SERVICE AND QUALITY

MANAGEMENT
Camo, Rotoni, Ramos, Rivera, Semaña, Pagaspas
SERVICE AND QUALITY MANAGEMENT

SERVICE QUALITY
• business activities that • “the totality of
are performed to satisfy features and
customer needs, where characteristics of a
the major end product is product or service that
customer experience bears its ability to
and not a physical satisfy stated or
article. implied- American
needs.” Society for Quality
Other Meaning for QUALITY
QUALITY

•Webster’s Dictionary
•degree of excellence
of a thing
QUALITY

Consumer’s Perspective
Fitness for use: Quality of design: Example:

how well designing A Mercedes and

product or quality a Ford are
equally “fit for
service does characteristics use,” but with
what it is into a product different design
supposed to or service dimensions
QUALITY

Producer’s Perspective
Quality of Conformance

Making sure a if new tires do if a hotel room is

not clean when a
product or not conform to guest checks in, the
service is hotel is not
produced specifications, functioning
they wobble according to
according to specifications of its
design design
QUALITY

Meaning of Quality: A Final Perspective

Consumer’s
and Consumer’s Producer’s Consumer’s
producer’s
perspectives
perspective perspective view must
depend on : PRICE : COST dominate
each other
QUALITY
Copyright 2006 John Wiley & Sons, Inc.
Dimensions of Quality
Manufactured Products
 Dimensions of Quality: Manufactured
Products
1. Performance -- basic operating characteristics of a product;
how well a car is handled or its gas mileage

IPHONE XI NOKIA 3210

it lasted nearly 12
hours on our web
surfing test..

A13 Bionic is the

fastest chip ever in
a smartphone
it lasted nearly 55-260 hours
 Dimensions of Quality: Manufactured
Products
2. Features - “extra” items added to basic features, such as a
stereo CD or a leather interior in a car

NOKIA 3210
The 3210 was one of the first
IPHONE XI mobile phones to feature an
internal antenna, distinguishing
-HIGH QUALITY the handset from others which
CAMERA featured external antennae
-INTERNET
- Animoji and
Memoji
 Dimensions of Quality: Manufactured
Products
3. Reliability - probability that a product will operate properly within an
expected time frame; that is, a TV will work without repair for about seven
years
4. Durability -how long product lasts before replacement

Apple says it's

made from the
toughest glass
ever in a
smartphone and
offers improved
water resistance
(IP68), boosting
overall durability
 Dimensions of Quality: Manufactured
Products
5.Serviceability -ease of getting repairs, speed of repairs, courtesy and
competence of repair person
6.Conformance - degree to which a product meets pre–established standards

NOKIA 3210
IPHONE XI
 Dimensions of Quality: Manufactured
Products
• Aesthetics
• how a product looks, feels, sounds, smells, or tastes

IPHONE XI
NOKIA 3210

Spatial audio offers a more immersive

sound experience, and Dolby Atmos is
supported.
Dimensions of Quality: Manufactured
Products
Safety
assurance that customer will not suffer injury or harm from a product; an especially
important consideration for automobiles
 Dimensions of Quality: Manufactured
Products
Perceptions
subjective perceptions based on brand name, advertising,
and the like.
Dimensions of Quality
Service
Dimensions of Quality: Service
Time and
Timeliness Completeness Courtesy
How long must a Is everything How are
customer wait for customer asked customers treated
service, and is it for provided? by employees?
completed on Is a mail order
time? Are catalogue
from a catalogue phone operators
Is an overnight company
complete when nice and are their
package delivered voices pleasant?
overnight? delivered?
Dimensions of Quality: Manufactured
Products
Accessibility and
Consistency convenience Accuracy
Is the same level How easy is it Is the service
of service provided to obtain performed right
to each customer service? every time?
each time? Is your bank or
Does a service credit card
Is your newspaper representative statement
delivered on time answer you correct every
every morning? calls quickly? month?
Dimensions of Quality: Manufactured
Products

Responsiveness

How well does the company react to

unusual situations?
How well is a telephone operator able
to respond to a customer’s questions?
Quality Attributes in Service

Best Practices Timeliness

“best” level of
quality achievement
how quickly a
one company or service is
companies seek to provided
achieve
Quality Function
Deployment
Quality Function Deployment (QFD)

