After Sales Service Management by gjw11470

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									Use of quality tools in a Greek after-sales
      service vehicle organization
                             T. Papazoglou1 and G. J. Besseris2
 1
     Department of Mechanical Engineering, Technological Education Institute of Piraeus,
                   P. Ralli & Thivon Avenue 250, Aigaleo 12224, Athens
                             & Kingston University, London, UK.
                        2
                           corresponding author: besseris@teipir.gr

Abstract
The current work refers to a Greek vehicle after sales organization. Specifically, it is
focused on improving after sales customer service in a multinational vehicle company
making use of novel quality improvement methods. The work presents an analysis of
problem areas causing customer concerns as collected by this company information
system. Service cycle times, along with vehicle part stock examined and quality
improvement is suggested.

1. Introduction
Today, it is widely accepted that the quality of a service or a product means the ability to
meet and even exceed customer expectations. In order to achieve and maintain continuous
improvement of service quality, organizations should have a strategy based on
management involvement and commitment and customer focus. Such a strategy refers to
a quality emphasis that includes the entire organization and it is widely known as Total
Quality Management (TQM).
The current work refers to a Greek car after sales organization. Specifically, it is focused on
improving after sales customer service in a multinational car company making use of novel
quality improvement methods. The work presents an analysis of problem areas causing
customer concerns as collected by this company information system. Service cycle times,
along with vehicle part stock examined and quality improvement is suggested.
In the organization focused upon, the Customer Satisfaction Data are collected using the
Proactive Feedback method. Through a simple procedure the Customer Care Department
of the organization records the customers’ impression after every visit to any of the
organization workshops. Through the analysis of the data the percentage of the unsatisfied
customers is calculated, and their claims are categorised in different types by percentage.
As it is shown through this analysis the most common claim is the time of delay during
service procedure. The delay in service may be a result of different factors like bad
scheduling, spare part unavailability, inexperienced technician etc. In this case the factor
that has major influence both on the customer and the organization (wasted man-hours), is
the delay during the repairing procedures.
The next step is to analyse the organization sales by vehicle model and compare them with
the visits per model for a specific period. Then, using quality tools like Pareto Analysis the
most common visiting models are detected. After this the detection of the most common
repair operations of the specific models follows and the most frequent operations during
which delays occur. Finally, these operations are analysed through Failure Mode and
Effects Analysis. Through the quantification of the failure modes the priority of improving
actions can be set.

2. Literature Review
Increased competition has motivated many automotive manufacturers to evaluate their
competitive strategies and management practices with the aim of improving organizational
performance. Through the need to preserve performance with reduced workforce, the
organizations are trying hard to define, implement and sustain TQM practice. As the
customers’ requirements are getting higher, this management philosophy was also adopted
by the car after-sales service organizations. Numerous studies are reported in literature on
the TQM in automotive sector both for manufacturing and services.
The Terziovski and Samson study (1999) [1] tests the strength of the relationship between
TQM practice and organizational performance with and without the parameters, company
size, industry type and ISO 9000 certification status. According to this study, a typical
manufacturing or service organization is more likely to achieve better performance in
employee relations, customer satisfaction, operational performance and business
performance, with TQM than without TQM.
Another journal (Ysof and Aspinwall 2001) [2] examines the implementation of TQM in four
industrial case studies. This work describes the methodology and findings of four industrial
case studies conducted on the implementation of TQM in automotive small and medium-
sized enterprises (SMEs). The companies were categorized as “TQM” and “lesser TQM”
companies and the analysis was performed on this basis. The results showed that the
TQM could be approached without the help of any specific framework, but with the
implementation of numerous quality initiatives or programs on a “slice by slice” approach.
A very important article was written by a Ford’s Quality Manager: Bob Stephens (1997) [3].
It compares three different groups of employees, within Ford, to determine the extent to
which TQM principles and quality tools are applied. The conclusion is that while ISO 9000
in not a prescription for TQM, implementation increased the application of TQM principles
and quality tools.
The Christian’s Madu study (2005) [4] aims to examine the strategic value of reliability and
maintainability management in achieving competitiveness and customer satisfaction. It
shows that there is a need to associate models of profitability assessment to reliability and
maintainability management. This, according to the article can help top management to see
the strategic value of reliability and maintainability management and, therefore, adopt
necessary organizational transformations to support these goals.
Chi Fong and Antony present in their study (2001) [5] the quality system standard QS 9000
for the automotive industry. The paper illustrates a comparison of QS 9000 with other
automotive standards and examines its relationship with ISO 9000 and TQM. According to
the article, QS 9000 could be considered as a stepping stone from ISO 9000 to TQM
implementation in the case of automotive industry.
Regarding car after-sales service, the Zairi’s paper (1996) [6] describes the best practices
through a study of Ford, Toyota, Nissan and Fiat in Germany. As reported, after-sales
improvements can only take place with a realization that future customer satisfaction would
be influenced by the quality of the after-sales delivery. The offerings in product design,
technology and price are becoming increasingly difficult to differentiate.
Beaumont and Sohal (1999) [7], report the results of a survey of quality management
practices in service companies. The most interesting findings of this work are that, first
although 94% of the companies used at least one quality management practice, there is no
link between the use of quality management practices and company size or success,
second, most companies are progressive in their dealings with suppliers and customers,
and third, view training positively.

