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Service Innovation | Dr Shaun West
Quality in services – what is it?
1 September 2016
Dr Shaun West
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 7705986shaun.west@hslu.chhttp://ch.linkedin.com/shaunwest
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
Service Innovation | Dr Shaun West
WHY IS SERVICE QUALITY HARD TO MEASURE?
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
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
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
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’
Service Innovation | Dr Shaun West
MEASURING SERVICE QUALITY
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
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?
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
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
Service Innovation | Dr Shaun West
WORKING SESSION: CREATING A SYSTEM TO MEASURE SERVICE QUALITY
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.
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
Service Innovation | Dr Shaun West
A MODEL FOR MEASURING SERVICE QUALITY
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
!
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$deliveries
!
Service Innovation | Dr Shaun West
A model for measuring service quality We can learn from hard facts about our quality?
Lessons-‐ Efficiency metrics confirm consistency of delivery-‐ OTD shows a late completion but for the customer this was acceptable
-‐ Reporting is a customer concern-‐ Price as quote here was over-‐delivered
Notes-‐ Critical outcomes based on Ulwich, OTD based innovation-‐ Importance = expectation-‐ Satisfaction = performance
The information here confirms if you are meeting internal and external expectations
Hard%facts Soft%facts
Efficiency
Effectiven
ess
Benchmarks Planned Actual
OTD$(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$deliveries
!
Service Innovation | Dr Shaun West
Hard%facts Soft%facts
Efficiency
Effectiven
ess
Benchmarks Planned Actual
OTD$(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
Service Innovation | Dr Shaun West
CLOSING
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
Service Innovation | Dr Shaun West
Thanks for your time!
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