Elimination of the Quality Issues and the Retention of Business - Case Study Example

Quality is an aspect which has gained importance and recognition around the world. The three components of quality which are quality control, quality assurance and quality improvement on a constant basis have become the core functions of numerous organizations since consumers are now well informed and not ready to compromise on quality. As the case suggests, the quality standards set by Presto Cleaners clearly did not meet the consumers’ standards and resulted in a lot of problems for the consumers (Dale B, van der Wiele T, van Iwaarden J, 2007). Quality standards in this case did not revolve around the quality of the product itself but the means used to communicate and transfer the service to the consumer. Quality management must then be implemented whereby quality assurance is guaranteed both with the products and the processes used to deliver the service altogether. Without the implementation of appropriate quality standards, preferably those that are in line with the principles and guidelines set by the ISO standards of quality, an organization will not be able to effectively conduct business and might even fail to retain let alone attract new business. This was exactly what happened in the case of Presto Cleaners; Mr. Shelton was not satisfied with the services Presto Cleaners had provided and demanded a compensation for the loss incurred by him or else lose out on business. We will now analyze the factors that have contributed to this low quality of service for Presto Cleaners and then according to various models and theories we will aim to provide solutions to the company. There were various reasons which led to this problem and Mr. Paul Hoffner admitted that the company was at fault and there were mistakes made for which responsibility must be taken. QUALITY ISSUES The objectives for which one chooses a product or service maintain a direct link with quality i.e. if the purpose for which the service in this case is chosen is not fulfilled the consumer would face quality issues (Howard S. Gitlow, 2005). When the Presto Cleaners opened their doors to customers, Mr. and Mrs. Shelton chose this service mainly because of the convenient location, suitable working hours and most importantly the friendliness and helpful nature of the staff. However, the cost was higher than competitors located in the vicinity, the Shelton’s gave Presto preference because they wanted to seek the quality services even if they had to pay higher costs for it. The New Computer System The major quality issue that the organization as well as the customer faced was regarding the new computer system Presto Cleaners had recently introduced. The system required Mr. Shelton to fill out a preference card which encompassed details regarding cloth type, starch requirements, type of cleaning and the packaging i.e. whether in a hanger or in a box. The system also required Mr. Shelton to select an identification number so that the procedure can be monitored when desired through the computer. Furthermore a bag was also provided with the customer identification number attached in order to make it convenient and time effective for the consumer. The system was designed to save time, effort and speed up processes; however, this did not happen. The system required the customer to buy a bag every time it was used; it required the counter person to input the information yet again regarding type of operation. Lastly, the system also had a flaw regarding the information processing. When Mr. Shelton asked for the clothes he had dropped off, the system displayed information that stated that his wife had picked up the clothes which she had not (Willard I. Zangwill and Paul B. Kantor, 1998). The system had confused the orders and had displayed information regarding the previous order whereas Mr. Shelton wanted information regarding the latest order. Even though Mr. Shelton dropped off the order at a different store, the system should be capable of handling information between stores and the plant in an integrated fashion. The system had clearly failed to provide its basic function i.e. to facilitate the interaction between the customer, data and processes which led to the confusion. Poor Communication Infrastructure The organization also had another flaw regarding the communication network. It had a very sub standard communication infrastructure since most of Mr. Shelton’s calls went unanswered and when they were answered Mr. Hoffner was not available. He was told that he would be called back but Mr. Hoffner did not call back until five days had past and when he did call, he had no idea regarding the situation. As a senior officer he must have been informed about the situation by his subordinates. Thus, this was another major quality problem since there was a lack of communication and customer complaints were not dealt with effectively. Given the fact that Presto Cleaners had several outlets, there should have been a dedicated customer complaint department or personnel to deal with such situations (Andreas B. Eisingerich and Simon J. Bell, 2008). The Receipt and Identification Number Controversy Presto Cleaners must have known that with the new computerized system which demanded customer identification number, the old system which involved counter receipts would have to be forgone. Mr. Hoffner demanded that Mr. Shelton provide him with a receipt of the lost clothes as well as the counter receipt, another quality problem. No one carries year old receipts and as with the counter receipt, Mr. Shelton was never given a counter receipt so how can Mr. Hoffner expect him to have a copy? This shows the lack of understanding and knowledge on the part of Mr. Hoffner. Quality standards require that employees of the organization who are dealing with customers must have complete knowledge regarding the systems in place and their functionality (Dale B, van der Wiele T, van