3.

C O N T E N T S TOTAL QUALITY SERVICE

MANAGEMENT........................................................................2 Aireen Y. Clores,
M.B.A....................................................................................................2
Introduction................................................................................................................6
Introduction to Total Quality in Organizations..........................................................................9
Principles of Total Quality.................................................................................................12
Quality in Manufacturing...............................................................................................17 The
Deming Management Philosophy...........................................................................28 Profound
Knowledge...................................................................................................29 Point I:
Management Commitment..............................................................................31 Point II: Adopt a
New Philosophy................................................................................31 Point III: Understand
Inspection..................................................................................31 Point IV: End Price Tag
Decisions................................................................................31 Point V: Improve constantly of
production and service.......................................................32 Point VII: Adopting and Instituting
leadership..................................................................32 Point VIII: Driving Out
Fear.......................................................................................32 Point IX: Optimize team
efforts..................................................................................32 Point X: Eliminating Slogans,
Exhortations, and Targets for the Workforce.............................33 Point XI: Eliminating Quotas
and MBO.........................................................................33 Point XII: Remove Barriers to Pride
of Workmanship........................................................33 Point XIII: Encouraging education and
Self-improvement...................................................34 Point XIV: Taking Action to Accomplish
the Transformation...............................................34 What customers want
..............................................................................................58 Benefits of customer service
......................................................................................61 To take full advantage of their
employees skills as a key competitive weapon, managers must have a people perspective.
Organizations whose managers succeed in practicing effective people skills as they carry out
their primary business functions are most likely to engender satisfied employees and repeat
customers both of which are essential to sustaining a competitive advantage into the 21st
century. Table 6 shows the benefit of customer service......................................................61
Chapter 6 TOTAL QUALITY & ORGANIZATIONAL CHANGE................................................71
Classification of Benchmarking........................................................................................76
1.Competitive benchmarking focus on the products and manufacturing of a companys
competitors. 76 2.Generic Benchmarking evaluates processes or business functions against
the best companies regardless of their
industry.............................................................................................76 Types of
benchmarking.................................................................................................76 3 Total Quality
Service Management
4. Preface In the last few decades, business competitiveness has become an area of
increasing interest as a consequence of economic globalization, increasing economic
integration and market liberalization. A review of theoretical models of business
competitiveness reveals the significance of two kinds of factors in regard to this area internal
factors pertaining to the actual firm and external factors related to the structure of the industry
in which the firm operates, as well as the economy of the country as a whole. These models
should be examined empirically, using sufficient data to identify the relative significance of
each individual factor regarding the overall improvement of business competitiveness.
However, most available studies are partial since they focus on 4 Total Quality Service
Management
5. quantifying the effects of macroeconomic variables, the effects of sector variables, or the
effects of strictly business-oriented variables. Quality of service has been one the most widely
investigated factors among those strictly related to business. In this context, business
competitiveness is positively related to matching the characteristics of the service to the ideal
preferences of clients, i.e. their level of satisfaction. This fact reveals the key role of service
quality on the improvement of business competitiveness, and how this has an effect not only

outside the actual firm, but also on the variables within it. The most relevant research on this
issue deals with the theoretical study of the relationships that exist between quality and
business competitiveness or with partial empirical relationships between variables.
Nevertheless there is little empirical evidence to verify the complex relationships between
quality and economic measures. 5 Total Quality Service Management

6. Introduction W hile Total Quality Management has proven to be an effective process for
improving organizational functioning, its value can only be assured through a comprehensive
and well thought out implementation process. The purpose of this chapter is to outline key
aspects of implementation of large-scale organizational change which may enable a
practitioner to more thoughtfully and successfully implement TQM. First, the context will be set.
TQM is, in fact, a large-scale systems change, and guiding principles and considerations
regarding this scale of change will be presented. Without attention to contextual factors, well
intended changes may not be adequately designed. As another aspect of context, the
expectations and perceptions of employees (workers and managers) will be assessed, so that
the implementation plan can address them. Specifically, sources of resistance to change and
ways of dealing with them will be discussed. This is important to allow a change agent to
anticipate resistances and design for them, so that the process does not bog down or stall.
Next, a model of implementation will be presented, including a discussion of key principles.
Visionary leadership will be offered as an overriding perspective for someone instituting TQM.
In recent years the literature on change management and leadership has grown steadily, and
applications based on research findings will be more likely to succeed. Use of tested principles
will also enable the change agent to avoid reinventing the proverbial wheel. Implementation
principles will be followed by a review of steps in managing the transition to the new system
and ways of helping institutionalize the process as part of the organization's culture. This
section, too, will be informed by current writing in transition management and
institutionalization of change. Finally, some miscellaneous do's and donts will be offered. M
embers of any organization have stories to tell of the introduction of new programs, techniques,
systems, or even, in current terminology, paradigms. Usually the employee, who can be
anywhere from the line worker to the executive level, describes such an incident with a
combination of cynicism and disappointment: some manager went to a conference or in some
other way got a "great idea" (or did it based on threat or desperation such as an urgent need to
cut costs) and came back to work to enthusiastically present it, usually mandating its
implementation. The "program" probably raised people's expectations that this time things
would improve, that management would listen to their ideas. Such a program usually is
introduced with fanfare, plans are made, and things slowly return to normal. The manager
blames unresponsive employees, line workers blame executives interested only in looking
good, and all complain about the resistant middle managers. Unfortunately, the program itself
is usually seen as worthless: "we tried team building (or organization development or quality
circles or what have you) and it didn't work; neither will TQM". Planned change processes often
work, if conceptualized and implemented properly; but, unfortunately, every organization is
different, and the processes are often adopted "off the shelf" "the 'appliance model of
organizational change': buy a complete program, like a 'quality circle package,' from a dealer,
plug it in, and hope that it runs by itself" (Kanter, 1983, 249). Alternatively, especially in the
underfunded public and not for-profit sectors, partial applications are tried, and in spite of
management and employee commitments do not bear fruit. This chapter will focus on ways of
preventing some of these disappointments. In summary, the purpose here is to review
principles of effective planned change implementation and suggest specific TQM applications.
Several assumptions are proposed: 6 Total Quality Service Management

7. 1. TQM is a viable and effective planned change method, when properly installed; 2. Not all
organizations are appropriate or ready for TQM; 3. Preconditions (appropriateness, readiness)
for successful TQM can sometimes be created; and 4. Leadership commitment to a large-

scale, long-term, cultural change is necessary. While problems in adapting TQM in government
and social service organizations have been identified, TQM can be useful in such organizations
if properly modified (Milakovich, 1991; Swiss, 1992). 7 Total Quality Service Management

8. P A R T I INTRODUCTION TO TOTAL QUALITY 8 Total Quality Service Management

9. CHAPTER 1 Introduction to Total Quality in Organizations QUALITY It is never and

accident: it is always the result of high retention, sincere effort, intelligent direction, and skillful
execution; it presents the wise choice of many alternatives, the cumulative experience of many
alternatives, the cumulative experience of many masters of craftsmanship. Quality also marks
the search for an ideal after necessity has been satisfied and mere usefulness achieved.
Wilma A. Foster In this chapter we will introduce you to the basic principles of total quality.
Specifically, we will: Provide reasons why attention to quality should be a part of every
organizations culture and management systems; Provide a brief history of the quality
revolution; Provide an overview of the key principles of total quality; Compare and contrast
quality focused management with traditional management practices, and; Discuss
relationships of total quality with organizational models in management theory. Total Quality
Management is a management approach that originated in the 1950's and has steadily
become more popular since the early 1980's. Total Quality is a description of the culture,
attitude and organization of a company that strives to provide customers with products and
services that satisfy their needs. The culture requires quality in all aspects of the company's
operations, with processes being done right the first time and defects and waste eradicated
from operations. Total Quality Management, TQM, is a method by which management and
employees can become involved in the continuous improvement of the production of goods
and services. It is a combination of quality and management tools aimed at increasing
business and reducing losses due to wasteful practices. Some of the companies who have
implemented TQM include Ford Motor Company, Phillips Semiconductor, SGL Carbon,
Motorola and Toyota Motor Company.1 TQM Defined 9 Total Quality Service Management

10. TQM is a management philosophy that seeks to integrate all organizational functions
(marketing, finance, design, engineering, and production, customer service, etc.) to focus on
meeting customer needs and organizational objectives. TQM views an organization as a
collection of processes. It maintains that organizations must strive to continuously improve
these processes by incorporating the knowledge and experiences of workers. The simple
objective of TQM is "Do the right things, right the first time, every time". TQM is infinitely
variable and adaptable. Although originally applied to manufacturing operations, and for a
number of years only used in that area, TQM is now becoming recognized as a generic
management tool, just as applicable in service and public sector organizations. There are a
number of evolutionary strands, with different sectors creating their own versions from the
common ancestor. TQM is the foundation for activities, which include: Commitment by senior
management and all employees Meeting customer requirements Reducing development
cycle times Just In Time/Demand Flow Manufacturing Improvement teams Reducing
product and service costs Systems to facilitate improvement Line Management ownership
Employee involvement and empowerment Recognition and celebration Challenging
quantified goals and benchmarking Focus on processes / improvement plans Specific
incorporation in strategic planning This shows that TQM must be practiced in all activities, by
all personnel, in Manufacturing, Marketing, Engineering, R&D, Sales, Purchasing, HR, etc.2
Total Quality Management is a management style based upon producing quality service as
defined by the customer. TQM is defined as a quality- centered, customer-focused, fact-based,
tea The word "total" in Total Quality Management means that everyone in the organization
must be involved in the continuous improvement effort, the word "quality" shows a concern for
customer satisfaction, and the word 10 Total Quality Service Management T Stands for
TOTAL; m-driven, senior- management-led process to achieve an organizations strategic

imperative through continuous process improvement. TQM principles are also known as total
quality improvement, world class quality, continuous quality improvement, total service quality,
and total quality leadership. WHAT DOES T.Q.S.M STANDS FOR?

M Stands for MANAGEMENT mean improving and maintaining business systems and their
related processes or activities. Total Quality Management is not a program; it is a systematic,
integrated, and organizational way-of-life directed at the continuous improvement of an
organization. It is not a management fad; it is a proven management style used successfully for
decades in organizations around the world. TQM is not an end in itself; it is a means to an
organizational end. Total Quality Management must not be the primary focus of an
organization; it should merely be the means to achieve organizational goals. Total Quality
Management differs from other management styles in that it is more concerned with quality
during production than it is with the quality of the result of production. Other management
styles have different concerns. Some major styles are compared with TQM as follows.
Management-by-Objectives (MBO) emphasizes achieving specified objectives, under the
control of individual managers. This approach works against multi-functional process
performance and interferes with teamwork and quality. TQM is not objective-oriented, except
for its one goal of achieving continuous quality improvement. Management-by-Results (MBR)
is management by viewing past results as an indication of future results. It has been compared
to driving an automobile in a forward direction while looking in the rear view mirror. In todays
fast-paced, quick-changing business environment, managers cannot rely on past results as a
predictor of future performance. In contrast, TQM is only concerned with current results and
ways to improve them. Management-by-Exception (MBE) is management by identifying
specific targets for management attention and action. It produces short-term results by reacting
to immediate problems, but there is no analysis of the processes that produced the problems,
so long- term benefits are lost. On the other hand, TQM is more concerned with correcting
processes that produce problems than it is with responding to individual problems. Total
Quality Management is very different from these and other management systems. It recognizes
that quality as determined by the service provider might be much different from quality as
perceived by the service receiver. If the customer is not satisfied with a service, then the
service does not have quality and the processes that produced the service have failed. 11
Total Quality Service Management S stands for SERVICE; act of help or assistance in a
manner of serving customer It is everyones business Fundamental to all major business
decisions It is about relationships Means meeting or exceeding customer (internal or
external) expectation. Q Stands for QUALITY; 11. "management" refers to the people
and processes needed to achieve the quality.

12. Total Quality Management requires an organizational transformation-a totally new and
different way of thinking and behaving. This transformation is not easy to achieve; it is not for
the weak or the statistically untrained. At first glance, many TQM techniques may seem simple
and based on common sense, but they must be understood and used correctly for TQM to
function properly. Knowing the history of Total Quality Management may help in understanding
its techniques. Principles of TQM The key principles of TQM are as following:3 Management
Commitment 1. Plan (drive, direct) 2. Do (deploy, support, participate) 3. Check (review) 4. Act
(recognize, communicate, revise) Employee Empowerment 1. Training 2. Suggestion scheme
3. Measurement and recognition 4. Excellence teams Fact Based Decision Making 1. SPC
(statistical process control) 2. DOE, FMEA 3. The 7 statistical tools 4. TOPS (FORD 8D - Team
Oriented Problem Solving) Continuous Improvement 1. Systematic measurement and focus
on CONQ 2. Excellence teams 3. Cross-functional process management 4. Attain, maintain,
improve standards Customer Focus 1. Supplier partnership 2. Service relationship with
internal customers 3. Never compromise quality 4. Customer driven standards Principles of
Total Quality Total quality is a people-focused management system that aims at continual
increase in customer satisfaction at continually lower real cost. TQ is a total system approach

(not a separate area or program) and an integral part of high-level strategy; it works
horizontally across functions and departments, involves all employees, top to bottom, and
extends backward and forward to include the supply chain and the customer chain.
Foundation of total quality is philosophical: the scientific method: includes systems, methods,
and tools. 12 Total Quality Service Management

Quality drives market share. And when superior quality and large market share are both
present, profitability is virtually guarantee. 13 Total Quality Service Management13. A
comprehensive, organizational-wide effort to improve the quality of products and services
applies not only to large manufacturers, but t small companies. A management of process
and set of disciplines those are coordinated to ensure that the organization consistently meets
and exceeds customer requirements. Concerned with continuous improvement in
performance aimed at delighting customers. Achieving quality through gaining everyones
commitment and involvement. Improvement of the quality of the organizations products and
services It is the integration of all functions and processes within an organization in order to
achieve continuous improvement of the goals and services. Michael Dells Touch of Quality
Although Dell Computer Corporations PCs have had some of the highest quality ratings in the
industry, CEO Michael Dell became obsessed with finding a way to reduce their failure rates.
The key, he believed, was to reduce the number of times that each hard drive the most
sensitive part of a PC was handled during assembly. Production lines were revamped, and
the numbers of touches were reduced from over 30 to less than 15. Soon after, the rate of
rejected hard drives fell by 40 percent, and the overall failure rate for the company PCs
dropped by 20 percent. Figure 1.5 E.g. of Improving Work Processes THE IMPORTANCE OF
QUALITY

