What do we mean by total service quality
Perspectives
Total service quality
management
V. John Peters
The author
V. John Peters is Editorial Director of this journal and with
Livingstone Bell & Associates, Calgary, Canada.
Keywords
BPR, Service quality, Supply chain, TQM
Abstract
The purpose of this paper is to discuss service quality and
total quality management as a business strategy designed
to add value to customers. It begins by discussing the roots
of quality assurance and total quality management, TQM,
discusses BPR and supply chain management, and argues
for a “moments of truth” analysis approach to delivering
service quality.
Managing Service Quality
Volume 29 · Number 1 · 1999 · pp. 6–12
© MCB University Press · 0960-4529
6
management (TSQM)? It is an important
question, because people use terms like
TQM, but are not always talking about the
same things. We could ask a more fundamen-
tal, more philosophical question and say –
what do we mean by quality? What is quality?
There is an old saying that “beauty is in the
eye of the beholder”. That means, what is
considered beautiful is judged so by the per-
son making the judgement, based on his or
her likes and dislikes, social conditioning,
social norms, parents and upbringing, sur-
rounding culture and so on. What is beautiful
to one person may not be beautiful to another.
Like beauty, can we say that quality is in
the eye of the beholder, or the mind of the
consumer? Is there such a thing as a universal
definition of quality, where all people at all
times would recognize it? Most people would
say there is no universal definition. Quality, to
a great degree, is what the customer says it is.
How could we know whether we give service
which is judged 100 percent satisfactory by
100 percent of our customers? By making the
judgement ourselves? No. We would have to
ask, observe, find out from the customers
themselves, see whether they recommended
us to others and so on. Quality of service
arises from the service encounter itself. As if
we needed reminding, a focus on the cus-
tomer is the key to delivering TQSM.
To answer our service quality question in
more depth, we will take a short look at the
roots of quality management in organizations.
The roots of quality
Quality management came from two ideas
about how to run organizations better.
The first was, as introduced above, about
customers. If we can figure out what it is our
customers like, and deliver it the same every
time, our customers will come back to us, tell
others about us, and we will become more
successful. We can think about quality in this
way as reliability – you know what you are
going to get – and replicability – we can repro-
duce it so it is the same every time.
The second impetus behind the quality
management movement was about efficiency.
If we can figure out the most efficient way to
produce a product or service, and stop wast-
ing time, materials, replacing broken-down
goods or delivering unsatisfactory services –
we will be more successful. Quality, under this
 Total service quality management
V. John Peters
mindset, is about simplicity and designing out
potential mistakes. Why simplicity? Because
the simpler a service or production process is,
and the simpler the surrounding and support-
ing processes, the more likely they are to be
right. Why designing out mistakes? Because
once a mistake is made, it tends to be expen-
sive and difficult to rectify. If we have an
inherently complex service process, we are
best off trying to design it so mistakes are less
likely to occur, rather than trying to catch
them when they do. You cannot inspect quali-
ty in at the end of a process but you can design
it in from the start.
The clearest antecedent of the modern
quality management movement is Eli Whit-
ney, the US armaments manufacturer, who,
in the nineteenth century, made his weapons
the product of choice for the US army by
being both cheaper and more reliable than
any other manufacturer. As well as having a
cheaper price and a more reliable product, he
also made more profit. How did this best-of-
all-world scenario come about? Through
quality management.
Quality can be a “magic bullet” which
provides lower cost, higher customer service,
better products and services, and higher
margins. Without managing quality, assuring
and adding value become an impossible
proposition. The earliest lessons of the quality
movement, still applicable today, are those of:
• understanding what people want from a
service or product, and delivering it to
match those needs (“fitness for purpose”);
• drawing detailed specifications based on
the articulated customer needs, and deliv-
ering carefully to them (“conformance to
specification”);
• understanding and managing the variables
in the manufacturing/service delivery
process which can lead to deviation from
specification (“process control”);
• keeping detailed records of the process,
allowing deviations to be traced and recti-
fied (“quality audit/document control”).
