Operations Management and TQM

CHAPTER 2

STRATEGIC DIMENSIONS OF QUALITY

OBJECTIVES
After reading this chapter the student should be able to
➢ Identity the eight dimension of product quality
➢ Name the five dimensions of service quality
➢ Differentiate the dimensions of product and service quality,

Quality is multidimensional Product and service quality are comprised of a number of

dimensions which determine how customer requirements are achieved Therefore it is essential
that companies consider the entire dimension that may be important to their customers Evaluating
all dimensions of a product or service helps to determine how well the service is given against
meeting the customer Requirements.

DIMENSIONS OF PRODUCT QUALITY

At a strategic level there are eight dimensions of product quality management that can be
used to evaluate quality characteristics, David Garvin of the Harvard Business School developed
a system of thinking about quality of products. Some of the dimensions are mutually reinforcing
whereas others are not which means improvement in one may be at the cost of others.
Understanding the trade-offs preferred by customers among these dimensions can help build a
competitive advantage.

Performance (Will the product do the intended job?)

Performance consists of the primary operating characteristics of a product. For an

automobile, performance would include traits like acceleration, handling Cruising speed, and
comfort: for a television set, performance means sound and picture clarity, and the ability to
receive distant stations.

This dimension of quality involves quantifiable attributes, so brands can typically be ranked
objectively on individual aspects of performance. Overall performance rankings, however, are
harder to develop, particularly when they entail benefits that not all consumers require.

Performance is regularly a basis of disagreement between customers and suppliers,

predominantly when deliverables are not sufficiently described within specifications. The
performance of a product frequently controls the profitability or status of the end-user. As such,
many contracts or specifications take in damages associated to poor performance. The issue of
whether performance differences are quality differences may be based on circumstantial
preferences. However, preferences are based on functional requirements, not taste. Some
performance standards are founded on personal preferences, but the preferences are so
universal that they have the force of an objective standard.
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Features (What does the product do?)

Features are added characteristics that boost the attraction of the product or service to the
user. They are all the qualities and characteristics of a product like its size, shape, materials, and
its functionalities and capabilities. Some examples of features include free drinks on a plane
permanent press cycles on a washing machine, and automatic tuners on a color television set.

Features are often a secondary aspect of performance Features are the bells and whistles"
of products and services, those characteristics that add values to their basic functioning. The line
separating primary performance characteristics from secondary features is often not easy to
illustrate.

Features of a products that are mentioned most are the qualities that make the product
saleable or that make it stand out from its competitors such as it is longer-lasting or more durable,
it is cheaper to operate, it is made of higher quality materials or it is better built, it has a special
function that its competitors do not, and so forth.

Reliability (How often does the product fail?)

Reliability is the likelihood that a product will not fail inside a particular time period. This is
a key element for users who need the product to work with no failures. This dimension reflects
the likelihood of a product malfunctioning or failing within a specified time period.

Reliability normally becomes more significant to consumers as downtime and maintenance

become more expensive. Farmers, for instance, are especially sensitive to downtime during the
short harvest season. Reliable equipment can mean the difference between a good year and
spoiled crops. However consumers on other markets are more familiar than ever to product
reliability too. Computers and copying machines certainly compare on reliability.

Reliability may be directly connected to performance. A reliability deficiency will eventually

lead to impaired or lost performance, compromised safety and we need for restorative actions like
diagnosis, repair, spare replenishment and maintenance. High reliability products will operate
longer, allowing resources to he focused on improving performance.

Reliability addresses the probability of a product or service. Among the most common
measures of reliability are the mean time between failures, and the failure rate per unit time. Since
these measures necessitate a product to be in use for a specified period, they are more relevant
to durable goods than to products and services that are consumed instantly.

Mean time between failures (MTBF) is literally the average time elapsed from one failure to the
next. Usually people think of it as the average time that something works until it fails and needs
to be repaired (again). For instance, the MTBF for a particular type of automatic nozzle on gas
pumps might be 18 months. This means that on the average, a failure will occur every 18 months.
The MTBF is beneficial in creating preventive maintenance policies.