As quality improves, so does cost, resulting in improved market share and hence profitability
and growth. Provides a means for further investment in such quality improvement areas as
research and development. The cycle goes on. See Figure 1.1 The quality circle. Rewards of
higher quality are positive, substantial, and pervasive. Findings indicate that attaining quality
superiority produces the following organizational benefits: 1. Greater customer loyalty 2.
market share improvement 3. higher stock prices 4. reduced service calls 5. higher prices 6.
Greater Productivity History of TQM Total Quality Management was developed in the mid
1940s by Dr. W. Edward Deming who at the time was an advisor in sampling at the Bur
Quality can also reduce costs. Provides an additional competitive edge Types of quality:
customer driven quality and conformance or internal specifications quality. 14. eau of
Census and later became a professor of statistics at the New York University Graduate School
of Business Administration. He had little success convincing American businesses to adopt
TQM but his management methods did gain success in Japan. After World War II, General
MacArthur took 200 scientists and specialists, including Dr. Deming, to Japan to help rebuild
the country. While working on the Japanese census, Dr. Deming was invited by the Japanese
Union of Scientists and Engineers to give lectures on his statistical quality techniques. One of
the attendees was a past professor to many of Japans CEOs. After attending the lectures, the
professor told his CEO students that, if they wanted to turn Japans economy around in five
years, they should attend Dr. Demings lectures on using statistics to achieve quality at a
reduced cost. Many of the CEOs took the professors advice and attended the lectures.
Eventually, many Japanese manufacturing companies adopted Dr. Demings theories and
were able to produce quality products at reduced costs. While the Japanese business world
was concentrating on producing quality products, businesses in the United States were more
concerned with producing large quantities of products. Their emphasis on quantity at the
expense of quality let the Japanese, with their inexpensive, high quality products; gain a
substantial foothold in American markets. In the 1970s and 1980s, many American companies,
including Ford, IBM, and Xerox, began adopting Dr Demings principles of Total Quality
Management. This gradually led to their regaining some of the markets previously lost to the

Japanese. Although Total Quality Management gained its prominence in the private sector, in
recent years it has been adopted by some public organizations. 14 Total Quality Service
Management

Management is development of each man and to his greatest efficiency and prosperity.
WALTER SHEWART, HAROLD DODGE, GEORGE EDWARDS Developed new theories and
methods of inspection to improve and maintain quality. KURT LEWIN Provided us with an
understanding of how to make large scale organizational change. Douglas McGregor Has
tremendous impact on what later became Total Quality Management. Detailed the Theories
of Management (Theory X and Theory Y). Theory X states that employees will not work if left to
their own devices; employees are inherently bad and must be forced and coerced into work.
Theory Y states that employees find work as natural as play and will work diligently to the firms
aims if assumptions follow later. Fred Emery Australian disciple of Lewin and Eric Trist. 15
Total Quality Service Management Management is maximum output not restricted output
Management is cooperation not individualism Management is harmony not discord
Management is science not rule of thumb Taylor summarized his thoughts in 1951 as:
The control quality focused on final inspection of the manufactured product, and a number of
techniques were developed to enhance the inspection process. Centralized inspection
departments were organized to check for quality at the end of the production line. Developed
his system of scientific management, which emphasized productivity at the expense of quality.
15. So far, this chapter has defined Total Quality Management, explored its origin, and
explained how it emphasizes quality during production. Since quality is so important to any
discussion of TQM, the next section explores this key element in detail. Deming Chain of
Reaction: As quality improves, cost will decrease costs; cost will decrease and productivity will
increase, resulting in more jobs, greater market share, and long-term survival FREDERICK
TAYLOR

16. Apply open systems thinking to social change, pointed out that optimal results could be
achieved only when social systems, which obey the laws of biology, psychology, and sociology
are designed integrative with technical systems following the laws of physics, chemistry and
engineering. The social technical approach required that those who do not work get a great
deal more authority, control, skills and information than is customary under scientific
management. JOSEPH M. JURAN Introduces the managerial dimension of planning,
organizing and controlling and focused on the responsibility of management to achieve quality
and the need for setting goals. Defines quality as fitness for use in terms of design,
conformance, availability, safety and field use. Promotes concepts known as Managing
Business Process Quality a technique for executing cross functional quality improvements.
ARMAND FEIGENBAUN Achieved visibility through his work in Japanese Management for
total quality improvement. Used a total quality control approach that may very well be the
forerunner of todays TQM Promoted a system for integrating efforts to develop, maintain and
improve quality by the various groups in an organization. PHILIP CROSBY Author of the
popular book Quality is Free. Argues that poor quality in the average firm costs about 20% of
revenues; most of which could be avoided by adopting good quality practices. THE CONCEPT
OF QUALITY Definition of quality: 1. Perfection 2. Consistency 3. Eliminating waste 4. Speed
of delivery 5. Compliance with policies and procedures 6. Providing a good, usable product 7.
Doing it right the first time 8. Delighting or pleasing customers 9. Total customer service and
satisfaction 16 Total Quality Service Management

17. Today most managers agree that the main reason to pursue quality is to satisfy customers.
The American National Standards Institute (ANSI) and the American Society for Quality (ASQ)
define quality as the totality of features and characteristics of a product or service that bears
on its ability to satisfy the given needs. TQM GOAL: CUSTOMER SATISFACTION Figure 1.1
TQM GOALS The view of quality as the satisfaction of customer needs is often called fitness

for use. In highly competitive markets, merely satisfying customer needs will not achieve
success. To beat with competition, organizations often must exceed customer expectations.
Thus, one of the most popular definitions of quality is meeting or exceeding customer
expectations. HOLLYWOOD CASINO RESORT Tunica, Mississippi Hollywood Casino
Resort/Tunica is a place where guests feel invited and welcome. We provide the highest levels
of personalized service and products for our guests, who always enjoy a fun-filled experience.
Everyone at Hollywood Casino does the right thing the first time, and puts the needs and wants
of our guests in the forefront of every decision we Figure 1.2 Vision Statement of Hollywood
Casino Resort Managers of manufacturing and service functions deal with different types of
quality issues; the following sections provide a brief overview of these issues. Although the
details of quality management differ between manufacturing and service industries, the
customer-driven definition eliminates these artificial distinctions and provides a unifying
perspective. Quality in Manufacturing 17 Total Quality Service Management

18. Quality systems focused primarily on technical issues such as equipment reliability,
inspection, defect measurement, and process control. Transition to a customer driven
organization has caused fundamental changes in manufacturing practices, changes that are
particularly evident in areas such as product design, human resource management, and
supplier relations. Quality dimensions: Manufactured products have several quality dimensions
including the following: 1. Performance: a products primary operating characteristics. 2.
Features: the bells and whistles of a product. 3. Reliability: the probability of a products
surviving over a specified period of time under stated conditions of use. 4. Conformance: the
degree to which physical and performance characteristics of a product match pre-established
standards. 5. Durability: the amount of use one gets from a product before it physically
deteriorates or until replacement is preferable. 6. Serviceability: the ability to repair a product
quickly and easily. 7. Aesthetics: how a product looks, feels, sounds, tastes, or smells. 8.
Perceived quality; subjective assessment resulting from image, advertising, or brand names.
Quality control in manufacturing is usually based on conformance, specifically conformance to
specifications. Specifications are targets and tolerances determined by designers of products
and services. Targets are the ideal values for which production strives; tolerances are
acceptable deviations from these ideal values. A lack of defects has constituted quality in
manufacturing for many years. However, the lack of defects alone will not satisfy or exceed
customer expectations. Many top managers have stated that good quality of conformance is
simply the entry into the game. A better way to achieve distinction and delight customers is
through improved product design. Thus, manufacturers are turning their attention toward
improved design for achieving their quality and business goals. Quality in Services: Service
can be defined as any primary or complementary activity that does not directly produce a
physical product that is, the non-goods part of the transaction between buyer (customer) and
seller (provider). A service transaction might be as simple as handling a complaint or as
complex as approving a home mortgage. A Service orientation places customer needs ahead
of organizational needs. Table 1 3 provides examples of how the four dimensions of service
quality apply to various industries. In this context, a physical product is simply the medium
used to facilitate the other services and a service rather than product orientation becomes the
focus. Customers needs take precedence over organizational needs. In contrast, when quality
programs are product oriented, it is often the case that a higher priority is placed on process
(and bottom line) performance than on customer satisfaction. Trying to squeeze and the
ounce of performance from its internal business processes, a company can lose touch with its
customers and what they can value. 18 Total Quality Service Management

19. INDUSTRY PHYSICAL SERVICE SERVICE SERVICE PRODUCT PRODUCT

ENVIRONMENT DELIVERY Auto manufacturin Vehicle Pricing Showroom Test drive & g Co.
sales pitch Hotel Room Pricing & Room Front Office/ Supplies Quality Bellman Performance
Restaurant & Chef, Food & Bar waitress, Beverage bartender Service performance Airline

Pricing Food & Transportatio Airport Cleanliness of Beverage n & External customer its
suppliers are members of different systems. 19 Total Quality Service Management Internal
customer its suppliers share the same production system. Internal customers are linked
together through the design of the value stream and the output of the value stream becomes
an output to an external customers system. Customer can be used to describe anyone
who benefits from goods or services anywhere along the value stream. Value stream all the
resources required to take production inputs and transform them into a suitable mixture of
products or services constitutes. QUALITY is about people flight facilities aircraft Service
entertainmen Safety in- Ticket t flight service Baggage Handling Table 1.3 COMPONENTS OF
SERVICE: Some Industry Example: How do customers make choices based on value
judgments? Customers compare alternative service providers on the basis of value.
Customers perform a gap analysis between what they expect and what perceived is the value
received. Evident in service industries where a customers satisfaction is often based on such
intangible factors as assurance, empathy, reliability, and responsiveness. VALUE STREAM
AND ITS CUSTOMERS

Quality is defined in the context of the totality of the experience. DIMENSIONS OF SERVICE:
The important dimensions of service quality include the following: Time: How much time must
a customer wait? Timeliness: Will a service be performed when promised? Completeness:
Are all items in the order included? Courtesy: Do frontline employees greet each customer
cheerfully? Consistency: Are services delivered in the same fashion for every customer, and
every time for the same customer? Accessibility and convenience: is the service easy to
obtain? Accuracy: is the service performed right the first time? Responsiveness: Can
service personnel react quickly and resolve unexpected problems? 20 Total Quality Service
Management Quality can mean different things to different people given the same
experience. The measure of output is difficult to define. The customer is present during the
production process and performing the final inspection. The image of the organization
shapes the perception of customers. Service requires contact (directly or via telephone)
between the service provider and the service equipment. The service recipient has the final
say regarding quality. The behavior of the service provider becomes a factor in service
delivery. People will go out of their way and more for good service, which indicates the
importance place on service by customers. As a strategic issue, customer service can be
considered a major dimension of competitiveness. 20. Most research dealing with the effects
of quality on business competitiveness generally falls into one of two categories, depending on
the kind of relationships under study. The first encompasses those studies analyzing the
external effects of quality on competitiveness, while the second includes those that focus on
the internal effects. External effects show the impact of changes in the quality perceived by
clients on business competitiveness. These effects have their source in changes in client
behavior and their level of satisfaction which, ultimately, will have a positive or negative impact
on the volume of sales and market share due to variations in clients' willingness to pay, their
purchase intentions or level of expenditure within the hotel. Internal effects refer to the
influence quality has on competitiveness due to changes in the firm's production processes.
Such changes have an influence on productivity and, therefore, on the firm's production costs
SERVICE QUALITY vs. PRODUCT QUALITY

Long-term benefits that may be expected from Total Quality Management are higher
productivity, increased morale, reduced costs, and greater customer commitment. 21 Total
Quality Service Management21. Service organizations must look beyond product orientation
and pay significant attention to customer transactions and employee behavior. Several points
that service organizations should consider are as follows: Customer Perceptions example
are speed of service is an important quality characteristics, yet perceptions of speed may differ
significantly among different service organizations and customers. Behavior quality of
human interaction is vital in every transaction that involves human contact; e.g. Friendliness of

front desk clerks. Image shaping customer expectations of a service and in setting
standards by which customers evaluate that service. Service standards value judgment,
customer attitudes and employee competence. Quality control supervision calls for training
of employees and self-management. Figure 1.4 Service Orientations Advantages of TQM

22. These benefits may lead to greater public support an Total Quality Management calls for
the elimination of the goals and objectives required by Management-by-Objectives. Critics of
TQM claim that this may negatively affect motivation. They claim that having established
production goals gives employees increasingly higher goals to reach, which motivates them to
find new ways to reach the goals. 22 Total Quality Service Management TQM detractors also
argue that although Total Quality Management calls for organizational change, it does not
demand radical organizational reform. Real quality improvement requires radical structural
change, such as flattening organizational structures. It requires liberation of employees from
stifling control systems and the tyranny of functionalism, both of which stifle teamwork. Longrange plans advocated by TQM may limit an organizations flexibility and agility. TQM teaches
that a long-term plan is required to achieve a complete quality transformation, but a long-term
plan that has been pursued for a long period may become an end unto itself. Completion of the
plan becomes the ultimate goal. Objectives the plan was designed to accomplish are forgotten;
achieving the transformation becomes the most important objective. Instead of maintaining
continuous change, the organization may reach a stable point and stagnate. To produce
continuously high quality services, an organization must react quickly to changes in the
community and not be restricted by its management style. Total Quality Management may
be a "profit generator," even for public organizations. It does not actually create profit for the
organizations, but if implemented properly, it may identify costly processes and cost-saving
measures. Once fully implemented, the only expense of TQM is the cost of routine operations.
In public organizations, saved resources may be viewed as "profits." Total Quality
Management does have some detractors who have pointed out some of the disadvantages of
TQM. Disadvantages of TQM Total Quality Managements extensive use of teamwork gives
employees the experience of problem solving and using their knowledge and experiences in a
collaborative effort. As employees gain experience with team problem solving, they may be
used to form cross-sectional ad-hoc "mega teams" that can attack larger organization-wide
problems. TQM gives an organization greater problem-solving flexibility and increases the
quality of work life for all employees. Total Quality Management may create an
organizational atmosphere of excitement and sense of accomplishment through the rewarding
of creativity. When experimentation-oriented failures are accepted as a part of the learning
process, employees feel free to use their creative energies to develop new ideas. Eliminating
errors and doing things right the first time saves time and resources. The savings may then be
used for expansion of services or made available to employees in their efforts to increase
service quality. d improvement of an organizations public image.