Iwaarden J, 2007). Lack of Trust in Customers Mr. Shelton had been in business with Presto Cleaners for the past year and had conducted business worth $30,000. They had been regular customers and deserved respect. However, with the way Presto’s management dealt with Mr. Shelton’s problem, it seemed that they did not trust him and demanded proof for the purchase of the lost items. This was taken very seriously by Mr. Shelton as customers must be valued with respect and given preference. Presto, however, kept delaying the issue and mistreated Mr. Shelton by not answering his calls and demanding proof let alone apologizing for the delay and confusion. On the other hand Mr. Hoffner suggested to Mr. Sewickley that it would be okay to lose Mr. Shelton’s business. This is like asking for trouble, no matter what customers do, they must be respected and all efforts be made to retain them. A lost customer can eventually result in a domino effect of lost customers since customers amongst themselves maintain strong networks of communication regarding goods and services (Matthias Gouthier and Stefan Schmid, 2003). Moreover, the handling of customer complaints, as discussed earlier, had some flaws. Now the first question is whether or not the customer was justified in complaining or not? He was justified, for customers, the first impression of a system of service or an organization makes a lot of difference therefore, when the issue of tracking the order took place and the problems with the production cycle were highlighted, the customer’s impression of Presto Cleaners was distorted. Lack of System Know How The new system introduced by Presto Cleaners was deemed to be successful in the future at the expense of some customers. Moreover, there was a delay on the part of the system vendor and the software therefore Presto Cleaners had only a week to train its employees. Whenever a new system is introduced it is mandatory for the organization to ensure that the employees are well qualified to use the system so that the customers do not suffer. Given the lack of knowhow on the part of the counter personnel and Mr. Hoffner himself, the misunderstandings arose and the customer Mr. Shelton was agitated by the system. Had the system been introduced after thorough checking and employee training, such a quality failure would not have occurred. Store personnel must be trained adequately to use the technology and must understand its functionality (Mesut Akdere, 2009). SOLUTIONS TO THE PROBLEMS Clearly there are numerous flaws in the system and processes which have led to an overall quality failure faced by Mr. Shelton. Quality guru’s have outlined various models and theories through which organizations and their managers can get a better understanding of how to manage quality assurance, quality improvement and quality control. Quality is a key factor to organizational success and Presto Cleaners must adopt certain approaches towards its management in order to keep customers satisfied and ensure their retention. The Deming Cycle In the 1950’s W. Edwards Deming stated that all business processes must be analyzed and measured to check for sources of variations that exist which eventually cause products to diverge from customer requirements resulting in a quality difference. Through his theories he stated that the business processes must be placed in a continuous feedback loop so that differences and problems can be discovered and solved immediately. Similarly, Presto Cleaners will have to adopt this approach to improve the functionality of their system and streamline it with the standards set by the customers i.e. saving time, costs and improving convenience. According to the Deming Cycle, there are four components to the process of a continuous feedback loop which include Plan, Do, Check and Act. Through this cycle, performance management principles should be applied by Presto and the necessary changes or alterations must be made. Presto Cleaners must therefore adopt this approach; firstly, they must revise the computer network system in order to improve results by modifying the software or even training the personnel i.e. Plan. Secondly, they must implement the system, preferably in a test environment i.e. at one location only in order to measure its performance i.e. Do. Thirdly, the company must have dedicated staff to measure the performance of the system along with customer feedback and report the results to the management or decision makers i.e. Check. Lastly, if there are any discrepancies or further improvement is required than the loop must be started again from the first step i.e. Act. In this way, the system would be streamlined with customer expectations and faults will be eliminated. The Deming Cycle does not only apply to the computer system but to all other processes such as communication with customers, complaint handling, inventory management and inter organizational communication. For e.g. Presto Cleaners can have a dedicated number for customer complaints with an officer in charge of handling the complaints. The process of customers calling and complaining and the efficient and effective execution of the problem must be monitored and reported to upper management (Benjamin Schneider, Susan S. White, 2004). Failure Mode Effect Analysis The Failure Mode Effects Analysis (FMEA) procedure is a methodology whereby potential quality problems are analyzed. The FMEA is designed to identify failure modes, determine their effect on the service and identify actions to solve the problem. Although there are several types of FMEA’s we will be concerned with the service type which focuses on the service functions. Presto Cleaners can use FMEA to its advantage as an ideal method to identify and solve quality issues. Through the FMEA procedure, Presto Cleaners must first describe the process and its functionality in this case it could be the computer system itself. The company must have an understanding of the computer