SERVICE QUALITY:Moments of Truth, Perceived Service Quality, Service Gap Analysis

<< MANAGEMENT OF QUALITY:Dimensions of Quality, Examples of Service Quality

TOTAL QUALITY MANAGEMENT:Determinants of Quality, Responsibility for Quality >>

Production and Operations Management MGT613

Lesson 24

SERVICE QUALITY

Learning Objectives

After completing this lecture the students should be able to describe the five dimensions of service

quality in detail. This would enable them to use the service quality gap model to diagnose quality

problems also understand the quality service by design concepts. This lecture would provide the

students with an opportunity to learn and illustrate how Taguchi methods and poka-yoke methods are

applied to quality design. The students should be able to at least gain awareness how organizations

perform service quality function deployment in order to improve their operations side. The students

should also be able to construct a statistical process control chart.

Moments of Truth

Each customer contact (between the service provider and customer) is called a moment of truth.

An organization has the ability to either satisfy or dissatisfy them when you contact them.

A service recovery is satisfying a previously dissatisfied customer and making them a loyal

customer.

Dimensions of Service Quality

Dimensions for Service Quality are more or less the same which we associate with the concept of

Quality in General. Also, we as service demanders (customers) are well aware of the fact that we always

seek reliability, agility (prompt responsiveness), assurance, tangibility and empathy while being

provided with a service. More or less these dimensions help the customer to rate and distinguish one

service provider from another. A good service from a bad service. Often organizations use a

performance measure matrix using the same service dimensions and they often call it RATE based on

the 5 dimensions described below.

Reliability: Perform promised service dependably and accurately.

Responsiveness: Willingness to help customers promptly.

Assurance: Ability to convey trust and confidence.

Tangibles: Physical facilities and facilitating goods.

Empathy: Ability to be approachable.

Normally in such situations, R represents Reliability and Responsiveness, A represent Assurance, T

represents Tangibles and E represents Empathy respectively.

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Production and Operations Management MGT613

Perceived Service Quality

It is often seen that a customers required service is not provided by the service provider primarily

because of a gap between Service Quality Dimensions and Service Quality Assessment by the customer.

Word of

Personal

Past

mouth

needs

experience

Service Quality

Service Quality Assessment

Expected

Dimensions

1. Expectations exceeded

service

Reliability

ES<PS (Quality surprise)

Responsiveness

2. Expectations met

Assurance

ES~PS (Satisfactory quality)

Perceived

Empathy

3. Expectations not met

service

Tangibles

ES>PS (Unacceptable

quality)

Service Quality Gap Model

We can pictorially capture the gaps that exist between service provided and the service demanded

Customer

Customer Satisfaction

GAP 5

Perceptions

Expectations

Understanding

Managing the

Customer /

the Customer

Evidence

Marketing Research

Communication

GAP 1

GAP 4

Management

Service

Perceptions

Delivery

of Customer

Expectations

Conformance

Design GAP 2

GAP 3

Conformance

Service Design

Service

Standards

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Production and Operations Management MGT613

Service Gap Analysis

A good example where gap analysis is used for improvements in business is in the services

field

The most popular assessment tool used in service quality is called SERVQUAL, which

involves a set of the 5 most important dimensions of quality according to rankings of

customers

Also involves a set of 5 gaps which represent the difference between customers'

expectations and perceptions or in other words the difference between expected level of

service vs. Actual level of service provided

SERVQUAL (Stands for SERVICEQUALITY).

SERVQUAL Model Gaps

Let's try to capture all 5 gaps; one by one this would help us to understand in detail the 5 dimensions of

service quality.

Gap 1

The difference between actual customer expectations and management's idea or perception of customer

expectations.

Managers and employees have a very internal process-oriented view of their business, it is tough to

break this view and to see things the way the customer does

This gap of the SERVQUAL Model can help management with customer service

Gap 2

Mismatch between manager's expectations of service quality and service quality specifications

To implement a system to improve this gap, management must first understand exactly what the

customer wants

If this understanding is not present, it will be impossible for management to know whether their

expectations are aligned with customer specifications.

Gap 3

Poor delivery of service quality

Once the specifications from gap 2 are aligned the next step is to deliver these services in a perfect

manner

Quality of delivery must be perfected during the interaction with the customer

The employees that are responsible for these actions are referred to as contact personnel

Some reasons for a lack of quality include poor training, communication, and preparation.

Gap 4

Differences between service delivery and external communication with customer

Customers are influenced by what they hear and see about a company's service

Word-of-mouth publicity and advertising are main outlets which customers open their

opinions to

The difference between what a customer hears about a company's service and what is

actually delivered is represented by gap 4

This gap can lead to dangerously negative customer perceptions

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Production and Operations Management MGT613

Gap 5

Differences between Expected and Perceived Quality

This gap is directly related to everyone's perception of service quality

Customers expect certain things from certain companies

When someone goes into a McDonalds to order their favorite meal a Big Mac, they are

expecting exactly what they are accustomed to getting (a quick, no hassle, tasty big burger

with all the works). If it takes 15 minutes to get a Big Mac that doesn't even have the

famous special sauce on it the customer's perceived service of McDonalds is going to

plummet.