Total Quality Management calls for the elimination of performance assessments that rate
employees in relation to each other. Critics fear that without performance assessment
managers would have too much power over employees and may be use it capriciously. Many
managers feel performance assessments let them document employee performance for
possible reward, but some employees fear the assessments might be used against them in
some disciplinary actions. Performance assessments may give employees with grievances the
documentation they need to prove managers are treating them unfairly. Without them,
managers could make unfair accusations about an employees performance and the employee
would not have the documentation to counter the claims. Some argue that the claims of
success by TQM supporters are not supported by facts but by anecdotes and stories. They
argue that TQM proponents tell heart-warming stories about how teamwork makes everyone
happy, but that they cannot back up their claims with hard data. Critics maintain that TQM
focuses manager attention on internal processes rather than on external results. When this is

taken to an extreme, managers may become too preoccupied with internal issues, such as the
documentation required by TQM methods, and ignore the shifting perceptions of customers.
Managers become so concerned with the process of TQM that they neglect the needs of the
customer, which was the initial reason for implementing TQM. Total Quality Management calls
for its implementation to be immediate and complete. Some contend it does not make sense to
try to create quality improvement in the entire organization from the very beginning. They argue
that all processes are not equally good or bad, all departments do not function equally well,
and all services do not measure up to the same quality standard. Because of this, they contend
that quality should be introduced incrementally and only in the specific areas that need it most.
Some critics claim Total Quality Managements focus on setting and maintaining standards
makes work life unexciting and boring. When employees are bored, their poor attitudes may
cause customer dissatisfaction with the quality of service received from them. In addition, when
too much emphasis is placed on standardization it precludes the constant internal changes
needed to keep up with external changes. Total Quality Management develops its own
bureaucracy. TQM detractors contend its statistical burden and committee structure is
cumbersome, slows organizational momentum, and consumes too much time and resources.
Opponents of Total Quality Management maintain that it appeals to egotism. After receiving
some TQM training, some employees consider themselves TQM "experts" who have the
answers to everyone elses problems. They claim their department is doing everything right
according to TQM principles and find fault with every other department. Some managers,
instead of viewing achievement as a joint effort where every participant deserves praise, apply
for awards for self-gratification or to benefit the organizations public relations image. Some
detractors posit that TQM is an emotionally cold way to manage people. Its analytical,
detached programs are often devoid of human emotion that inspires attachment to the
organization and its customers. 23 Total Quality Service Management23. When there are no
established production goals, some employees will only produce the minimum required to keep
their job.

24. Total Quality Management calls for a cultural transformation. Some argue it creates a
process-crazed organization, similar to a cult, where the impression is that only total
commitment to TQM can save the organization from ruin. Just as in a cult, all the decisions in
TQM are related to the "vision." No one wants to claim individual credit for success; instead,
success is attributed to the TQM philosophy. Results become less important than performing
the proper TQM techniques. Just as in a cult, periodic evangelism by TQM experts is used to
maintain a missionary zeal for TQM. If an employee is not a TQM believer, he or she
considered an outcast who does not care about the organizations success. Even with its
problems, Total Quality Management may still be the best choice as a successor to the
militaristic, authoritative management style. Exercise NO. _____ Introduction to TQM Name
_____________________________ Course & Year _______________________ Subject
time/Day ____________________ Date: _____________ Instructor________ Case 1.1
APPLYING TQM TO EVERYDAY TASK Pauline Knowlton has worked for Matt Pantusa for
nearly three months. Pauline really likes Matt because he practices what he preaches and is a
good supervisor. But sometimes Matt can be a little overbearing, especially now that he is
really sold on Total Quality Management. For example, Matt is the publicity person for the local
Computer Enthusiasts Club. He sends out 5,000 copies of a brochure each month that
advertises the next months meeting of the Club. Pauline usually is the one to make sure the
flyers are copied, folded, addressed, and mailed on time. The advertisement that Pauline
mailed a few weeks ago announced last weeks monthly meeting on quality productivity tools
for computers. When Matt went into the office the morning after the meeting, he called Pauline
into his office. He told Pauline that over 600 people had attended the meeting a record
crowd. Pauline congratulated Matt for such a successful meeting. She was pleased that had
had a part in making the meeting a success. But Matt didnt seem pleased as he gave her two
copies of the flyer that had been given to him by his friends who received his mailing. One flyer

was folded a little crooked and the other has a mailing label that was affixed at the slightly
downward angle. Matt asked her to be more careful with these details as she did future
mailings. Pauline like her work and wants to please Matt. She thinks, however, that hes gone a
little bit overboard with this TQM. Does anyone really care if a flyer is perfectly folded or a label
is a little askew? And having time to think about their conversation, Pauline cant understand
why Matt is making such a big deal about the mailing. After all, more people showed up at the
monthly meeting than had ever been there before. 24 Total Quality Service Management

25. RESPONDING TO THIS CASE: 1. Do you think Matt is taking the TQM philosophy too far?
Why or why not? 2. Pauline feels that if the customer is satisfied, why Matt shouldnt be please.
Discuss the pros and cons of her rationale. 3. Is there a lesson that Pauline could learn from
this incident? 4. What advice would you give to Matt in Supervising Pauline and here
employees? Exercise NO. _____ Introduction to TQM Name
_____________________________ Course & Year _______________________ Subject
time/Day ____________________ Date: _____________ Instructor________ Case 1.2 The
Reservation Nightmare H. James Harrington, a noted quality consultant, related the following
story in Quality Digest magazine: I called to make a flight reservation just an hour ago. The
telephone rang five minutes before a recorded voice answered. Thank you for calling ABC
Travel services, it said. To ensure the highest level of customer service, this call may be
recorded for future analysis. Next I was asked to select from one of the following choices: If
the trip is related to company business, press 1.Personal business, press 2. Group travel,
press 3. I pressed 1. I was then asked to select from the following choices: If this is a trip
within the United States, press 1.International, press 2.Scheduled training, press 3. Related to
conference, press 4. Because I was going to Canada I pressed 2. Now two minutes into my
telephone call, I was instructed to be sure that I had my customer identification card available.
A few seconds passed and a very sweet voice came on, saying, All international operators are
busy, but please hold because you are a very important customer. The voice was then
replaced by music. About two minutes later, another recorded message said, Our operators
are still busy, but please hold and the first available operator will take care of you. more
music. Then yet another message: Our operators are still busy, but please hold. Your
business is important to us. more bad music. Finally the sweet voice returned, stating, to
speed up your service, enter your 19-digit costumer service number. I frantically searched for
their card, hoping that I could find it before I was cut off. I was lucky; I found it and entered the
number in time. The same sweet voice came back to me, 25 Total Quality Service
Management

26. saying, to confirm your service number, enter the last four digits of your customer service
number, enter the last four digits of your social security number. I pushed the four numbers on
the keypad. The voice said: Thank you. An operator will be with you shortly. If your call is
emergency, you can call 1-800-CAL-HELP, or push all of the buttons on the telephone at the
same time. Otherwise, please hold, as you are a very important customer. This time, in place
of music, I heard a commercial about the service that the company provides. At last, a real
person answered the telephone and asked, Can I help you? I replied, Yes, oh yes. He
answered, Please give me your 19-digit customer service number, followed by the last digit of
your social security number so I can verify who you are. (I thought that I gave these numbers
in the first place to speed up service. Why do I have to rattle them off again? I was now
convinced that he would call me Mr. 5523-3675-0714-1313-040. But, to my surprise, he said:
Yes, Mr. Harrington. Where do you want to go and when? I explained that I wanted to go to
Montreal the following Monday morning. He replied: I only handle domestic reservations. Our
international desk has a new number: 1-800-1WE-GOTU. Ill transfer you. A few clicks later a
message came on, saying. All of our international operators are busy. Please hold and your
call will be answered in the order it was received. Do not hang up or redial, as it will only delay
our response to your call. Please continue to hold, as your business is important to us.

DISCUSSION QUESTIONS 1. Summarize the service failures associated with this experience.
2. What might the travel agency have done to guarantee a better service experience for Mr.
Harrington? How do your suggestions relate to the TQ principles? Case 1.3 A Tale of Two
Restaurants Kellys Seafood Restaurant was founded about 15 years ago by Tim Kelley, who
has run it from the start. The restaurant is very profitable because of its excellent food quality,
but lately has been having problems with consistency because of numerous suppliers. The
restaurant operations are divided into front-end (servers) and back-end (kitchen). The kitchen
has notes to boost employee morale, employees are cross- trained in all areas, and the kitchen
staff continually seeks improvements in cooking. Servers, however, have minimal wages and
few perks, and turnover is a bit of a problem. Tims primary criterion for selecting servers is
their ability to show up on time. There is little communication between and front-end and backend operations, other than fulfilling 26 Total Quality Service Management

27. orders. Tim makes sure that any complaints are referred to him immediately by the servers.
The restaurant has no automation, as Tim believes that it would get in the way of customers
special requests. this is the way weve done it for past 15 years and how we will continue to do
it, was his response to a suggestion of using a computerized system to speed up orders and
eliminate delays. Tim used to hold staff meetings regularly, but recently they have dropped
from each week to one every five or six months. Most of the time is spent focusing on negative
behavior, and Tim has often said You cant find good people anymore. Jims Steakhouse is a
family-owned restaurant in the same state. Jim uses only the freshest meats and ingredients
from the best suppliers and gives extra large portions of food to customers, who feel they are
getting their moneys worth. Jim pays his cooks high wages to attract quality employees.
Servers get 70 percent of tips, bussers 20 percent, and the kitchen staff 10 percent to foster
team work. Many new hires come from referrals from current employees. Jim interviews all
potential employees and ask them many pointed questions relating to courtesy, responsibility,
and creativity. The restaurant sponsors bowling nights, golf outings, picnics, and holiday
parties for its employees. At Jims, birthday customer receive a free dinner, children are
welcomed with balloons, candy, and crayons, and big screen TVs caters to sports fans. Jim
walks around and constantly solicits customer feedback. Jim visits many restaurants to study
their operations and learn new techniques. As a result of these visit, Jim installed computers to
schedule reservations and enter orders to the kitchen. DISCUSSION QUESTIONS 1. Contrast
these two restaurants from the perspective of TQ. What conclusions can you make and what
advice would you give to the owners? 2. What type of management model (mechanistic,
organismic, or cultural) do you think each organization represents? CHAPTER 2
APPROACHES TO TOTAL QUALITY TOTAL QUALITY PARADIGMS Adopting a TQ
philosophy requires significant changes in organization design, work processes, and culture.
Organizations use a variety of approaches. 27 Total Quality Service Management

28. A paradigm (pronounced "pair-a-dime") is a set of beliefs about phenomenon around us

that constrains and guides our thinking. For example, consider yourself to be in Spain or
Portugal in 1492. You believe the sun rises in the East and sets in the West. When you look
westward out over the ocean, you see a straight line where water meets the sky. You are
familiar with straight edges where the plane meets the sky. If you walk off the plane of a roof,
you fall. Therefore, ships must fall off the earth if they travel too far. N'est-ce pas? Paradigms
are shared by people creating schools of thought. The ancient mariners of the late 1400's all
believed the same perceived facts and, thus, never ventured too far from land. Paradigms
change when first an anomaly appears. The late 1400's brought additional facts to bear, such
as: at first you see the top of a mast, then the whole mast, then the top of the ship hull, and
then the full hull as a ship approaches from far out to sea. This is similar to what you see when
a person climbs over a small hill. Perhaps the ocean is like a hill and there is no edge.
Experimentation occurs to verify the anomaly and seek out new relationships and causes.
People who explore anomalies may be considered outcasts by those who staunchly support

the existing paradigm. Columbus was considered a "strange and touched" sailor by many who
were sure they would never see him or his ships again. Paradigm shifts occur when the
anomaly is perceived to be a violation of the natural laws. The Quality Philosophies of Edward
Deming The Deming Management Philosophy Deming stresses that higher quality leads to
higher productivity, which in turn leads to long-term competitive strength. Demings chain of
reaction, shown in Figure 2.1, summarizes this view. This theory states that improvements in
quality lead to lower costs because of less rework, fewer mistakes, fewer delays and snags,
and better use of time and materials. Lower costs, in turn, lead to productivity improvements.
With better quality and lower prices, the firm can achieve a higher market share and thus stay
in business, providing more jobs. Demings states emphatically that top management has the
overriding responsibility for quality improvement. Deming has summarized his philosophy in
what he calls A System of Profound Knowledge. 28 Total Quality Service Management

Management policies and practices 29 Total Quality Service Management Disruptions on the
job Leadership of supervisors and managers Information and resources provided
Training received 29. Figure 2.1 THE DEMING CHAIN REACTION Improved quality Costs
decrease because of less rework, fewer mistakes, fewer delays and snags, and better use of
time and materials. Productivity Improves Capture the market with better quality and lower
price. Stay in business Provide jobs and more jobs Profound Knowledge Four parts of
profound knowledge:(1) appreciation of a system, (2) knowledge of the theory of variation, (3)
theory of knowledge, and (4) psychology. Systems A set of functions or activities within an
organization that work together to achieve organizational goals. For example, a McDonalds
restaurant can be viewed as a system. It consists of the order-taker/cashier subsystem, grill
and food preparation subsystem, drive-through subsystem, and so on. Factors within a
system that affect the individual performance of an employee;

30. Variation It is the difference in the reproducibility of a particular action. It is the difference
between a particular action and the target outcome. Variation increases the cost of doing
business Theory of Knowledge It is a branch of philosophy concerned with the nature and
scope of knowledge, its pre- suppositions and bases, and the general reliability of claims to
knowledge. Theory establishes a cause-and-effect relationship that can be used for
prediction. Theory leads to questioning and can be tested and validated it explains why.
Psychology Helps to understand people, interactions between people and circumstances,
interactions between leaders and employees, and any system of management. People differ
from one another. We must understand how people are intrinsically motivated. It is through
intrinsic motivation that people find joy in work and excitement in application of new knowledge.
True innovation in a company only comes at the discretion of the employees. Think about this
saying: "you can lead a horse to water but you cannot make him drink." A professor of
leadership/motivation/management once told a class, "you don't get paid to get a horse to
drink, and you get paid to motivate him to float on his back in the pond!" Within the concept of
knowledge of psychology, we must understand how people react to change. You have heard it
said that people resist change. This is absolutely untrue. People have welcomed change
throughout history AS LONG AS they understood the benefit of change to them.
Management's responsibility in using profound knowledge is to market change so as to be
exciting and desirous by employees. Lastly, profound knowledge requires an understanding of
transformation from competition to collaboration. Negotiators have long understood that
cooperation and mutually satisfying results start by someone taking a risk and offering another
something that is desired. Deming's Fourteen Points Edward Deming created Fourteen Points
of management based upon three principles. The first one is customer orientation. The second
element is continuous improvement. The last principle is to recognize that quality is determined
by the system, which is the inputs and the manner in which the previous two aspects are
processed. 1. Management commitment 2. Adopt the new philosophy. 3. Understand

inspection. 4. End price tag decisions 5. Improve constantly of production and service. 30 Total
Quality Service Management

