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STATISTICAL QUALITY CONTROL IN SERVICES • 205

A way to measure the quality of services is to devise quantifiable measurements of the important dimensions of a particular service. For example, the number of com- plaints received per month, the number of telephone rings after which a response is received, or customer waiting time can be quantified. These types of measurements are not subjective or subject to interpretation. Rather, they can be measured and recorded. As in manufacturing, acceptable control limits should be developed and the variable in question should be measured periodically.

Another issue that complicates quality control in service organizations is that the service is often consumed during the production process. The customer is often present during service delivery, and there is little time to improve quality. The work- force that interfaces with customers is part of the service delivery. The way to manage this issue is to provide a high level of workforce training and to empower workers to make decisions that will satisfy customers.

One service organization that has demonstrated quality leadership is The Ritz-Carlton Hotel Company. This luxury hotel chain caters to trav- elers who seek high levels of customer service. The goal of the chain is to be recognized for outstanding service quality. To this end, computer records are kept of regular clients’ preferences. To keep customers happy, employees are empowered to spend up to $2,000

on the spot to correct any customer complaint. Consequently, The Ritz-Carlton has re- ceived a number of quality awards including winning the Malcolm Baldrige National Quality Award twice. It is the only company in the service category to do so.

Another leader in service quality that uses the strategy of high levels of employee training and empowerment is Nordstrom Department Stores. Outstanding customer service is the goal of this department store chain. Its organizational chart places the customer at the head of the organization. Records are kept of regular clients’ prefer- ences, and employees are empowered to make decisions on the spot to satisfy cus- tomer wants. The customer is considered to always be right.

Service organizations, must also use statisti- cal tools to measure their processes and monitor performance. For example, the Marriott is known for regularly collecting data in the form of guest surveys. The com- pany randomly surveys as many as a million guests each year. The collected data is stored in a large database and continually exam- ined for patterns, such as trends and changes in customer preferences. Statistical techniques are used to analyze the data and

provide important information, such as identifying areas that have the highest impact on performance, and those areas that need improvement. This information allows Marriott to provide a superior level of customer service, anticipate customer de- mands, and put resources in service features most important to customers.

LINKS TO PRACTICE

The Ritz-Carlton Hotel Company, L.L.C. www.ritzcarlton.com Nordstrom, Inc. www.nordstrom.com LINKS TO PRACTICE Marriott International, Inc. www.marriott.com

It is easy to see how operations managers can use the tools of SQC to monitor product and process quality. However, you may not readily see how these statistical techniques affect other functions of the organization. In fact, SQC tools require input from other functions, influ- ence their success, and are actually used by other organi- zational functions in designing and evaluating their tasks. Marketing plays a critical role in setting up prod- uct and service quality standards. It is up to marketing to provide information on current and future quality standards required by customers and those being of- fered by competitors. Operations managers can incor- porate this information into product and process de- sign. Consultation with marketing managers is essential to ensure that quality standards are being met. At the same time, meeting quality standards is essential to the marketing department, since sales of products are dependent on the standards being met.

Finance is an integral part of the statistical quality control process, because it is responsible for placing fi- nancial values on SQC efforts. For example, the finance department evaluates the dollar costs of defects, mea- sures financial improvements that result from tighten- ing of quality standards, and is actively involved in ap- proving investments in quality improvement efforts.

Human resources becomes even more important with the implementation of TQM and SQC methods, as the role of workers changes. To understand and utilize SQC tools, workers need ongoing training and the ability to work in teams, take pride in their work, and assume higher levels of responsibility. The human resources de- partment is responsible for hiring workers with the right skills and setting proper compensation levels.

Information systems is a function that makes much of the information needed for SQC accessible to all who need it. Information systems managers need to work closely with other functions during the imple- mentation of SQC so that they understand exactly what types of information are needed and in what form. As we have seen, SQC tools are dependent on information, and it is up to information systems managers to make that information available. As a company develops ways of using TQM and SQC tools, information systems managers must be part of this ongoing evolution to en- sure that the company’s information needs are being met.

All functions need to work closely together in the implementation of statistical process control. Everyone benefits from this collaborative relationship: opera- tions is able to produce the right product effi- ciently; marketing has the exact product cus- tomers are looking for; and finance can boast of an improved financial picture for the organization.

SQC also affects various organizational functions through its direct application in evaluating quality per- formance in all areas of the organization. SQC tools are not used only to monitor the production process and ensure that the product being produced is within speci- fications. As we have seen in the Motorola Six Sigma ex- ample, these tools can be used to monitor both quality levels and defects in accounting procedures, financial record keeping, sales and marketing, office administra- tion, and other functions. Having high quality stan- dards in operations does not guarantee high quality in the organization as a whole. The same stringent stan- dards and quality evaluation procedures should be used in setting standards and evaluating the performance of all organizational functions.