•a structured approach to defining

customer needs or requirements
and translating them into specific
plans to produce products to meet
those needs.
Quality Function Deployment (QFD)

• oriented toward involving a team of people

representing the various functional
departments that have involvement in
product development:
• Marketing, Design Engineering, Quality
Assurance, Manufacturing/ Manufacturing
Engineering, Test Engineering, Finance, Product
Support, etc. .
QFD PROCESS

•Quality Function Deployment begins

with product planning; continues with
product design and process design; and
finishes with process control, quality
control, testing, equipment
maintenance, and training.
Voice of the Customer (VOC)

• the term used to describe the stated and

unstated customer needs or requirements.
• captured in a variety of ways: direct discussion or
interviews, surveys, focus groups, customer
specifications, observation, warranty data, field
reports, etc.
• Customer voices are diverse
STAGES OF EXCELLENCE
STAGES OF EXCELLENCE

LEADERSHIP SERVICE
STRATEGY PRACTICES ORGANIZATION
refers to the many companies the more mature
understanding of struggle to even organizations look
the market and recognize that service at it as their
the competition to can be an excellent customer’s pulse
develop a differentiating factor; and the voice that
differentiation for the leaders leverage it
helps shape future
long-term product and
competitive extensively to create services to be
advantage. more value. delivered.
STAGES OF EXCELLENCE

PEOPLE PROCESS TECHNOLOGY

quality of people this reflects the refers to how much
(their qualifications, importance of technology to use
training, and attitude) obtaining feedback and how efficient
are reflected in the from customers to and user-friendly it
determine how well is for customer. The
service. Most leading their needs are being
organizations invest met. More advanced advancement of
heavily in the stage organizations technology have the
education and training embed customer potential to increase
of its human resources feedback as a routine the service level at
supporting customer process. a lower cost.
STAGES OF EXCELLENCE

MEASUREMENT
this is a reflection on accountability and
how the service provider measures its
performance. The progressive organizations
not only create qualitative and quantitative
scorecards, but also link its performance to
pay
What is Quality
Management?
What is Quality Management?

Quality Management
• development of essential
processes, ideas, theories and
• focused not only on
tools that are central to product/service
organizational development,
change management, and the quality, but also the
performance improvements that
are generally desired for
means to achieve it.
individuals’, teams’ and
organizations’ continued success.
Components of Quality
Management
Components of Quality Management

Quality Quality Quality Control Quality

Planning Improvement Assurance
the initial the purposeful the ongoing effort the planned or
change of a to maintain the systematic actions
stage of integrity of a necessary to
process to
creating the process to provide enough
improve the maintain the confidence that a
master design reliability of reliability of product or service
of an achieving an achieving an will satisfy the
expected outcome outcome given requirements

result
Quality Improvement and
Role of Employees
Quality Improvement and Role of Employees

Participative problem
solving
• employees involved in
quality management
• every employee has
undergone extensive
training to provide
quality service to
Disney’s guests
Seven Quality Control
Tools
Seven Quality Control Tools

•Pareto Analysis •Scatter Diagram

•Flow Chart •SPC Chart
•Check Sheet •Cause-and-Effect
•Histogram Diagram
Seven Quality Control Tools

Pareto Analysis
Seven Quality Control Tools

Pareto Chart
Seven Quality Control Tools

Flow Chart
Seven Quality Control Tools

Check Sheet
Seven Quality Control Tools

Histogram
Seven Quality Control Tools

Scatter Diagram
Seven Quality Control Tools

Control Chart
Seven Quality Control Tools

Cause-and-
Effect
Diagram
 Globalization
Rivera, Ramos, Semaña, Camo, Pagaspas, Rotoni
Recap
• Service and Quality Management
• Meaning of Quality
• Dimensions of Quality(Manufactured Products)
• Dimensions of Quality(Services)
• Quality Function Deployment
• Stages of Excellence
• Quality Management
• Tools, Programs, ISO 9000
Learning Objectives for this Lecture:

• GLOBALIZATION
• Meaning of Globalization
• The Impact of Global Business
• Trade Barriers
• Trade Agreement
• Forms for Global Business
• Finding the Best Business Climate
What Is Global Business?
What Is Global Business?