3. Case Study
Subjected Organization
The object of the current assignment is the use of quality tools in after sales service in
multinational car company. The subjected organization is the first Greek organization in the
automotive after-sales service area, since it was originated 85 years ago. The reason that
make an old organization like this still living and evolving, is the continuously development
and the investments on new technologies and techniques.
 The organization owns 7 selling points and 4 authorized service stations, in two different
Greek cities. Relatively to the company’s size, it is a SME company since it has about 400
employees. Overall the organization sales more or less 300 cars per month and manages
approximately 170 service procedures per day.
The subjected organization is developed under the brand name of Ford Motor Company. It
is widely known that these kind of multinational companies are very concerned with quality
issues. In fact, the automotive companies were the leaders the most quality practices were
developed from and established, enforcing all the other industries to follow. So, it is easy to
understand that the automotive industry is the state-of-the-art in TQM, generating and
developing continuously quality tools that are put down as best practices. Adopting this
philosophy, the examined organization has been certified with ISO 9001. Nevertheless,
organization’s priority is to keep on attempting in order to reach higher levels of quality.
Methodology
The study is focused on suggesting ways through making use of novel quality tools in order
the quality services of the subjected organization to be improved. This work could be a
basis on which a framework for the organization’s future continuous quality improvement to
be developed. For this reason, after reviewing the relative literature, a proposal was made
by the author to the organization after-sales management. Due to the company’s sensitivity
about quality issues, the proposal was discussed extensively and finally it was approved.
During the first meeting with the relevant managers a definition of the problem was made.
The object of research is the definition of the area that causes the most customer
concerns. The next step was the creation of a research team responsible to detect this
area, applying the Delphi method. The research team made the participants selection,
prepared and distributed the questionnaires and analyzed the responses. The report of the
research team presented as the most frequent customer claim, the delays during service
procedures.
After that a sequence of meetings has followed with the participation of relevant managers
and company’s employees. During these meetings, through Brainstorming the causes and
the effects of the problem were detected and the appropriate Cause and Effect diagram
was designed.
Next, to the relevant managers and employees were asked to collect and provide data in
order to detect the service procedures that delay. The definition of these procedures was
the most complicated part of the research, due to the models and service procedures
variety. Applying a sequence of Pareto Charts, the three most frequent repairing operations
were detected for each one of the three most popular Ford models.
 Finally, each repairing operation was examined through Failure Mode and Effect Analysis
in order to determine actions to eliminate or reduce the risk. Through this analysis many
interesting conclusions were derived and suggestions for further quality improvement were
presented.
Problem Definition
Since the subjected Greek organization is interested in change, tries to find out the quality
problems that they affect the quality level of the providing service. During the first meeting,
the participants decided that the first step for the research subject definition is the detection
and analysis of the customers’ claims. So, it was asked to the Customer Care Manager to
provide the customer claims data for the period 1/1/05-31/12/2005.
The 85% of the customers that visit anyone of the organizations’ work-shops is called in by
the Customer Care Department. In general, according to the Customer Care Department
records, there are customer claims of any type in a percentage of 19.6 %. That means that
about 1 to 5 customers is dissatisfied. At the same time a research team was created
applying the Delphi Method in order the problem area to be defined.
After the research team categorized and analysed the provided data, it was made clear
that the most frequent customers claim is the time delay during service by a percentage of
50%. Next, follows the product quality (24%), the prices (18%) and the parts availability
(8%) are.
It was indicated that the 1 to 2 customers’ claims relates to the needed time each car has
to remain in the service station until is fixed and delivered to the customer. Of course the
