BAHRIA UNIVERSITY (KARACHI CAMPUS)

Final Assessment Paper Spring 2020

Course Title: PROJECT QUALITY MANAGEMENT Course Code: MSP-607

Class: MSPM 3A Course Instructor: M M B TUFAIL

Submission: 05 July 2020 Max Marks: 50
Student’s Name: _Sajid Hussain Chaudhry_ Reg. No: 02-398182-045

CASE STUDY – RITZ CARLTON

Question 2(1). In what ways could the Ritz-Carlton monitor its success in
achieving quality?
Ans.

The Ritz Carlton Hotel management can undertake a rigorous self-examination of its
operations in an attempt to measure and quantify quality. They can analyze selected
areas to focus on, e.g room service delivery, guest reservation and registration,
message delivery, and breakfast service. These selected areas can help statistical
measurement of process work flows and cycle times for areas ranging from room
service delivery times and reservations to valet parking and housekeeping efficiency.
The results can be used to develop performance benchmarks against which future
activity could be measured.

With specific, quantifiable targets in place, Ritz-Carlton managers and employees could
focus on continuous improvement.

The company can also use Key Performance Indicators (KPIs) to measure performance
versus set goals. KPIs can identify issues in need of addressing. Measuring customer
satisfaction across multiple touch-points may reveal weak areas to focus on.

QUESTION 2(2). Many companies say that their goal is to provide quality
products or services. What actions might you expect from a company that
intends quality to be more than a slogan or buzzword?
The company can undertake following tangible actions to prove quality to be more than
a slogan or buzzword:

1. Understand your mission.

What is the purpose of your business, and why does your product or service matter to
your clients? Every employee of the organization should have a clear understanding of
the company’s mission.

2. Solicit Feedback From Customers

 Receiving feedback from customers is essential in order to improve your business

overall. Find out ways to solicit feedback, for instance, as a business request telephone
numbers or email addresses to text or email surveys to them. 

3. Offer value-add services

Offering value added complimentary services helps you to gain customer satisfaction.
Similarly customer service representatives don’t only respond to issues and help clients.
They should also be offering knowledge and information about the brand and services.

4. Be responsible

If you’re the head of the company, you’re ultimately responsible for everything that
happens. You give support and direction to the team.

5. Train Your Front-Line Staff

The heart of your customer service operation should rest with your front-line staff.
These employees are the face of your business and if trained well, it gives your
business the opportunity to define how your customers perceive your company’s
products and services. 

6. Retain the customers.

Customer retention programs must aim to retain the maximum number of

customers. It’s vital in maintaining a successful business. It starts with the very first
contact and runs throughout the relationships lifetime.

Question 2(3). Why might it cost the Ritz-Carlton less to “do things right” the first
time?
Ans. It might cost Ritz-Carlton less to do things right the first time, because, it will
benefit company in following terms:

a. It will reduce failures cost (internal and External) both.

b. Customer satisfaction rate will increase.
c. Cost of re-doing will be eliminated.
b. It will help to retain customers, which are your primary source of income,
thereby reducing cost.
c. Satisfied customers will also be source of referral to others. This will also
help to enhance company’s business.

Question 2(4). How could control charts, Pareto diagrams, and cause-and effect
diagrams be used to identify quality problems at a hotel?

The purpose of a control chart is to set upper and lower bounds of acceptable
performance given normal variation. In hotel business, they can be used to provide a
way to monitor any sort of process you have in place so you can learn how to improve
your poor performance and continue with your successes.

A Pareto chart is a type of chart that contains both bars and a line graph, where
individual values are represented in descending order by bars, and the cumulative total
is represented by the line. The purpose of the Pareto chart is to highlight the most
important among a (typically large) set of factors. In identity Quality problems in a hotel
Control, it can help to represents the most common sources of defects/ complains, the
highest occurring type of defect, or the most frequent reasons for customer complaints.  

Whereas, A Cause-and-Effect Diagram is a tool that helps identify, sort, and display possible
causes of a specific problem or quality characteristic. It graphically illustrates the
relationship between a given outcome and all the factors that influence the outcome.
The hotels can use this diagram to identify root cause of any specific problem and its
effect on overall business process.

Question 2(5). What are some nonfinancial measures of customer satisfaction

that might be used by the Ritz-Carlton?