• Globalization
• The buying and selling of goods and services
by people from different countries.
• The movement towards the expansion of
economic and social ties between countries
through the spread of corporate institutions
and the capitalist philosophy that leads to the
shrinking of the world in economic terms.
The Impact of Global
Business
The Impact of Global Business

Multinational Corporation Direct Foreign Investment

• A corporation that • A method of
owns businesses in investment in which a
company builds a new
two or more business or buys an
countries. existing business in a
foreign country.
Foreign Investment in the
U.S.
Foreign Investment in the U.S.
Foreign Investment in the U.S.

Investment
coming into the
U.S., like this
Honda Motor
plant in Ohio,
totaled $106
billion in 2004.
Trade Barriers
Trade Barriers
Trade Agreements
Trade Agreements
 GATT
GATT made it easier and cheaper for consumers in all countries to
buy foreign products. all
GATT

• Tariffs were cut 40 percent on average worldwide by

2005
• Tariffs were eliminated in 10 specific industries
• Stricter limits were put on government subsidies
• GATT established protections for intellectual property
• Trade disputes between countries now are fully settled
by arbitration panels from the WTO
World Trade Organization
(WTO)
World Trade Organization (WTO)
Location: Geneva, Switzerland
Established: 1 January 1995
Created By: Uruguay Round
negotiations (1986 – 1984)
Membership: 148 countries (as of
13 October 2004)
Budget: 169 million Swiss francs for
2005
Secretariat Staff: 630
Head: Supachai Panitchpakdi
(director –general)
Functions:
• Administering WTO trade
agreements
• Forum for trade negotiations
• Handling trade disputes
• Monitoring national trade policies
• Technical assistance and training
for developing countries
• Cooperation with other
international organizations
Maastricht Treaty of
Europe
Maastricht Treaty of Europe

• Formed in 1992 with 12 European

countries
• Total membership as of 2005 25
countries
• Transformed these countries into
the European Union, forming one
economic market and one common
currency (the Euro)
• Opened up and simplified trade
among member nations
NAFTA
NAFTA

• North American Free Trade

Agreement between Canada,
United State, & Mexico
• Liberalizes trade among these
three nations
• Eliminates most tariffs and
barriers
 FTAA
Free Trade Area of the Americas
FTAA

• Proposed agreement to
established a free trade zone
throughout the Western
Hemisphere
• Remove nontariff barriers
• Reduce tariffs to zero
• Standardize financial markets
• Establish process for handling
trade disputes
ASEAN & APEC
ASEAN & APEC

ASEAN APEC

• Brunei • Myanmar • Australia • Peru

Darussalam • Philippines
• Canada • Russia
• Chile • South Korea
• Cambodia • Singapore • China • Taiwan
• Indonesia • Thailand • Hong Kong • United States
• Japan • ASEAN members
• Laos • Vietnam • Except:
• Mexico
• Malaysia • New Zealand
• Cambodia
• Laos
• Papua New Guinea • Myanmar
Consumers, Trade Barriers,
and Trade Agreements
Consumers, Trade Barriers, and Trade
Agreements

• American consumers get more for their

money than most other consumers in
the world because:
• U.S. marketplace is easiest for foreign
companies to enter and competitive
market between domestic and foreign
companies keeps prices low
Consumers, Trade Barriers, and Trade
Agreements
Consistency or Adaptation?
Global Consistency
• When a multinational
company has
offices/plants in different
countries and uses the
same rules, guidelines,
policies, and procedures
Local Adaptation
• When a multinational
company modifies its
rules, policies and
procedures to adapt to
differences in foreign
costumers, governments,
and regulatory agencies
Doing the Right Thing

Fair and Safe Working Conditions in Foreign Factories

• Make sure there is no forced labor or child labor
• Provide a safe and healthy working environment
• Respect the right of employees to freedom of
association and collective bargaining association and
collective bargaining association and collective
bargaining
• Provide legally required benefits
Forms for Global Business
Exporting
Exporting

