Total Quality

Management
Dr. Naga Vamsi Krishna Jasti
BITS Pilani Asst Professor
Mechanical Engineering Department
Hyderabad Campus
 BITS Pilani
Hyderabad Campus

Chapter 3: Customer Satisfaction

 Contents
 Who is the customer?
 Why Customer satisfaction?
 What is customer satisfaction?
 Internal Customer and Supplier relationship
 Customer perceptions of Quality
 Customer feedback and feedback methods
 Service Quality
 Customer requirements
 Voice of the customer
 Customer Retention
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 A Quote on Customer!

“A customer is the most important visitor on our

premises, he is not dependent on us. We are
dependent on him. He is not an interruption in our
work. He is the purpose of it. He is not an outsider in
our business. He is part of it. We are not doing him a
favor by serving him. He is doing us a favor by giving us
an opportunity to do so.” - M. K. Gandhi

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 Why Customer satisfaction?
 Customer is the Boss or ‘King’
 Customer dictates the market trends and direction
 Customer not only has needs to be supplied( basic
performance functions) but 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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 Model of Customer
Satisfaction

Customer needs

Company
Product/Service
offer

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 What is customer satisfaction?

 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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 Customer types
 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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 Customer/supplier chain

Inputs from Outputs to

Internal
external external
customers
customers customers

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 Internal customer/Supplier
relationships
 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.
 Leaders lead the role in supervising the internal
customer-supplier chain.

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 TQM and customer quality
percepts
 TQM is quality of management but not 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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 Customer perceptions of
Quality
 Performance: “Fitness for use”
 Features: Secondary characteristics
 Service : A method by which an organization gives the
costumer – an added value.
 Warranty: Represents an organization's public promise of
a quality product backed up by a guarantee of customer
satisfaction.
 Price: Efforts to be made in identifying, verifying and
updating the costumer's perception of value
 Reputation: Customer’s go with brand name. It costs five
times as much to win a new customer.
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 Customer feedback
 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)
 It enables for the organization to
 Discover customer dissatisfaction
 Discover relative priorities of quality
 Identify customer needs
 Performance comparison with competitors
 Determine opportunities' for improvement

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 Customer feedback methods
 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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 Customers- Handle with care!

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

the wages!
 So take good care of your customers.

 Customer-care centers not just profit-centers!

 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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 Service Quality
Organization
 Identify each market segment

 Write down the requirements

 Communicate the requirements

 Organize processes

 Organize physical spaces

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 Service Quality
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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 Service Quality
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.
Leadership
 Lead by example
 Listen to the front-line people
 Strive for continuous process improvement

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 Service Quality
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

 Recognize and reward performance

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 Kano Model-conceptualizes
customer requirements

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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 Kano Model-conceptualizes customer requirements

 Must-be Quality: Simply stated, these are the requirements that the customers expect and are taken for
granted. When done well, customers are just neutral, but when done poorly, customers are very
dissatisfied. Kano originally called these “Must-be’s” because they are the requirements that must be
included and are the price of entry into a market.
 One-dimensional Quality: These attributes result in satisfaction when fulfilled and dissatisfaction when
not fulfilled. These are attributes that are spoken and the ones in which companies compete. An
example of this would be a milk package that is said to have ten percent more milk for the same price
will result in customer satisfaction, but if it only contains six percent then the customer will feel misled
and it will lead to dissatisfaction.
 Attractive Quality: These attributes provide satisfaction when achieved fully, but do not cause
dissatisfaction when not fulfilled. These are attributes that are not normally expected, for example, a
thermometer on a package of milk showing the temperature of the milk. Since these types of attributes
of quality unexpectedly delight customers, they are often unspoken.
 Indifferent Quality:  These attributes refer to aspects that are neither good nor bad, and they do not
result in either customer satisfaction or customer dissatisfaction. For example, thickness of the wax
coating on a milk carton. This might be key to the design and manufacturing of the carton, but
consumers are not even aware of the distinction.
 Reverse Quality:  These attributes refer to a high degree of achievement resulting in dissatisfaction and
to the fact that not all customers are alike. For example, some customers prefer high-tech products,
while others prefer the basic model of a product and will be dissatisfied if a product has too many extra
21 features.
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 Voice of the customer
How the voice of customer is heard? Who is the customer?
Customer reports
NBA Internal
Design reviews External
Survey
Interviews
Focus groups
Site visits Voice of
the
Clarify exactly customer
For listening
Affinity diagrams
QFD For evaluating
Data control
IPD team meetings

How is the voice of the customer evaluated? Who has what responsibility ?

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 Customer Retention

 Customer satisfaction should lead to customer loyalty and

customer retention.
 Important that the customer repeatedly comes back for
repeat orders/purchase new products besides others.
 Firm orders received or cash payments registered , market
share, customer referrals and customer retention are an
indication of customer success and penetration.

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 Recap..
 Who is the customer?
 Why customer satisfaction?
 What is customer satisfaction?
 Customer perceptions of quality
 Customer feedback and feedback methods
 Service quality
 Customer requirements
 Voice of the customer
 Customer retention
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