stay time to the work-shop is independent to the time required for repairing. For example,
the required time for a specific repairing operation may be 2 hours, but due to bad
scheduling, or parts unavailability the vehicle stay time into the work-shop might be much
longer.
Relatively to the Product Quality and the Price Policy, there is totally none organization’s
responsibility. As the organization is non-vehicle manufacturer, this kind of claims concerns
the manufacturer which in this case is the Ford Motor Company..
The pricing policy either is established by the Ford Motor Company, Each dealer has to be
conformed to the Ford pricing policy both for the parts and man-hour charging. So, the
claims concerning prices does not consist any organization responsibility.
According to the before mentioned reasons, the research area relative to the customers
claims could be only the service delay. Except the customer satisfaction that might occur
by minimizing the service procedure delay, there is one more essential reason which
makes this effort meaningful. The time needed for each technician to accomplish a specific
repairing operation is independent to the man-hours that the customer pays for the same
operation. The Ford Motor Company has strictly established an indicative time for each
repairing operation. So, the customer is charged according to the indicative time,
regardless of the actual time that a technician may need for the operation. It is obvious
then, that as faster are the technicians as higher is their productivity, resulting higher profits
for the organization. In contrast, possible delays have major affect to the company’s
outcome. Subsequently, the delay reduction during repairing operation will improve the
organization profitability.
Brainstorming
The organization Quality Control Team invited relevant managers and expert employees in
a sequence of meetings in order through Brainstorming, the causes and the effects of the
service procedure delays to be detected. The participants of these meetings except some
Quality Control Team members, there were also company’s employees who could aim the
attempt. Among the participants were technicians, chief mechanics, the parts manager and
technical advisors. Each of them is in position to face the problem of service procedure
delay by its own side, providing information and aspects that cover all the problem
dimensions.
Cause and Effect Diagram
The Brainstorming resulted to the structure of a wide Cause and Effect Diagram. The Effect
of that is analyzed is the Service Delay as it was defined before. The main Causes of the
diagram are the Methods, Materials, People and Machinery. This diagram, except to the
indication of the possible problem causes, also helps to the identification of the areas
where data should be collected for the further study.
Pareto Analysis
The next step was the detection of the most frequent repairing procedures per model
during which delays are presented. This may was the most difficult part of the research,
since the collection and the analysis of these data required the support of various
organization departments and services. The After-Sales department, the Sales department
and the Electronic Data Processing department together with the relative managers helped
significantly to the collection and provision of the required data. Due to the volume and the
complexity of these data it was decided the research to deal with one of the organization
workshops.
The detection of the most popular models that visit the organization’s workshops could be
made by two different ways. The first way is based to the new vehicle sales per model and
the second to the number of visits per model. The Quality Control Team decided to use the
both ways in order the results to be ascertained.
Relative to the visits per model, it was decided that the period 1/2005-12/2005 would
provide a representative sample of the present situation. So, through the organization’s
information system the required data were collected and analyzed. As it was shown the
most frequently visiting models are the Focus 98-05, the Fiesta 01- and the Mondeo 01-.
Analytically, the Focus by 1576 visits comprises the 41.3% of the total visits (3820) during
the year 2005, the Fiesta by 832 visits the 21.8% and the Mondeo by 731 visits the 19.1%.
The visits of these three models comprise the 82.2% of the total visits during 2005
(3139/3820). According to the Pareto Analysis the research should be focused on these
models (Focus 98-05, Fiesta 01- and Mondeo 01- ).
In this point it should be noticed that the frequency of these models visiting the workshop
does not mean that the specific models are characterized by lower quality levels. As it is
proved further down these models are the Ford’s best sellers for the years 2001-2005, so
the service station visiting frequency is a consequence of their volume.
                         1800

