Customer Satisfaction

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 Quality is also defined as excellence in the product or
service that fulfills or exceeds the expectations of the
customer.

 There are 9 dimensions of quality that may be found in

products that produce customer-satisfaction.

 Though quality is an abstract perception, it has a

quantitative measure- Q= (P / E ) ,
where Q=quality, P= performance(as measured by the
Mfgr.), and E = expectations( of the customer).
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 Quality is not fine-tuning your product at the final
stage of manufacturing, before packaging and shipping .

 Quality is in-built into the product at every stage from

conceiving –specification & design stages to prototyping
–testing and manufacturing stages.

 TQM philosophy and guiding principles continuously

improve the Organization processes and result in
customer satisfaction.

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  Performance
 Features

Performance
Conformance
 -----------------------------
 Reliability
 Durability
 Service
 ----------------------------- Cost
 Response- of Dealer/ Mfgr.. to
Customer
 Aesthetics – of product Service Features
 Reputation- of Mfgr./Dealer

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 MONOPOLIST markets Seller’s market

 GLOBAL markets Buyer’s market

 Market more competitive Customer-oriented

Demand is defined
by Users.
 Quality management is a necessity for survival and growth
of the organization in a global environment.

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 Quality infused Personnel and Processes.

TM Q

U
A
MM
L INPUTs

LM I
T
Y
Other Staff

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 Management commitment to TQM principles and
methods & long term Quality plans for the Organization
 Focus on customers – internal & external
 Quality at all levels of the work force.
 Continuous improvement of the production/business
process.
 Treating suppliers as partners
 Establish performance measures for the processes.

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 Low customer satisfaction
 Low productivity, sales & profit
 Low morale of workforce
 More re-work, material & labour costs
 High inspection costs
 Delay in shipping
 High repair costs
 Higher inventory costs
 Greater waste of material

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 Higher customer satisfaction
 Reliable products/services
 Better efficiency of operations
 More productivity & profit
 Better morale of work force
 Less wastage costs
 Less Inspection costs
 Improved process
 More market share
 Spread of happiness & prosperity
 Better quality of life for all

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 Good Quality – leads to more Productivity
Sales, Profits, and increased Operational
efficiency and min. Losses.
 Bad Quality - results in less Productivity,
Sales , Profits and Efficiency - with Losses amounting
to 20% or more of the Sales revenue generated.

to maintain quality it takes more 20% sales, it means that you

at the verge of being running at loss
Refer slide 13

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 Quality cost is the cost of bad Quality of product and services that
rebounds to the Manufacturer.
 It adds to other costs in Design, Purchase,Production,Sales , Service etc.
Quality costs in all depts. can be measured , programmed,budgeted etc.

 External failure Quality costs – Returned goods, Warranty,Service etc.

 Internal failure Quality costs- Rework of products

 Appraisal costs –Inspectors and Inspection costs

 Prevention costs-assoc. with Design,Sales,Purchase

----------------------------------------------------------------------------
 [.Accepted Quality Level ( AQL) eg. 3-4 defects per million ( six Sigma
process) or zero-defect manufacturing process.]

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 Identifies the magnitude of Quality loss in financial terms- ie. Rs., $ etc.

 Reveals the Management commitment to Quality.

 Identification of Quality improvement areas by studying Quality costs

 Identification of hidden losses in all the processes

 Comprehensive system that improves Quality by finding source of the

problem and correcting it.

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Profits
Quality costs
~20-30%

Operation costs
~70%

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 External failure
75

Quality
Costs50 Internal failure

(1000’s Appraisal
dollars)
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Prevention

3 4 1 2 3 4 1
Quarters
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 

Quality
Costs

Total costs
Intnl.and Extnl.
Failure costs

Prevention and
Appraisal costs

Quality of conformance % 90 100

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 Customer is the Boss or ’King’
 Customer dictates the market trends and direction
 Customer not only has needs to be supplied( basic
performance functions)
 Also he ‘wants what he wants!’( additional features satisfy
him and influence his purchase decision)
 Hence the Suppliers and Manufacturers have to closely
follow at the heel of the customer.

