European Journal of Scientific Research ISSN 1450-216X Vol.33 No.3 (2009), pp.398-410 EuroJournals Publishing, Inc. 2009 http://www.eurojournals.com/ejsr.htm Application of Quality Function Deployment to Study Critical Service Quality Characteristics and Performance Measures Baba Md Deros Department of Mechanical and Materials Engineering Faculty of Engineering and Built Environment Universiti Kebangsaan Malaysia E-mail: hjbaba@eng.ukm.my Norashikin Rahman Department of Mechanical and Materials Engineering Faculty of Engineering and Built Environment Universiti Kebangsaan Malaysia Mohd Nizam Ab. Rahman Department of Mechanical and Materials Engineering Faculty of Engineering and Built Environment Universiti Kebangsaan Malaysia Ahmad Rasdan Ismail Department of Mechanical and Materials Engineering Faculty of Engineering and Built Environment Universiti Kebangsaan Malaysia Ahmed Husam Said Department of Mechanical and Materials Engineering Faculty of Engineering and Built Environment Universiti Kebangsaan Malaysia Abstract This paper aims to measure service quality performance and identify critical service quality characteristics as perceived by the customers. This began by conducting a survey through designed questionnaires to the identified group of customers to get their feedback. This is followed by constructing house of quality, establishing the customer s requirements and technical specifications, design the questionnaire, and identifying other parameters for the Quality Function Deployment (QFD) matrix. There are two different competitive assessments that have been conducted; performance related to customer requirements and performance related to technical requirements. Both case study companies are involved in the same industry with studied firm. Based on the QFD technique, critical service quality characteristics that need to be enhanced by the studied firm in Malaysia have been identified as technical specification such as employee training, human resource, customer feedback analysis, understanding customer needs, quality and implementation of continuous improvement, process management, and supply from suppliers. From the study, it was found the service quality performance of the studied firm was 68 percent, which the
Application of Quality Function Deployment to Study Critical Service Quality Characteristics and Performance Measures 399 firm s top management feels unsatisfactory. Therefore, the authors had suggested to the studied firm to further improves its service quality performance by improving the critical service quality characteristics as perceived by its customers. Keywords: Critical service quality, performance, QFD, service industry, customers Introduction In today s global and highly competitive market, it is essential for the survival of any firm involved in the service industry to be adaptive, responsive to changes, proactive and has the capability to deliver high quality products according to diverse customer requirements. Therefore, it is very important for any firms which involved in service industry to improve their service quality by reducing the gap between internal quality and external customer satisfaction (Lin 2007). The main objectives of this study are to measure the service quality performance and identify critical service quality characteristics as perceived by the firm s customers. QFD is a customer driven planning process to guide the design, manufacturing, and marketing of goods. In this study, QFD will be used as a tool to improve quality in service industry. By implementing QFD, it will help the firms involved to have clearer picture of quality requirements that could improve their customers satisfaction. QFD is a powerful technique in determining customers requirements and integrate them into the product or service provided by system integrator firm. QFD technique is not only applicable in manufacturing industry, but it could be implemented in various industries to meet or exceed customer expectations. By using QFD technique, service quality characteristics and performance of the studied firm can be determined. Literature Review QFD is one of the TQM quantitative tools and techniques that could be used to translate customer requirements and specifications into appropriate technical or service requirement. This is important in order to deliver product or service that fulfills or exceeds customer requirements. According to Guinta and Praizler (1993), QFD is a customer driven tool. While Chan and Wu (2002), stated that QFD is a customer driven planning process to guide the design, manufacturing, and marketing of goods. QFD uses visual planning matrices that link customer requirements, design requirements, target values and competitive performance into one chart (Pun et al. 2000). QFD was first put into use at Mitsubishi s Kobe shipyard site in 1972, and later in 1983 it was introduced into the USA (Akao 1990). Since then, it has been used as a product development and quality improvement tool around the world (Akao 1990). In 1966, Yoji Akao had introduced the QFD concept in Japan (Dean 