network system, its core functions and its management. Next a block diagram of the process must be created such as the following which shows the information flow of the system: This is a simplified version of a block diagram for Presto Cleaners; block diagrams generally help the organization outline the logical relationships that exist so that the FMEA structure can be outlined. Next the company should fill out a FMEA form highlighting the different nodes and links as per the block diagram. Based on this information, the company must now describe the effects of the failure modes on service quality i.e. time consumption and misrepresentation of information, another problem is also the fact that the system is not integrated properly i.e. the different branches are not linked through the system. Next the causes of the various failure modes must be identified i.e. why is the system giving problems which could result in loss of customers? Lastly, controls must be placed so that the probability of the mishap or event happening again is reduced. Based on this a recommended action must be initiated and personnel must be held responsible for working on the problem within a given time period. This means that Presto Cleaners might have to change the software or ask the software company to make certain modifications (Langford, J. W, 1995). Ishikawa Approach Presto Cleaners can also utilize the Ishikawa Approach to solve the quality problems they are engulfed in. The Ishikawa Approach, also known as the Cause-And-Effect Approach is a helpful tool to determine the key sources that contribute most to the problem at hand. These sources are then targeted for improvement and the problem is solved. The approach is also known as the Root Cause Analysis whereby, as the name suggests, the problem is solved by analyzing and fixing the root cause of the problem. The diagram below highlights the approach (Lockyer K and Gordon J, 2005). These are the possible root causes to the problem. The customer himself could be impatient but that is unlikely, the management is inefficient and unorganized or the system is too complicated and time consuming, however, Presto Cleaners admit that their employees or personnel were not trained enough and had difficulty understanding and working the system. Even if we give the benefit of the doubt to the system than the root cause of the problem would be the employees themselves. The lack of training and understanding of the system might have caused the delay in locating Mr. Shelton’s clothes both at the store level and the plant level. Another way to look at the scenario would be the lack of communication amongst the staff at Presto Cleaners, between the store and plant facilities and the company and the customer. Presto Cleaners must analyze the causes of the problems rather than the symptoms. The sources of variation in quality should than be rearranged to eliminate the problems for e.g. an issue for the customer was that his calls went unanswered and that his messages were not received whereas Mr. Hoffner states that the customer did not leave a number. The root cause of this problem is the absence of Mr. Hoffner from his office. Thus, Presto Cleaners must ensure that Mr. Hoffner is at his duty and that no calls go unanswered. Moreover, a caller ID phone must be installed so that it is easy to trace missed calls. The GAP Model According to the GAP Model, the key features of a consumer-company relationship are the standard and quality of service provided. In the case of Presto Cleaners, a lack of communication and insufficient relationship were observed complimented by a lack of customer driven standards and poor service design. For e.g. the gaps between service standard and service delivery was wide i.e. Mr. and Mrs. Shelton were satisfied with the cleaning services of Presto Cleaners but the service delivery department required upgrading and revamping. CONCLUSION It is clear that the customer Mr. Shelton was justified to complain and deserves an apology from Mr. Hoffner for his behavior. Mr. Hoffner himself admitted that the company was at fault however, it is debatable whether the system was at fault or whether the employees lacked the system knowledge because of which there was a delay in locating the missing clothes. There are various quality issues which Presto Cleaners must address immediately through the various models and theories discussed in the text. Different approaches are suitable for different problems but these approaches, if carried out efficiently and effectively would guarantee the elimination of the quality issues and the retention of Mr. Shelton’s business. BIBLIOGRAPHY Dale B, van der Wiele T, van Iwaarden J (2007) Managing Quality, Blackwell. Lockyer K and Gordon J (2005) Project Management and Project Network Techniques, FT Prentice Hall. Howard S. Gitlow (2005) Quality Management, 3rd Edition, Mc Graw-Hill/Irwin. Benjamin Schneider, Susan S. White. (2004). Service Quality: Research Perspectives. Illustrated Edition, Sage Publications. Langford, J. W., Logistics: Principles and Applications, McGraw Hill, 1995, pp-488. Mesut Akdere,(2009). The Role of Knowledge Management in Quality Management Practices: Achieving Performance Excellence in Organizations, Advances in Developing Human Resources, 11: 349 - 361. Andreas B. Eisingerich and Simon J. Bell, (2008). Perceived Service Quality and Customer Trust: Does Enhancing Customers' Service Knowledge Matter? Journal of Service Research, 10: 256 - 268. Matthias Gouthier and Stefan Schmid, (2003). Customers and Customer Relationships in Service Firms: The Perspective of the Resource-Based View, Marketing Theory, 3: 119 - 143. Willard I. Zangwill and Paul B. Kantor, (1998). Toward a Theory of Continuous Improvement and the Learning Curve, Management Science, 44: 910 – 920. Procedure for performing a failure mode effect and criticality analysis, November 9, 1949, United States Military Procedure, MIL-P-1629 Read More