If a service is truly fit for purpose, has had a
specification set out and followed accurately;
if we can do so consistently, know when some-
thing goes wrong, and know how to put it
right and also fix the problem so the same
error does not keep occurring, then we can
probably say that we are managing service
quality. These tenets can be traced directly to
the notion of codifying and independently
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Managing Service Quality
Volume 29 · Number 1 · 1999 · 6–12
setting third-party issued quality standards,
best exemplified by the ISO 9000 quality
standards series.
Quality and diversity
But quality is more than replication. What
about the quality of, say, a novel by a favourite
author, or a song by a favourite band? They
cannot be “the same” as the last one you read
or listened to, or you would not bother to read
them or buy their recordings. For some goods
and, especially, for many services, the ques-
tion of “the same” has to be thought about a
bit more carefully.
Also, what if present activity becomes
uneconomic, or customer requirements
change, or new technologies emerge? The
provider can start to try to re-educate cus-
tomers into liking what they want to provide,
as Sony did with the Walkman, banks did with
ATM machines or Netscape did with Internet
software, or can anticipate and/or react to the
change.
In other words, although quality assurance
is essentially about doing the same things over
and over again as efficiently and cost-effec-
tively as possible, the principle which drives
effective quality assurance is continual ques-
tioning – what is it that people want to buy? Is
this way of organizing good enough? Is what
we do still making economic sense?
Another way to put it is that quality assur-
ance is a static discipline – it is always the
same, and hates change – and behind quality
assurance are dynamic questions, which are
always looking to provoke change. Articulating
this dynamic questioning is what is usually
called continuous improvement or Kaizen (a
Japanese term). Kaizen is a restless state which
looks at constant questioning, re-appraisal and
incremental improvements, however tiny. One
of the principles used in Kaizen is the “1 per-
cent improvement” – the idea of looking for
and acting on tiny improvement possibilities,
every day. Nothing stands still.
Customer expectations do not stand still
either. We discussed in the introduction the
idea of a customer-driven definition of quality
which says that “quality is in the eye of the
beholder” or “quality is what the customer
says it is”. Sometimes a customer-driven
definition of quality is expressed as “delight-
ing” a customer or of exceeding expectations.
But when expectations are regularly exceed-
ed, a new expectation benchmark is set. If you
 Total service quality management
V. John Peters
expect parcel delivery in three days and you
get it in two, you might be “delighted”. But
after the tenth time, you are not delighted any
more. You have come expect it. Your stan-
dards have become higher.
For a provider, this poses a knotty prob-
lem; it is the difference between “creating
quality”, through at least meeting and some-
times exceeding expectations, and “avoiding
non-quality”, which is done by avoiding a slip
below expectations. This point is an impor-
tant one, for it marks a crucial difference in
philosophies of quality management. The
parcel firm achieving a two-day delivery in
three days may think they are delivering a
quality-creating service. But after a while,
when customers get used to the new standard,
they will only be delivering a quality-main-
taining service. And if service levels drop back
to what was an acceptable, quality-maintain-
ing service of three days, that is likely to be
seen as a drop in standards – as a negative
quality service. It is as if quality is a scale with
zero in the middle, positive numbers on one
side and negatives on the other:
–3 –2 –1 0 +1 +2 +3
Meeting expectations, which from the organi-
zation’s point of view, represents “quality”,
only gets to zero in the customer’s eyes. No
value is added. Another way to think of it is
using the example of air travel. We expect to
arrive at our destination in one piece, with
our bags coming off the carousel. But if that
happens, we do not say – wow, that was a
really high quality flight! We did not crash
and our bags got here! it is what we expect.
