Monday, June 25, 2012
How often have you not purchased a product when the accompanying service was not upto your expectations? I am sure, several times. As a keen observer of how I, my family, and others purchase products, I am convinced that increasingly we purchase a product as a package – with the accompanying service. To add to this we buy a range of services regularly. Are we then primarily buying services of products? While writing about quality at Ford, in June 2011, I asked if Ford was a Service company or manufacturing one?
This month Paul Borwaski, CEO of ASQ, highlights this question as well. His question is inspired by a recent Conference Board paper on Answering the Conference Board CEO Challenge. While some wonder if we are predominantly a service economy, I think we are already in one. Unless we are buying iron ore or defense aircrafts.
So what are the things we buy? Groceries, Utilities, Clothing, Food, Entertainment, Phones, Cars… You get the drift. Most of these products are similar to each other. I haven’t researched many reports, but I can safely say a KFC burger is pretty much same as a Mac. But some of us like KFC and others like Mac. Why? It’s the service and experience that we base our decision on. I have personally switched from a local grocer recently because of how he would talk to some customers. Now what he sold is just the same as the new grocery shop does. Prices are also same.
In Financial services we buy Loans and Cards and safety of our deposits (with some returns). Survey after Survey shows that most major providers actually offer the same rate (or pretty close to each other). Still, people, like one over the other. Why? Service makes the difference.
How can quality help? Just as we help in improving products. I would refer Dr J M Juran’s classic work on Juran Trilogy – Quality Planning, Quality Control, and Quality Improvement.
Planning Quality in Services – This is perhaps the most difficult of the three processes. Services processes have to be more flexible and yet broken down into small steps for staff to deliver this service with ease. Frontline or customer facing processes need high quality flexible and caring staff to help customers. While quality professionals will develop processes for most situations, there will always be new ones. Service oriented staff will use common sense in such cases. Frontline processes should be short and crisp while backend processes must be detailed for effective delivery.
Controlling Quality in Services – Service processes are different from manufacturing in one key way. Customers are part of delivering the service. Controlling a process where customer is a part of the delivery process can be insane. Some companies try to do this by breaking the process in parts while others prefer to have only one or two staff touch the process. Michael Hammer would have been happy to see lesser touch points. I personally prefer the lesser touch point method – of course this does not work when some parts of the work are very specialized.
Improving Quality in Services – Of the Juran Trilogy this part is the most similar to manufacturing or improving quality in product. Established methods such as Kaizen, A3, Six Sigma, and Lean work just as well in services as they do with products.
So, where is the tough part?
Metrics and Measurement – I believe this is where the rubber hits the road. With very limited experience in management of services, most of us are not sure of the metrics to follow. If you focus on productivity a bit too much, quality will suffer. If you focus on Quality, process time will suffer. Focus on the customer a bit too much and costs will spiral. What metrics to use in what stage of service delivery and maturity is a critical question. It’s a question with few answers.