1998). Professor Mizuno first used QFD in 1972 to Mitsubishi s Kobe shipyard site to design super tankers (Martins and Aspinwall 2001). According to Cohen (1995) the two pioneer researchers that had developed the QFD were Mizuno and Akao. In the late 1970s, Toyota the automobile manufacturer had adopted QFD and further developed the QFD concept to a detailed process (Cohen, 1995). According to Sullivan (1986) Toyota Auto body had started using QFD in 1977, and as a result, Toyota introduced four new van-type vehicles between 1977 and 1984. Toyota experienced a 20% reduction in the startup cost due to QFD technique adoption in launching its new products from 1977 till 1979 (Chan and Wu 2002). In 1986, Ford Motor Company and Xerox were the early users of QFD that initiated the use of QFD concept in the USA (Chan and Wu 2002). Since then, QFD has been developed and broadly used in various industries such as automotives, electronics, banking, insurance, healthcare, utilities, food processing, aerospace, software engineering, construction and marketing (Chan and Wu 2003). Many other multinational companies such as IBM, HP, General Motors, AT&T, Digital Equipment, ITT,
400 Baba Md Deros, Norashikin Rahman, Mohd Nizam Ab. Rahman, Ahmad Rasdan Ismail and Ahmed Husam Said Baxter Healthcare, Texas Instruments, Miliken Textile, Black and Decker and Philips International have subscribed to QFD advantages (Prasad 1998). The Cadillac car model 1992, considered one of the great car models that had attracted many customers at that time, this car model has been planned and designed entirely using the QFD technique (Besterfield et al. 1995). Methodology Case study methodology was used in this research. It starts from identifying specific group of customers that the firm deals with in order to get their feedback (voice of customer) on the designed case study protocol. Case study protocol was designed to give detailed feedback needed for making improvements to the provided service or product quality. This case study protocol includes information about the importance weight of customer requirements, service performance, competitive assessment, and customer suggestions (open ended questions) on the customer requirements field. The authors will then integrate these voices of customers into the service or product provided by incorporating these collected data into QFD matrix (house of quality). In general, there is no right or wrong ways to choose samples for measuring customers satisfaction surveys. However, it is important that the samples are consistent with the evaluation objectives. For constructing the QFD house of quality, it involves establishing the primary inputs to QFD matrix such as customer requirements (WHATs), technical specifications (HOWs). The relationship matrix between (WHATs) and (HOWs), and correlation between (HOWs) will also be established. Other QFD matrix parameters that shall be included are the importance weight of customers requirement, competitive assessment, relative and absolute weight of customers requirements and technical specifications, technical difficulties and target. Establishing customer requirements is the most important step in QFD process. In this research, the main customer requirements (WHATs) have been adapted from Garvin (1988); Parasuraman et al. (1985) and modified by the firm s quality team and experts. Second, it is important to establish technical specifications in QFD process. In order to meet customers requirements, the firm s quality team and experts had identified the technical specifications (HOWs). Other parameters for QFD matrix had also been identified. These parameters include the importance weight of customers requirements and competitive assessment. They were assessed using the case study protocol; the relative and absolute weights of the customer requirements and technical specifications were calculated from QFD equations, the firm s quality team assesses the technical difficulties and target. To achieve research goals, service quality performance and critical service quality characteristics that need to be enhanced are defined during data analysis and evaluation. The data collected from case study protocol has been integrated and analyzed to the QFD matrix. Then, the critical technical specifications were identified. These shall have the highest relative and absolute weights that the firm should focus on and improve, in order to meet or exceed customer expectations and improve the service quality performance provided by the firm. The last activity was measuring the service quality performance of the case study firms. Finally, the quantitative value in % of the firm s quality performance was measured by dividing the actual performance level to the maximum performance level. Results and Discussions As mentioned earlier, the two main aims of this study are to measure service quality performance and identify critical service characteristics that need to be enhanced in order to improve the studied firm s customer satisfactions. This can be achieved after the completion of constructing QFD matrix.
