Tuesday, February 21, 2012

Customer Driven Quality

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In today’s total quality environment, organizations must have an intimate knowledge of who their customers are and what they perceive as quality. Customer driven quality can be stated as the following principle

Customers define quality and employees produce it (Goetsch).

While this is a simplified idea, it touches upon the basic idea that the consumers’ needs and satisfaction are the organization’s number one priority upon which their survival depends. Organizations utilizing this principle continuously strive to improve upon their products and services in order to exceed expectations and keep customers loyal to them.

Measuring satisfaction is one component of maintaining positive customer relationships. Understanding and building customer loyalty pays dividends. At a minimum, companies must know which of their customers will continue to do business with them, but loyal customers positively impact an organization in many other ways and ultimately increase profitability in the marketplace. Anyone can check a few boxes on a postcard or a survey card, but it is the duty of the manufacturers to gather information from its customers in order to define just exactly what the customers want. Satisfied customers may feel trapped by lack of choices in products that a manufacturer may offer and leave when something better comes along.


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In regards to the child car seats, parents are looking for the newest and upcoming trends and safety packages offered by many of the manufacturers. One of the latest developments that the customers are anxiously awaiting is the new ISOFIX car seat. “ISOFIX stands for International Standards Organization FIX. It is a new standard for installing child seats into cars, which is being adopted by vehicle manufacturers and is intended to make fitting child seats quick and simple. ISOFIX is an essential development because many people find it difficult to fit child seats correctly, and many surveys have found that a high proportion of the child seats are not fitted securely enough.” (Child Car Seats.org, 2000).

Manufacturers must make the customers aware of the realities of modern manufacturing. “Until the late 1980s, most manufactured fixtures in the U.S., even customized items-were for all intents and purposes built by hand, one at a time. Customizing a product, therefore, wasnt that big a deal. Since then, however, things have drastically changed. Manufacturing now utilizes intricate computer programs, extremely costly tooling, out-sourcing for certain components, and extensive CAD drawings for both fabrication and assembly” (Proquest, 2000). When creating a custom fixture, obviously, some or all of these must be created from scratch. This leads to the biggest hindrance to getting a custom fixture completed.

There are many groups, such as MADD, that are excited about seeing the results of such an item that has yet to hit the market. In addition, many parents are willing to pay the costly rate for the added safety devices that the various car seat manufacturers are charging for the items. It gives them the sense of stability and peace of mind. ISOFIX is designed to solve all these problems. The ultimate aim is that any ISOFIX child car seat that a consumer buys will fit their car simply by plugging it into the ISOFIX points.

“Unfortunately, it is taking a very long time for the technical details of the ISOFIX standard to be finalized. And then, the Regulation R44.0 will need to be updated to include the new standard” (Child Car Seats.org, 2000).

The true measure of success for Montana Rail Link is short and long-term profitability. Their common goal is to enhance profitability by managing costs and increasing business volume. Their business philosophy is Helping our Customers Grow and Prosper. They strive to be the lowest cost provider of transportation services.

All of their employees are expected to recognize that they work in a Service Industry and People Business. Their people are their most important asset. They create an atmosphere that demands results; with the attainment of those results, profit sharing rewards employees’ effort. Their strategy is to offer the best available value for our customers’ transportation and logistics dollars. They accomplish this by focusing on the quality of their service and the cost of their operation. In general, they prefer variable costs to fixed costs because variable casts will allow the company to survive any down market or economy.

Only a productive workplace with a commitment to excellence will allow them to remain a low cost producer. Then, as a viable company, they have the flexibility to lower prices to retain or increase market share, or to increase prices to enhance margins and improve profitability.

Safety and productivity complement one another. Their company is committed to supporting employees’ efforts in order to operate their railroad free of accidents and injuries. Given that level of commitment and support, employees are expected to accept the responsibility for their safety and the safety of their co-workers.

