3.

Customer Focus

Total Quality Management

 Introduction
The most successful TQM programs begin by
defining quality from the customers
perspective
Quality means meeting or exceeding the
customers expectations

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 Teboul model

Figure 3-2 Customer Satisfaction Model

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Customer/Supplier Chain

Figure 3-3

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 Who is the Customer
An external customer
one who uses the product or service, the one who
purchases the product or service, or the one who
influences the sale of the product or service
current, prospective, and lost
An internal customer
Each workers goal is to make sure that the quality
meets the expectations of the next person. When that
happens throughout the manufacturing, sales, and
distribution chain, the satisfaction of the external
customer should be assured

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 Customer Perception of Quality
There is no acceptable quality level because the customers needs, values,
and expectations are constantly changing and becoming more demanding
ASQ Survey on end user perceptions of important factors that influenced
purchases showed the following ranking
1. Performance
2. Features
3. Service
4. Warranty
5. Price
6. Reputation
According to American Customer Satisfaction Index (ACSI),
Perceived quality is a measure of the customer's evaluation via recent consumption
experience of the quality of a company's products or services. Quality is measured in
terms of both customization, which is the degree to which a product or service meets
the customer's individual needs, and reliability, which is the frequency with which
things go wrong with the product or service
The world is now flooded with information available to the user in a few seconds
of web search and customer reviews available on-line before making a decision
to buy. Thus buyers can easily influence decisions of potential buyers!

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 Customer Feedback
Customer feedback must be continually
solicited and monitored
Feedback enables the organization to:
Discover customer dissatisfaction.
Discover relative priorities of quality.
Compare performance with the competition.
Identify customers needs.
Determine opportunities for improvement

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 Tools for Listening to Voice of Customer

Comment cards,
Questionnaires,
Focus groups,
Toll-free telephone lines,
Customer visits, report cards,
The Internet,
Employee feedback,
Mass customization and
American Customer Satisfaction Index

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 Mass Customization
Mass customization is a way to provide variety at
an affordable cost
Mass customization is a direct result of advances
made in manufacturing, such as flexible
manufacturing technologies, just-in-time systems,
and cycle time reduction
It has been done in the car industry for years.
Customers determine what type of seat coverings,
colour, and stereo system they want.
Mass customization is now being used in many
other industries
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Point of Customer Involvement

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 The American Customer Satisfaction Index (ACSI)

ACSI reports scores on a 0100 scale at the national level.

The measured companies, industries and sectors are
broadly representative of the U.S. economy serving
American households
The ten sectors of the economy are:
1. Transportation and warehousing
2. Manufacturing (nondurable)
3. Manufacturing (durables)
4. Healthcare and social assistance
5. Accommodation and food services
6. Information
7. Public administration/government
8. Retail trade
9. Finance and insurance
10. E-commerce
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Total Quality Management - MSR 12
Sector wise American Customer Satisfaction Index

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 Customer Satisfaction Surveys in India
An elaborate and structured customer satisfaction measurement similar to
ASCI does not happen in India and many other countries.
Independent companies such as J. D. Power Asia Pacific have been conducting
surveys in automotive industry in India.
According to J.D.Power 2013 Asia Pacific 2013 India Initial Quality Study (IQS),
the sales volumes of automakers having quality better than industry average
have increased by an average of 6 percent since 2011.
In contrast, automakers whose customers report more quality problems than
average have experienced an 8 percent decline in sales during the same
period.
Moreover, the shift toward purchasing above-industry-average quality
vehicles is more pronounced among experienced/repeat buyers, with 27
percent choosing higher quality vehicles during the same period.

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 Using Customer Complaints
Complaints are vital in gathering data on customer
perceptions
A dissatisfied customer can easily become a lost
customer.
Frequently, dissatisfied customers switch to a
competitor and dont say anything
Many organizations use customer dissatisfaction as the
primary measure to assess their process improvement
efforts

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 Using Customer Complaints
Following table shows results of survey conducted by ASQ. Observe
that that most customers do not complain to anyone!
Results of another study indicated that more than half of dissatisfied
customers will buy again if they believe their complaint has been
heard and resolved. Only 20% will buy again if their complaint is
heard but not resolved. Fewer than 10% will be repeat buyers when a
complaint is not heard.

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 Handling complaints
Investigate customers experiences by actively soliciting feedback, both
positive and negative, and then acting on it promptly.
Develop procedures for complaint resolution that include empowering
front-line personnel.
Analyze complaints, but understand that complaints do not always fit into
neat categories.
Work to identify process and material variations and then eliminate the
root cause. More inspection is not corrective action.
When a survey response is received, a senior manager should contact the
customer and strive to resolve the concern.
Establish customer satisfaction measures and constantly monitor them.
Communicate complaint information, as well as the results of all
investigations and solutions, to all people in the organization.
Provide a monthly complaint report to the quality council for their
evaluation and, if needed, the assignment of process improvement teams.
Identify customers expectations beforehand rather than afterward through
complaint analysis.

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 Service Quality
Customer service is the set of activities an
organization uses to win and retain customers
satisfaction.
It can be provided before, during, or after the sale of
the product or exist on its own. Elements of
customer service are:
Organization:
Customer Care
Communication
Front-line people
Leadership

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The Kano Model

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Translating Needs into Requirements

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 Customer Retention
Customer retention is more powerful than
customer satisfaction
Customer retention moves customer satisfaction
to the next level by determining what is truly
important to the customers and making sure that
the customer satisfaction system focuses valuable
resources that really matter to the customer.
Customer retention is the link between the
customer satisfaction and the bottom line.
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