31. 6. Institute training. 7. Institute leadership. 8. Drive out fear. 9. Optimize team efforts 10.
Eliminate slogans, exhortations and targets for the work force. 11. Eliminate quotas and MBO
12. Remove barriers to pride of workmanship. 13. Institute education and retraining. 14. Take
action to accomplish the transformation. Point I: Management Commitment The main
message that Deming is trying to express under this point features two key aspects. These are
customer obsession and strategic planning. These two ideals converged under this first point to
establish the appropriate direction for businesses to focus their attention. They should
concentrate more on pleasing the customers than defeating any of their competitors.
Competition will always be present if the business remains successful and manages to stay at
the top of production, yet the only way such will be feasible is if they continue to maintain
customer satisfaction. Point II: Adopt a New Philosophy This new philosophy is nothing more
than businesses taking the time to notice and prevent the further production of defective
products or services, which in effect will lead to increase profits in the long-term. Deming
summarizes under this point, defects are expensive, unnecessary, and not inevitable. Point III:
Understand Inspection Inspection cannot put quality into a defected product. It can only stop
the defected product from advancing further. When many inspectors are hired to inspect the
individual products the problem of passing defective products to consumers worsens because
nearly every inspector assumes to some degree that a minimum inspection of so many
products is enough. The usual mindset to a certain extent is that a past inspector should have
already found the defect or future inspectors should find it if he or she had missed the mistake
Point IV: End Price Tag Decisions Deming suggests that businesses should minimize their
long-term costs rather than minimize the initial cost Least cost is not necessarily the best
cost. Buying form a supplier based on low cost rather than a quality/cost basis defeats the
need 31 Total Quality Service Management

32. for a long-term relationship. Vendor quality can be evaluated with statistical tools. Point V:
Improve constantly of production and service Improving every process concerning planning,
production, and service provides better products for the consumer and higher profits for the
business. Search for quality is never ending and results from studying the process itself, not
the defects detected during inspection. Point VI: Institute Training Deming urges that every
level of the system be trained for its specific tasks. The laborer responsible for performing the
manual tasks may misunderstand it, despite how it might seem easily to be understood by the
requester in management. When new employees are hired they should receive total quality
management training in groups at the company, departmental, and local level before they
begin working alone in order to prevent such misunderstandings Point VII: Adopting and
Instituting leadership Deming rationalized that at the expense of leadership, management had
over-expressed organizational control, thus devoting a majority of their time worrying only
about outcomes. He pushes them to concentrate their efforts in improvements by making
company visions actual actions of the corporation. Corporate leaders should center their
attention on finding the source of any problems and correcting them in the system rather than
blaming certain individuals for these inefficiencies Point VIII: Driving Out Fear Employees
need to feel secure in order for quality to be achieved. Fear of asking questions, reporting
problems, or making suggestions will prevent the desired climate of openness. Point IX:
Optimize team efforts The employees from each level of the corporation must work well with
the other levels in order for the company to function at its best potential. This includes
understanding the problems among the various branches of the business at each level. Only
after a high level of awareness and commitment exists between them can change initially
develop because cooperation requires this earnest fundamental transition. When managers
share information with employees, they recognize that a complication exists that inhibits

employees from providing statements, presenting opinions or ideas, and asking questions in 32
Total Quality Service Management

33. large group settings. Once realized, the managerial staff can prompt the specific brand of
trust and interest needed by the certain group of individuals to promote an honest exchange of
ideas between levels without these barriers of communication. Point X: Eliminating Slogans,
Exhortations, and Targets for the Workforce A pointless sign hanging throughout the
company in an attempt to promote corporate objectives is useless to employees and a waste of
money to the business. Providing employees with company policies and purposes is essential
but doing so in a tactful manner in memos and letters is less insulting and ignored than are the
tacky posters dispersed throughout the organization in no particular order (Anschutz, 1995, p.
25). Presenting such necessary information in the latter manner only proves failure of the
management to express company goals and objectives adequately and professionally, thus
using signs to speak to employees rather than by personal confrontations (Anschutz, 1995, p.
30). Point XI: Eliminating Quotas and MBO Eliminating numerical quotas for the staff and
numerical goals for the management increase quality because each employee is no longer
based on the statistical average worker but on their own performance without comparative
judgments making it easier for management to advance individuals who work to the highest
potential. This in effect encourages the actual above-average half especially to work to their full
potential at all times rather than merely work to meet the proposed numerical objective before
halting their efforts or working slower than is necessary to prevent reaching the set number
before the desired time (Drummond, 1992, p. 35). Point XII: Remove Barriers to Pride of
Workmanship Abolishing annual performance appraisals promotes self worth and pride in
employees because it creates improved ways for individuals to receive increases in pay.
Instead of basing the pay increase on achieved results without taking into account the possible
barriers outside the control of the employees or overseeing their work, the increase is solely
based on how much it would cost to hire a new employee with the same skills to replace the
position. Handling pay increases in this manner prevents unneeded competition between
workers and promotes teamwork since all will reap the benefit of the increase rather than a few
favorites In addition, by eliminating the annual rating or merit system, tension is relieved
creating room for pride in workmanship, which contributes to further improvements. 33 Total
Quality Service Management

Performance ratin The effects of these are devastating teamwork is destroyed, rivalry is
nurtured. Looking to increase the quarterly dividend undermines quality and productivity.
Evaluation by performance, merit rating or annual review of performance A company that is
without constancy of purpose has no long range plans for staying in business. Management
is insecure, and so are employees. Emphasis on short-term profits 34. Point XIII:
Encouraging education and Self-improvement Deming advises that businesses should
promote the institution of vigorous programs of education and self-improvement for every
employee at all levels. Employees who have a career within a certain corporation are more
than likely to change positions due to newly created jobs or the decline of out-of-date ones
rather than changing to gain an increase in pay. This is the main reason why there will
presumably always remain a need for educating employees. As employees advance in
knowledge both within and outside the criteria of their jobs, they gain satisfaction in this
opportunity, which adds increased self worth and dignity that in effect brings forth
improvements in them and the company as well. Point XIV: Taking Action to Accomplish the
Transformation It basically sets forth the motivation to implement the previous thirteen points
with vital patience. He emphasizes that change takes time, but its long-term outcomes are
worth the initial costs and wait. An organization that wants to establish a culture based on
quality needs to emphasize the preceding 13 points on a daily basis. This usually requires a
transformation in management style and structure. Demings Seven Deadly Diseases Lack of
consistency of purpose Reduce Cost on tests and treatments on medical expenses of

employees. Excessive costs of warranty, fueled by lawyers who work on the basis of
contingency fees. Demings Obstacles 34 Total Quality Service Management The most
important figures are unknown and unknowable the multiplier effect of a happy customer,
for example. Excessive medical cost for employee health care, which increase the final costs
of goods and services. Job hopping managers never understand the companies they work for
and are never long enough to follow through on long-term changes that are necessary for
quality and productivity. Running a company on visible figures alone g build fear and leave
people bitter, despondent and beaten. They also encourage defection in the ranks of
management. Mobility of Management

Requirements must be clearly stated so that they cannot be misunderstood. There is no such
thing as a quality problem. 35 Total Quality Service Management Quality is simply the feeling
of excellence. Not only may products meet specifications yet vary in quality, but in addition,
the supposition that everything is all right inside the specifications and all wrong outside does
not correspond to this world. DEMINGS MISCELLANEOUS PRINCIPLES The 85-15 Rule:
The 85 15 rules holds that 85 percent of what goes wrong is with the system, and only 15
percent with the individual person or thing. In this connection, we do well to remember that in
any group of people, not all, nor even the majority, can be above average. In fact, exactly half
will be below average. Know Thy Customer: In quality-minded organizations, the word
customer describes more than a relationship in which money merely changes hands. It
describes the exchange of services as well. For any given enterprise, there are two sets of
customers, external and internal. The external customer is the end user of a product or service.
The internal customer is the person or work unit that receives the product or the service of
another within the same company. Too often one department does not understand how its
work is used by the next, and thus cannot learn what things are important in carrying out its
tasks. The notion of internal customers lends relevance to each employees job and is
absolutely critical to quality transformation. CROSBY S PHILOSOPHY: THE 14 POINTS: The
essence of Crosbys quality philosophy is embodied in what he calls the Absolutes of Quality
Management and the Basic elements of Improvement. Quality means conformance to
requirements not elegance. The supposition that is only necessary to meet specifications
yet another excuse that lets top management off the hook We would installed quality control
Another excuse managers use to avoid taking responsibility. Our quality control
department takes care of all our problems for quality The pretext managers rise to avoid
dealing with quality issues. Our Problems are different Which companies undertake to
find a ready-made recipe they can follow when they must instead map their own route to
quality? Search for examples the idea that improvement of quality and productivity is
accomplished suddenly by affirmation of faith Hope for instant pudding 35.

Concentrating on preventing defects rather than just finding and fixing them. Crosby s Basic
Elements of Improvements: 1. Determination Top management must be serious about quality
improvement. 2. Education absolutes should be understood by everyone only through proper
training A performance standard of the craftsperson regardless of his or her
assignmentThe theme of ZD is do it right the first time. Quality cost data are useful in
calling problems to managements attention, selecting opportunities for corrective action, and
tracking quality improvement over time. The only performance standard is Zero Defects.
The cost of quality is the expense of nonconformance. Similar to Demings Chain of
Reaction message. The only performance measurement is the cost of quality. Quality is
free. What costs money are all the actions that involve not doing jobs right the first time. The
quality departments should measure conformance, report results, and lead the drive to develop
a positive attitude toward quality improvement. There is no such thing as the economics of
quality: it is always cheaper to do the right job the first time. Problems must be identified by
the individuals or departments that cause them. 36. & Field service - comprises of

promptness, competence, and integrity. JURAN S TEN STEPS TO QUALITY

IMPROVEMENT: 1. Build awareness of opportunities to improve. 2. set goals for improvement
3. Organize to reach goals. 4. Provide Training 5. Carry out projects to solve problems 36 Total
Quality Service Management Availability - focuses on reliability, maintainability, and logistical
support. Quality of Conformance - includes technology, manpower and management
Quality of Design -focuses on market research, product concept, and design specifications
education. 3. Implementation Every member of the team must understand the
implementation process. THE JURAN S PHILOSOPHY: Juran defines quality as fitness for
use. This is broken down into four categories:

ISO 9000:2000 The Malcolm Baldrige standard: Standard Dimensions: APPROACH: The
methods (policies, procedures, processes) used to address the requirements of the operations.
DEPLOYMENT: Extent (number of users and consistency of use) to which the approach is
used by all appropriate work units. RESULTS: The outcomes (trends, measures, KPIs) of the
organizations approach and deployment. The Malcolm Baldrige standard Categories and
Items Point Values 1. Leadership 120 2. Strategic Planning 85 3. Customer and Market Focus
85 4. Measurement, Analysis, and Knowledge Management 90 5. Human Resource Focus 85
37 Total Quality Service Management The Malcolm Baldrige standard provides an
internationally comparable framework and criteria for assessing organizational performance. It
is a template for competitiveness based on the principles of Total Quality Management. 37. 6.
Report Progress 7. give recognition 8. communicate results 9. keep score 10.Maintain
momentum by making annual improvement part of the regular systems and processes of the
company FRAMEWORKS FOR QUALITY AND PERFORMANCE EXCELLENCE Two most
prominent frameworks for quality that have had world-wide influence:

38. 6. Process Management 85 7. Business Results 450 TOTAL POINTS 1000 Figure 2.2 The
Malcolm Baldrige Standard CRITERIA FOR PERFORMANCE EXCELLENCE Designed to
encourage companies to enhance their competitiveness through an aligned approach to
organizational performance management that results in: 1. Delivery of ever-improving value to
customers, contributing to market place success. 2. Improvement of overall company
performance capabilities 3. Organizational and personal learning. The seven categories are:
1. Leadership examines how an organizations leaders address values, direction, and
performance expectations, as well as their focus on customers and other stakeholders,
empowerment, innovation, and learning. 2. Strategic planning examine how the organization
develops strategic objectives and action plans. examines how an organization 3. Customer
and market focus determines requirements, expectations, and preferences of customers and
markets. 4. Information and analysis examines and organizations information management
and performance measurement systems and how the organization analyzes performance data
and ensures hardware and software quality. 5. Human resource focus examines how an
organization motivates and enables employees to develop and utilize their full potential in
alignment with the organizations overall objectives and action plans. 6. Process management
examines the key aspects of an organizations process management including customerfocused design, product and service delivery, key business, and support processes. 7.
Business results examines and organizations performance and improvement in key business
areas customer satisfaction, product and service performance, financial and marketplace
performance, human resource results, and operational 38 Total Quality Service Management

39. performance. Also examined are performance levels relative to those of competitors.
Figure 2.3 MALCOLM BALDRIGE NATIONAL QUALITY AWARD CRITERIA FRAMEWORK A
Systems Perspective Framework ISO 9000:2000 Terms such as quality management, quality
control, quality system, and quality assurance acquired different, and sometimes conflicting
meanings from country to country, within a country, and even within an industry. ISO 9000 is
a family of standards for quality management systems. ISO 9000 is maintained by ISO, the

International Organization for Standardization and is administered by accreditation and 39

Total Quality Service Management

40. certification bodies. Some of the requirements in ISO 9001 (which is one of the standards
in the ISO 9000 family) would include: a) a set of procedures that cover all key processes in
the business; b) monitoring processes to ensure they are effective; c) keeping adequate
records; d) checking output for defects, with appropriate corrective action where necessary; e)
regularly reviewing individual processes and the quality system itself for effectiveness; and f)
facilitating continual improvement A company or organization that has been independently
audited and certified to be in conformance with ISO 9001 may publicly state that it is "ISO 9001
certified" or "ISO 9001 registered." Certification to an ISO 9000 standard does not guarantee
the compliance (and therefore the quality) of end products and services; rather, it certifies that
consistent business processes are being applied. History of ISO 9000 Pre ISO 9000 During
WWII, there were quality problems in many British high-tech industries such as munitions,
where bombs were exploding in factories during assembly. The adopted solution was to
require factories to document their manufacturing procedures and to prove by record-keeping
that the procedures were being followed. The name of the standard was BS 5750, and it was
known as a management standard because it did not specify what to manufacture, but how to
manage the manufacturing process. According to Seddon, "In 1987, the British Government
persuaded the International Organization for Standardization to adopt BS 5750 as an
international standard. BS 5750 became ISO 9000." 1987 version ISO 9000:1987 had the
same structure as the UK Standard BS 5750, with three 'models' for quality management
systems, the selection of which was based on the scope of activities of the organization: ISO
9001:1987 Model for quality assurance in design, development, production, installation, and
servicing was for companies and organizations whose activities included the creation of new
products. ISO 9002:1987 Model for quality assurance in production, installation, and servicing
had basically the same material as ISO 9001 but without covering the creation of new
products. ISO 9003:1987 Model for quality assurance in final inspection and test covered only
the final inspection of finished product, with no concern for how the product was produced. 40
Total Quality Service Management

