2013

Submitted to:

OM Prof. Manny Ocampo,

Submitted by:

Zuellen Furro

and

Ma.Angela Maroma

University of the Philippines

8/31/2013

USEast Airlines (A Quality Management Problem)

I. Background

Mike Shepard was traveling from Roanoke, Virginia, to Nashville, Tennessee, through Pittsburgh on USEast Airline and had purchased an electronic ticket on the airline‘s website. When he checked in with an airline agent in Roanoke, she gave Mike a boarding pass from Roanoke to Pittsburgh and a second boarding pass for his connecting flight from Pittsburgh to Nashville. Mike uses a canyon bag, so he proceeded directly to the gate, boarded his flight on time, and had an eventful trip to Pittsburgh. Arriving on time on Pittsburgh, he ate a sandwich and went to the gate where he waited for his flight to Nashville to board. When his flight began to board, Mike stood nearby so he could get on the plane as soon as possible. From experience he knew that people who boarded a full flight late often could not find space in the overhead bin for their carry on and this appeared to be a hill flight. When Mike handed his ticket to the gate attendant, she told him, “I am sorry sir, you can’t board; your boarding pass is supposed to have a ticket coupon attached. The boarding pass does not verify you have paid for your ticket.” Mike told her, “The boarding pass was ail I was given in Roanoke. Anyway, how do you think I got from Roanoke to Pittsburgh if I didn’t pay for my ticket?”The attendant showed Mike his boarding pass which clearly said, ‘not valid without flight coupon attached,“ and curtly told him to see the attendant at the gate desk and tell him he needed a ticket.

Mike dutifully did as he was told; he walked to the desk 30 feet away and approached theattendant, who looked up at Mike. Mike explained what had happened and said that the boarding pass was all that he had been given by the agent in Roanoke. The attendant began working at his computer. Several minutes passed and the attendant returned the boarding pass to Mike with a copy of a ticket coupon stapled to the boarding pass, never having spoken to a single word to Mike. Mike joined the end of the tine boarding the plane and was the last to board. When he handed the boarding pass and ticket to the gate attendant she tore the coupon off and said, “Thank you, Mr. Shepard, you may board now.”

Mike sucked up his courage and asked the attendant, “Why did this happen? What I originallygave you was what i got in Roanoke, so why was I made to wait when it was the airline’s fault?” The attendant responded, “They just messed up down there in Roanoke. Half the time they hire inexperienced people who don’t know what they’re doing. We’re the hub here in Pittsburgh, so all of our people are very experienced and are more efficient so we catch things like this. If your flight had originated here this would not have happened.”

She offered Mike a quick smile to indicate the conversation was over, and Mike boarded hisflight wondering if she was implying that he should have driven to Pittsburgh to catch his flight rather than in Roanoke where he was evidently doomed from the start.

On board the flight was full as Mike suspected, so there was no available space in the overhead bins to put his carry-on bag. The stewardess immediately approached Mike and informed him he would have to take a seat and she would take his bag and have it checked through to Nashville.

The whole point of using a carry-on was so he would not have to check it through. so Mikecrammed the soft-sided bag under the Seat in front of him, which left him no room to stretch his legs out.

Mike then asked the attendant for a Pillow; he has a bad back and he puts a pillow behind him for support. However, the attendant informed him that they were sort on pillows on this flight and there were none available. Mike spent on uncomfortable two hours flying to Nashville. In Nashville Mike picked up a car at the rental car agency, and when he opened his carry-on to get his sunglasses he found that they

were broken from shoving his bag under the seat. The day was bright and sunny, so by the time he arrived at his hotel he had headache from squinting, his legs were crammed and his back hurt. -After his visit in Nashville, Mike retraced his route to Roanoke through Pittsburgh, which wasuneventful for him. However, alter he had settled into his seat in Pittsburgh for his flight toRoanoke, three elderly ladies got on. They sat down behind Mike, and they were obviouslydistressed. After it appeared everyone had boarded, one of the ladies approached the flightattendant and explained that two of their friends who were traveling with them were not on the plane and could she (the attendant) check on them. The flight attendant said she would.

After about 15 minutes, it was obvious the flight had been delayed and was now running late when two more elderly ladies boarded. One of the ladies was angry, and the other was near tears. As they sat down just behind Mike, he overheard their conversation what happened, a story all familiar to him. When one of the ladies handed her boarding pass to gate attendant, she was told that she should have an attached ticket coupon. She told the attendant that this was all she had been given by the ticket agent when she checked her bags when she arrived at the airport. She said the gate attendant acted like she was trying to sneak on board without paying.

The other lady said, “They were just plain rude!” They acted like we were two addled old ladies who had never flown anywhere before and had somehow lost the ticket or forgotten we had bought in the first place. Why, we travel all the time!’