Creating quality in airline services means
getting above the zero point of expectations;
airlines tackle that issue through innovations
in ticketing, check-in, food and beverage
services, humour (some airlines have a policy
where the attendants make jokes and have
games and competitions in-flight), movies,
seat-back TV, in-flight phone services and so
on. But if a wing falls off in flight, no innova-
tions in food or movies will make up for that.
It will become, by definition, a low quality
experience.
We need to find ways to add value, but also
to maintain consistent quality and remember
that the prime task of a provider is to avoid
negative quality while differentiating on posi-
tive quality.
In summary:
• Expectations change.
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Volume 29 · Number 1 · 1999 · 6–12
• Quality which conforms to expectations
can stop being quality as such – it just gets
you to zero.
• Differentiation occurs when positive quali-
ty is consistently created through adding
value that the customer says is important.
• The wings have to stay on the airplane!
Avoiding negative quality is the basis on
which creating positive quality is con-
structed.
Total quality management
When work became more specialized and
departmentalized, there came a new chal-
lenge, addressed by a wider notion of quality
management called TQM (total quality man-
agement). TQM said that a narrow view of
quality assurance was no longer effective
when there were separate, expert, professional
functions dealing with specializations such as
marketing, sales, customer service and
finance, and micro-specializations such as
purchasing and price-setting, each with their
own reward structures and performance
measures. TQM said that we should look at
organizations as social organisms, like an ant
colony, where a greater good should be put in
place of individual (or departmental) self-
interest.
One way of looking at TQM is that it is
simply the same disciplines of setting and
conforming to specifications as is quality
assurance, but set across a wider perspective.
Taking the wider perspective necessitates
seeing how all the bits of the organization
inter-relate as a system, and then assuring the
output. It is a bit like thinking of the workings
of a clock – if you just take one cogwheel and
make sure that one cogwheel is perfectly
polished and prepared to exact tolerances,
you will have no guarantee that the clock will
tell you the right time. A systems perspective
involves understanding how all the cogs work
together to tell the time properly, and making
sure that together, that’s what they do; opti-
mizing the whole, with little regard for the
individual units, except for how they work
within the system.
Think about a consulting firm. A consul-
tant may be working towards a goal which
says – keep the customer happy by arranging
flexible payment terms – those, say, which
coincide with their financial year-end. The
accounting side, on the other hand may be
working towards a goal which says – optimize
 Total service quality management
V. John Peters
cashflow by billing within 48 hours of work
being completed and collecting within 30
days of billing. These goals – both perfectly
sensible from a departmental point of view –
can lead to chaos when put together, with
customers told two different things. While
each departmental goal might be seen as a
“quality” one individually, they would not, in
combination, lead to a quality experience
from a customer’s point of view.
Another interpretation of TQM has arisen
from the humanistic rather than engineering
viewpoint. This says that people in organiza-
tions tend to behave in unpredictable ways,
despite the creation of systematic structures.
Therefore, the only way to achieve a “total
quality” orientation is by unifying the organi-
zation’s employees’ belief systems around
some unifying values. By doing this, people
will naturally use their intelligence and effort
to gravitate towards a best outcome within
these self-managed boundaries. This view of
TQM gave rise to the concept of the “empow-
ered” workforce – one in which internal con-
trols are relaxed and lifted, and therefore
power rests with each individual member,
who is committed to “do the right thing”
given any particular circumstance.
Here is an example. The Smith family and
the Jones family fly from Sydney to Singapore
on the same airplane. Both have small chil-
dren. But the Smiths’ child is fractious and
will not settle. The Smiths take it in turns to
nurse the baby, but the more tense they
become, the more restless the baby is. A few
hours into the flight one of the cabin staff asks
if she can help. She picks up and carries the
Smith baby around the airplane for a while.
She smiles and plays with the baby. The
Smiths calm down, watch fondly, and enjoy
the few minutes of peace.