Following are some nonfinancial measures of customer satisfaction that might be used
by the Ritz-Carlton Ritz Carlton Hotel:

1. Net Promoters Score (NPS).

NPS is an index ranging from -100 to 100, measuring your customer's willingness to
recommend your company to others. Essentially, it’s a proxy for customer satisfaction. It
may even speak of brand loyalty.

2. Customer retention
Customer retention programs must aim to retain the maximum number of
customers. It’s vital in maintaining a successful business. It starts with the very first
contact and runs throughout the relationships lifetime.

3. Conversion rate

Conversion rate shows the percentage of users completing the desired action. In this
case it can be a percentage of visitors visiting hotel website/ reception desk to inquire
about service and buying services.

4. Average Resolution Time

Time-to-resolution (TTR) allows companies to track the average time it takes to solve
customer issues. TTR is normally measured in hours or days, depending on the nature
of the business. It takes into account the time elapsed between the original request log
and its closure.

5. Customer satisfaction surveys

Creating new customers costs 6/7 times more than retaining existing ones. Customer
satisfaction then saves you money. And to obtain accurate satisfaction data means
creating surveys. The Ritz company can use effective surveys containing 5 to 10
questions relating to customer experience, service delivery, and measure overall
satisfaction.

6. Customer Satisfaction Score

Customer Satisfaction Score (CSAT) shows services and products meet or indeed
surpass customer expectations. CSAT is easily determined using one follow-up
question. “How would you rate your overall satisfaction with the service?” Generally, this
is graded on a scale of 1 “very unsatisfied” to 5 “very satisfied”.

7. Social media monitoring

Monitoring tools help understand what people are saying about you on social media.
Insights like this paint a richer picture than simply relying on traditional media.

8. Customer engagement metrics

Customer engagement starts from the first touch point and incorporates subsequent
interactions, including the time customers spend with your hotel and the actions they
take throughout their stay. Customer engagement metrics are effective in measuring
service accessibility and the quality of customer experience.

9. Monthly/daily active users

Active users give a clue to the success of your customer service approach. Daily,
Weekly and Monthly Active Users indicate who is actively using your product or service
in a given time period.

Question no. 3 (a): PokaYoke is an error proofing technique in which you take
counter measures to void problem recurrence. From your observation, suggest
any three situations in last one year where you faced problems and took
countermeasures to avoid problem repetition.

Poka-yoke is a Japanese term that means "mistake-proofing" or "inadvertent error prevention".

A poka-yoke is any mechanism in any process that helps an equipment operator avoid
mistakes (poka).

Situations:

1. In our home we have been using bucket to collect air-conditioner condensation drain
water. However, at time the bucket used to over flow. The problem has been addressed by
using a long drain pipe to drop water into drain or lawn. This method helped to avoid problem
recurrence.

2. Reverse parking in a small garage has always been a challenge. In order to eliminate
chances of hitting rear wall, I installed tyre stoppers near the rear wall of garage so that the car
should not cross that point even by mistake.

3. The detailed evaluation of recent air crash of PIA PK-8303 reveals that during initial
approach the landing gears could not open. Actually, in Airbus A-320 aircraft, there is a safety to
ensure that, landing gears do not open if the aircraft is flying at a speed of more than 250 knots,
as the same may result in structural damages. In this case the pilot tried to open landing gears
at a speed more than 250 knots, due to which landing gear did not open, however, it was pilot’s
error which resulted in belly touchdown during initial approach.

Question 3 (b). You are hired as consultant to implement lean management

system in Pharma Company. Which eight mudas you will identify in that
organization? Share your strategy to quantify any five mudas.

Lean management is an approach to managing an organization that supports the concept of

continuous improvement, a long-term approach to work that systematically seeks to achieve
small, incremental changes in processes in order to improve efficiency and quality.

Muda is a Japanese word meaning "futility; uselessness; wastefulness", and is a key concept

in lean management. Following eight Mudas can be identified in a pharma company:

1. Overproduction
2. Delay (Waiting) 
3. Transport 
4. Processing Inefficiencies 
5. Excess Inventory
 6. Unnecessary Motion 
7. Scrapped Batches
8. Lack of Employee Involvement

Strategy to quantify any five mudas

1. Overproduction

Overproduction is a waste, since it ties up valuable assets and causes your Materials and
Logistics Departments to order more raw materials and produce more work-in-progress (WIP)
goods that compounds the carrying costs. In Pharma industry, over production can be a major
source of losses, because most of the medicines have a shelf life. Over production means
inventory will remain in stock for long time, which may result in short expiry period or even
expiring before reaching the customer. If the organization does not use a pull system to produce
based on your customers’ needs, then you will most likely produce more finished goods than
you can readily sell. Relying on “Pull” demand system is better than “Push” in pharma to
reduce over production.