The plane then took off and arrived in Roanoke 15 minutes late w the same 15 minutes that the flight was delayed in Pittsburgh because the two old ladies could not board. Mike thought of a recent news article he had read that rated airlines according to on time flights, a key airline performance indicator and how the airlines had maintained their statistics were low because of abnormally bad weather conditions in the East during the past six months.

A few days after Mike got home he saw a friend, Vicki, who was a flight attendant for USEast.

He explained his story and that of two elderly ladies in humorous tone, and was somewhat taken aback by her defensive response. “You don’t understand, Mike, how hard it is. We are just overwhelmed since 9/11 attack on WTO, US. With the loss of business we’ve had to cut back and lay people off, and we just don’t have enough people to cover everything. We have really been up against it; there is just a whole lot of pressure. I wish people would be more understanding about how much we have to do now and be a little more patience. And people are not flying because they are scared so nobody knows when business is going to pick back up.’Mike decided not to pursue this conversation, but he did wonder to himself if people were notflying because they were scared or because of other reasons.

Asses the airline’s approach to quality and customer satisfaction based on Mike’s experiences on his trip.

II. Problem

How can USEast Airlines improve their performance in collecting board passes and tickets at the gate and at the same time create outstanding customer experience?

III. Objectives

● to eliminate the problem of missing ticket coupons● to properly accommodate passenger complaints and queries● to achieve quality performance in service and superior customer experience

IV. Areas of Consideration

Six Sigma

Define: Suppliers, Inputs, Process, Outputs, Customers (SIPOC)

Measure: Cause and Effect Diagram (FISHBONE DIAGRAM)

Analyze: Failure mode effects analysis

Improve: Brainstorming

Control: Process Control Chart

Baldridge Award-winning companies

The Malcolm Baldrige National Quality Award recognizes U.S. organizations in the business, health care, education, and nonprofit sectors for performance excellence. In 2010, the program's name was changed to the Baldrige Performance Excellence Program to reflect the evolution of the field of quality from a focus on product, service, and customer quality to a broader, strategic focus on overall organizational quality—called performance excellence.

To receive a Baldrige Award, an organization must have a role-model organizational management system that ensures continuous improvement in delivering products and/or services, demonstrates efficient and effective operations, and provides a way of engaging and responding to customers and other stakeholders.

USEast Airlines could adopt some of the Baldridge Award-winning companies strategies to serve as benchmarks or role models for performance improvement. The examples are shown below:

Baldridge Award-winning companies Strategies for Performance Improvement

Jenks Public Schools· serves 9,400 students with nine schools in the ciy of Jenks and portions of Tulsa, Oklahoma

· improvement in test scores based on PDCA Cycle· All staff members participate in the district's goal setting process and incorporate the PDCA cycle into their plans for achieving these goals. As a result of its improvement efforts its teacher turnover rate became high; its academic performance scores performance scores exceeded state and national levels; dropout rate was 1%.

Adapt W.E. Deming’s PDCA (Plan-Do-Check-Act) Cycle.

· Participation of staff members in the goal setting process· Creation of PDCA team· Establishment of key targets

Baptist Hospital, Inc. (BHI)· used several metrics to determine if hospitals were maintaining organizational value· used PDCA cycle to address the deficiencies if any metrics fell below target values under the supervision the PDCA team made up of physicians and front-line employees

Iredell-Statesville Schools· Despite ranking 107 out of 115 school systems in North Carolina in per pupil expenditures, it ranked in the top 10 in the state in academic achievement; SAT scores ranked 7th in the state and were better than the national average; teacher turnover rate was well below the state average· established a program called the "Model to Raise Achievement and Close Gaps (RACG)" - establishment of targets in key class-room learning categories

Coral Springs City, Miami· first state or local government to receive the Baldridge National Quality Award (2007)· 2006 Best Places to Live by Money magazine

· Emphasis on customer feedback· Establishment of core values· Establishment of appraisal system· Establishment of teams

· operated like a business· To provide information to its customers and get customer feedback it uses a call center and Web site, email, a city magazine, podcasts, CityTV, CityRadio, a consumer-friendly “City Hall in the Mall” (for bill payments permit applications), annual neighborhood meetings, 27 advisory committees and boards comprised of residents and business people, customer surveys, demographic trends, and analyses of strengths, weaknesses, and opportunities.· city's quality management program is based on four core values: customer focus, leadership, empowered employees, and continuous improvement· key component of its success has been an empowered, motivated, and high-performing workforce· excellent staff through job security, competitive pay and benefits, a safe and positive work environment and recognition programs· Employees are encouraged to be innovative and make “on-the-spot” improvements.· Employee teams work together to solve problems and review processes.· Employees are recognized and rewarded in several ways including “applause cards” given by one employee to another for exemplary customer service, restaurant and movie certificates for employees who display outstanding initiative, and bonuses for extraordinary service.