The flight is on time, the food is good, the
toilets are clean. The Smiths look back on the
flight as a high quality experience, and in
telling the story to their friends, recommend
the airline to others. The other family forget
the flight as uneventful and adequate.
If the cabin staff had been operating to 100
percent efficiency, the attendant would not
have had the time to pick up and play with the
Smiths’ baby. She would have been “busy”
doing something. Is it the job of the service
quality manager to encourage spontaneous
acts of kindness? To make sure we have space
to give individual attention?
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The shapers of the modern TQM move-
ment – most notably W. Edwards Deming,
Joseph Juran and Philip Crosby – all combine
a mixture of an engineering and a humanistic
approach. Deming in particular says that, for
example, formal performance measurement
systems produce bad quality, because people
who feel they are being judged by others do
not give of their best. He also suggests that
measurement systems more often than not
measure the wrong things, which produces a
sub-optimal result (back to the clock and the
ant colony again).
Re-engineering
Probably the most influential thinker current-
ly active in the quality management field is
Michael Hammer (Hammer, 1996). Hammer
approaches the idea of the optimization of a
total organizational system through what he
calls business processes. For example, an
organization might have a process which is
called “a customer order”. That process – of
an order being, let’s say, sold, placed, taken
from stock, wrapped, delivered, installed and
billed – crosses several departments, each of
which “hands over” to the next one like a
baton in a relay race; each of which has its
own hierarchies, internal controls, reward
structures and management styles.
TQM thinking has approached this prob-
lem in many cases by describing the flow as
one of internal customer service – you think of
the next department as a customer, and strive
to give them great service. Hammer, on the
other hand, suggests that the baton will
inevitably be dropped, misplaced and delayed
– so the challenge is to get rid of the baton,
and organize on process lines not department
lines. If the organization fits its processes, it
will function more closely to a theoretical
optimum. A process-designed organization
might have a single “department” called
“order fulfilment” with a single unified mis-
sion, hierarchy, culture and so on.
Thus through what has become known as
business process re-engineering (BPR), Ham-
mer urges organizations not to automate or
improve sub-process handovers, but to find
and get rid of the ones which add no real value
– a question which must be asked thoroughly,
rigorously and with no regard for history and
tradition – and simplify the organization on
process lines. Automation of poorly designed
processes to speed them up, Hammer argues,
 Total service quality management
V. John Peters
simply gives you bad processes which come
together badly more quickly. Hammer
launched his ideas with what has become a
famous phrase among BPR adherents – “Do
not automate – obliterate!”
To summarize:
• TQM looks at whole organization outputs
and seeks to optimize their efficiency and
effectiveness.
• To do so, it looks at whole system design
and operations.
• One TQM approach looks at organizing
for internal customer service, where
departments hand over to the next as if to
an external customer.
• Another looks to align the organization
behind a values system and let its mem-
bers’ good sense and good intent do the
work.
• A third looks at radical redesign of organi-
zations along process lines (BPR).
The supply chain
A more thorough interpretation still of
TQSM looks beyond the organization’s
boundaries and backwards and forwards
through its “supply chain”. Looking at supply
chain total quality provides an even more
thorough focus on what the customer wants,
and an even more thorough focus on reliabili-
ty, elimination of waste, and efficiency.
Let us say we are specialty chocolate retail-
ers. We keep the store clean, we buy good
quality chocolates, we have knowledgeable
staff. We know about TQSM and we try to
practice it. One day, we ship out a large box of
chocolates for a wedding. But on the way, the
carrier accidentally lets the chocolates sit in a
pool of oil. The customer who buys our
chocolates sees a dirty box and tastes oily
chocolates. Does he or she think we produce
great chocolates? No. In the customer’s mind
we produce terrible chocolates, and we – we,
not the carrier, not anyone else – have upset
the wedding. The customer neither knows nor
cares that it “is not our fault” – and if our
product leaves the store as we would like it,
but gets messed up along the way by another
member of the supply chain – we are not
delivering quality.