41. ISO 9000:1987 was also influenced by existing U.S. and other Defense Standards ("MIL
SPECS"), and so was well-suited to manufacturing. The emphasis tended to be placed on
conformance with procedures rather than the overall process of management which was
likely the actual intent. 1994 version ISO 9000:1994 emphasized quality assurance via
preventative actions, instead of just checking final product, and continued to require evidence
of compliance with documented procedures. As with the first edition, the down-side was that
companies tended to implement its requirements by creating shelf-loads of procedure manuals,
and becoming burdened with an ISO bureaucracy. In some companies, adapting and
improving processes could actually be impeded by the quality system. 2000 version ISO
9001:2000 combines the three standards 9001, 9002, and 9003 into one, now called 9001.
Design and development procedures are required only if a company does in fact engage in the
creation of new products. The 2000 version sought to make a radical change in thinking by
actually placing the concept of process management front and centre. ("Process management"
was the monitoring and optimizing of a company's tasks and activities, instead of just
inspecting the final product.) The 2000 version also demands involvement by upper
executives, in order to integrate quality into the business system and avoid delegation of
quality functions to junior administrators. Another goal is to improve effectiveness via process
performance metrics numerical measurement of the effectiveness of tasks and activities.
Expectations of continual process improvement and tracking customer satisfaction were made
explicit. Future Version: 2008 TC 176, the ISO 9001 technical committee, has started its
review on the next version of ISO 9001, which will in all likelihood be termed the ISO
9001:2008 standard, assuming its planned release date of 2008 is met. Early reports are that

the standard will not be substantially changed from its 2000 version. As with the release of
previous versions, organizations registered to ISO 9001 will be given a substantial period to
transition to the new version of the standard, assuming changes are needed; organizations
registered to 9001:1994 had until December of 2003 to undergo upgrade audits. 41 Total
Quality Service Management

42. Certification ISO does not itself certify organizations. Many countries have formed
accreditation bodies to authorize certification bodies, which audit organizations applying for
ISO 9001 compliance certification. Although commonly referred to as ISO 9000:2000
certifications, the actual standard to which an organization's quality management can be
certified is ISO 9001:2000. Both the accreditation bodies and the certification bodies charge
fees for their services. The various accreditation bodies have mutual agreements with each
other to ensure that certificates issued by one of the Accredited Certification Bodies (CB) are
accepted world-wide. The applying organization is assessed based on an extensive sample of
its sites, functions, products, services and processes; a list of problems ("action requests" or
"non-compliances") is made known to the management. If there are no major problems on this
list, the certification body will issue an ISO 9001 certificate for each geographical site it has
visited, once it receives a satisfactory improvement plan from the management showing how
any problems will be resolved. An ISO certificate is not a once-and-for-all award, but must be
renewed at regular intervals recommended by the certification body, usually around three
years. In contrast to the Capability Maturity Model there are no grades of competence within
ISO 9001. Advantages It is widely acknowledged that proper quality management improves
business, often having a positive effect on investment, market share, sales growth, sales
margins, competitive advantage, and avoidance of litigation. The quality principles in ISO
9000:2000 are also sound, according to Wade, and Barnes, who says "ISO 9000 guidelines
provide a comprehensive model for quality management systems that can make any company
competitive." Barnes also cites a survey by Lloyd's Register Quality Assurance that indicated
ISO 9000 increased net profit, and another by Deloitte-Touch that reported that the costs of
registration were recovered in three years. According to the Providence Business News [7],
implementing ISO often gives the following advantages: 1. Create a more efficient, effective
operation 2. Increase customer satisfaction and retention 3. Reduce audits 4. Enhance
marketing 5. Improve employee motivation, awareness, and morale 6. Promote international
trade 42 Total Quality Service Management

43. Exercise NO. _____ Approaches to Total Quality Name

_____________________________ Course & Year _______________________ Subject
time/Day ____________________ Date: _____________ Instructor________ Case 2.1 The
Reservation Clerk Mary Matthews works for an airline as a reservation clerk. Her duties include
answering the telephone, making reservations, and providing information to customers. Her
supervisor told her to be courteous and not to rush callers. However, the supervisor also told
her that she must answer 25 calls per hour so that the departments account manager can
prepare an adequate budget. Mary comes home each day frustrated because the computer is
slow in delivering information that she needs, and sometimes reports no information. Without
information from the computer, she is forced to use printed directories and guides. Discussion
Questions: 43 Total Quality Service Management

44. 1. What is Marys job? What might Deming say about this situation? 2. Drawing upon
Demings principle, outline a plan to improve this situation. CHAPTER 3 TOTAL QUALITY
TOOLS AND STATISTICAL THINKING Joseph Juran describes quality management as the
Quality Trilogy: planning, control, and improvement. He says that most managers devote too
much attention to control, and too little to planning and improvement - which may be the most
important activities for meeting and exceeding customer expectations and gaining competitive
advantage. Two groups of tools in quality management: 1. Tools for planning Quality function
deployment, concurrent engineering, and the new seven management and planning tools

that are design to assist managers in planning the quality effort and making efficient use of
information. 2. Tools for continuous improvement Includes Deming Cycle, tools for data
analysis, poka yoke (mistake proofing), and bench marking. Use to improve the
manufacturing and service systems Deming cycle and basic statistical tools are usually found
in basic quality training for all employees of an organization and are used by problem solving
teams to attack specific quality problems. QUALITY TOOLS IN QUALITY IMPROVEMENT
Quality function deployment 44 Total Quality Service Management

45. Used to measure that customers requirements are met throughout the product design
process and in the design and operation of production system Originated in 1972 at
Mitsubishis Kobe shipyard site which represents the overall concept that provides a means of
translating customer requirements into the appropriate technical requirements for each stage of
product development and production Represents customer requirements referred to as the
the voice of the customer. These are the collection of customer needs, including satisfiers,
delighters, exciters, and dissatisfiers the whats that customers want from a product.
Sometimes referred to as customer attributes. THE NEW SEVEN MANAGEMENT AND
PLANNING TOOLS 1. Affinity diagram/KJ method Gathering and organizing a large number
of ideas, opinions, and facts relating to a board problem or subject area. Enables problem
solvers to sift through large volumes of information efficiently and to identify natural patterns or
groupings in the information. E.g., determining the elements of quality cost, the group will list
various elements in a random fashion. Once many ideas have been generated, they can be
grouped according to their affinity or relationship, to each other. 2. Tree diagram Maps out the
paths and tasks that need to be accomplished to complete a specific project or to reach a
specified goal. The planner uses this technique to seek answers to such questions as What
sequence of tasks needs to be completed to address the issue? or What are all of the factors
that contribute to the existence of the key problem? 3. Interrelationship diagrams Map out
logical or sequential links among related categories. It shows that every idea can be logically
linked with more than one idea at a time, and allows for lateral rather than linear thinking. 4.
Matrix diagram These are spreadsheets that graphically display relationships between
characteristics, functions and tasks in such way as to provide logical connecting points
between each item. 5. Matrix data analysis Takes data from matrix diagrams and seeks to
arrange it quantitatively to display the strength of relationships among variables so that they
can be understood. Based on factor analysis technique or prioritization matrix that is easier
to understand. 6. Process decision program chart Method for mapping out every conceivable
event and contingency that can occur when moving from a problem statement to possible
solutions. It is used to plan for each possible chain of events that could occur when a problem
or goal is unfamiliar. 45 Total Quality Service Management

46. 7. Arrow diagrams Used by construction planners in the form of CPM or PERT project
planning process. PERT/CPM for Program Evaluation and Review Technique. CPM stands
for Critical Path Method. The two systems, although developed separately, have many similar
features and today are blended together by most people. A project consists of tens, hundreds
or thousands of individual steps. Many are dependent on other steps, some are independent.
Charting the flow of the project with a PERT/CPM diagram allows the manager to graphically
see the relationships of the elements, one to another. It shows which steps are critical to the
successful completion of the project in order that it remain on schedule. Grouping of several
steps or tasks yield sub projects which may need additional care and supervision. PERT
diagrams contain only one start and one end. All activity at an event must wait until all
succulents activity is complete. If activity can be started prior, it represents a separate
succulent. TOOLS FOR CONTINUOUS IMPROVEMENT Flow Chart A flow chart is a
diagram showing the travel and interaction with people that work entails. A flow chart is
different than a decision chart. While decisions may be shown on a flow chart the purpose is to
show changes in direction of work. A flow chart documents the process, shows who is

responsible for each step, and who the internal/external customer is. Boxes, diamonds and
lines are used to show work flow. Commonly Used Symbols in Detailed Flowcharts One step in
the process; the step is written inside the box. Usually, only one arrow goes out of the box.
Direction of flow from one step or decision to another. Decision based on a question. The
question is written in the diamond. More than one arrow goes out of the diamond, each one
showing the direction the process takes for a given answer to the question. (Often the answers
are yes and no.) Delay or wait 46 Total Quality Service Management

47. Link to another page or another flowchart. The same symbol on the other page indicates
that the flow continues there. Input or output Document Alternate symbols for start and end
points Scatter Diagrams Scatter diagrams help us see causal relationships. The diagram
usually is limited to two variables, one independent and one dependent variable. An example
may help demonstrate the use of a scatter diagram. Consider a production line where plastic
spoons are manufactured. Orders increased recently and production added overtime hours
each week to meet demand. Unfortunately, defects increased as well. Examine the data below
and the diagram. What do you think? Useful tool to establish a potential relationship between
two factors, e.g. speed of delivery and the number of complaints. 47 Total Quality Service
Management

48. CONTROL CHARTS Shows visually whether a product or activity is within normal
specifications. One a process is operating in a controlled way; random samples are taken to
monitor it for a changed output. 120 100 East 80 XY (Scatter) 60 2 40 XY (Scatter) 20 3 0 0 5
10 15 PARETO CHART States that 80% of results are caused by 20% of causes. Can be
used to focus on the few (20%) causes that are responsible for the majority (80%) of the quality
problems. no of defects per week 90 East 46.9 West 45.9 45 43.9 38.6 Nor th 34.6 30.6 31.6
27.4 48 Total Quality Service Management 20.4 20.4 1s t Qt r 2 n d Qt r 3 r d Qt r 4 t h Qt r

49. RUN CHARTS A running tally of data points over a specific time reference. Used to find
critical times or periods when various problems are prone to occur. For example, some
problems may occur on Mondays or Fridays (Friday car syndrome) or at certain specific times
of the day. 100 90 80 70 60 50 40 30 20 10 0 1st Qtr 2nd 3rd Qtr 4th Qtr Qtr HISTOGRAMS
A commonly used graph. The number of products in each control category is displayed using
a bar. By placing the bars next to each other, comparisons can easily be shown. CAUSE AND
EFFECT DIAGRAMS Known as fishbone or Ishikawa diagram, named after the Japanese
quality expert who popularized the concept. 49 Total Quality Service Management

50. Constructed in a brainstorming setting; requires significant interaction among group

members. The facilitator must listen carefully to the participants and capture the important
ideas. THE DEMING CYCLE Description The plandocheckact cycle (Figure 1) is a fourstep model for carrying out change. Just as a circle has no end, the PDCA cycle should be
repeated again and again for continuous improvement. The PDSA Cycle: The Plan-Do-StudyAct cycle is referred to as the Deming cycle by the Japanese. The cycle represents work on
processes rather than specific tasks. Plan: Identify an opportunity and plan for change. Do:
Implement the change on a small scale. Check: Use data to analyze the results of the change
and determine whether it made a difference. Act: If the change was successful, implement it
on a wider scale and continuously assess your results. If the change did not work, begin the
cycle again. 50 Total Quality Service Management

51. The Deming cycle is a methodology for improvement, based on the premise that
improvement comes from the application of knowledge. Knowledge of engineering,
management, or operations may make a process easier, more accurate, faster, less costly,
safer or better suited to customer needs. POKA YOKE (MISTAKE PROOFING) An
approach for mistake-proofing processes using automatic devices or methods to avoid simple
human error. Developed and refined by the late Shigeo Shingo, a Japanese manufacturing

engineer who developed the Toyota production system. Two aspects: o Prediction, or
recognizing that a defect is about to occur and providing a warning. o Detection, or recognizing
that a defect has occurred and stopping the process. Poka yoke techniques are also
applied to the design of consumer products to prevent in adherent user errors to safety
hazards. CREATIVITY AND INNOVATION Creativity is the ability to discover useful new
relationships or ideas Innovation refers to the practical implementation of such ideas.
Creativity is the foundation of successful problem-solving teams in the workplace. Quality
circles and other forms of teams that address quality and productivity problems often use a
scientific approached to solving problems. Four key steps: Creative approaches to problem
solving: 1. Redefining and analyzing the perceived problem 2. Generating ideas 3. Evaluating
ideas and selecting a workable solution, and 4. Implementing the solution. CREATIVITY AND
ORGANIZATIONAL SYSTEMS There are two ways of being creative. One can sing and
dance. Or one can create an environment in which singers and dancers flourish. (Warren
Bennis) Fostering creativity in an organization: 1. Remove or reduce obstacles to creativity
within an organization 2. Match jobs to individuals creative abilities 3. Tolerate failures and
establish direction 4. Improve motivation to increase productivity and solve problems creatively
5. Enhance self esteem and build the confidence of organizational members. 6. Improve
communication so that ideas can be better shared. 7. Place highly creative people in special
jobs and provide training to take advantage of their creativity. STATISTICAL THINKING
Statistical thinking is at the heart of the Deming philosophy and is the basis for good
management. 51 Total Quality Service Management