                                                                                                                                                98,7% 99,2% 99,7% 99,9%                                      100%
                                                                                                                                    96,9% 97,9%
                         1600
                                    1576                                                                       93,3%    94,6% 95,8%                                                                                  100,0%
                                                                                                91,8%
                                                                                        90,0%
                                                                             88,2%
                                                                 85,8%
                                                      82,2%
                         1400
                                                                                                                                                                                                                     80,0%

                         1200

                                           63,0%
                         1000                                                                                                                                                                                        60,0%
                                              832
                          800
                                                        731

                                                                                                                                                                                                                     40,0%
                          600         41,3%



                          400
                                                                                                                                                                                                                     20,0%

                          200
                                                                   139        90          71         67         58           51    46         41        38           29          22         16         10        3
                            0                                                                                                                                                                                        0,0%




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         Figure 2. Pareto Chart for the subjected Workshop’s Visits per Model for the year 2005
The Sales Department was asked to provide additional data about the organization sales
for the period 2001-2005. The choice of this period was not coincidental. It has been
noticed that the vehicles between 1-5 years of age constitute the larger part of the
organization’s clientele. According to the provided data the most popular Ford model is the
Focus by 4129 vehicles sold, comprising the 39.9% of the total organization sales (10343
vehicles sold) for the period 2001-2005. Next, follows the Fiesta by 2713 vehicles sold and
the Mondeo by 1489, comprising the 26.2% and the 14.4% of the total organization sales
correspondingly. These three models together comprise the 80.5% of the total company’s
sales for the specific period, since their sum corresponds to 8331 sold vehicles.
As it is arisen by the above data, there is correspondence among the models with the most
frequent visits and those with the highest sales. In both cases the first three models by the
same shorting comprises over the 80% of the total visits and vehicles sold correspondingly.
Consequently, according to the Pareto Analysis it is proven that the further research should
be focused on the specific models (Focus 98-05, Fiesta 01- and Mondeo 01- ).
Since the subjected model has been defined, the next step is the detection of the most
common repairing operations per model. The most accurate method, for detecting the most
common repairing operations per model, is through analysing the spare part sales for the
specific period (2005). For this reason the Parts Manager required to provide the needed
data.
The spare parts sales data was derived through the organization’s information system. Of
course the spare parts which are considered “expendables” or “fast moving” and they are
consumed during the scheduled service (e.g. filters, spark plugs, lubricants etc) were
removed from the record. The research focuses on the non-scheduled repairing
operations, since this is the area that the problem has been defined. The spare parts with
the highest sales per model are presented into the following table (Table 1).
                     Table 1. Most frequent Spare Parts sales per model for the
                                             year 2005

The definition of the most frequent repairing operations per model is made by analyzing
their spare parts sales through Pareto Analysis. In this point it has to be noticed that the
defined repairing operations are not the only ones during which occur delays, nor that
during these operations occur the longest delays. There are certainly many different
repairing operations during which maybe occur much longer delays, but definitely are much
fewer than those defined. Consequently, the attempt for quality improvement should be
focus on the few but vital operations instead of many and trivial.
The severity of a short repairing procedure is considered very low for the current research.
For this reason the following analysis comprises parts that the standard time required for
their replacement is at least 0.5 hour.
Relative to Focus model, the Cowl Panel Grille by 291 units sold comprises the 60% of the
total recorded sales (485 parts sold). Next, follow the Water Pump by 80 parts sold and the
Clutch Master Cylinder by 72, comprising the 16% and 15% correspondingly. The sum of
these three spare parts’ sales represents the 79% of the total recorded sales.
Respectively, concerning Fiesta the Water Pump (54 units sold), the Throttle Housing (42
units sold) and the Drive Shaft Bearing (39 units sold) comprise the 32%, 25% and 23% of
the 168 recorded total sales. The sum of these three spare parts’ sales represents the 80%
of the total recorded sales.
Finally, regarding Mondeo the 47 sales of the Fuel Pump, the 33 of the Inlet Manifold and
the 29 of the Flywheel, comprise the 34%, 24% and 21% of the 138 recorded total sales
correspondingly. The sum of these three spare parts’ sales represents the 79% of the total
recorded sales.
Notice, that the volume of the specific sold parts does not mean that their corresponding
repairing operations present the longest delays as well.
Failure Mode and Effect Analysis
The above data were determined in order to be used through the Failure Mode and Effect
Analysis (FMEA). The FMEA addresses the issue of why a process is unable to achieve its
goal. The aim is to identify the sources of the process problems by breaking the process
into its sub-components with the intention of isolating the problem. This approach involves
the previous determined statistical data collection especially with relation to the frequency
of sub-components failures and the causes of such failures. Like the Cause-and-Effect
Diagram, FMEA also tends to relate the causes to people, materials, methods and
machinery problems. Management will come to understand through this analysis the
impact that reliability has on its ability to achieve its strategic goals.
There are two phases in the FMEA process. The first phase is to identify the potential
failure modes and their effects. Notice that in this case failure means delay during repairing
operations. The second phase is to perform critically analysis to determine the severity of
the failure modes. The first phase has to be done concurrently with the detailed process
design. In this case the process designs are given by Ford Motor Company, in a form of
instruction sheet for each one of the repairing operations. At the second phase of FMEA
the criticality of each repairing operation is evaluated and ranked. The most serious failure
has the highest rank and is considered first in the process revision. The process is revised
to ensure that the probability of occurrence of the highest ranked failure is minimized.
The FMEA team, which performed the FMEA members, consisted of several organization
employees. Members of this team were technical advisors, the chief mechanic and the
author who is responsible for the FMEA process.
The potential failure modes and their effects were identified through each one procedure
instruction sheet provided by Ford. The FMEA team studied and analysed the instruction
sheet for each one of the defined repairing operations, in order to identify the failure modes
and their effects relative to delay occurrence during the repairing operations.
The severity determination of the failure modes was performed through the FMEA team
through critical analysis. According to severity ranking a severity value of 10 means that
failure results in death. In this case, the failure-delay during a vehicle repairing operation
could not have at any case such negative implications. Thus, the failure severity estimation
was performed according to how crucial each repairing operation is for the smooth, safe
and efficient vehicle function. A simple repairing operation that does not affect any of these
factors has high severity value since a potential delay will possibly cause customers
complaint. On the other hand, an essential for the vehicle’s safe operation has lower
severity value, since the customer in case of delay probably will not express any claim due
to taking into account that it concerns safety reasons.