Application of Quality Function Deployment to Study Critical Service Quality Characteristics and Performance Measures 401 Figure 1: Identify critical service characteristics Technical specifications Management involvement Quality and continuous improvement implementation Encourage and inherent the quality responsibility to all of the firm staff. The degree of the top management involvement, encouragement, empowerment, and support Customer focus and public Understanding custom needs Customer relation and satisfaction Knowledge about the market and profitable products Customer feed back and analysis Human resources Employee training Supply from suppliers Increase the Warranty period Dealership Technology implementation Information technology and Web collaboration Create customer data base Firm's web site Resources Seminars, advertising, and exhibitions participation Process management 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Absolute weight 254.5 482 420.6 526 351 119 569 565 772 506 134 144 340 82 132 184 42 460 Absolute factor 0.042 0.08 0.069 0.09 0.06 0.02 0.09 0.09 0.13 0.08 0.02 0.02 0.06 0.01 0.02 0.03 0.01 0.08 Relative weight 1530 2965 2521 3258 2154 671 3447 3404 4837 3045 848 831 2097 488 863 1098 237 2824 Relative factor 0.041 0.08 0.068 0.09 0.06 0.02 0.09 0.09 0.13 0.08 0.02 0.02 0.06 0.01 0.02 0.03 0.01 0.08 The Most critical Second most critical 6080 SUM 37116 SUM Third most critical Referring to Figure 1, the most critical specification for service characteristic is employee training, while technical specification for human resource, customer feedback analysis, and understanding customer needs have the second highest relative factor and absolute factor. Technical specification for quality and continues improvement implementation, process management, and supply from suppliers have the third highest relative factor and absolute factor. Higher relative factor and absolute factor of technical specifications show their degree of criticality. In this study there are two different competitive assessments that have been made. First, the performance related to customer requirements, which has been assessed by the customers using the case study protocol. Second, competitive assessment which related to technical requirements, which has been assessed by the firm s quality team and experts based on their previous experiences. Both customer requirements and competitive assessments are based on two competitors (competitor X and competitor Y). Both competitors are in the same industry with the studied firm (M) that provide system integration of building management systems, access control system, public address system, intercom system, and other sub system. There are not many system integrators in this field, which would help the studied firm (M) to get better feed back from the customers about its competitors. Table 1: General firm size comparisons between studied firm, M and competitors X and Y Dimension Studied firm, M Competitor X Competitor Y Paid up capital Medium High Low Over head Low High Medium Number of Staff Low High Medium Resources Medium High Medium Product reputation High High Medium Ability to finance large projects Medium High Low Nation wide recognition Medium High Low Table 1 represents general background information with respect to firm size between the studied firm, M, and the other two competitors, X and Y that could provide better understanding about the size of three firms assessed. There are seven dimensions that authors had been considered to classify the firms into small, medium or large size. With reference to Table 1, the authors had classified
402 Baba Md Deros, Norashikin Rahman, Mohd Nizam Ab. Rahman, Ahmad Rasdan Ismail and Ahmed Husam Said the studied firm as medium size firm, while competitor X as large size firm and competitor Y as medium size firm. Figure 2 is the overall QFD matrix structure, which includes the calculations and analyses from questionnaires in case study protocol for technical specifications and customers requirements. It also shows the relationship between customer requirements and technical specifications, whether it is strong, moderate or weak. These relations were determined by analyzing case study protocol and will be used to calculate service performance for every firm. Competitive assessments for customers requirements and technical specifications have been included in this matrix. Other than that, this matrix also consists of important weight, target value, sales point and absolute weight. All these figures have been calculated by analyzing case study protocol. Figure 2: Overall QFD matrix structure
Application of Quality Function Deployment to Study Critical Service Quality Characteristics and Performance Measures 403 Figure 3: Technical specifications competitive assessment Referring to Figure 3, it is shown that the overall performance of the studied firm (M) is better than competitor (Y) related to technical specifications. Meanwhile, the overall performance of competitor (X) is better than the studied firm (M) related to the same technical specifications. The studied firm (M) is performing better than competitor X in some technical requirements, which can be considered as the firm s strengths. Technical specifications have been divided into twelve groups as shown in Figure 3. Since M has high expertise in the field which provides system integration of building management systems, access control system, public address system, intercom system, and other sub system, it is performing better in terms of knowledge about the market and profitable products. Other than that, M is performing better in customers relation and satisfaction. These capabilities had made M perform better in terms of customer focus and public relations. Compared to competitor X, which had already achieve the status by being well established firm, M performs better in participating in seminars and exhibitions to reach its target to be well known firm. This is important because M needs to advertise itself and to make known to the market. The studied firm, (M), is performing better in term of dealership