quality in services – what is it?

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Service Innovation | Dr Shaun West Quality in services – what is it? 1 September 2016 Dr Shaun West

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Page 1: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Quality  in  services – what  is  it?

1  September  2016

Dr  Shaun  West

Page 2: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

The  lecturers  and  the  module  structureWho  are  we  and  why  are  we  here?

Over  20  years  of  combined  industrial  and  academic  experience

Lecturer  Product-­‐Service  Systems  Innovation  +41  79  [email protected]://ch.linkedin.com/shaunwest

Page 3: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

OutlineFour  points  relating  to  quality  in  services  will  be  discussed

Why  is  service  quality  hard  to  measure?

Measuring  service  quality

Creating  a  system  to  measure  service  quality

Services  are  mostly  intangible  so  how  do  we  measure  service  quality?

A  model  for  measuring  service  quality

Page 4: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

WHY  IS  SERVICE  QUALITY  HARD  TO  MEASURE?

Page 5: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Why  is  service  quality  hard  to  measure?What  do  manufactures  typically  measure  for  quality?

Typical KPIs

Safety AFRASR

#  of  near  missesDays  since  last  LTA

People AbsenteeismAttrition

Training  daysDiversity

Quality NCRsCOPQ

Internal  QCExternal  QC

Delivery OTDLead time

Response  timeOrders or  quotes

Finance SalesROSROCE

Order  backlogHit  rateWIP or  inventory

But  what  does  this  really  tell  us  about  the  service  quality?

-­‐ Tangible  aspect  of  the  product-­‐ Operational  aspects  of  the  business  (value  chain)

Real  example  from  a  Swiss  firm

Page 6: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Why  is  service  quality  hard  to  measure?What  is  different  with  services  compared  to  manufacturing?

Services  are  based  on  intangibles  and  harder  to  define

Page 7: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Why  is  service  quality  hard  to  measure?What  is  different  with  services  compared  to  manufacturing?

Following  requirements  engineering  processes  it  is  simple  to  measure  the  critical  performance  aspects

Page 8: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Why  is  service  quality  hard  to  measure?What  is  different  with  services  compared  to  manufacturing?

The  requirements  of  the  services  require  us  to  measure  the  personal  expectations  and  ’feelings’

Page 9: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

MEASURING  SERVICE  QUALITY

Page 10: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Measuring  service  qualityWe  must  understand  the  life-­‐cycle

Engineer  facility Procure  equipment Install  equipment Commission  

equipment

To  measure  service  quality  we  must  know  who  to  ask  – this  situation  is  critical  to  expectations

Commission  equipment Operate  facility

• Operations• Routine  maintenance• Planned  maintenance• Unplanned  maintenance

Upgrades Operate  facility

Page 11: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Measuring  service  qualityWhat  should  be  measured?

Efficiency-­‐ How  cost  effective  was  the  service  delivered-­‐ Was  it  delivered  on  time-­‐ How  safe  was  it  delivered

Effectiveness-­‐ Did  the  customer  achieve  the  outcome  they  wanted?-­‐ Who  is  the  customer?-­‐ Would  the  customer  recommend  our  services  to  others?

Objective  it  to  capture-­‐ Hard  and  soft  factors-­‐ Improvement  ideas  for  efficiency  and/or  effectiveness

Relates  back  to  Jobs-­‐to-­‐be-­‐done  -­‐ did  it  meet  your  expectations?  

Page 12: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Measuring  service  qualityWe  must  not  be  slaves  to  a  SLA

-­‐ SLAs  are  standardised  measures  of  service  delivery-­‐ Firms  measure  their  performance  against  the  standard

-­‐ They  do  not  discriminate  on  the  situation-­‐ They  do  not  measure  service  quality-­‐ They  do  not  account  for  personal    expectations

Service

Level

Agreement

To  measure  service  quality  we  must  know  who  to  ask  – this  situation  is  critical  to  expectations

Page 13: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Why  is  service  quality  hard  to  measure?Wikipedia's  definition  of  service  quality

But  what  does  this  really  tell  us?