Mean Time between Failures = (Total up time) / (number of breakdowns)

Failure rate is the frequency with which a component' fails, expressed in failures per unit
of time. It is often denoted by the Greek letter A (lambda). The failure rate of a system usually
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depends on line with the rate varying over the life cycle of the system. For example, an
automobile's failure rate in its fifth year of service may be many times greater than its failure rate
during its first year of service. One does not expect to replace an exhaust pipe, overhaul the
brakes, or have major transmission problems in a new vehicle. Failure rates are important factors
in the insurance finance, commerce and regulatory industries and fundamental to the design of
safe systems in a wide variety of applications.

Failure rate = Number of failures/number of units tested X total length of time

Conformance (Is the product made exactly as the designer intended?)

Conformance depicts to what extent a product's design and operating characteristics meet
established standards. This dimension owes the most to the traditional approaches to quality
pioneered by experts like Juran.

All products and services involve specifications of some sort. When products are
developed, these specifications are set and a target is set, for instance the materials used or the
dimension of the product. Not only the target but also the tolerance (the range of permitted
deviation from the target) is defined. One problem with this approach is that there is little interest
in whether the specifications have been met exactly as long as the tolerance limits are met.

On the one hand, this can lead to the so-called "tolerance stack-up". When two or more
parts are to be fit together, the size of their tolerances often determine how well they will match.
Should one part fall at a lower limit of its specification and a matching part at its upper limit, a tight
fit is unlikely. The link is likely to wear.

This problem can be addressed by taking a different approach to measuring quality.

Instead of measuring a simple conformance to specifications, the degree to which parts or
products diverge from the ideal target is measured. Using this approach process 1 (See Figure
4) is better even though some items-fall beyond specification limits. The traditional approach
would have favored process 2 because it produces more items within the specification limit. It was
demonstrated that the problem of "tolerance stack-up is worse when the dimensions of parts are
more distant from the target than when they cluster around it, even if some parts tall outside the
tolerance. This approach requires a fresh look at the common process quality factor of "defect
rate" to take into account the fact that two parts may each pass the "tolerance test" separately but
be unusable when the attempt is made to join them together.

In service businesses, measures of conformance normally focus on accuracy and

timeliness and include counts of processing errors, unanticipated delays and other frequent
mistakes.

Durability (How long does the product last?)

Durability is a measure of how much use a person gets from a product before it breaks
down to such a point that replacement makes more sense than continual repair.

It measures the length of a product's life. When the product can be repaired, mating
durability is more complicated. The item will be used until it is no anger economical to operate it.
This happens when the repair rate and the associated costs increase significantly. Technically,
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durability can be defined as the amount of use one gets from a product before it deteriorates.
After so many hours of use, the filament of a light bulb burns up and the bulb must be replaced.
Repair is impossible. In other cases, consumers must weigh the expected cost, in both pesos and
personal inconvenience, of future repairs against the investment and operating expenses of a
newer, more reliable model.

This approach to durability has two important implications. First, it suggests that durability
and reliability are closely linked. A product that often fails is likely to be scrapped earlier than one
that is more reliable. Repair costs will be correspondingly higher and the purchase of a competitive
brand will look that y much more desirable. Second, this approach implies that durability figures
should be interpreted with care. An increase in product life may not be the result of technical
improvements or the use of longer-lived materials. Rather, the underlying economic environment
simply may have changed.

Durability testing allows the assessment of a products response to the physical and
climatic hazards that may occur throughout the operational life of the product. This testing
provides recognition of compliance, analysis and resolution of damage issues, and assurance of
reliability and durability. There three types of durability testing which are:

1. Vibration testing - In vibration testing, the vibration environment to which products will
be exposed to in real use is reproduced. Products are tested in this environment to judge their
durability or check for improvements. There are two types of vibration testing,

a. Vibration Experiment - Vibration testing that is used to test a sample or

representative model of volume production. It is used to improve the product design.

b. Vibration Stress Screening - All production products are tested to eliminate faulty
units and approved good units. It may be compulsory in certain industries.

Example: Vibration Testing in a CAR

Vibration is inseparable from a car's motion There is a lot of influence from vibration in
long term driving and off-road driving Observation for durability and influence of vibration
is an important process to obtain the reliability of products.

All of the possible environments that a car will experience in its lifetime are reproduced
during vibration testing.

Investigations occur for vibration damping and motion characteristics of the tire, car frame
and car body, Investigation also occurs into the influence of vibration on car electronics,
such as radios and stereos. Also, simulation testing of vehicle seats and safety devices is
performed.