and product warranty period which the studied firm has extend it to three years rather than one year compared to other competitors. M is a dealership from several high quality products supplied by recognized worldwide suppliers for its products and systems provides better confidence to M to increase the warranty period. Studied firm (M) is achieving lower than competitor X in most of the technical requirements, which can be considered as the firm s weaknesses. Lack of employee training and resources lead to poor service quality and process management. Small number of staff had caused the firm to perform lower than competitor X in term of human resource. Since the firm does not have enough human resources, it depends on the suppliers or contractors to perform the system installation. As a result, it makes the firm difficult to control the quality of installed system. In terms of management involvement, technology implementation and understanding customers need, getting supply from suppliers and resources, M is performing lower than X. These specifications include the degree of top management involvement, encouragement, empowerment and support, implementation of quality and continuous improvement as well as encouragement of quality responsibility to all the firm staff. All these specifications need to be improved to ensure customers satisfaction to the delivered products and
404 Baba Md Deros, Norashikin Rahman, Mohd Nizam Ab. Rahman, Ahmad Rasdan Ismail and Ahmed Husam Said services. Continuous improvements and high quality products will lead M to be recognized by customers. In order for M to stay competitive in today s market, there are some improvements that need to be implemented. At present, majority of the firm s staff are managerial level, therefore the firm had to recruit more technical and engineering staff in order to improve the performance of system installation and customer services. Increasing the firm s technical staff will help the studied firm (M) to reduce its dependence on the contractors and have better quality control on the executed projects. Proper technical and customer service training shall be provided to the newly hired staff. M also needs to develop a standard specifications and criteria for suppliers selection for better performance control and process management. Contractors and suppliers that perform system installation shall be selected based on these standard criteria so that the quality of installed system could be monitored and always at the satisfied level. M also needs to understand more on customer needs to achieve better performance than other competitors. In terms of management involvement, all the three technical specifications need improvements especially in quality and continuous improvement implementations as well as to encourage quality responsibility to all the firm staff. More programs and training on quality awareness shall be held to promote the importance of quality in the products and service. High quality products will maintain their customers and improve the firm s reputation. Quick response time and critical analysis to every customer feedback are important for M to give a better service, thus could increase the firm s status. Figure 4: Customer requirements competitive assessment
Application of Quality Function Deployment to Study Critical Service Quality Characteristics and Performance Measures 405 Referring to Figure 4 which has been adapted from the overall QFD matrix structure, it also shows that the overall performance of the studied firm (M) is better than competitor Y related to the customer requirements. However, overall performance of competitor X is slightly better that the studied firm (M) related to the same customer requirements. There are twenty eight requirements which have been divided into seventeen main groups, as shown in Figure 4. Studied firm, (M), is performing better in terms of conformance by meeting customers specifications for the system installed including the workmanship. For product consistency and reliability, M is performing better by providing consistent of system and product performance over time. In terms of accessibility, M is performing better compared to other competitors because M has friendly and staff accessibility solving problems. Other than that, customers are easy to access to the firm s staff in order to obtain contracting service. M which is capable to focus on meeting customers requirements performs better in terms of responsiveness. For communication requirement, M has the ability to listen to the customer complaints and suggestions, which lead to better performance compared to other competitors. Beside all the strengths, studied firm (M) has to improve its performance related to the customer requirements, which is lagging behind the two competitors. Low performance related to minimum time to complete the projects, actual project duration, completeness and responsiveness to the projects can be considered as the firm s weaknesses. These can be improved by enhancing the human resource, employee training, customers feedback analysis, customer understanding, quality and continuous improvement and enhancing the process management. It is important for studied firm, (M), to improve its performance in some customer s requirements, so that the reputation and the firm s status could be increased and better from the other two competitors. In terms of service, M shall hire more technical staff to provide prompt resolution of system/ product problems and complaints as well as good service and technical support during the warranty period. M could also benefit to these technical staffs as it could minimize the completion time and improve responsiveness to the variation of requirements during completing the project. Since M is performing at the average level between other two competitors in terms of accuracy and precision, M needs to develop standard procedure to the staffs to ensure they perform the right service from the first time with the minimum errors to the products/systems installed. Small good changes to every aspect could improve the firm s performance