Operations Notes – Service Quality


Notes from core MBA Operations class, these focused on service quality.
Subject: Operations
  • Services are intangible, heterogeneous (performance varies), inseparable (production & consumption)
  • Meeting expectations rather than conformance becomes important
  • Inspection difficult/not possible
  • Quality evaluations based on outcome and process of delivery
  • Intangibles such as culture can help alleviate problem of non-proprietary nature of service
  • Customer satisfaction tends to be the only reliable measure of service quality

3 dimensions of performance

  1. Levels of material
  2. Levels of facilities
  3. Levels of personnel

3 dimensions of quality

  1. Physical quality
  2. Corporate quality
  3. Interactive quality

2 types of service quality

  1. Technical – what customer is actually receiving
  2. Functional – manner in which service is delivered

Gap Model of Service Quality

Model assumes customer homogeneity

Ways to close various gaps:
GAP 0/ GAP6 – Swim in the fishbowl
GAP 1/ GAP 2 – Use a robust design; ask more detailed questions
GAP 3 – Training; flagging special causes
GAP 4 – More cross-functional integration

Good service has four benefits:

  1. Number of repeat customers increases
  2. Referrals increase
  3. Positive word of mouth increases
  4. Negative word of mouth decreases

To justify benefits of increased customer service, helps to know the current % of satisfied customers, % of satisfied customers who repeat, average purchase per customer (one-time vs. repeat) and gross margin.

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