2. Shock tests. Shock testing replicates events to determine if structures can withstand
sudden applied forces. Shocks are characterized by their short duration and sudden occurrence.

3. Climatic testing - Materials can deteriorate over time, ageing prematurely due to either
high or low temperature extremes, while humid conditions may lead to condensation which can
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be damaging to biological items, industrial products, materials, and electronic devices and
components. A climatic test makes use of an environmental test chamber which artificially
replicates the conditions under which machinery materials, devices or components might be
exposed. It is also used to accelerate the effects of exposure to the environment, sometimes at
conditions not actually expected.

Serviceability (How easy is it to repair the product?)

Serviceability involves the consumer's ease of obtaining repair service like access to service
centers and/or ease of self-service; the responsiveness of service personnel like the ease of
getting an appointment and willingness of repair personnel to listen to the customer, and the
reliability of service like whether the service is performed right the first time. Competence and
ease of repair is the speed with which the product can be put into service when it breaks down,
as well the competence and the behavior of the service personnel.

Consumers are concerned not simply about a product breaking down but also about the
time before service is brought back, the timeliness with which service appointment are reserved,
the nature of transactions with service personnel, and the frequency with which service calls or
repairs fall short to correct outstanding problems. In those cases where problems are not right
away resolved and complaints are filed, a company's complaint handling procedures are also
possible to affect customer's final assessment of product and service quality.

Some variables of serviceability reflect differing personal standards of acceptable service.

Others can be measured quite objectively. Customers may continue to be displeased even after
completion of repairs. How these complaints are managed is essential to a company's reputation
for quality and service. Ultimately, profitability is likely to be affected as well. Companies vary
extensively in their techniques to complaint handling and in the value they attach to this element
of serviceability. Some do their best to resolve complaints, others use legal tricks, the silent
treatment and similar strategies to refuse displeased customers. For instance lately, General
Electric, Procter & Gamble and other companies have sought to prevent consumer discontent by
installing toll-free telephone hot lines to their customer relations departments.

Important attributes for serviceability dimension in a car include service warranty, parts
warranty, parts availability, number of reasonable distance to dealer service centers, distance to
service parts center-dealer, distance to service parts center individual length of wait for service
appointment, schedule of preventive maintenance, employees listen to customers, information
regarding repairs, courteous service centers, repaired correctly first time, service time relative to
other dealers, warranty claims handled without argument, average repair cost/ vear, extended
warranty, underestimation of service cost and provision of loan.

Aesthetics (What does the product look like?)

Aesthetics means how a product looks, feels, sounds, tastes, or smells. It is obviously an
issue of personal judgment and an indication of individual preferences. Though, there emerge to
be some patterns in consumers rankings of products with taste as the starting point. High quality
was most often associated with "rich and full flavor, tastes natural, tastes fresh, good aroma, and
looks appetizing". Aesthetics also refers to the "outside" feel of the product. The aesthetics
dimension differs from subjective criteria pertaining to "performance" in that aesthetic choices are
not nearly universal. Not all people prefer "rich and full flavor or even agree on what that means.
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Companies therefore have to search for a niche. On this dimension of quality, it is impossible to
please everyone.

The aesthetic properties of a product add to a company's or brand's identity Faults or

defects in a product that weaken its aesthetic properties, even those that do not lessen or change
other dimensions of quality, are often causing for negative response

Perceived Quality (What is the reputation of the company or its product?)

Perceived quality is the individuals' subjective appraisal of products or service's

attributes, indirect measures may be their only basis for comparing brands, Consumers do not
always have comprehensive information about a product's or service's attributes. A product's
durability, for instance can rarely be observed openly and is usually must be inferred from various
tangible and intangible aspects of the product. In such situation, images, advertising, and brand
names can be vital. Perception is not always reality. Sometimes customers perceived products
and services as they see them in advertising.

Reputation is the primary stuff of perceived quality. Its power comes from an implicit
comparison that the quality of products today is analogous to the quality of products of yesterday,
or the quality of goods in a new product line is similar to the quality of a company's established
products.