4. Conclusion
The current work refers to the service quality improvement in a Greek vehicle service
organization through the use of quality tools and methods. After reviewing the relative
literature, were determined the areas that the organization should perform continuous
quality improvement for achieving its strategic goals and gaining the competitive advantage
against the competition. By using quality tools and methods the delays during repairing
operations was defined as the most frequent customer claim. In addition, through
Brainstorming, Cause-and-Effect Diagram and Pareto Charts, were analysed the workshop
visits per vehicle type, the vehicle sales and the parts sales. In this way the most frequent
repairing operations, during which delays are occurred, were defined for the three most
popular vehicle models. These repairing operations were further analysed applying the
FMEA process. Through the FMEA the wasted time during the repairing operation was
reduced by 42%-76%. It is concluded that through the wide TQM and FMEA process
application, both the service quality and profitability of the organization can be improved
significantly.

5. REFERENCES
[1] Mile Terziovski, Danny Samson, “The Link between Total Quality Management Practice and
    Organizational Performance”, International Journal of Quality & Reliability Management, Vol. 16, No 3,
    1999, pp. 226-237
[2] Sha’ri Mohd. Yusof, Elaine Aspinwall, “Case Stusies on the Implementation of TQM in the UK Automotive
    SMEs”, International Journal of Quality & Reliability Management, Vol. 18, No 7, 2001, pp. 722-743
[3] Bob Stephens, Implementation of ISO 9000 or Ford’s Q1 Award: Effects on organizational Knowledge
    and Application of TQM Principles and Quality Tools, TQM Magazine, Vol. 9, 1997, pp. 190-200
[4] Christian N. Madu, “Quality and Reliability Corner: A Strategic Value of Rerliability and Maintainability
    Management”, International Journal of Quality & Reliability Management, Vol. 22, No 3, 2005, pp. 317-
    328
[5] Jeffrey Lo Chi Fong, Jiju Antony, “QS 9000: an Overview and Comparison with ISO 9000” The TQM
    Magazine, Vol. 13, No 5, 2001, pp.315-318
[6] Olajide Omotuyi Ehinlanwo, Mohamed Zairi, “Best Practice in the Car After-Sales Service”, Business
    Process Re-engineering & Management Journal, Vol. 2 No 3, 1996, pp. 39-53
[7] Nicholas Beaumont, Amrik Sohal, “Quality Management in Australian Service Industries”, Benchmarking:
    An International Journal, Vol. 6, No 2, 1999, pp.107-124

								
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