Service  quality(SQ)  is  a  comparison  of  expectations  (E)  about  a  service with  performance  (P)  SQ=P-­‐E.  A  business  with  high  service  quality will  meet  customer  needs  whilst  remaining  economically  competitive.  Improved  service  qualitymay  increase  economic  competitiveness.

1.0>P/E>1.2  – don’t  over  deliver!

Service  quality  -­‐ Wikipedia,  the  free  encyclopaediahttps://en.wikipedia.org/wiki/Service_quality

Page 14: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

WORKING  SESSION:  CREATING  A  SYSTEM  TO  MEASURE  SERVICE  QUALITY

Page 15: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Working  session:  Creating  a  system  to  measure  service  qualityYour  task:  design  a  Service  Quality  system

You  have  15  minutes  to  design  a  system

You  run  a  field  service  business  unit  that  is  part  of  a  larger  manufacturing  business.  Your  staff  provide  a  range  of  services  on  the  motors  over  their  operational  life:  from  installation  to  upgrades  on  old  units.Over  the  past  five  years  your  customers  have  started  to  use  other  firms  for  some  services.  Sales  blame  this  on  your  prices  but  you  cannot  complete  on  an  hourly  basis  with  firms  from  France  or  Germany  due  to  the  Euro.    You  have  heard  that  others  cannot  complete  with  your  technical  quality  but  there  have  reticently  been  some  complaints  on  issues  such  as  lateness  of  reports,  helpfulness  of  staff  and  lack  of  answers  on  the  ’hotline’.  In  the  past  the  company  did  not  measure  service  quality  however  in  the  past  2  years  it  has  been  included  in  the  

QA  reporting  system.  Your  On-­‐Time  Delivery  metric  looks  fine  yet  even  here  people  have  been  complaining  to  you  about  your  ability  to  delivery.  Something  is  going  wrong  and  it  is  your  take  to  develop  a  system  Service  Quality  system  to  help  improve  your  Field  Service  business.

Page 16: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Working  session:  Creating  a  system  to  measure  service  qualityYour  task:  design  a  Service  Quality  system

Try  to  integrate  the  tangible  and  intangible  aspects  on  one  sheet

Page 17: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

A  MODEL  FOR  MEASURING  SERVICE  QUALITY

Page 18: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

A  model  for  measuring  service  quality  My  Service  Quality  system

Hard  facts Soft  facts

Efficiency

Effectiveness

It  should  be  completed  after  every  service  ’project’

Benchmarks Planned Actual

OTD  (days) 10 11

Lead time  (days) 22 20

Gross  margin  (%) 25% 30%

Extra work  (k  CHF) 2 1

Critical  outcomes Importance Satisfaction

Safety 10 8

Reporting 9 6

Price  as  quoted 4 10

Complete on  time 9 10

NPS 1-­‐5  😟 5-­‐8  😐 8-­‐10😃

Schmitt  (GM)

Meier (Ops)

Kellerhals (mtc)

Obermeier  (F&C)

Empathy 1-­‐5  😟 5-­‐8  😐 8-­‐10😃

Well  managed

Communications

Changes

Comments  (PM) More focus  is  need  on  internal  deliveries

!

Page 19: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

A  model  for  measuring  service  quality  We  can  learn  from  hard  and  soft  facts  about  efficiency  and  effectiveness

-­‐ We  should  ask  all  stakeholders  (internal  and  external)Customer  Journeys/Ecosystem  mapping

-­‐ We  should  treat  good  and  poor  feedback  as  NCR  so  that  we  can  learn

Written  comments  enrich  the  service  quality  data

Hard%facts Soft%facts

Efficiency

Effectiven

ess

Benchmarks Planned Actual

OTD$(days) 10 11

Lead time$(days) 22 20

Gross$margin$(%) 25% 30%

Extrawork$(k$CHF) 2 1

Critical% outcomes Importance Satisfaction

Safety 10 8

Reporting 9 6

Price$as$quoted 4 10

Complete on$time 9 10

NPS 1?5%! 5?8%" 8?10#

Schmitt$(GM)

Meier (Ops)

Kellerhals (mtc)

Obermeier (F&C)

Empathy 1?5%! 5?8%" 8?10#

Well$managed

Communications

Changes

Comments$ (PM) More focus$is$need$on$internal$deliveries

!

