Service Operations

Topics: Service system, Management, Service Pages: 12 (3445 words) Published: December 10, 2012
Day 19 (Nov 28, 2012)
Improving Service Quality and Productivity
Integrating Service Quality and Productivity Strategies

“Not everything that counts can be counted, and not everything that can be counted, counts”- Albert Einstein

“Our mission remains inviolable. Offer the customer the best service we can provide, cut our costs to the bones; and generate a surplus to continue the unending process of renewal.” – Joseph Pillay, Former Chairman, Singapore Airlines

During the 1980s and early 1990s, improving quality became a priority as compared to productivity earlier on. In a service context, this strategy entails creating better service processes and outcomes to improve customer satisfaction However, since the beginning of the 21st century there was a growing emphasis on linking these two strategies in order to create better value for both customers and the firm.

The task of value management requires quality improvement programs to deliver and continuously enhance the benefits desired by customers. At the same time, productivity improvement efforts must seek to reduce the associated costs. The challenge is to ensure that these two programs are mutually reinforcing in achieving common goals, rather than operating at loggerheads with each other in pursuit of conflicting goals.

Integrating Service Quality and Productivity Strategies – Quality and Productivity improvement Strategies must be considered jointly rather in isolation.

Improving productivity is important to marketers for several reasons. First, it helps to keep costs down. Lower costs either mean higher profits or the ability to hold down prices. The company with the lowest costs in an industry has the option to position itself as the low-price leader—usually a significant advantage among price-sensitive market segments. Second, firms with lower costs also generate higher margins, giving them the option of spending of spending more than the competition in marketing activities, improved customer service, and supplementary services,. Such firms may also e able to offer higher margins to attract and reward the best distributors and intermediaries. Third is the opportunity to secure the firm’s long-term future through investments in new service technologies and in research to create superior new services, improved features, and innovative delivery system. Finally, efforts to improve productivity often affect customers. Marketers are responsible for ensuring that negative effects are avoided or minimized and that new procedures are carefully presented to customers. Positive effects can be promoted as a new advantage.

Quality and productivity are twin paths to creating value for both customers and companies. In broad terms quality focuses on the benefits created for the customer’s side of the equation and productivity addresses the financial costs incurred by the firm. Carefully integrating quality and productivity improvement programs will improve the long tern profitability of the firm.

What is Service Quality?
What do we mean when we speak of service quality? Company personnel need a common understanding in order to be ale to address issues such as the measurement of service quality, the identification of causes of service quality shortfalls, and the design and implement of corrective actions.

Different Perspectives of Service Quality
The word quality means different things to people, according to the context. There are five perspectives on quality. 1. The transcendent view of quality is synonymous with innate excellence: a mark of uncompromising standards and high achievement. This viewpoint is often applied to performing and visual arts. It argues that people learn to recognize quality only through the experienced gained from repeated exposures. From a practical standpoint managers or customers will know quality when they see it is not helpful. 2. The product-based approach sees quality as a precise and measurable variable....
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