A1] Customer Perception of Quality:
One of the basic concepts of the Total Quality Management (TQM) philosophy is continuous process improvement. This concept implies that there is no acceptable quality level because the customer’s need, values and expectations are constantly changing and more demanding.
An American Society for Quality (ASQ) Survey on end user perceptions of important factors that influenced purchases showed the following ranking:
- Performance
- Features
- Service
- Warranty
- Price
- Reputation
The factors of performance, features, services and warranty are part of the product or service quality. Therefore, it is evident that product quality and service are more important than price.
- Performance: Performance involves “fitness for use” other considerations are:
· Availability – this is probability that a product will operate when needed.
· Reliability – this is freedom from failure overtime and
· Maintainability – this is the ease of keeping the product operable.
- Features: Features are secondary characteristics of the product or service,. For example – the primary function of a car is transportation, whereas a stereo system in the car is the feature.
- Service: Customer service is emerging as a method for organizations to give the customer added value. Customer service is intangible. It is made up of many small things, all geared to change the customer’s perception. Intangible characteristics are those traits that are not quantifiable, yet contribute greatly to customer satisfaction.
- Warranty: The product warranty represents an organization’s public promise of a quality product backed up a guarantee of customer satisfaction. Ideally, it also represents a public commitment to guarantee level of service sufficient to satisfy the customer.
· A warranty forces the organisation to focus on the customer’s definition of product and service quality.
· A warranty generates feedback by providing information on the product and service quality.
· The warranty encourages customers to buy a service by reducing the risk of the purchase decision and
· A warranty generates more sales from existing customers by enhancing loyalty.
5. Price: Customers are constantly evaluating one organizations products and services against those of its competitors to determine who provides the greatest value. However, in our highly competitive environment, each customer’s concept of value is continually changing. Ongoing efforts must be made by everyone having contact with customers to identify, verify and update each customer’s perception of value in relation to each product and service.
6. Reputation: Total customer satisfaction is based on the entire experience with the organization, not just the product. Customers are willing to pay a premium for a known or trusted brand name and often became customers for life. Although it is difficult for an organization to quantify improved customer satisfaction, it is very easy to quantify an increase in customer retention. An effective marketing retention strategy is achieved through the use of feedback from information collecting tools.
A2] Partnering:
Partnering is a long term commitment between two or more organizations for the purpose of achieving specific business goals and objectives by maximizing the effectiveness of each participant’s resources. Partnering is a multifaceted relationship requiring constant nurturing to achieve continuous improvement and maximum benefit. There are three key elements to a partnering relationship.
- Long-term commitment:
Experience has shown that the benefits of partnering are not achieved quickly. Problems require time to solve or processes need constant improvement. Long-term commitment provides the needed environment for both the parties to work toward continuous improvement. Each party contributes its unique strengths to the processes. When these strengths are not sufficient, investment in new equipment or system may be required. The parties take risks that are commensurate with their rewards and the degree of relationship. The supplier may not take these risks, such as acquiring new equipment or systems without a long-term commitment.
- Trust:
Trust enables the resources and knowledge of each partner to be combined to eliminate an adversarial relationship. Mutual trust forms the basis for a strong working relationship. Open and frequent communication avoids misdirection and disputes while strengthening the relationship.
The strength of partnering is based on fairness and parity. Both parties become mutually motivated when “win-win” solutions are sought rather than “win-lose” solutions.
- Shared vision:
Each of the partnering organizations must understand the need to satisfy the final customer. To achieve this vision there should be an open candid exchange of needs and expectations. Shared goals and objectives ensure a common direction and must be aligned with parties’ mission. The partners must understand each others business so that equitable decisions are made. These decisions must be formulated and implemented as a team.
A3] Definition of Benchmarking:
According to Lawrence S. Pryor – “Benchmarking is measuring performance against that of best-in-class organizations, determining how the best in class achieve those performance levels and using the information as the basis for goals, strategies and implementation.
This definition contains two key elements:
- Measuring performance requires some sort of units of measure. These are called metrics and are usually expressed numerically. The number achieved by the best-in-class benchmark is the target. The organization seeking improvement then plots its own performance against the target.
- Benchmarking requires that managers understand why their performance differs. Benchmarkers must develop a thorough and in depth knowledge of both their processes and the processes of the best-in-class organizations. An understanding of the differences allows managers to organize their improvement efforts to meet the goal. Benchmarking is about setting goals and objectives and about meeting them by improving processes.
Types of Benchmarking:
There are a number of different types of benchmarking, as summarized below:
- Strategic Benchmarking:
Description:
Strategic benchmarking is used where businesses need to improve overall performance by examining the long-term strategies and general approaches that have enabled high-performers to succeed. It involves considering high level aspects such as core competencies, developing new products and services and improving capabilities for dealing with changes in the external environment. Changes resulting from this type of benchmarking may be difficult to implement and take a long time to materialize.
Purposes:
Its main purpose is to re-aligning business strategies that have become inappropriate.
- Performance or Competitive Benchmarking:
Description:
Businesses consider their position in relation to performance characteristics of key products and services. Benchmarking partners are drawn from the same sector. This type of analysis is often undertaken through trade associations or third parties to protect confidentiality.
Purposes:
Its main purpose is to assess relative level of performance in key areas or activities in comparison with others in the same sector and finding ways of closing gaps in performance.
- Process Benchmarking:
Description:
It focuses on improving specific critical processes and operations. Benchmarking partners are sought from best practice organizations that perform similar work or deliver similar services. Process benchmarking invariably involves producing process maps to facilitate comparison and analysis. This type of benchmarking often results in short term benefits.
Purposes:
Its main purpose is to achieve improvements in key processes to obtain quick benefits.
- Functional Benchmarking:
Description:
Businesses look to benchmark with partners drawn from different business sectors or areas of activity to find ways of improving similar functions or work processes. This sort of benchmarking can lead to innovation and dramatic improvements.
Purposes:
Its main purpose is to improve activities or services for which counterparts do not exist.
- Internal Benchmarking:
Description:
It involves benchmarking businesses or operations from within the same organisation (e.g. business units in different countries). The main advantages of internal benchmarking is to access to sensitive data and information is easier; standardized data is often readily available; and, usually less time and resources are needed. There may be fewer barriers to implementation as practices may be relatively easy to transfer across the same organisation. However, real innovation may be lacking and best in class performance is more likely to be found through external benchmarking.
Purposes:
Several business units within the same organisation exemplify good practice and management wants to spread this expertise quickly, throughout the organisation.
- External Benchmarking:
Description:
It involves analyzing outside organizations that are known to be best in class. External benchmarking provides opportunities of learning from those who are at the "leading edge". This type of benchmarking can take up significant time and resource to ensure the comparability of data and information, the credibility of the findings and the development of sound recommendations.
Purposes:
Examples of good practices can be found in other organisation and there is a lack of good practices within internal business units.
- International Benchmarking:
Description:
Best practitioners are identified and analyzed elsewhere in the world, perhaps because there are too few benchmarking partners within the same country to produce valid results. Globalization and advances in information technology are increasing opportunities for international projects. However, these can take more time and resources to set up and implement and the results may need careful analysis due to national differences.
Purposes:
The aim is to achieve world class status or simply because there are insufficient "national" businesses against which to benchmark.