Looking backwards up the supply chain,
let’s say we buy our gift boxes in from XYZ
Cartons. We use XYZ because we put the job
of supplying gift boxes out to tender, and
XYZ came back with the cheapest quote.
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Volume 29 · Number 1 · 1999 · 6–12
However, they sometimes miss deliveries, and
their boxes sometimes are not printed proper-
ly. That has led to us using a whole back office
in the store to hold stocks of boxes, and there-
fore we have a lot of money and space tied up
in holding these boxes, because we do not
want to risk running out. We hold on to them
“just in case” a delivery gets missed. What’s
more, we have to look carefully at all the boxes
we use, because of XYZ’s print problems. In
fact, we have a staff member spending an hour
or more inspecting XYZ’s cartons after every
delivery, and putting on one side the ones
which are no good, so we can return those and
get some of our money back.
A supply chain management approach
would mean we would try to get away from
inspecting incoming goods, because we would
make sure we were confident that goods-in
would be exactly what we wanted, near
enough 100 percent of the time. And to
increase our financial and operational efficien-
cy, we would try to get away from the “just in
case” stockholding in our store, because we
would make sure we were confident that
deliveries would come in on time – “just in
time” and to specification.
To do just that, many firms have tried to
move away from a confrontational model of
supplier management towards a partnership
model. A confrontational model might have
led to us looking to recoup some of our
inspection and rectification costs by squeezing
XYZ’s profit margins, which might have led to
their service getting even worse. People who
feel bullied, a supply chain theorist would say,
respond with resentment and lack of care. A
partnership model might mean we would sit
down with XYZ’s management team and try
to help them solve their supply and quality
control problems, even if that meant investing
our time and money in their systems and
training. After all, what would benefit them
would also benefit us, and our customers.
XYZ’s gift boxes make our chocolates “fit for
purpose” as gifts and are an intrinsic and
important part of our service. Why not just
get rid of XYZ and start over? We could do
that, but then we are risking the same prob-
lems with a new supplier. Supply-chain quali-
ty is about relationships, and relationship
management.
To summarize:
• A supply chain approach means extending
the TQM concept beyond your own orga-
nization, backwards through your suppliers
 Total service quality management
V. John Peters
(and their suppliers) and forwards through
to your customers. You are searching for
quality assurance of the whole chain.
• Produced quality is not the same as deliv-
ered quality. Firms whose name goes on a
product or service (a brand) need to be
particularly conscious of delivered quality,
as any failure reflects badly on them and
their brand name.
• A customer who has a contract of any kind
with you neither knows nor cares that a
failure may be someone else’s fault.
• You cannot inspect quality into a process.
You can try to inspect faults out – but the
best way is to not let them in in the first
place
• Sometimes a strategic partnership, with co-
operation between two or more supply
chain members, can be the best way of
assuring delivered quality.
Moments of truth
The quality assurance movement was, in its
original conception, intuitively customer-
oriented in looking for brandable replicability.
Customers crave brands. Brands mean relia-
bility of service, even if what the reliability
customers crave is to be reliably surprised by
pleasing variation. QA exists to deliver relia-
bility coupled with operational efficiency – the
ultimate double prize.
The first question for practitioners of
TQSM to ask themselves must be – how does
what I do support brandable replicability of
service? It is not too hard a question, if one
follows the “moments of truth” approach to
analysis coined by Carlzon (1987).
Moments of truth analysis takes a view of
quality which says that direct experience
carries more weight than does anything else. If
an organization’s brand proposition says
“service with a smile”, moments of truth
analysis would ask – when customers meet the
organization or one of its representatives (or
outputs) – do they physically get smiled at?
Do they metaphorically get smiled at? When
the customer receives an invoice, is there
anything “smiling” about that invoice? When
customers are being serviced by a subcontrac-
tor, do they still get smiled at? If service with a
smile leads to repeat business at a premium
price, moments of truth analysis would in
effect conduct a “smile audit”.