Advantages Disadvantages
• Less dependence on • Many exports are subject to
tariff and nontariff barriers
home market sales
• Transportation costs can
• Greater degree of increase price
control over research, • Companies may depend on
design, and production foreign importers for product
distribution importers
Cooperative Contracts
Cooperative Contracts
• In a franchising model, the
Franchising
• A collection of networked
firms in which the
manufacturer or maker of a
product/service licenses the
entire business to another
person or organization
franchisee uses another firm's
successful business model and brand
name to operate what is effectively
an independent branch of the
company. The franchiser maintains a
considerable degree of control over
the operations and processes used by
the franchisee, but also helps with
things like branding marketing
support that aid the franchise. The
franchiser also typically ensures that
branches do not cannibalize each
other's revenues .
Franchising

Advantages Disadvantages
• Fast way to enter • Franchisors face a
foreign markets loss of control
• Good strategy when a • Franchising success
company’s domestic
may be culture-
sales have slowed
bound
Cooperative Contracts
• Under a licensing model, a company
Licensing
• A domestic company receives
royalty payments for allowing
another sell company to
produce its product, sell a
service, or use its brand name
in a service, a service, or use
its brand name in a specified
foreign market
sells licenses to other (typically
smaller) companies to use
intellectual property (IP), brand,
design or business programs. These
licenses are usually non-exclusive,
which means they can be sold to
multiple competing companies
serving the same market. In this
arrangement, the licensing company
may exercise control over how its IP
is used but does not control the
business operations of the licensee.
Licensing
Advantages
• Allows companies to earn
profits without investing more
money
• The licensor invests in
production equipment and
facilities
• Helps companies avoid tariff
and nontariff barriers
Disadvantages
• Licensor gives up control over
quality of the product or
service sold by the foreign
licensee
• Licensees can eventually
become competitors
Strategic Alliances
Strategic Alliances

Strategic Alliances Joint Venture

• An agreement in which • A strategic alliance in
companies combine which two existing
key resources, costs, companies collaborate
risk, technology, and to form a third,
people independent company
Joint Venture
Advantages
• Help companies avoid tariff
and nontariff barriers to
entry
• Participating companies
bear only part of the costs
and risks
• Advantageous to smaller
local partners
Disadvantages
• Companies must share
profits
• With equal ownership,
power struggles and a lack
of leadership may occur
Wholly Owned Affiliates (Build or Buy)

Advantages Disadvantages
• Parent company • Expense of building
receives all of the new operations or
profits and has buying existing
complete control business
• Losses can be immense
if the venture fails
Finding the Best Business
Climate
Finding the Best Business Climate
Growing Markets
Growing Markets

Purchasing Power Degree of Global Competition

• comparison of a • the number and
standard set of goods quality of
and services in
different countries companies already
• more means greater in the market
growth potential
Choosing an Office/Manufacturing Location

Qualitative factors Quantitative factors

•work force • kind of facility
• tariff and nontariff
quality barriers
•company • exchange rates
• transportation and labor
strategy costs
Choosing an Office/Manufacturing Location
World’s Best Cities for
Business
World’s Best Cities for Business
Minimizing Political Risk
Political Policy
uncertainty uncertainty Strategies
risk of major risk associated • avoidance
changes in with changes in
political laws and • control
government • cooperation
regimes policies directed
at businesses
 Becoming Aware of
Cultural Differences
Becoming Aware of Cultural Differences

• The set of shared values

and beliefs that affects
National the perceptions,
decisions, and behavior
Culture of the people from a
particular country.
Becoming Aware of Cultural Differences

In Saudi Arabia,
store
mannequins must
not have heads
or limbs that
would indicate
gender.
Becoming Aware of Cultural Differences

• Power distance
• Individualism
Cultural • Masculinity and femininity
Dimensions • Uncertainty avoidance
(Geert Hofstede)
• Short-term/long-term
orientation
Cultural Differences
Cultural Differences

• Recognize cultural differences

• Decide how to adapt your company to
those differences
• Do not base adaptations on outdated
and incorrect assumptions about a
company’s culture
 Preparing for an
International Assignment
Preparing for an International Assignment

•Someone who
lives and works
Expatriate outside his or
her native
country.
Preparing for an International Assignment

Language and Cross- Consideration of Spouse,

Cultural Training Family, and Dual-Career Issues
• Documentary • Adaptability
Training Screening
• Cultural Simulation • Intercultural
• Field Experiences Training