Productivity and Quality Improvement (PowerPoint)

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					      Productivity and Quality
Quality level

                Check    Do

                 Act    Plan

            Four Stages in Service Firm
 1. Available for service       2. Journeyman              3. Distinctive competence        4. World-class service delivery

 Customers patronize service   Customers neither seek      Customers seek out the firm      The company’s name is synonymous
 firm for reasons other than   out nor avoid the firm.     on the basis of its sustained     with service excellence. Its service
 performance.                                              reputation for meeting           doesn’t just satisfy customers; it
                                                           customer expectations            delights them and thereby expands
                                                                                            customer expectations to levels its
                                                                                            competitors are unable to fulfill.

 Operations is reactive,       Operations functions in a   Operations continually excels,   Operations is a quick learner and fast
 at best.                      mediocre, uninspired        reinforced by personnel          innovator; it masters every step of the
                               fashion.                    management and systems           service delivery process and provides
                                                           that support an intense          capabilities that are superior to
                                                           customer focus.                  competitors.
Is subsidiary to cost,         Meets some customer         Exceeds customer                 Raises customer expectations and
highly variable.               expectations; consistent    expectations; consistent         seeks challenge; improves
                               on one or two key           on multiple dimensions.          continuously.
             Four Stages in Service Firm
             Competitiveness (cont.)
1. Available for service    2. Journeyman                   3. Distinctive competence        4. World-class service delivery
Counting room.             Contributes to service, plays    Is equally valued with front     Is proactive, develops its own
                           an important role in the total    office; plays integral role.     capabilities, and generates
                           service, is given attention,                                       opportunities.
                           but is still a separate role.
Unspecified, to be         A market segment whose            A collection of individuals     A source of stimulation, ideas,
satisfied at minimum cost. basic needs are understood.       whose variation in needs is     and opportunity.
When necessary for      When justified by cost              When promises to enhance         Source of first-mover advantages,
survival, under duress. savings.                            service.                         creating ability to do things your
                                                                                             competitors can’t do.
                  Efficient resource; disciplined; Permitted to select among
Negative constraint.                                                                         Innovative; creates procedures.
                  follows procedures.               alternative procedures.
Controls workers. Controls the process.            Listens to customers; coaches            Is listened to by top management
                                                   and facilitates workers.                 as a source of new ideas. Mentors
                                          workers to enhance their career.
    Continual Improvement as a
    Competitive Strategy
 Analogy with Just-in-Time Manufacturing
 Inventory and Waiting Line Analogy
 Continual Improvement as a Service
  Organization Culture
 Management Implications
          Inventory and Waiting Line
Feature        Inventory                             Waiting line

Costs          Opportunity cost of capital           Opportunity cost of time
Space          Warehouse                             Waiting area
Quality        Poor quality hidden                   Negative impression
Decoupling     Promotes independence of              Allow division of labor and
                production stages                      specialization
Utilization    Work in process keeps machines busy   Waiting customers keep servers busy
Coordination   Detailed scheduling not necessary     Avoids matching supply and demand
     Traditional vs World-Class
     Service Organizations
Dimension              Traditional            World-class

System assumption      Closed system          Open system
Job design premise     Division of labor      Flexibility
Structure              Rigid                  Fluid
Relation to others     Individual             Team player
Employee orientation   Task                   Customer
Management             Supervisor             Coach and facilitator
Technology             Replace human effort   Assist service delivery
Information             Efficiency            Effectiveness
    Deming’s Foundations of Quality
    Improvement Program
 Customer Satisfaction
 Management by Facts
 Deming’s Wheel
 Respect for People
    Mega Bytes Restaurant

 How is the Seven Step Method (SSM)
  different from Deming’s PDCA cycle?
 Prepare a cause-and-effect diagram for
  “Why customers have lone waits for coffee”
 How would you resolve the difficulties that
  study teams have experienced when
  applying SSM?

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