If gaps 1 through 4 are closed to a minimum then gap 5 should follow, if there are any gaps

left in steps 1 through 4 the perceived customer service quality will be negatively affected

The way to make sure these gaps are closed is through thorough systems design, precise

communication with customers, and a well-trained workforce.

Quality Service by Design

We had discussed earlier, that design of a product or service half ensures a good productive system and

we did mention about Quality indirectly. We now take a direct approach and identify the ways in which

we can incorporate and identify Quality in the Design of Services.

1. Quality in the Service Package :Quality based service should be offered at same price, club class

passengers in an airline though being provided additional luxury are not able to bring enough

revenue. An airline that does not add quality would loose out to its competitors.

2. Taguchi Methods (Robustness): Relate to the quality based methods being able to deliver under all

possible environments. If a company is unable to offer an after sales service to a customer at any

particular place in the same country, it would simply lose out to its competitors.

3. Poka-Yoke: Poka Yoke (pronounced POH-kah YOH-kay) is the Japanese word for mistake proof.

In services, a simple mistake can have dire consequences, think of a hair dresser or stylist giving

you a wrong haircut. His mistake cannot be rectified because service again is an entity which is

based on transaction between the service provider and service receiver. These

devices/strategies/mechanisms/methods are used either to prevent the special causes that result in

defects, or to inexpensively inspect each item that is produced to determine whether it is acceptable

or defective.

4. Quality Function Deployment: is also known as QFD or House of Quality. It is an important tool of

Quality Management and allows a company not only to benchmark itself with industry leader but

also to review its internal operations critically.

The thing to remember here is that Quality in design ensures the safe as well as reliable operations of

the service. Consider for example the simple case of an oil change or a hair cut. If the service provider is

unable to include Quality in service, or fails to provide a consistent service under all conditions or fails

to do justice to idea of mistake proof service or is unable to deploy Quality Function in his service, he or

she would lose customers and competitive advantage along with loss in revenues and increase in costs.

Classification of Service Failures with Poka-Yoke Opportunities

Server Errors

Customer Errors

Task: Doing work incorrectly

Preparation: Failure to bring necessary

materials

Treatment: Failure to listen to customer

Encounter: Failure to follow system flow

Tangible: Failure to wear clean uniform

Resolution: Failure to signal service failure

House of Quality

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Production and Operations Management MGT613

QFD can strongly help an organization focus on the critical characteristics of a new or existing product

or service from the separate viewpoints of the customer market segments, company, or technology-

development needs.

R e l a t io n s h i p s

S t ro n g

M e d iu m

W eak

C u s t o m e r P e rc e p t io n s

S e r vic e E le m e n t s

V illa g e V o l v o

rt a

V o l vo

D e a le r

C u s t o m e r E x p e c t a t io n s

R e lia b ilit y

R es p o ns iven e s s

A s s u ra n c e

E m p a th y

T a n g i b le s

C o m p a ris o n

w it h V o l v o D e a le r

W e ig h t e d s c o re

102

127

Im p r o v e m e n t d i ffi c u l t y r a n k

Achieving Service Quality: Service Quality can be achieved by making use of the following strategies

Cost of Quality

Service Process Control

Statistical Process Control

Unconditional Service Guarantee

We will discuss all four in detail during our discussions in lectures that follow this lecture for the time

being we can reiterate the fact that quality is offered free of cost. Also, as prevention is better than cure,

it makes a lot more sense to incur cost in prevention of defects instead of allowing the defects to occur

and then rectifying them. Statistical Process Control is one important tool to ensure that Service Quality

is achieved before a defect is introduced in the service being offered or product being manufactured.

Costs of Service Quality (Bank Example)

This example shows how a weak design service can incur loss in customer service, which leads to loss

in revenues. With this example we also try to focus our attention on the concept of cost in quality

dimension. We try to capture the importance of prevention costs and how they are more beneficial to the

organization as compared to detection and failure costs. As a rule of thumb it is said that prevention

costs are half the detection costs and about 12 to 16% of failure costs, but these percentages often fail to

represent, the cost expenditures in all types of services.

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Production and Operations Management MGT613

Failure costs

Detection costs

Prevention

costs

External failure:

Loss of future

Process control

Quality planning

business

Negative

Peer review

Training program

word-of-mouth

Liability

Supervision

Quality audits

insurance

Legal

Customer

Data acquisition

judgments

comment card

and analysis

Interest

Inspection

Recruitment and

penalties

selection

Supplier

evaluation

Internal failure:

Scrapped

forms

Rework

Recovery:

Expedite

disruption

Labor and

Control Chart of Departure Delays

We talked about the concept of Service quality and one of its dimensions was Tangibility. We can apply

this dimension to the service provided by airlines operating in Pakistan. If we happen to visit any airport

in the northern part of Pakistan during winters especially during the months of December and January,

we face a situation where often there is a delay in the flight arrival and departure. We can make good

use of statistics to improve our service quality. In the graph below we have been able to identify a

Lower Control Limit and an Upper Control Limit.

expecte

100

Lower Control

199

p(1 - p

LCL = p - 3

UCL = p + 3

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