Ritz-Carlton Hotel Company (winner in 1992 and 1999)· manages luxury hotels around the world (4 or 5-star ratings from Mobil Travel Guide)· goal for customer satisfaction is a defect-free experience for guests and 100% customer loyalty· The hotel employs a measurement system to chart progress toward

· Application of the Six Sigma· Use of chart quality measurement system· Customer customization process· Extensive managerial trainings

elimination of customer problems, no matter how minor. To meet its goal of total elimination of problems, the RitzCarlton has identified over 1000 potential instances for a problem· To arise during interactions with guests.· To cultivate customer loyalty the hotel has instituted an approach of “Customer Customization,” which relies on extensive data gathering. Information gathered during various types of customer contacts, such as responses to service requests by overnight guests or post-event reviews with meeting planners, are systematically entered into a database, which holds almost a million files. The database enables hotel staff worldwide to anticipate the needs of returning guests.· The “Greenbook” is the Ritz-Carlton handbook of quality processes and tools, a nearly constant reference that is distributed to all employees· The hotel’s “pride and joy” program gives employees a larger role in the design of their jobs. First-year managers and employees receive over 300 hours of training. As a result, the hotel’s employee turnover rate, in an industry in which employee turnover is a chronic problem, has declined over a long period, and levels of employee satisfaction are very high.

V. Alternative Courses of Action

Alternatives Advantages Disadvantages

Stay the same – airline with similar situationSpirit Airlines hit rock bottom on all of the customer benchmarks, including seating comfort, cabin staff service, cleanliness and baggage handling. (May 2013, Consumer Reports survey)

● no additional operating costs

● poor passenger patronage / bad publicity

● insufficient supplies ● poor staff service -

overworked employees● unease in flight

bookings● uncertainty of demand

● Do nothing● Just wait until the

business will pick up again

Play it safe - just right management

● Write a memo to all staff regarding the missing coupons and make sure coupons are attached to boarding passes all the time

● Prepare a script on what to do and in cases that events like missing coupons arise

● Attach a process chart on all work areas to ensure that all steps are taken in every transaction

● Post checklist of supplies and other materials needed in every flight to make sure that passengers request if any will be attended to

● ease in flight bookings● on-time flights● less customer

complaints● organized operating

procedures● enhanced collaboration /

expertise among staffs ● improved supply service

translates into increased reputation and goodwill

● higher sales

● additional operating costs (i.e, hiring additional staffs)

● maintenance costs on added or new supplies / facilities

● training and development costs for the human resource

Upgrade to first class – first class airline

Benchmark with Virgin America, the top-performing U.S. airline (May 2013)

● Give refresher courses to all the staffs regarding customer service and courtesy

● Retrain employees especially front liners regarding their duties and responsibilities and also their daily tasks and transaction protocols

● Make sure that all supplies are replenished and inventory is managed carefully

● Educate passengers by

● timely flights● improved facilities and

supplies inventory● higher customer

patronage● trained / skilled workers● less customer

complaints● close agent-customer

relationship● Conformance to quality

results to decreased scrap costs.

● ease in flight bookings● on-time flights● organized protocols

● increased maintenance and operating costs

● Substitution effect. Airline passengers might opt for a similar airline service offering a lower flight cost.

printing reminders on what to do and must bring to have a smooth travel. (Travel tips)

● Maintain top quality through careful observance of activities and performance

VI. Decision

UPGRADE TO FIRST CLASS

VII. Conclusion and Recommendation

Playing safe can get one company going through the years but a company cannot truly realize its full potential unless it chooses to think big and think about ZERO DEFECTS. Upgrading will bring about big change. Change comes with growing pains and big sacrifices that must be paid. A company must not only think about these short term discomfort but envision the BIG rewards that change can bring to them. Quality, management and innovation will surely result to highly satisfied customers, the key to a successful business.

Upgrading service quality is an investment. The company will incur costs but the result of the investment will produce more profit.

The airline is greatly affected because of the 9/11 attack and people are scared but the aftershock will die down and business will be up and running again. The airline industry will recover.

USEast Airlines does not have a lot of competitors which is an advantage; still, the company must not be satisfied on this, but also must make sure that they give quality

service to the customers in order to gain consumer loyalty and trust no matter what the situation is. They should give the best all the time, anytime.

Since upgrading will include training employees and it will cost the company much, there are ways in order to cut costs like e-training. The staffs will be grouped according to their function and they will be scheduled for viewing on their available time.

Inventory should be monitored and supplies on board should be enough for all passengers. Shortage of supplies does not have an excuse. The passengers have paid for their flight and the company must meet customer expectation or better exceed it.

Reference:

Salvo, Christina. "Best, Worst Airlines Survey: Virgin America Tops List, Spirit Comes in Last." Abc 7. N.p., May-June 2013. Web. 21 Aug. 2013.