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Topic 4

Based on a survey, customer service and product quality are ranked as the most important goals for business success. Providing excellent service and quality products gives companies a competitive advantage. Happy customers return and bring in new customers through positive word-of-mouth. Customer relationship management uses technology to maintain close communication with customers and understand their needs. Quality management recognizes principles like customer focus, leadership, and continual improvement to guide organizations towards better performance. Statistical quality control uses methods like control charts and Six Sigma to systematically monitor processes and ensure products and services meet high quality standards.

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34 views

Topic 4

Based on a survey, customer service and product quality are ranked as the most important goals for business success. Providing excellent service and quality products gives companies a competitive advantage. Happy customers return and bring in new customers through positive word-of-mouth. Customer relationship management uses technology to maintain close communication with customers and understand their needs. Quality management recognizes principles like customer focus, leadership, and continual improvement to guide organizations towards better performance. Statistical quality control uses methods like control charts and Six Sigma to systematically monitor processes and ensure products and services meet high quality standards.

Uploaded by

Topped Off Coffee Shop
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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TOPIC 4 – SERVICE AND PRODUCT QUALITY

Based on a survey, some business leaders rank customer service and product quality as
the first and the second most important goals in the success of their organizations. Providing
great service and quality products are isn’t always easy. It must be relentlessly pursued and
striving to reach these goals can be an important source of competitive advantage.

According to Bill Gates: “Your most unhappy customers are your greatest source of learning.”

Happy customers and clients return again and again. They would also tell others of their
experience and this expands the customer base.

A. Customer Relationship Management (CRM)


- This is an approach that uses the latest information technologies to maintain intense
communication with customers as well as to gather and utilize data regarding their
needs and desires.

External customers – those that purchase the goods or utilize the services provided - - they
may be industrial customers or they may be retail customers.

Internal customers – those that are found within the organization. They are the individuals and
groups who use or otherwise depend on one another’s work in order to do their own jobs well.

The notion of customer service applies equally well to external and internal customers

When customers are respected and treated as key stakeholders of any organization, they put
today’s organizations to a very stiff test. They want a) high quality b) low price and c) on time
delivery in the goods and services they buy.

Many organizations now use the principles of Customer Relationship Management to establish
and maintain high standards of customer service.

TO DO: Read more about CRM and think of examples of how it becomes helpful in
establishing a competitive advantage.

B. Quality Management

Managers that are customer and quality conscious understand the basic link between
competitive advantage and the ability to always deliver quality goods and services. High
performance organizational cultures include service and quality as core values to be
reinforced in all aspects of value and supply chain management.

Question: What is ISO Certification and why do organizations find it important in their
operations?
Quality management recognizes a number of management principles that can be used
as a framework to guide organizations toward improved performance. The principles
include customer focus, leadership, involvement of people, process approach, system
approach to management, continual improvement, factual approach to decision-making,
and mutually beneficial supplier relationships. It provides a suitable guidance to build upon
Quality Assurance standards to achieve business benefits for all stakeholders and focuses
on continual performance improvement to sustain customer satisfaction.

Question: Who is W. Edwards Deming? What is his contribution to Quality Management?

Total Quality Management is an outgrowth of Deming’s work. This is a process that


makes quality principles part of the organization’s strategic objectives, applying them to all
aspects of operations and striving to meet customers’ needs by doing things right the first
time.

The search for quality is closely related to the emphasis on continuous improvement.
The notion is that one can never be satisfied; something always can and should be improved
on. Another important aspect of total quality operation is cycle time - - the elapsed time
between receipt of an order and delivery of the finished product. The quality objective here
is to reduce cycle time by finding ways to serve customer needs more quickly.

TO DO: Find out what is the Pareto Chart. Be sure you can explain how it works with
quality improvement.

C. Statistical Quality Control

Quality Control checks processes, materials, products, and services to ensure that they
meet high standards.

An easy way to understand the notion of systematic quality control is through control
charts. Control charts are graphical ways of displaying trends so that exceptions to quality
standards can be identified for special attention. An upper control limit and lower control
limit specify the allowable tolerances for measurements. As long as the manufacturing
process produces parts or goods that fall within these limits, things are “in control.”
However, as soon as manufactured parts/goods start to fall outside the limits, it is clear that
something is going wrong that is affecting quality. The process can then be investigated,
even shut down, to identify the source of the errors and correct them.

The same logic is extended further with sophisticated statistical quality control
procedures that use rigorous statistical analysis for checking processes, materials, products
and services to ensure that they meet high standards. Typically, statistical quality control
begins by taking samples of work, measuring the quality in the samples, and then
determining the acceptability of results. Unacceptable results in a sample trigger the need
for investigation and corrective action.
The power of statistics allows sampling to be efficiently used as the basis for decision-
making and quality management.

Question: What is Six Sigma?

Be sure you can:


● Explain the difference between external and internal customers of a firm
● Discuss the importance of customer relationship management in a competitive
business environment
● Explain ISO certification
● Define the terms TQM and continuous improvement
● Illustrate how control charts and Six Sigma programs enhance quality management

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