2. Delay (Waiting) 

This is a sign of not having the right mix of raw or WIP materials on hand when you need
them. Delay can also be due to lesser production, which means that the company may lose
precious customers to others in a competitive world. In Pharma company also, the delay in
meeting customer’s demand cannot be afforded, because it will create out of stock situation for
our customers. Maintaining reasonable stocks of raw material and improving business
processes can reduce delay time.

3. Processing Inefficiencies 

Using poor scheduling practices or running incapable equipment or tooling will cause process
losses. That is why Standardized Work Practices (SWPs) are so important. Using a cross-
functional team to validate SWPs or Standard Operating Procedures (SOPs) is the most
sustainable method for instilling ownership and to reduce wastes

4. Inventory – Excess inventory can be very costly. If the financial organization values
your carrying cost at 30% and you have excess inventory in raw, WIP and finished goods, then
there should be formal plans that reduce your inventory to increase your turns. Excess inventory
can be a result of long lead times from your suppliers (internal or external), or the respective
reorder triggers. Just-In- Time delivery and Kanban actions can reduce this excess cost. An
inefficient workflow can also induce costly inventory into the process. In pharma also, excess
inventory can be a source of waste in your business cycle.

5. Transportation

Transportation & Logistics is important in most industries, but in pharma it can literally be a life-or-
death scenario. Transporting pharmaceuticals is arguably more important than manufacturing them,
because it enables these lifesaving medications to make it to where they are needed most.
When transporting pharmaceuticals, how can logistics workers do it safely, and what precautions are
necessary for things like temperature control and to guard against theft? Guarding Against Cargo
Theft Cargo theft is one of the largest risks associated with pharmaceutical manufacture
and transport. Any delays in transportation of pharmaceutical can result in wastage. Adopting better
Supply Chain Management (SCM) practices to deal with pharmas can reduce wastages due
transportation.

Question no. 4 (a).Which of the following statements about quality costs is true?
Why or why not?

a. Quality cost reduction is the responsibility of the quality control department.

The given statement is false. The quality control department is acting as a

supporting department, and this department is not responsible for the reduction in quality cost.

b. Quality costs provide a method of determining problem areas and action

priorities.

This statement is true, given the proper context. Quality costs are used to point out
the area for where the waste exists in the system and to suggest prevention actions. Defective
products means that wastages exist in the system.

c. The efficiency of any business is measured in terms of the number of defective

products

This statement is also true, because the efficiency of any business is measured in
terms of the number of defective products. Quality costs are the costs of not producing
the defective products or services. Defective products mean that waste exists in the
system. The efficiency of any business is improved by reducing the defective products.

Question no.4 (b): For each of the following activities, identify whether the costs
incurred should be allocated to the prevention, appraisal, failure (internal,
external), or intangible costs category:

a. Customer inquires about incorrect billing statement.

Ans. Intangible cost

b. Maintenance technician is unable to gain access to customer’s premises

during a service call because the service is not being performed when scheduled
and no one notified the customer.

Ans. Failure Cost (Internal)

c. Workers check/test their work before allowing it to leave their work area.

Ans. Appraisal Cost

d. Management carries out a quality systems audit.

Ans. Appraisal Cost

e. The accounts department is having difficulty obtaining monthly figures from

the production department.

Ans. Appraisal cost

f. A customer’s purchase breaks because of inadequate training in the use of the

item and must be replaced.

Ans. Failure cost (External)

g. Management must deal with written complaints from a customer about

continuous poor service.

Ans. Appraisal cost

h. A technician keeps an appointment after driving across town to pick up

equipment from an outside supplier upon finding it out of stock in his own
warehouse.

Ans. Failures cost (Internal)

i. An instruction manual and set of procedures are developed for maintaining a

new piece of equipment.

Ans. Appraisal cost

j. The company conducts a survey of customer requirements.

Ans. Appraisal cost