Page 20: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

A  model  for  measuring  service  quality  We  can  learn  from  hard  facts  about  our  quality?

Lessons-­‐ Efficiency  metrics  confirm  consistency  of  delivery-­‐ OTD  shows  a  late  completion  but  for  the  customer  this  was  acceptable

-­‐ Reporting  is  a  customer  concern-­‐ Price  as  quote  here  was  over-­‐delivered

Notes-­‐ Critical  outcomes  based  on  Ulwich,  OTD  based  innovation-­‐ Importance  =  expectation-­‐ Satisfaction  =  performance

The  information  here  confirms  if  you  are  meeting  internal  and  external  expectations

Hard%facts Soft%facts

Efficiency

Effectiven

ess

Benchmarks Planned Actual

OTD$(days) 10 11

Lead time$(days) 22 20

Gross$margin$(%) 25% 30%

Extrawork$(k$CHF) 2 1

Critical% outcomes Importance Satisfaction

Safety 10 8

Reporting 9 6

Price$as$quoted 4 10

Complete on$time 9 10

NPS 1?5%! 5?8%" 8?10#

Schmitt$(GM)

Meier (Ops)

Kellerhals (mtc)

Obermeier (F&C)

Empathy 1?5%! 5?8%" 8?10#

Well$managed

Communications

Changes

Comments$ (PM) More focus$is$need$on$internal$deliveries

!

Page 21: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Hard%facts Soft%facts

Efficiency

Effectiven

ess

Benchmarks Planned Actual

OTD$(days) 10 11

Lead time$(days) 22 20

Gross$margin$(%) 25% 30%

Extrawork$(k$CHF) 2 1

Critical% outcomes Importance Satisfaction

Safety 10 8

Reporting 9 6

Price$as$quoted 4 10

Complete on$time 9 10

NPS 1?5%! 5?8%" 8?10#

Schmitt$(GM)

Meier (Ops)

Kellerhals (mtc)

Obermeier (F&C)

Empathy 1?5%! 5?8%" 8?10#

Well$managed

Communications

Changes

Comments$ (PM) More focus$is$need$on$internal$deliveries

!

A  model  for  measuring  service  quality  We  can  learn  from  soft  facts  about  our  quality?

Lessons-­‐ Changes  were  well  manged-­‐ Internal  communications  and  project  management  need  more  focus

-­‐ One  stake  holder  was  ’delighted’  with  the  service-­‐ Interviews  with  customer  stake  holders  are  needed

Notes-­‐ NPS  =  Net  Promoter  Score-­‐ Importance  =  expectation-­‐ Satisfaction  =  performance

Internally  you  begin  to  see  problems  coming  – externally  you  view  the  stakeholders  as  individuals

Hard%facts Soft%facts

Efficiency

Effectiven

ess

Benchmarks Planned Actual

OTD$(days) 10 11

Lead time$(days) 22 20

Gross$margin$(%) 25% 30%

Extrawork$(k$CHF) 2 1

Crital outcomes Importance Satisfaction

Safety 10 8

Reporting 9 6

Price$as$quoted 7 10

Complete on$time 9 10

NPS 1?5%! 5?8%" 8?10#

Schmitt$(GM)

Meier (Ops)

Kellerhals (mtc)

Obermeiere (F&C)

Empathy 1?5%! 5?8%" 8?10#

Well$managed

Good comms

Changes

Comments$ (PM) More focus$is$need$on$internal$deliveries

Page 22: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

CLOSING

Page 23: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

ClosingService  quality  is  different  to  manufacturing  quality

You  have  tried  and  see  a  system  for  measuring  ’Service  Quality’  – could  you  now  test  something  similar  in  your  business?

You  know  some  reasons  why  service  quality  hard  to  measure

You  know  that  service  quality  needs  tangible  and  intangible  inputs  

You  have  designed  a  system  to  measure  service  quality

You  have  seen  my  system  for  measuring  service  quality

Page 24: Quality in services – what is it?

Service  Innovation  |  Dr  Shaun  West

Thanks  for  your  time!