a deposit or withdrawal it should not have gone to your account when you're affected your account by mistake then of course repetitive error the same error was repeated that's also something that would like you to do then force balancing this is also something that for which really did these these errors they were an indication of the level of satisfaction something more of course we got to make sure we also
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understand that service quality and professionalism do things and what we would like to be able to do is would like to be able to do certain things that are important for the customer for example there's a rating provided to people and that we think should be at least three it's from it goes from one to five and these are feedbacks provided by various people and many of these are they are members of the traders even if they provide feedback on you know what their rating
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was but how satisfied they felt when they were dealing with a particular tailor that accounted that that count that is something that you can just check in a box when you are leaving the bank you could probably see a service was okay and it was delightful it was not so good and so on spot so threes at a certain level they wanted to make sure that the average was at least had three and no more than two controllable negative complaints this is the complaint that resulted because the error could have been come could have been controlled by the app ready to any
48:04
person but it was not done so there's again a particular limit set there and no more than one counseling session about dress code per year you understand what I mean by that you know the dress the dress of the person should be such that it's presentable because you're dealing with the public after all why is it that bankers dress so well because you know people walking in to try to do some financial transactions with them because they're going to trust your money to these people and they certainly do not want to do this if the place looks shabby the people who dressed look
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shabby and so on forbid they would not like to do that so therefore it's kind of almost a must for bankers to always have a you know white shirt and nice dry and dark suit and everything polished shoes and really a you know kind of a perfect professional kind of look that's what they would like to project and I've noticed that in you know ladies as well there they are really immaculately dressed it gives you a sense of trust you know you trust the person when it's so well you know his getup is so good you you begin to trust that person and that puts you at a at a kind of very
49:07
comfortable level to do transactions then of course teamwork that was also there also a target was said and there the complaints would not be more than two true complaints coming from your peers about you that she was rough or she was rude or whatever it was she didn't ask me or she it could even be that she didn't wait for me when I was leaving for home and there was no public transport available and she just left she knew I was the last person in the room in the in the office or in the bank
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but she left a few small things like that they may appear to be small but they can be pretty nasty so no and no more than six absences per year this is also something that's like a team work it it actually implies that you care so there were these three areas but quantitative targets were set many more quantitative targets were set and I'm going to be showing that to you on this slide here actually what I do is I leave this shape for a couple of minutes for you and just take a look at what these various things are there is the criteria
50:10
and I call this the rubric what is it rubric well many times we teachers we teachers we would give an example and there's the chance of making a judgment that the chance of making a judgment on the answers are the answer is just perfect or they just fine they're probably not perfect but they are excellent or they are very good or they are good or they are satisfying or
50:40
they are downright unsatisfactory and so on so there's a rubric that actually defines these levels I have the similar type of rubric defined here on the screen there notice here the criteria is given criteria overall short what is unsatisfactory this is like over our short 500 dollars per year and what is significantly exceeding the requirements never over our short and then of course have got exceeds requirements that is like when it comes to work you know
51:10
making sure you're under 300 dollars that is the target here over a short ninety nine or less per year that's like exceeding requirements meeting requirements would be being over or short like a hundred then of course you know over a short between $301 and 499 dollars I'm below requirements and so on and of course span over are short beyond 500 my performance is unsatisfactory and SUNY I've got the provision for outer balance balance within 30 minutes controllable errors dinner transactions
51:41
average feedback scores member complaints dress code peer complaints and so on sports all of these have already been listed in the previous slide there and what I've done here is I've provided I've taken away that subjectivity I've taken away the subjectivity and here I've come up with a rubric a rubric basically tells you how do you judge it gives you objectivity you make a measurement based on you make an evaluation based on exactly what is what you are able to see or measure and therefore it becomes much more objective and there is no argument
52:13
then because these standards are clear and I'm not talking what I'm not talking about manufacturing anymore I'm talking about doing qfd doing the Carnot model and everything else setting standards making sure I understand them and I've set quantitative standards here and this can be done the moment you start plotting something by the way the moment you start plotting any of these sub parameters on escape people would like to keep that chart low you would like to see it trending downward so the moment you start collecting data it's been seen over and
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over that people start watching what they are doing some good practices in the management of service quality the the very first thing that has been pointed out is try to make sure cost of quality is kept as low as possible and that would be done if you reduce internal failures rework and scrap and so on if you reduce external failures which is returns from customers and perfidy so the damage that has been done to the customer outside of course you
53:14
also like to utilize also like to minimize the inspection so these are the three things you would like to reduce which is like reduce internal errors intern losses you'd like to reduce external losses I'd like to also reduce inspection how do you do that when you spend money on prevention if you spend money on prevention you're going to be able to do this this is Deron's philosophy service process control this like you start monitoring things this is also something that would give you data and it would naturally become something that you could then slowly move toward what we
53:45
call SPC and there are companies that actually do SPC charting they they produce the number of defects for example for example if you're looking at a a room a hotel room somebody comes along before the room is certified to be okay to be given to a guest somebody comes along and he checks say he's got a big checklist with him and he walks around with the checklist and he took certain things and the number of ticks that he makes that are like not satisfactory that can be charted that can be put in a control chart and it can be done then of course there's the
54:17
provision of unconditional service guarantee this again is like another vehicle by which I could delight I could delight a customer I could do that so what is it that would like to be able to do if you look at the cost of quality component for example I'd like to be able to minimize failure cost I'd like to minimize external failure cost I'd also like to be able to minimize internal failure cost I'd also like to be able to minimize detection cost these are generally three inspection these are the things that I would like to minimize how do I do that by spending money on
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prevention which is like quality planning good training programs quality audits done all these have to be done in the provision of service I'm really not talking about production in production here I'm not a real manufacturing all this is to try to help manage a service facility better data acquisition analysis I collect data like we did in the case of that credit union we had various categories in which data could be collected and these could be tabulated a database could be built and so on and so forth that could help in
55:19
the management of quality then of course recruitment and selection and supplier evaluation now something you've got to remember in the provision of service your supplier is generally the worker he's easier easier he's basically your you know supplier so how you what kind of people do you recruit that's something that we could take a look at service process control that also can be done you start with customer input then of course you make sure you design the service process appropriately then the experience is going to be the customers
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output you you you take your resources and you take customers input features in terms of requirements and you produce the service then you've got the custom custom output there and this is to be monitored and then you've got your own service concept with the basis of which you've got some standard set and then you compare the two and you come up with recent finding kind of nonconformist that is there and you take corrective action if you're doing this you are doing service process control this is a lot like what we did
56:21
in our manufacturing situation when we're doing d-mac we were doing DMACC for Six Sigma so this is like another way to emulate the philosophy of Six Sigma I defined I measured I then I analyzed I improved and then I said some control mechanisms I've done the same thing DMAIC and I'm doing Six Sigma now in the provision of service I'll continue with our series thank you very much

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