52. Statistical thinking is a philosophy of learning and action based on the principles that: 1.
All work occurs in a system of interconnected processes 2. Variation exists in all processes,
and 3. Understanding and reducing variation are keys to success. Exercise NO. _____ Total
Quality Tools and Statistical Thinking Name _____________________________ Course &
Year __________ Subject time/Day _________ Date: _____________
Instructor_______________ Score ____________________________________ THE HMO
PHARMACY CRISIS John Dover just completed an intensive course, Statistical Thinking for
Continuous Improvement, that was offered to all employees of a large health maintenance
organization (HMO). There was no time to celebrate, however, because he was already under
a lot of pressure. Dover worked as a pharmacy assistant in the HMOS pharmacy, and his
manager, Juan de Pacotilla, was about to be fired. Pacotillas dismissal appeared 52 Total
Quality Service Management

53. imminent because of numerous complaints and even a few lawsuits over inaccurate
prescriptions. Pacotilla now was asking Dover for his assistance in trying to resolve the
problem. John, I really need your help, said Pacotilla. If I cant show some major
improvement or at least a solid plan by next month, Im history. Ill be glad to help, replied
Dover, but what can I do? Im just a pharmacy assistant. Your job title isnt important. I think
youre just the person who can get this done, said Pacotilla. I realize that Ive been too far
removed from day-to-day operations in the pharmacy, but you work there every day. Youre in
a much better position to find out how to fix the problem. Just tell me what to do, and Ill do it.
But what about the statistical consultant you hired to analyze the dataa on inaccurate
prescriptions? asked Dover. To be honest, Im really disappointed with that guy. He has spent
two weeks trying to come up with a new modeling approach to predict the mistakes, I want to
eliminate them. I dont think I got through, however, because he said we need a month of
additional data to verify the model before he can apply a new method he just read about in a
journal to identify change points in the time series, whatever that means. But get this, he will
only identify the change points and send me a list. He says its my job to figure out what they
mean and how to respond. I dont know much about statistics. The only thing I remember form
my course in college is that it was the worst course I ever took. Im becoming convinced that
statistics really doesnt have much to offer in solving real problems. Since youve just gone

through the statistical thinking course, maybe you can see something I cant. I realize its a long
shot, but I was hoping you could use this as the project you need to officially complete the
course. I used to feel the same way about statistics, too, replied Dover. But the statistical
thinking course was interesting because it didnt focus on crunching numbers. I have some
ideas about how we can approach making improvements in prescription accuracy. I think it
would be a great project. But we might not be able to solve this problem ourselves. As you
know, there is a lot of finger pointing going on. Pharmacists blame the doctors sloppy
handwriting and incomplete instructions for the problem. Doctors blame the pharmacy
assistants, who do most of the computer entry of the prescriptions, claiming that they are
incompetent. Pharmacy assistants blame the pharmacists for assuming too much about their
knowledge of medical terminology, brand names, known drug interactions, and so on. it
sounds like theres no hope, said Pacotilla. I wouldnt say that at all, replied Dover. Its just
that there might be no quick fix we can do by ourselves in the pharmacy. Let me explain what
Im thinking about doing and how I would propose attacking the problem using what I just
learned in the statistical thinking course. Discussion Questions: 1. How do you think John
should approach this problem, using what he has just learned? Assume that he really did pick
up a solid understanding of the concepts and tools of statistical thinking in the course. PART 2
53 Total Quality Service Management

54. TOTAL QUALITY AND ORGANIZATION THEORY CHAPTER 4 QUALITY IN CUSTOMER

SUPPLIER RELATIONS The customer is the most important part of the production line. W.
Edwards Deming (1900 - 1993) OBJECTIVES: Developing strong and positive relationships
with customers and suppliers within the supply chain is a basic principle of total quality. This
chapter will: 54 Total Quality Service Management

55. Demonstrate the importance of customer supplier relationships to achieving total

quality; Identify the principles and practices of quality customer-supplier relationships; and
Compare the TQ approach to customers and suppliers to conventional organizational theories.
In Japanese the same word okyaksama means both customer and honorable guest.
World class organizations are obsessed with meeting and exceeding customer expectations.
CUSTOMER SUPPLIER RELATIONSHIPS AND TOTAL QUALITY Develop partnerships:
customers and suppliers can build relationships that will help them satisfy their shared
customers further along the customer supplier chain. Importance of customers: In view of
customer as a buyer to increase profitability, to a view of the customer as an active partner and
the focus of all quality activities. Customer satisfaction translates directly into increase profits,
thereby achieving strong profitability and market share requires loyal customers those who
stay with a company and make positive referrals. Quality is judge by customers. Thus, quality
must take into account all product and service features and characteristics that contribute value
to customers and lead to customer satisfaction, preference and retention. Poor quality leads
to customer dissatisfaction. Importance of suppliers: Suppliers are those companies that
provide the organization with goods and services that help them to satisfy the needs of their
own customers. If a suppliers performance is of consistently high quality, its customer can
decrease or eliminate costly incoming inspections that add no value to the products.
Suppliers are viewed as partners with customers, because there usually is a codependent
relationship. THE CUSTOMER SERVICE ATTRIBUTES The delivery of the service must be
timely, accurate, with concern, and with courtesy. All services are intangible and are a
function of perception. They depend on interpretation. By definition, service is perishable; it
can backfire on the organization. This relates to the acronym COMFORT. C CARING O OBERVANT M - MINDFUL 55 Total Quality Service Management

56. F - FRIENDLY O - OBLIGING R - RESPONSIBLE T TACT PRINCIPLES FOR

CUSTOMER-SUPPLIER RELATIONSHIPS: Three governing principles describe CSRs under
total quality: Recognition of the strategic importance of customers and suppliers.
Development of win-win relationship between customers and suppliers and; Establishing

relationships based on trust. Figure 4.1Customer-supplier relationship PRINCIPLE 1:

RECOGNITION OF STRATEGIC IMPORTANCE OF CUSTOMERS & SUPPLIERS: Every
organization must recognize that its customers and suppliers are absolutely crucial to its
success. Customers must be at the center of the organizational universe. Satisfying their
needs leads to repeat business and positive referrals, as opposed to one shot business and
negative referrals. Suppliers must also be considered crucial to organizational success,
because they make it possible to create customer satisfaction. PRINCIPLE 2: DEVELOP WINWIN RELATIONSHIP: Working together to increase the size of the pie, rather than competing
over how to divide it. The goal of building partnerships with customers and suppliers can be
seen as an extension of the teamwork principle that applies to all TQ activities. Fosters spirit
of continuous improvement, in which larger customers often help smaller suppliers develop
their quality management system and process capabilities. 56 Total Quality Service
Management

57. PRINCIPLE 3: ESTABLISH RELATIONS BASED ON TRUST: This point is described by

Juran as the pattern of collaboration. Trust is not a blind leap into the unknown; it is
developed over time through a pattern of success by all parties to fully and faithfully deliver
that which was promised. PRACTICES FOR DEALING WITH CUSTOMERS: 1. Collect
information constantly on customer expectations 2. To disseminate this information widely
within the organization, and 3. To use this information to design, produce and deliver the
organizations products and services. Collect Customer information Acquiring customer
information is critical to understanding customer needs and indentifying opportunities for
improvement. Getting employees involved in collecting customer information improves worker
skills and learning, makes work more meaningful, and enhances motivation. Monitoring
customer needs and wants using the process called the voice of the customer. A more formal
approach to collect customer information to getting into customers minds is called imprint
analysis. Imprint refers to the collection of associations and emotions unconsciously linked to a
word, concept, or experience. The stronger the emotions, the stronger the imprint. Disseminate
Customer information After all information is gathered about the customer needs, the next
step is to broadcast this information within the organization. Customer information must be
translated into the features of the organizations products and services. The bottom line of
quality customer supplier relations from the suppliers point of view: giving the customers
what they want. Translating customer needs into product features can be done in a structured
manner using quality function deployment (QFD) which allows people to see how aspects of
their products and services relate to customer satisfaction, and to make informed decisions
about how their products should be improved. The overall process of using information from
customers to provide quality products is summarized in figure 4.2. Customer needs and
expectations (Expected quality) Identification of customer needs Feedback Translation into
product/service specifications (Design quality) 57 Total Quality Service Management

58. Output (Actual quality) Customer perceptions (Perceived quality) Figure 4.2 customerdriven quality cycle Use Customer information Customer feedback should be integrated into
continuous improvement activities. For example, by listening to customers suggestions, e-mails
and so on. Manage customer relationships Builds customer loyalty by developing trust and
effectively managing the interactions and relationships with customers through customer
contact employees. In services, customer satisfaction or dissatisfaction takes place during
moments of truth every instance in which a customer comes in contact with an employee of
the company. Moments of truth may be direct contacts with customers representatives or
service personnel, or when customers read letters, invoices or other company correspondence.
Service standards are measurable performance levels of expectations that define the quality
of customer contact. Survive standards might include standards such as response time, or
behavioral standards. Dont ignore internal customers Internal customers contribute to the
companys mission and depend on the departments or functions products or services to

ultimately serve consumers and external customers. Each employee receives inputs from
others and produces some output to internal customers. The linkages among internal
customers build up the chain of customers and suppliers, throughout the company that
connect every individual and function to the external customers and consumers. What
customers want Delivering customer service begins with understanding what customers want.
And this understanding begins with the understanding that they do not always know what they
want, or why they want it. Traditional market research assumes that they do.1 Regardless of
how they arrived at their findings, most researchers agree on the factors listed in Table 2 What
customers want. Suppliers that meet these requirements are likely to give their customers a
satisfactory experience. 1 58 Total Quality Service Management

59. 59 Total Quality Service Management

60. FIGURE 1 What Customer Wants Source: Mason, Sean. Core Values Exercise. United
Communication Unlimited. [http://www.ucunlimited.com/ Category Description Friendly, helpful,
courteous Empathetic Knowledgeable, accurate, thorough Resourceful, empowered Able to
recommend solutions '''Good People Able to anticipate needs Efficient Trustworthy, authentic
Reliable Responsible Appropriate appearance and demeanor Good selection Good quality In
stock '''Good Offering Available demos Clear descriptions & pricing Competitive prices
Financing, deferred payments Convenient locations Long hours Available help, fast service
Signage that facilitates self-service Fast checkout '''Convenience Shipping/delivery Installation
Phone/web support On-site repair Hassle-free returns Quick resolution of problems Clean
Organized '''Good Environment Safe Low-pressure Energy level appropriate to clientele In a
competitive environment, however, satisfaction may not be enough. To stay in business, firms
must be at least as satisfactory as their competitors. Moreover, firms that aim to gain profitable
growth must increase the number of their customers, while reducing the cost of customer
acquisition. This is particularly true of companies that compete in mature industries. The
objective then is not merely to satisfy customers, but to convert them into promoters
(customers who recommend a company to others). Promoters serve to increase a firms
clientele, without increasing its cost of acquisition i.e. with no additional marketing or
promotional expense. 60 Total Quality Service Management

61. But customers do not make recommendations lightly. When they make a recommendation,
they put their own reputations on the line. Firms must earn that recommendation through the
consistent delivery of outstanding customer service.2 Benefits of customer service To take full
advantage of their employees skills as a key competitive weapon, managers must have a
people perspective. Organizations whose managers succeed in practicing effective people
skills as they carry out their primary business functions are most likely to engender satisfied
employees and repeat customers both of which are essential to sustaining a competitive
advantage into the 21st century.3 Table 6 shows the benefit of customer service. Beneficiary
Benefit Higher income (more sales, repeat business, referred business) Recognition Personal
satisfaction & fulfillment Less stress Providers Higher self-awareness and self-control Greater
authenticity Happier life at work Stronger social networks, family ties Happier life outside work
Organizations Quality sales (more add-ons, more service sales) More repeat business More
referred business Fewer returns Better reputation Higher morale, happier employees Lower
employee turnover Higher caliber of job applicants Fewer complaints Higher productivity Better
work environment 2 Mason, Sean. Core Values Exercise. United Communication Unlimited.
[http://www.ucunlimited.com/ 3 Frank M. Go. Et.al. Human Resource Management in the
Hospitality Industry. John Wiley & Sons, Inc. c1996. p3. 61 Total Quality Service Management

62. Higher inventory turnover Higher profits FIGURE 2 Benefit of Customer Service Adding
Value to Service The competitive success of any hospitality and tourism organization depends
largely on its capacity to deliver high quality, value added service, which, in turn, is
dependent on the performance of the organizations people. How people perceive value is a

function of their expectations and needs in combination with the products or services quality
and price. Because perceived value provides a mechanism for discriminating among the
services of competing organizations, consumers rely upon it as a means by which to simplify
their purchasing decisions. If for example, a consumer perceives value in a smoke-free
environment, he may be able to simplify his decision regarding where to spend the night by
eliminating from his set of possible choices all hotels that do not offer smoke free rooms. The
prescriptions for delivering value-added service may seem simple: To value for customers,
service improvements should be based on what customers perceived as important.4 Creating
value via service improvements requires teamwork among an organizations personnel. It often
requires training personnel throughout the organization in the new skills involved in delivering
better service. Delighting Customers It does not matter how much emphasis is put on
delivering good or excellent customer service; what matters at the end of the day is if people
and especially front-line people in an organization have the feelings, will and commitment to
serve the customers in a delightful way. It is said that ninety percent of unhappy customers do
not complain but they do tell at least ten people about their bad experience or inadequate
service. The Reason Customer Service Failed Gitomer (1998) discussed that why customer
service goes wrong. What happen to unsatisfied customer? We can find out it from a variety of
reliable research. 4 Frank M. Go. Et.al. Human Resource Management in the Hospitality
Industry. John Wiley & Sons, Inc. c1996. pp 3-4. 62 Total Quality Service Management

80% will do business with you again if their problem is handled quickly, and to their complete
satisfaction. When the incident is real bad and they leave, stories about what happened will be
retold for year. Also, here are the several basic reasons service is bad, which Gitomer (1998)
mentioned, Failure to start friendly- Give what you want to receive. The first few words set the
tone for the entire dialog. The single most important brick in the foundation of customer service
is "Friendly." It is also the least consistent element of the experience. Failure to say it in a way
that the customer wants to hear it - The first tendency of the front- line person is to make an
excuse or tell why something occurred. But thats the last thing the customer wants to hear.
Customers want answers started in terms of them and their needs. And that is rare or missing
from front-line communication. Companies allow employees to be rude to customers and tell
customers No.- When you deny a customer, their need still exists and they are mad. Then
you add to the fire by saying, Dont talk to me like that, sir. Or I dont have to take this. A
complaining customer is seen as a hassle rather than an opportunity. We are living in an era
of responsibility shirkers and blamers People do not want to take responsibility. It is not my
job is their credo. Responsibility takers are so rare that they often receive awards. Low
training budget priority. Big companies spend more money producing and airing one sixtysecond commercial than they will spend on a customer service program in a year. They spend
more money on lip service than customer service. Companies make the fatal mistake of
only providing company training and policy training.- They may provide some customer
training, but very few offer any personal development training such as positive attitude, goals,
listening, responsibility, pride, or communication skills. This is especially fatal for front-line
people. Companies only train once in a while instead of every day. - Fifteen to thirty minutes
of training a day will make any employee a world-class expert in five years. Concepts of
Customer Perception and Expectation 63 Total Quality Service Management 96% wont tell
you the real reason they left 91% customers who leave with angry feeling will never return to
your business 63.