and minimize the cost. Service Quality Performance Service quality performance for the studied firm (M) is calculated in terms of quantitative value by dividing the total maximum service performance level to the total actual service performance level. The author had followed the following steps to calculate the service quality performance. These steps have been adapted and modified from Arditi and Lee (2003): Actual performance is identified from the questionnaires administered to the firm s customers. Maximum performance is the maximum performance the firm could perform which is excellent and ranked with numerical number (5). Actual service performance = final importance weight of each customer requirements x relationship value between WHAT and HOW for the technical requirements x actual performance (1) Maximum service performance = final importance weight of each customer requirements x relationship value between WHAT and HOW for the technical requirements x maximum performance (2) Total actual service performance level = Actual service performance (3) Total maximum service performance level = Maximum service performance (4) Service quality performance = Total actual service performance level / Total maximum service performance level (5)
406 Baba Md Deros, Norashikin Rahman, Mohd Nizam Ab. Rahman, Ahmad Rasdan Ismail and Ahmed Husam Said Referring to Figure 5, 6 and 7 which has been adapted from the overall QFD matrix structure (Figure 2) and following steps provided by Arditi and Lee (2003), the service quality performance can be calculated by using Equation (5): Service quality performance of the studied firm, M = 20505.23 / 30282.45 = 0.67713 = 67.713 %. Service quality performance of Competitor X = 21390.33 / 30282.45 = 0.7064 = 70.64 %. Service quality performance of Competitor Y = 15990.82 / 30282.45 = 52.81 = 52.81 %. The result from the calculation shows the current quality service performance of the studied firm (M) is about 68%. M is performing better than Y, but slightly lower than X. Therefore, it is very critical for the studied firm to further improve its service quality performance to higher level in order to ensure their customers are satisfied, thus provide long term sustainability and growth. Figure 5: Service quality performance matrix for studied firm, M
Application of Quality Function Deployment to Study Critical Service Quality Characteristics and Performance Measures 407 After determining the service quality performance and identifying the critical service characteristics that need to be improved, the studied firm (M) should have clearer vision of its strengths, weaknesses, opportunities and threats. In other words, the firm had benchmarked itself against its competitors and identified the critical areas that need to be enhanced in order to improve customer satisfaction. Figure 6: Service quality performance matrix for competitor X
408 Baba Md Deros, Norashikin Rahman, Mohd Nizam Ab. Rahman, Ahmad Rasdan Ismail and Ahmed Husam Said Figure 7: Service quality performance matrix for competitor Y Conclusion QFD is an effective technique that helps both manufacturing and non-manufacturing industries to improve their quality, performance, customer satisfaction, understanding the customers needs, benchmarking against competitors, and clear vision of customer, market intangible requirements, and other quality and business characteristics by integrating the voice of customer with the firm s processes. Based on the QFD technique used in this study, critical service quality characteristics that
Application of Quality Function Deployment to Study Critical Service Quality Characteristics and Performance Measures 409 need to be enhanced by the studied system integrator firm in Malaysia have been identified, and service quality performance of the studied firm has been determined and quantified. The critical service quality characteristics that need to be enhanced by the firm are the technical specification which includes employee training, human resource, customer feedback analysis, understanding customer needs, quality and continues improvement implementation, process management, and supply from suppliers. The authors could conclude that the studied firm (M) is capable of installing good quality products but they do not have enough competent staff to install the products. To overcome this problem, the firm is using contractors for the installation of the systems that might not be able to provide installation quality up to the customers expectation. Therefore, the firm should ensure and enhance the supply from suppliers, which are the contractors for installing the system by awarding the installation job only to high quality installers. The calculated service quality performance of the studied firm is 68%, which is considered not satisfactory to the firm s top management. Therefore the studied firm should further improve its service quality performance to higher level by improving the critical service quality characteristics as required by their customers. Since most previous researches on service quality had focused on the qualitative quality characteristics. Therefore more researches that focus on the quantitative quality characteristics should be conducted in the future. More studies are needed to quantify service quality using QFD techniques to show that QFD technique can also be applied in service industry and not only limited to manufacturing industry. This study had achieved its aims to identify the critical service quality characteristics and determine the service quality performance of a system integrator firm in Malaysia using QFD technique. In future, the QFD technique could be used by the studied firm (M) to get the importance weight of the customer requirements from customers that the firm had not dealt with them earlier. This is to identify the critical quality characteristics that need to be enhanced by the firm in order to enhance the firm s ability to attract more customers, get more business and market shares, thus able to achieve better customer satisfaction.
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