Running Head: Managing Quality: Eccotemp

A Study in Managing Quality in the Business Environment: Eccotemp

Xxxxxx Xxxxxxxx
Xxxxxxx Xxxx Xxxxxxx University

Managing Quality

Abstract
The purpose of this paper is to discuss Quality Management in the business environment. More
specifically, a particular experience that the writer had involving a water heater purchased from
an energy efficiency company that specializes in tankless water heaters. In discussing this
experience, the writer will touch on all the critical elements put forth by the course rubric while
suggesting change implementation.

Managing Quality

Company Background and History

Eccotemp is a manufacturer of tankless water heaters and other energy efficient products
for home use. They are mainly powered by electricity, liquid petroleum, or natural gas. Eccotemp
is located outside of Charleston, in Summerville, South Carolina, and was founded by Mike
Elrod in 2004 with the intent of bringing small, affordable tankless water heaters into regular
homes that cost about the same as a standard heater. Today, their products can be found in over
2,000 retailers around the world, including the US and Canada, South America, Australia and the
Middle East. (Eccotemp, 2015, para. 1-4)

Description of Quality Issue

After owning an Eccotemp tankless water heater, we experienced a design flaw where the
internal pipe heater was placed too close to the plastic motherboard housing. In normal
conditions the use was minimal enough that it didnt become an issue, but this winter was
particularly hard, and the flaw ended up becoming a fire hazard. Luckily, an error code came up
before we had an actual fire. However, upon removing the front cover of the equipment, we
discovered the heating element had already melted a corner of the motherboard as well as the
housing case that the motherboard resides in, making the quick clips for motherboard removal
nearly impossible to use.

Quality Culture
There are seven major elements to an effective quality culture; consistency, usefulness,
learning, truthfulness, utilitarianism, respect, and empowerment. (Powell, 2011, para. 4) I cannot
speak for all of these in regards to the physical product. It is indeed a highly useful product, but
where the company is lacking is in the customer service of some of its managerial staff, (see
below) and in its refusal to be even slightly flexible in policies. This rigidity of protocol is quite
ineffective when building the customer relationship, consequently damaging valuable word of
mouth advertisement. Still, the company maintains a B+ average with the Better Business
Bureau. (BBB, 2015, para. 1)

Voice of the Customer

We worked with a customer service representative who was as friendly and helpful as she
could be, followed by an extremely unfriendly and unhelpful manager. After a lot of headacheinducing conversation with this manager, they were only willing to inspect the heater if we paid
our technician to uninstall the heater and paid to ship it to them. They would then spend one to
two days to have the product evaluated by an in-house technician. If they agreed it was a
warranty related item, they would repair or replace the product and mail it back to us via ground

Managing Quality

mail- at which time we would have to pay our technician again to re-install the product. This is
not acceptable business practice. If, however, they felt that it was not a warranty issue, they
would contact us regarding payment of repair and inspection. With all out of pocket expenses
added in, the repair job would cost over 155% of a new product. Again, this is not acceptable
business practice.

Change Management Proposal

While we as customers definitely felt trivialized and insulted by the company manager,
we feel some remedial customer service training would be best suited for the situation. To fix the
product itself we strongly and politely suggest separating the heat pipe from the plastic
motherboard casing a bit better, and securing it in place better as well. Lastly, for the warranty
process, we feel it would be infinitely more effective, not to mention satisfying to customers if
the company maintained a database of technicians local to at least the major American metros
that would be authorized to come on site, diagnose, and repair without removal or mailing of
such a heavy and important product for the home. They could be independent contractors that are
paid a per-use fee by the company, or the company could align with a national organization
that would allow them national technician usage of some sort. Some of Demings 14 points for
management would apply here; for example, Constantly Improve the System, Institute Training
on the Job, and Improve Leadership. (Foster, 2013, pg. 30) These three points would incorporate
the changes I have discussed above quite effectively.

Quality Theories
Implementing a registry of localized technicians for servicing would require considerable
initial setup and in the long term could potentially cost slightly more than in-house specialist
technicians, but would lead to a much shorter repair turnaround time and much more satisfied
customers. Retraining rude and insulting managers to be more effective in customer service (as
compared to terminating employment) would show the employees that the company cares and
wants to see employees do their absolute best; that theyre not only interested in the profit
margin. We dont know the events that led up to our incident with the manager; perhaps he was
feeling angry and even resentful at the company and didnt mean to direct his frustrations at the
customer.

Quality Tools and Techniques

As discussed above, training and customer relationship management would benefit some
of the management team at this company. In addition, benchmarking would allow the company
to network and find dynamic ways to have local technicians make house calls on their
equipment. The company could use a Histogram to track when customers reported being
dissatisfied with their service experience when interacting with management and call center
representatives. That would enable the company to detect trends; whether the unhappy callers all
spoke with the same member of management or if there was another unknown factor they shared.
In addition, a Check Sheet could be used not only to determine the most frequently reported

Managing Quality

faults, but they could even use a Pareto chart to show the surrounding factors pertaining to the
reported faults. (7 Quality Tools, Para. 1-3)

Implementing Change
The registry of localized technicians I discussed above would take considerable time,
money and effort to initially set up. Regardless, this would cut their work order turnaround time
exponentially and raise customer opinion of the company considerably as well. This would in
turn have a strong benefit for word of mouth advertisement. Moving the heating element away
from the motherboard slightly would only require a small modification to the design of the
product. A brief study into the effects of the change followed by structured implementation of the
change would see a considerable drop in maintenance calls, and as a result, more satisfied
customers.

Expected Outcomes
While I dont expect much of anything to happen to the manager, I do hope that the
company can at least look into alternatives instead of the customer mailing the heavy (and
therefore expensive) product and the customer paying a technician to install and uninstall it as
well. Also, a simple modification to the product design as discussed earlier would reduce
maintenance calls considerably as well- further saving the bottom line. Flexibility and ability to
change and grow is critical for any business that wants to compete in todays fast paced, digitally
connected marketplace.

Managing Quality

Research

American Society for Quality (ASQ) (2012). The 7 Basic Quality Tools for Process
Improvement. Retrieved from
http://asq.org/learn-about-quality/seven-basic-quality-tools/overview/overview.html
Better Business Bureau. (2015). BBC Business Review for: Eccotemp Systems LLC.
http://www.bbb.org/columbia/business-reviews/water-heater-tankless/eccotemp-systems-insummerville-sc-34013018 (material will be added on final)
Eccotemp. (2015). About Us. Retrieved from
http://www.eccotemp.com/about
Foster, S. Thomas. (2013). Managing Quality, Integrating The Supply Chain, 30-33.
Powell, W. (2015). 7 Essentials For A Quality Culture. Retrieved from
http://www.theleadershipadvisor.com/blog/2011/08/16/7-essentials-for-a-quality-culture/