64. Perceptions are frequently developed over a period and reflect the ways that we have been
treated, our values, priorities, prejudices and sensitivity to others. Two people could share with
same experience and then describe it differently. Unfortunately, perceptions are not
necessarily based on rational ideas and may be influenced by momentary frustration and
anger. It is important for the customer service staffs to anticipate customer resistance based on
the customers prior interactions and always to work at providing customers with excellent

service, so that their most current perception is a positive one. Customers may not remember
every detail of an experience, but they will retain an overall feeling about it. That feeling, in
combination with other experiences, will create their perception of company. It is hard to erase
customers negative perceptions that are based on their prior interactions, but what customer
service staffs can do is to show them, through their genuine action, that their perception is not
accurate. In addition, Harris (2000) explained expectations are our personal vision of the result
that will come from our experience. Expectations may be positive or negative. Expectations are
usually based on our perceptions. If customer last experience with a company was negative,
he may approach a new situation with the expectation that he will again be dissatisfied.
Expectations can be divided into two distinct categories: primary expectations and secondary
expectations. Primary expectations are the customers most basic requirements of an
interaction. For example, when staying at the hotel, customers primary expectations are to
clean room, excise room and amenities, to someone else clean the room, and pay a
reasonable price. Secondary expectations are expectations based on customers previous
experiences and represent enhancements to their primary expectations. That is to say, when
staying at the hotel, their secondary expectations include good service, courtesy, prompt
service and good, tasty food. Consequently, guest experienced bad customer service in hotel;
he will not expect to get good service again and may not return to same hotel. Factors
influencing expectations from Zeithaml, Parasuraman and Berrys (1990) focus group result
are: First, what customers hear from other customers-word-of-mouth communications is a
potential determinant of expectations. For instance from focus-group findings, several
respondents in product- repair focus groups indicated that the high quality of service they
expected from the repair firms they chose stemmed from the recommendations of their friends,
neighbors and associates. In addition, Gitomer (1998) said it is estimated that more than 50%
of American business is based on this word-of- mouth ad form. If the experience was good, the
customer may not proactively say something, but if the experience was bad, she or he will
bring up the story in the first 5 minutes of a conversation. For instance, if a friend who will go to
business trip asked which hotel is good for staying, how will we recommend it? Here is
example: A referral Radission Hotel is the greatest Nothing Well, I do not know, they are
all about the same or, A reverse referral Anyplace but Radission hotel If we had bad
experience, we might talk about all of bad experience repeatedly. Second, personal needs of
customers might moderate their expectations to a certain degree. For example, in the credit
card focus groups, while some customers expected credit card companies to provide them with
the maximum possible credit limits, other customers wished that their credit card companies
were more stringent than they were. Third, the extent of past experience with using a service
could also influence customers expectation levels. Their research findings told us that more
experienced participants in the securities- brokerage focus groups seemed to have somewhat
lower expectations regarding brokers behavioral attributes such as friendliness and politeness;
however, they appeared to be more demanding with respect to brokers technical competence
and effectiveness. 64 Total Quality Service Management

65. Fourth, external communications from service providers play a key role in shaping
customers expectations. Under external communications, we include a variety of direct and
indirect messages conveyed by service firms to customers: a banks print advertisement
promising the friendliest tellers in town, a television commercial for a credit card touting its
acceptability around the world, a repair firms receptionist guaranteeing the arrival of a service
representative at an appointed time, advertising from pizza place delivering within 30 minutes
and money back guarantee, hotels 100% guest satisfaction guarantee advertising. Guarantee
come back when they might not have, and positive word of mouth from the customers who
invoke the guarantee attract still more customers. Exercise NO. _____ Quality in Customer
Supplier Relationships Name _____________________________ Course & Year
_______________________ Subject time/Day ____________________ Date:
_____________ Instructor________ The Case of missing reservation Mark, Donna, and their

children, along with another family, traditionally attend Easter brunch at a large downtown
hotel. This year, as in the past, Donna called and made a reservation about three weeks prior
to Easter. Because half the party consisted of small children they arrived 20 minutes prior to
the 11:30 reservation to assure being seated early. When they arrived, however, the hostess
said that they did not have a reservation. The hostess explained that guests sometimes fail to
show that she would probably have a table available for them before long. Mark and Donna
were quite upset and insisted that had made a reservation and expected to be seated
promptly. The hostess told them, I believe that 65 Total Quality Service Management

66. you made a reservation, but I cant seat you until all the people on the reservation list are
seated. You are welcome to go to the lounge for complimentary coffee and punch while you
wait. When Mark asked to see the Manager, the hostess replied, I am the manager, and
turned to other duties. The party was eventually seated at 11:45, but was not at all happy with
the experience. The next day, Mark wrote a letter to the hotel manager explaining the entire
incident. Mark was in the MBA program at the local university and was taking a course on total
quality management. In the class, they had just studied issues of customer focus and some of
the approaches used at the Ritz Carlton Hotel, a 1992 Baldrige Award winner. Mark
concluded his letter with the statement, I doubt that we would have experience this situation at
a hotel that truly believes in quality. About a week later, he received the following letter: We
enjoy hearing from our valued guests, but wish you had experienced the level of service and
accommodations that we strive to achieve here at our hotel. Our restaurant manager received
your letter and asked me to respond as Total Quality Lead. Looking back at our records we did
not show a reservation on the books for your family. I have addressed your comments with the
appropriate department head so that others will not have to experience the same
inconveniences that you did. Thank you once again for sharing your thoughts with us. We
believe in a philosophy of continuous improvement, and it is through feedback such as yours
we can continue to improve the service to our guests. Discussion questions: 1. Were the
hostesss actins consistent with a customer-focused quality philosophy? What might she have
done differently? 2. How would you have reacted to the letter that Mark received? Could the
Total Quality Lead have responded differently? What does the fact that the hotel manager did
not personally respond to the customer tell you? CHAPTER 5 DESIGNING ORGANIZATIONS
FOR QUALITY Not many people really do know how to design an organization that is not a
machine. Charles Handy (1932 - ) Irish-born British management educator and writer. Strategy
and Business, Interview OBJECTIVES: Describe the functional structure, the most common
structure used at the business unit level; Show how many aspects of the functional structure
stand in the way of quality and what changes are necessary to create organization structures
that support TQ; Compare organization design from a TQ point of view to more conventional
perspectives. Organizational Behavior 66 Total Quality Service Management

67. The way in which individuals and groups act in the organization and the influences on
these actions and behavior patterns. Takes account of peoples attitudes and beliefs and tries
to examine the reasons for them. Emphasis is on the impact of individual and group behavior
on the organization and vice versa. The Main Influences on Organizational Behavior
Organization Climate External influences (i.e., family, Organization culture background, etc.)
Motivation Management style Group norms Organization structure Processes Elements
Common in Organizations A common purpose Processes for coordinating activities Some
kind of structure People carrying out distinct roles Classifications of Organizations: A.
According to Type of AUTHORITY (By Weber) 1. Traditional Organization where authority is
established by custom and long standing and unquestioned belief. (e.g. monarchy) 2.
Charismatic Organization where authority is derived from the outstanding personal qualities
of the leader. 3. Bureaucratic Organization where authority is based on the acceptance of
formal rules and procedures. (e.g. military) B. In terms of the MAIN BENEFICIARY (BY: Blau &
Scott) 1. The Rank and File Members - Mutual benefit 2. The Owners or Managers - Business

3. The Public who have contact with the organization - Service 4. The Public in general Commonwealth C. In terms of POWER and INVOLVEMENT (By: Etzioni) POWER in terms
of how it is exercised values and beliefs of those exercising power (e.g. church) in the
organization INVOLVEMENT the individuals Commitment Three Types of Power: to the
organization 1. Coercive Power relies on the use of threats or sanctions to Three types of
Commitment: enforce control, (e.g. prison) 1. Alienative where members 2. Remunerative
Power relies on are forced to accept the use of rewards and control involvement of resources
(e.g. commercial 2. Calculative where the enterprise) members participate because 3.
Normative Power relies on of the rewards available to the acceptance of the norms, them. 67
Total Quality Service Management

accountability FORMS OF ORGANIZATION: 1. LINE ORGANIZATION Clear delineation of

line authority from direct superior to direct subordinates 2. LINE authority Responsibility
Knowledge spread throughout the organization. ORGANIZATIONAL DESIGN AND
STRUCTURES Basis for Establishing Organizational Relationships Network of structure and
control, authority and communication Constant redefinition of jobs Jobs are determined by
the organizations overall objectives Specialized knowledge and experience which contribute
to the overall objectives. Definite hierarchy for controlling work and decision making 2.
Organismic Structures (appropriate to changing conditions) Precise definitions of tasks and
how these are carried out Clear differentiation between specialized tasks 68. 3. Moral
where the members are committed to the goals and values of the organization. D. In terms of
MANAGEMENT STURCTURES (BY:Burns and Stalker) 1. Mechanistic Structures
(appropriate to stable conditions) & STAFF FUNCTION Wider scope of work with multi-level
departmentalized tasks structures 3. FUNCTIONAL ORGANIZATION Organized according to
the nature & Managers in functional organizations are usually rewarded for satisfying
functional goals, such as meeting design deadlines and limiting manufacturing costs, rather
than for providing value to customers. 2. the functional structure inhibits process improvement
68 Total Quality Service Management If chained ended at the customer, the structure might
work, but this is generally not the case. Functional structure promotes the idea that ones
boss is the customer whom the employee must satisfy. Of course, this manager is trying to
satisfy the next-level manager, and so on. The functional structure tends to insulate
employees from learning about customer expectations and their degree of satisfaction with the
service or product the firm is providing. types of work functions in an organization THE
FUNCTIONAL STRUCTURE: Problems with the structure: 1. The functional structure
separates employees from customers

This process involves a large number of functions because the breakup of the organization
into functions is usually unrelated to the processes used to deli69. Holds the organizations
try to succeed by creating structures that will be seen as appropriate by important external
constituencies customers, other organizations in the industry, government agencies, and so
on. __________________________________________________________________
___________ Exercise NO. _____ Designing Organization for Quality 69 Total Quality Service
Management Based on the assumptions that organizations choose structures to help them
perform better provide high quality, lower costs, and so forth. Organic (decentralized, few
rules, loose division of labor, informal coordination across departments) Institutional Theory:
Mechanistic (centralized, many rules, strict division of labor, formal coordination across
departments) Process Management involves the design of processes to develop and deliver
products and services that meet the needs of customers, daily control, so that they perform as
required, and their continual improvement. COMPARISON TO ORGANIZATIONAL DESIGN
THEORY: Structural Contingency Theory: Originated in the 1960s; two principal types of
organization structures: Support process is critical to the operation of a business, but
generally do not add value directly to a product or service. Core process drive the creation of

products and services, are critical to customer satisfaction, and have a large impact on the
strategic goals of the organization. Process owners are accountable for process performance
and have the authority to manage and improve their process. Process is how work creates
value for customers. Focus on Processes Organizations pursuing TQ often retain their
quality assurance departments, rather than as the group with primary responsibility for quality.
REDESIGNING ORGANIZATIONS FOR QUALITY The QC department is generally
responsible for collecting and maintaining quality statistics, which may not seem as valid to the
departments actually doing the work. The organization that there is a group dedicated to
quality This structure is likely to create complex, wasteful processes, as people do things in
one area that must be redone or undone in another. 3. Functional organizations often have a
separate function for quality; called Quality Control or Quality Assurance ver a product to the
customer.

70. Name _____________________________ Course & Year _______________________

Subject time/Day ____________________ Date: _____________ Instructor________ The
State University Experience Wow! That State University video was really cool. It has lots of
majors; its close to home so I can keep my job; and Mom and Dad loved it when they visited. I
wish I could know what its really like to be a student at State. Hmmm, I think Ill ask mom and
dad to take a campus tour with me.. Im sure that we took our tour on the hottest day of the
summer. The campus is huge it took us about two hours to complete the tour and we didnt
even see everything! I wasnt sure that the tour guide knew what he was doing. We went into a
gigantic lecture hall and the lights werent even on. Our tour guide couldnt find them so we had
to hold the doors open so the sunlight could come in. About three fourths of the way through
our tour, our guide said, State University isnt really a bad place to go to school; you have to
learn the system. I wonder what he meant by that? This application is really confusing. How
do I let the admissions office know that I am interested in physics, mechanical engineering, and
industrial design? Even my parents cant figure it out. I guess Ill call the admissions office for
some help Im so excited! Mom just handed me a letter from State! Maybe theyve already
accepted me. What? Whats this? They say I need to send my transcript. I did that when I
mailed in my application two weeks ago. Whats going on? I hope it wont affect my application.
Id better check with Admissions.. You cant find my file? I thought you were missing
only my transcript. I asked my counselor if she had sent it in yet. She told me that she sent it
last week. Oh, youll call me back when you locate my file? OK.. Finally, Ive been accepted!
Wait a minute. I didnt apply to University College; thats a two year program. I wanted
physics, M.E., or industrial design. Well, since my only choice is U. College and I really want to
go to State, I guess Ill send in the confirmation form. It really looks a lot like the application. In
fact, I know I gave them a lot of the same information. I wonder why they need it again. Seems
like a waste of time.. Orientation was a lot of fun. Im glad they straightened out my
acceptance at U. College. I think I will enjoy State after all. I met lots of other students. I saw
my advisor and I signed up for classes. All I have left to do is pay my tuition bill. Whoops. None
of my financial aid is on this bill. I know I filled out all of the forms because I got an award letter
from the state. There is no way my parent and I can pay for this without financial aid. It says at
the bottom, Ill lose all my classes if I dont pay the bill on time. Im not confirmed on the
computer? I sent in my form and the fee a long time ago. What am I going to do? I dont want
to lose all of my classes. I have to go to the admissions office or my college office and get a
letter that says I am a confirmed student. OK. If I do that tomorrow, will I still have all of my
classes?...... I cant sleep; Im so nervous about my first day.. 70 Total Quality Service
Management