DIMENSIONS OF SERVICE QUALITY

Service is normally described as an experience felt by the consumer. In a restaurant for
instance, the way the customer is treated is considered as a service. Services are frequently
intangible in nature. The quality of service is evaluated by how well the customer is contented
with the service. Service quality is about comparing performance with the customer expectations.
Service quality also leads to customer contentment and interrelated. The key to preserve
customers is to be aware of their needs and fulfill those needs. Making customers purchase the
services continually needs focus on dimensions of service quality. There are five dimensions of
service quality and specified below:

Tangibles
The tangible dimension of quality is associated to the environment in which the service is
rendered to the customers. This is the equivalent of physical characteristics of quality of goods.
Since services are tangible, customers draw from their perception of service quality by comparing
the tangible associated with these services provided. It consists of the appearance of the physical
characteristics of facilities, equipment’s, consumable goods and personnel used in or related with
the service rendered.

In a Starbucks restaurant for instance, it may be seating arrangement, interior decoration,

ambiance and lighting arrangement. However here also the quality is assessed not by some
standardized specifications in terms of physical characteristic, but by the impact these physical
characteristics have on customer assessment of the service quality

Reliability
Reliability is the ability to perform the promised service dependably and accurately to
customers on specific service. It is all about what is promised about delivery, service provision,
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problem resolutions and pricing and what is delivered. Like, Cebu Pacific airline in the Philippines
has proved to be most successful low cost carrier in the world with fun-filled air travel.

Customers would like to carry out business with companies that keep their promises,
chiefly their promises about the service outcomes and core service attributes. Alle companies
need to be conscious of customer anticipation of reliability. Firms that do not grant the core service
that customers thin they are buying displeased their customers in the most direct way. Say for
instance in a hotel where the basic quality of room decor, food, and facilities must be provided.

Responsiveness
Responsiveness is the willingness to help customers and provide prompt service. This
dimension emphasizes attentiveness and promptness in dealing with customer's requests
questions complaints and problems Responsiveness is communicated to customers by span of
time they have to hang around for help answers to questions or attention to problems
Responsiveness also captures the impression of flexibility and ability to tailor the service to
customer needs.

The willingness to help the customer promptly in case of special and unforeseen
requirements is another way of showing responsiveness. Helping a customer for instance who
falls sick when staying in the hotel is a good example of responsiveness.

Assurance
Assurance is defined as employee’s knowledge of courtesy and the ability of the firm and
its employees to inspire trust and confidence. This dimension of service quality is connected to
the competence of the service employee. The employees must be competent to gain the trust of
customers

This dimension is likely to be predominantly significant for the services that the customers
perceive as involving high rising and/or about which they feel uncertain about the ability to
evaluate. Trust and confidence may be embedded in the person who relates the customer to the
company, like the marketing department. Thus, employees are aware of the value to create trust
and confidence from the customers to gain competitive advantage and for customers' loyalty.

For instance the customer dining in a restaurant may not be able to openly assess the
level of cleanliness maintained by the restaurants. Here it is not only imperative to really provide
germ-free food but also to stir confidence that the food is clean. The assurance is about giving
the customer peace of mind that everything will be taken care of as necessary, rather than just
actually taking care when the need happens. For example a doctor with Master degree may
inspire more assurance than a doctor with just an MD degree, although the basic treatment
provided by them may be of same quality.

Empathy
Empathy refers to caring attitude that an organization provides toward customer. This
dimension of service quality calls for individual attention to customer, so as to make them feel
exceptional and to show to the customer that the company does best to satisfy his needs.
Empathy is an additional plus that the trust and confidence of the customers and at the same time
increase the loyalty. In this competitive world, the customer's requirements are rising day after
day and it is the companies duties to their maximum to meet the demands of customers, else
customers who do not receive individual attention will search elsewhere.
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This is being able to understand the needs of the customer as an individual and meet the
special requirements of the customer. This is more about customizing the service and the general
service provider behavior for each customer, rather than providing a uniform high quality treatment
to all. Many companies try to create this sense of empathy by employing tactics like addressing
each customer by name. However, true empathy means understanding the special characteristics
and needs of individual customer, and modifying service to them accordingly.

Considering the above dimensions of service quality, comparisons are made between
actual service performance and expectations of customers. The difference between customers'
expectations and actual delivery (perception) at the time of service performance is known as
service quality gap. Organization conducts survey and exploratory research to study the various
service gaps, so as to understand why the gap arises and how it can be reduced.