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
CUSTOMERS

Front-line Staff

Functional
Department
Staff
Sr.
Mgrs
CEO

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 Customer needs

Company
Product/Service
offer

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 Is it due to Product quality?
 Is it due to pricing?
 Is it due to good customer service ?
 Is it due to company reputation?
 Is it something more?

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 External and Internal customers
 External – current, prospective and lost customers
 Internal – Every person in a process is a customer of the
previous operation.( applies to design, manufacturing,
sales, supplies etc.) [Each worker should see that the
quality meets expectations of the next person in the
supplier-to-customer chain ]
 TQM is commitment to customer-focus - internal and
external customers.

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 Outputs to
external customers
Inputs from
external customers

Internal customers

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 Questions asked by people to their internal customers
 What do you need from me?
 What do you do with my output?
 Are there any gaps between what you need and what
you get?
 Good team-work and inter-Departmental harmony is
required. Also the leaders role in supervising the internal
customer-supplier chain.
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 TQM is quality management and management of quality –
there is no full stop and no break in the chain!
 Continuous process (quality) improvement is all its about.
 Why? One important reason is the customer quality level is
not static and his expectations keep changing and his
demands too!
 Also plant process dynamics- how to achieve maximum
efficiency , optimizing cost and performance in the process
operations, minimizing waste etc.

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 Performance
 Features
 Service
 Warranty
 Price
 Reputation

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 Customer feedback has to be continuously sought and monitored -
not one-time only!( Pro-active! Complaints are a reactive method
of finding out there is a problem)

 Customer feedback can be relayed to Manufacturer(Mfgr)

 Performance comparison with competitors can be known(From the

market share)
 Customers needs can be identified(Questionnaire)

 Relative priorities of quality can be obtained from the horses’

mouth!

 Areas for improvement can be noted.

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 Comment cards enclosed with warranty card when product is purchased.
 Customer survey and questionnaire
 Customer visits
 Customer focus groups
 Quarterly reports
 Toll-free phones
 e-mail, Internet news groups, discussion forums
 Employee feedback
 Mass customization.

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 Employers don’t pay wages but it is the customer who pays the
wages!

 So take good care of your customers.

 Customer-care centres not just profit-centres!. It is more than that.

 The entire organization must in effect revolve around the customer –
whether the customer is being well served and if he is really
pleased,contented and satisfied with the service you have to offer.

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(i.)Organisation
Identify each market segment

Write down the requirements

Communicate the requirements

Organise processes( ATM Machines)

Organise physical spaces( Mini COM bank)

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(ii) Customer Care
Meet the customer’s expectations

Get the customer’s point of view

Deliver what is promised

Make the customer feel valued

Respond to all complaints

Over-respond to the customer

Provide a clean and comfortable customer reception area.

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(iii) Communication
Optimize the trade-off between time and personal

attention
Minimize the number of contact points

Provide pleasant, knowledgeable and enthusiastic

employees
Write documents in customer-friendly language.

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(iv) Front-line people
Hire people who like people

Challenge them to develop better methods

Give them the authority to solve problems

Serve them as internal customers

Be sure they are adequately trained

Recognise and reward performance

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(v)Leadership
Lead by example

Listen to the front-line people

Strive for continuous process improvement

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 Keep promises to customers
 Return customer calls promptly
 Allot staff to handle customer problems
 Treat customers with courtesy, respect and professionalism always
 Evaluate customer satisfaction regularly
 Search for customer-related improvements continuously
 Deliver Products/Service promptly and efficiently
 Give every customer complete and personal attention.

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 Maintain a neat and clean appearance of self and work-place, at all
times
 Review and implement customer feedback and suggestions into
current procedures when needed
 Training and education to enhance job performance and
commitment to customer care
 Treat every customer as we would treat ourselves.