71. DISCUSSION QUESTIONS 1. What breakdowns in service processes has this student
experienced? How might these be a function of organizational design? 2. What types of
process management activities should State University administrators undertake? Chapter 6
TOTAL QUALITY & ORGANIZATIONAL CHANGE Every organization of today has to build

into its very structure the management of change. Peter Drucker (1909 - 2005) Austrian-born
U.S. management consultant. Post-capitalist Society Psychologists suggest that individuals go
through four stages of learning. Quality-related changes in organization structure and
employee responsibilities are discussed in other chapters. This chapter will: Explain the
importance of organizational change to TQ; 71 Total Quality Service Management

Reengineering o The process by which the organization operates are examined and
redesigned to provide higher quality at lower cost. Why Organizational Change is Necessary:
Triggering Conditions: 1. Unstable and unpredictable world economic environment 2. Speed in
technological advancement that hastens product obsolescence 3. Rise of information
technology and cybernetics shifting competition towards intelligence, networking and strategic
alliances. 4. Capital rationing based on quality and security of investment returns. 5.
Competitive advantage derived from lower cost and speed of reaction to changing markets 6.
Move towards flatter, leaner organizations 7. Doing more of the same no longer works The
Need to Change: When to Jump the Curve: When the Organization. 1. Diminishes in its
uniqueness or satisfaction of relevant needs. 2. People need to operate more effectively 3. Is
financially threatened 4. Must redefine its objectives, polices and structures. 5. Must eliminate
traditional roles, procedures, products and services. 6. Must create new roles, procedures,
products and services 7. Must acquire new Needed in implementing TQ Organizational
learning Organizations can't change without people changing first Importance of Change
Breakthrough improvement Continuous improvement Cultural change 72. Identify the
types of changes necessary for quality; Provide examples of firms undertaking these
changes, and; Explain how TQ perspective on organizational change relates to organization
theory. Types of change Differing assessment - conflicting agreement over the value of the
benefits associated with the change 72 Total Quality Service Management Self-interest conflicting personal priorities Cultural pressure - some who may want to change are held
back by others in the organization Misunderstanding - benefits not properly understood
Surprise - proper groundwork has not been done so people are caught off guard (need for
change not established) Timing - conflicts with other initiatives and/or priorities Inertia comfort with the status quo technology, specialization and markets. Resistance to change

The commonly held and relatively stable beliefs, attitudes and values that exist within the
organization reflected as the organizations way of corporate existence. CULTURAL CHANGE:
NATURE AND FORMATION INTERACTION People join organizations bringing their own set
of values, attitudes and beliefs Values, attitudes CORPORATE CULTURE Sum total of the
knowledge, beliefs, attitudes, values, practices and behavioral patterns commonly held by
members of the society and transmitted from one generation to another. way of life of a
given group of people first used in the 19th century by social anthropologists; a set of
beliefs and values shared by the people in an organization CULTURE 73. CULTURAL
CHANGE: NATURE AND FORMATION & beliefs commonly held/shared are: reinforced &
Organizational values are beliefs and ideas about what kinds of goals members of an
organization should pursue and ideas about the appropriate kinds or standards of behavior
organizational members should use to achieve these goals. From organizational values
develop organizational norms, guidelines or expectations that prescribe appropriate kinds of
behavior by employees in 73 Total Quality Service Management Organizational culture is the
specific collection of values and norms that are shared by people and groups in an
organization and that control the way they interact with each other and with stakeholders
outside the organization. perpetuated; No common ground: Modified, submerged, or
discarded. Therefore, with or without conscious efforts, Corporate Cultures do exist in any
given organization.

Kaizen was first implemented in several Japanese businesses during the country's recovery
after World War II, including Toyota, and has since spread to businesses throughout the world.

74 Total Quality Service Management Japanese for "continuous improvement" is a Japanese

philosophy that focuses on continuous improvement throughout all aspects of life. When
applied to the workplace, Kaizen activities continually improve all functions of a business, from
manufacturing to management and from the CEO to the assembly line workers. By improving
standardized activities and processes, Kaizen aims to eliminate waste. Process change o
Organizational changes resulting from operational assessment activities Table 6.2 Strategic vs.
Process change STRATEGIC PROCESS PROCESS CHANGE Theme to change Shift in
organizational Adjustment of direction organizational processes Driving force Usually
environmental Usually internal How can forces market, rival, we better align our
technological change processes? How much of the Typically widespread Often narrow
divisional or organization changes? functional Examples Entering new markets Improving
informational Seeking low-cost position systems Mergers and acquisitions Establishing hiring
guide CONTINUOUS IMPROVEMENT Kaizen Strategic Change o Organizational changes
resulting from strategy development and implementation Change the measurement and
information systems. STRATEGIC CHANGE vs. PROCESS CHANGE Make sure everyone
spends at least one hour a week working on quality issues. Use of existing organization to
implement TQ Make involvement in TQ a required part of peoples responsibilities. 74.
particular situations and control the behavior of organizational members towards one another.
(Strategic Management, Charles W. L. Hill, Gareth R. Jones, Fifth Edition, 2001 Houghton
Mifflin, MeansBusiness, Inc.) Making the New Culture Permanent

Also referred to as "best practice benchmarking" or "process benchmarking", it is a process

used in management and particularly strategic management, in which organizations evaluate
various aspects of their processes in relation to best practice, usually within their own sector.
This then allows organizations to develop plans on how to make improvements or adopt best
practice, usually with the aim of increasing some aspect of performance. Benchmarking may
be a one-off event, but is often treated as a continuous process in which organizations
continually seek to challenge their practices. Benchmarking, originally invented as a formal
process by Rank Xerox, is usually carried out by individual companies. Sometimes it may be
carried out collaboratively by groups of companies (eg subsidiaries of a multinational in
different countries). 75 Total Quality Service Management Benchmarking is the process of
comparing the cost, time or quality of what one organization does against what another
organization does. The result is often a business case for making changes in order to make
improvements. Result from innovative and creative thinking; often these are motivated by
stretch goals, or breakthrough objectives. Benchmarking: Refers to discontinuous change,
as opposed to the gradual, continuous improvement philosophy of kaizen. Kai means
literally; change (kai) to become good (zen) The foundation of the Kaizen methods consists of
5 founding elements: 1. Teamwork 2. Personal discipline 3. Improved morale 4. Quality circles,
and 5. Suggestions for improvement. Breakthrough improvement Key elements of Kaizen
are quality, effort, involvement of all employees, willingness to change and communication.
75.

76. Classification of Benchmarking 1. Competitive benchmarking focus on the products and

manufacturing of a companys competitors. 2. Generic Benchmarking evaluates processes or
business functions against the best companies regardless of their industry. Types of
benchmarking Process benchmarking - the initiating firm focuses its observation and
investigation of business processes with a goal of identifying and observing the best practices
from one or more benchmark firms. Activity analysis will be required where the objective is to
benchmark cost and efficiency; increasingly applied to back-office processes where
outsourcing may be a consideration. Financial benchmarking - performing a financial analysis
and comparing the results in an effort to assess your overall competitiveness. Performance
benchmarking - allows the initiator firm to assess their competitive position by comparing
products and services with those of target firms. Product benchmarking - the process of

designing new products or upgrades to current ones. This process can sometimes involve
reverse engineering which is taking apart competitors products to find strengths and
weaknesses. Strategic benchmarking - involves observing how others compete. This type is
usually not industry specific meaning it is best to look at other industries. Functional
benchmarking - a company will focus its benchmarking on a single function in order to improve
the operation of that particular function. Complex functions such as Human Resources,
Finance and Accounting and Information and Communication Technology are unlikely to be
directly comparable in cost and efficiency terms and may need to be disaggregated into
processes to make valid comparison. The Benchmarking Process : The five process stages
are as follows. 1) Determine what to benchmark. The purpose of this step is to define what the
organi Defining the customers for benchmarking information. This is the first step in
determining what to benchmark. To define the customers or users of the benchmarking
information one simply has to think of answers to the following questions: who is requesting the
information? and who will be using it.? If one does not know who will be using the information,
one will suffer from trying to find the information because one does not know whom this
information will be serve. Therefore, the purpose of benchmarking might be blurring and later
will lead to failure of the process. 76 Total Quality Service Managementzation wants to
benchmark. After the organization defines it, it will allocate the resources required to conduct
benchmarking. The process can be described in the following steps:

By answering these three questions, one will discover the resources that are available to
support ones process of benchmarking. Actually, the challenge of this stage is to identify
benchmarking partners that will provide useful information to your benchmarking process. 77
Total Quality Service Management Develop a benchmarking information network. Information
obtained is a resource that has a limited period of time in which one can use it to make a
reasonable decision. Although the information one collects fills a specific short-term need,
these referent documents and individuals that one use to collect benchmarking information
should be consider a potential long-term resource. If one develops a benchmarking information
network from these resources, the time required to find information is reduced. The process of
collecting information for benchmarking will be easier. Identify information resource. This step
can be easily implemented by asking three questions : (a) Who produces the information I
want? (b) Who else uses the information I want? (c) Who accumulates the data I want? Ad
hoc teams. This type of team represents the flexibility of forming a team. An ad hoc team can
be formed by any number of employees who share the same interests or responsibilities, which
brought them together to do a benchmarking investigation. 3) Identify benchmarking partner.
Identify the information sources that the company will use to collect the benchmarking
information and pick the industry with the best practices. The focus of this stage is on
information. There are five steps toward identify benchmarking partner as follows: Crossfunctional, interdepartmental, and inter-organizational teams. These types of teams are
brought together to work on a specific assignment. Members of the team are been selected to
represent their departments, locations, or divisions. Intact work groups. These group
members are usually located in a single location reporting to a common manager. The
manager may or may not play the role of the team leader; usually every member participates
as a benchmarking team member. These groups are often the customers of their own
benchmarking process. Identifying critical success factors. The last step of this stage is to
identify the factors that will have the greatest impact on the performance of ones organization.
Benchmarking will have the greatest impact to organizational performance when it has applied
on the bottom-line results of business. 2) Form a benchmarking team. Like other change
methodology, benchmarking should be conducted in a team effort activity. Specify roles and
responsibilities for each team member. In general, there are three types of benchmarking
teams that can be formed as defined by their structure and reporting relationships (Spendolini,
1992). Determining customer requirements for benchmarking information. The second step
toward this stage is to determine the information requirements of ones benchmarking

customers. A thorough understanding of users helps avoid the wasted effort of gathering
useless information. 77.

Presenting finding to benchmarking customers 78 Total Quality Service Management

Producing a benchmarking report This is one of the major tasks of the benchmarking team.
The report will serve several purposes including: a report to be delivered to the benchmarking
customers, a summary of data that were collected and analyzed, a record of the organization
benchmarked and key project contacts, and a communications product for other internal
employees and functions After the information has been collected and summarized, the next
step is data analysis. The steps toward information analysis are (1) check for misinformation,
(2) identify the patterns of the data, (3) identify omissions or displacement, (4) check for data
that do not fit, and (5) draw conclusions. 5) Take Action. In this stage, all actions that are
required to change the process that the company chose to benchmark are implemented. These
actions may include making recommendations, conducting a report or preparing a presentation
to apply to the process. Analyze information. The step can be done by (1) writing an outline
of the information, (2) put information in comparing matrix of each company, (3) analyze matrix
and the collected information in phases, and (4) summarize all data. Organize information.
The step of collection information can be done by many ways such as telephone interviews,
personal meetings, site visits, surveys, publications, media and archival research. Collect
information. Selecting benchmarking partner(s). This step is to collect background
information about the potential partners and decide which of these potential partners one will
select as benchmarking partner(s). 4) Collect and analyze benchmarking information. In this
stage, the company collects and analyzes the information. Also, in this stage recommendations
are made for later action. Identify potential benchmarking partners. Potential benchmarking
partners might not have to be best-in-class or world class. They can be only best-in-the local
area when the company draw the line to benchmark with companies located in the same area.
Benchmarking with these companies can be as good as benchmarking with the world class
companies, thus one can also save the company resources. Design list of benchmarking
partner criteria. The list of criteria should express the requirements an ideal benchmarking
partner should satisfy, and can cover most of the issues. These issues are such as
geographical location, size, structure and organization, products and technology. The criteria
might seem to carry away when the company has list too many variables and forget to focus on
important issues. Therefore, the company should assure that all criteria set forward are
relevant. 78.

The above model is generic in nature. However there is no assurance that the same process
model will work for all sectors of business in all organizations. Very often organizations will
have to develop their own models, which are likely to suit their specific style of functioning.
Figure 3. The five-stage benchmarking process. (Spendolini, 1992 Overall, benchmarking is
not a one-time change methodology. The arrows in the Figure 3 show that effective
benchmarking is a continuous process. Therefore, an organization would have to be aware of
what is out there, and be able to improve their process in order to be able to compete with
others. Benchmarking is required time like other changing methodologies. Once one has
started it, one has to make sure it has been carried out through the timing period that has been
plan leads to successful of benchmarking. Seeing the project through Identifying possible
product and process Improvements This step is taking the action of what the company has
been planned. 79. This step might be provided upon customers request. This step offers an
opportunity to expand the audience for the benchmarking findings and stimulate action for
changes. For example A ten-step model is not necessarily better than a 4-step model. Its very
essential that the model have clarity. The best measure of a process models level of clarity is
peoples ability to describe it to others including their ability to explain why each part of the
process is important to the process user. Another aspect of the clarity criterion is the listeners
ability to understand the process and translate it into action. 79 Total Quality Service

Management The process model should be as simple as possible. There is no need to add
stages to the process model just for the sake of numbers. , p. 48) Requirements of a
successful benchmarking model (Spendolini, 1992) There are some guidelines for developing
a benchmarking model: 1) Follow a logical simple sequence of activity

The benchmarking process must be consistent within the organization. Although there should
be some flexibility in any process to accommodate some level of variation, there is no need for
a unique benchmarking process model for every department, division or location. Figure 4. The
benchmarking approach (http://www.metabpr.com/ben-mark.htm) 80 Total Quality Service
Management Benchmarking is a process that produces information as a product. Successful
benchmarking organizations treat the benchmarking information product just as they would any
other type of product. The product must meet customer requirements. 4) Make it a generic
model. Heavy emphasis has to be laid on planning and organizing the activities that occur
before any actual contact is made with a benchmark partner. The types of activities included in
this part of the process involve developing a clear understanding of the benchmarking
customer requirements, procuring adequate resources to enable the benchmarking team to
fulfill its mission, selecting and briefing members of benchmarking teams, using effective
project planning and techniques and establishing appropriate benchmarking protocols that
define expected behaviors toward benchmark partners. 3) Use customer focused
benchmarking. 80. 2) Put a heavy emphasis on planning and organization