Management style is the key to developing and maintaining productive employees. They use a participatory management style to challenge each employee

-High performance expectations measured by employee evaluations

-Integrity, high ethical standards and rigorous compliance with laws and


Regulations

-Open door policy and willingness to listen

-Focus on company rather than departmental individual objectives

-Standardized policies and procedures

-Decision-making is pushed down rather than up

-Attitude to solve problems, improve communications and measure


Effectiveness

-Management training program provided to enhance leadership skills

Their focus remains outstanding customer service, for without the customer there is no business. The employees must understand that they control their own destiny in that they are the point of contact of the customer. Management style and financial philosophy can only hope to guide the company, but the employees carry it to its ultimate destination.

The United Way faced a scandal that had a huge impact on its future contributions. The President of the United Way, Bill Aramony, was asked to step down after exploiting the power of his position. This included first class travel, flights on the Concorde, and chauffeured cars in addition to his hefty salary, bonuses, and other benefits.


The United Way saw an immediate decline in contributions. Four years later, in 1996, the United Way finally exceeded inflation for the first time in seven years. However, we would be remise if we did not point out that total private giving in the United States increased 4% between 1 and 16, while the United Way recognized growth of only 6 % in the same period.


As noted by David Goetsch in Quality Management, a leader must be able to “establish an ethical framework within which all employees and the company as a whole operate” (2000). Mr. Aramony clearly failed to lead by example. By setting a poor example, Aramony exposed his organization to further unethical behavior by its employees.

The United Way raises few billion annually and supports over 4,000 agencies. Due to the scandal at the United Way, these agencies also recognized a decline in contributions. Damage to workplace fund raising from the scandal also hurt the “alternative funds” movement. After dramatic double-digit growth throughout the 1980s, alternative funds could only achieve a 6.5% gain the year of the United Way scandal.

The United Way’s Board of Directors sought swift recovery from the scandal. They appointed a new President within days of Aramony’s forced resignation. Next, they implemented immediate travel restrictions including a ban on first-class travel and the supersonic Concorde jet as well as a requirement to use taxis or other economical ground travel. This quick reaction showed their customers that they were committed to changing the culture.

It has taken several years for the United Way to fully recover from the scandal but it is clear that by taking action against unethical behavior, the United Way ultimately improved their quality of services provided to their internal and external customers. The United Way now has a leader that sets a positive example for the organization. He has made a commitment to credibility and quality. Without this, no non-profit organization will be successful in achieving maximum contributions from, and for, their customers.

The US Department of Education was organized in 1980 by Congress. Its primary mission is to strengthen the Federal commitment to assuring access to equal educational opportunity for every individual as well as promoting excellence for all Americans. To that end, the DOE administers Federal Financial Aid funding and the No Child Left behind program as well as supporting educational research to name a few of its many programs. The DOE is run by the Presidential nominate, the Secretary of Education. The organization serves many internal and external customers, such as it’s many sub departments, colleges and Universities, and ultimately the individual student. The DOE must be able to met or exceed all of its customer expectations, or its funding will ultimately be cut and the organization will disappear from our government. If this were to happen, there would be a void within the government until consumer demand required the creation of a new federal agency to fulfill the needs to the American public.

The four previous examples all illustrate how diverse the idea of customer driven quality is, and also how widely it can be applied. The United Way and the Department of Education are both public organizations which depend upon their customers for their continued existence. The Montana Rail Link and manufacturing in general are both very good examples of private sectors governed by the needs and desires of their consumers. Their success in the global marketplace depends upon the ability to anticipate and satisfy customer needs to the fullest.

National Committee for Responsive Philanthropy, Retrieved on Line June 7, 2000 at http//www.ncrp.org/reports/charity7.htm.

Goetsch, D.L., & Davis, S.B. (2000). Quality Management Introduction to Total

Quality Management for Production, Processing, and Services (4th Ed.)

http//www.childcarseats.org.uk/standards/isofix.htm

http//www.ed.gov/about/welcome.jsp

http//proquest.umi.com/pqdweb?Did=000000187581&Fmt=&Deli=1&Mtd=1&Idx =4&Sid=1&RQT=0



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