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 Customer
satisfied
Exciters-
Quickly expected Easily identified
Innovations
Typically performance related

Requirement Requirement
Not satisfied satisfied
Unspoken-
but expected
requirements
Spoken and Known only to experienced
expected Customer designers or discovered late
requirements Not satisfied

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 Customer satisfaction should lead to customer loyalty and
customer retention.
 This is the acid test and bottom line- when the customer
repeatedly comes back to you for repeat orders and to
purchase new products Manufacturering. by you. (In spite of
stiff competition and multiple Suppliers/Sources! )
 Firm orders received or cash payments registered , market
share, customer referrals and customer retention are an
indication of your customer success and penetration .

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 Maslow’s Hierarchy of Needs
 Herzberg’s Two-Factor Theory

 Achieving a motivated task-force

Know your self, Know your employees, Establish a positive
attitude, share the goals, Monitor progress, Develop
interesting work, Communicate effectively, Celebrate
success.
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 To invest people with authority –to tap the potential
in every worker (avoid the wastage of unrealized
capacity)

 People have the ability, confidence and commitment

to take the responsibility and ownership to improve
the process, and initiate the necessary steps to satisfy
customer requirements within well-defined
boundaries in order to achieve organizational goals.

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 Everyone must understand the need for change(Understand need for
empowerment)
 The system needs to change to the new paradigm
 The organisation must enable its employees (Empower employee)
 Teams

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 Process refers to business and production activities of
an Organization.
 Processes for improvement- eg. Design &
Manufacturing, Marketing,Stores & Purchase,etc.
 Inputs of the Process-
Manpower, materials, money,data,etc.
 Outputs- Products, Services, data etc.
Outputs need performance measures – main outcome
being customer satisfaction.(feedback is used to
improve the process)

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 Process refers to business and production activities of
an organization

 Business processes-Manufacturing, Design, Sales,

Purchase,Stores etc.are areas where non-conformance
can be reduced and processes improved

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 FEEDBACK

PROCESS
INPUT People OUTPUT
Materials Equipment Infornmation
Money Method Data O/P
Data,etc. Environment Product
Matterials Service,etc.
Procedures

CONDITIONS
(Control System)

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 Reduce resources
 Reduce errors
 Meet or exceed expectations of internal/external
customers
 Make the process safer
 Make the process more satisfying to the person doing it.

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 Juran’s Trilogy
 Shewhart’s Plan-Do-Study-Act cycle
 Kaizen- making small incremental improvements to the
individual and the organization.

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 Three components - PLANNING,CONTROL AND
IMPROVEMENT
 Based on financial processes ,such as
budgeting(planning), expense measurement(control),
and cost reduction (improvement)

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 Repair
 Refinement
 Renovation
 Re-invention

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 The 3 K Method
 Kimerareta Kotoo – What has been decided
 Kimerareta Tori – must be followed
 Kichim to Mamorukoto – as per standard.

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 Seiko - Sort ( Proper arrangement )
 Seiton - Set ( Systematic or Orderliness )
 Seiso - Shine ( Sweep or clean-up )
 Seiketso - Standard ( Personal cleanliness )
 Shitsuke - Sustain ( Self-discipline )

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 Kaizen- defines the managements role in continuously encouraging
and implementing small improvements in the individual &
organization.
 Break the complex process into sub-processes and then improve the
sub-processes.
 Continuous improvements in small increments make the process
more efficient ,controllable and adaptable.
 Does not rely on more expense,or sophisticated equipment and
techniques.
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  Value and non-value added work
activities
 Muda-seven classes of waste
 Principles of motion study and work-
cell use
 Principles of materials handling and
use of one-piece flow
 Documentation of standard
operating procedures
 The 5S’s
 Visual displays for communicating to
factory personnel
 JIT- to produce right quantities at
right time and with right resources
 Poka-yoke to prevent or detect
errors
 Team dynamics – problem solving
,comm.,conflict resoln.

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  Kaizen
 Heijunka
 Kairetsu
 Kokusunka

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 Compliance
 Unstructured
 Efficiency
 Process design
 Product design

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 Identify the opportunity
 Analyze the current process
 Develop the optimal solution(s)
 Implement changes
 Study the results
 Standardize the solution
 Plan for the future.

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