Carlzon, ex-CEO of Scandinavian Air
Services, had to try to carry the SAS service
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Volume 29 · Number 1 · 1999 · 6–12
promise not only on his own flights but also
through the whole flight experience – from
booking, ticketing, through airport ingress,
check-in and egress, to baggage reclaim. How
do you assure all that? Well, that is a TQM
challenge. No one said it was easy.
Viewed from a customer-oriented view-
point, TQM is quality assurance of the whole
range of moments of truth.
Summary
We have discussed the philosophy of service
quality, the roots of quality assurance, and the
evolution of TQM for both products and
services. To recap its key points:
Quality management is based on some key
principles.
• understanding what people want from a
service or product, and delivering it to
match those needs (“fitness for purpose”);
• drawing detailed specifications based on
the articulated customer needs, and deliv-
ering carefully to them (“conformance to
specification”);
• understanding and managing the variables
in the manufacturing/service delivery
process which can lead to deviation from
specification (“process control”);
• keeping detailed records of the process,
allowing deviations to be traced and recti-
fied (“quality audit/document control”).
• remembering that in the end, service quali-
ty is what the customer says it is. It does not
exist outside of the service transaction.
But quality assurance has to be more than just
efficiency and doing things the same every
time. It has to be about effectiveness too,
which means changing and developing and
continually improving. Therefore continual
questioning needs to underpin the drive
towards conformance and repetition:
• Expectations change.
• Quality which conforms to expectations
can stop being quality as such – it just gets
you to zero.
• Differentiation occurs when positive quali-
ty is consistently created through adding
value that the customer says is important.
• The wings have to stay on the airplane!
Avoiding negative quality is the basis on
which creating positive quality is con-
structed.
TQM takes a system-wide view of quality
assurance taking into account all the principles
 Total service quality management
V. John Peters
and ideas summarised above. It addresses
whole organization outputs, not just individ-
ual or departmental ones, and seeks to opti-
mize their efficiency (in line with the tenets
above under quality assurance). To do so, it
looks at whole system design and operations:
• One TQM approach looks at organizing
for internal customer service, where
departments hand over to the next as if to
an external customer.
• Another looks to align the organization
behind a values system and let its mem-
bers’ good sense and good intent do the
work.
• A third looks at radical redesign of organi-
zations along process lines (BPR).
But TQM does not begin and end at a single
organization’s borders. It needs to extend
both backwards and forwards into the supply
chain – the range of firms which interact, in
many cases, to bring a service or product to a
customer. A true TQM perspective looks at
the full supply chain.
• A supply chain approach means extending
the TQM concept beyond your own orga-
nization, backwards through your suppliers
(and their suppliers) and forwards through
to end consumers. You are searching for
quality assurance of the whole chain.
• If your service depends on others who
participate in its creation or delivery, what
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Volume 29 · Number 1 · 1999 · 6–12
you alone do is not enough. The whole of
the supply chain needs to be working
together to satisfy the end customer. Firms
whose name goes on a product or service
(as a brand) need to be particularly con-
scious of delivered quality, as any failure
reflects badly on them and their brand
name.
• A customer who has a contract of any kind
with you neither knows nor cares that a
failure may be someone else’s fault.
• You cannot inspect quality into a process.
You can try to inspect faults out – but the
best way is to not let them in in the first
place.
• Sometimes a strategic partnership, with co-
operation between two or more supply
chain members, can be the best way of
assuring delivered quality.
And TQM must keep its eye on the cus-
tomer as the final arbiter of whether we are
producing a quality output. A particularly
powerful method of keeping customers in
mind in service quality is moments of truth
analysis.
References
Carlzon, J. (1987), Moments of Truth, Harper & Row, New
York, NY.
Hammer, M. (1996), Beyond Re-engineering, Harper
Collins, Philadelphia, PA.