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International Journal of Industrial Engineering and Technology. ISSN 0974-3146 Volume 2, Number 1 (2010), pp.

325--333 International Research Publication House http://www.irphouse.com

Customer Satisfaction through best Practices of Total Quality Management (TQM)


N. Venkateshwarlu, Ashish Agarwal and Manoj Kulshreshtha School of Engineering & Technology, IGNOU, New Delhi-68 Email: nvenkateshwarlu2008@ignou.ac.in, ashisha@ignou.ac.in, kulshreshtha_m@ignou.ac.in

Abstract TQM and its tools, techniques, methodologies and philosophy has gained importance in improved quality of products, services, processes and the customer satisfaction. Customer satisfaction is one of the TQM factor strives to improve the financial performances. Recently customer focus, customer understanding and traditional questionnaire survey methodologies are gained importance by best practicing these tools to understand the needs, requirements of the customers. Understanding needs of the various customers is a gigantic task. Reaching nearness to the customer needs and requirements indicates the importance of the organization efforts towards the increased customer satisfaction. Manufacturing companies or service organizations are increasing their efforts for improving the customer satisfaction level, by allocating more funds, training their employees in quality tools and encouraging the employees in participating in the customer focus groups. In this paper, we are going to explain the importance of customer satisfaction in improving the organizational and financial improvements. Key Words: Customer Satisfaction, TQM, Customer Focus, Commitment to Customers.

Introduction
Definition of TQM in relation to customer satisfaction TQM is a philosophy, qualitative approach to identify customer needs in advance, fulfill the requirements with full customer satisfaction or delighting the customers with overcoming their expectations. TQM stresses the importance of culture in designing, producing and improving products and services that satisfy customers (Collins, 1994). TQM conducts the customer satisfaction surveys through effective

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questionnaire and interview methods. TQM is a management approach, collects and analyses the customer data to modify old products, to design the new products and services to the extent of the customer expectations. Customer satisfaction is the objective of TQM (Dean and Bowen, 1994, Youssef and Zairi, 1995). TQM multiplies the customer satisfaction levels by improved product and service quality with developing and maintaining good customer supplier relationships. TQM delights the customers with innovative products and product features, which are beyond the customer expectation levels.

Benefits of TQM implementation In the literature studies, the benefits observed from the TQM implementation in the various manufacturing and service organizations are as follows: (i) Reduced defects (ii) Reduced rework (iii) Reduced lead time (iv) Lower inventory levels (v) Cost reduction (vi) Increased market share (vii) Increased profits (viii) Customer satisfaction* (ix) Employee satisfaction (x) Supplier satisfaction (xi) Stakeholders satisfaction (xii) Reduced product development time (xiii) Increased design capabilities (xiv) Increased technological developments (xv) Enhanced business competitiveness (xvi) Production and productivity improvements

Understanding concept of customer satisfaction During 1990 to till date the customer has become focal point to the business. Some times the organizations views that the Customer as the King. TQM implemented organizations treats customers as their own employees. So organizations should start the process of customer satisfaction by best practicing the quality tools and techniques. Which includes market research, customer feedback, questionnaire survey etc;. To satisfy or delight the customer one should understand the customer requirements, capture the words of the customers and produce or service whats right to the customer. Most organizations do not understand the real benefits of providing excellent customer service and support. Customer satisfaction strategy has become competitive advantage nationally and globally to the organizations. Some organizations dealing with the customers nationally and internationally, there fore the needs of the customers vary. So that the organizations should adjust their processes, quality standards and delivery timings etc; according to the varied needs of the

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customers. Maintaining customer data helps the organizations to update their level of the efforts to improve the quality and customer satisfaction. Customer complaints, customer feedback reports help in identifying the problems and bottlenecks in the customer satisfaction process. Satisfying customer is a gigantic task. Getting information through market research to develop a new product may not satisfy the customers. This market research or feed back information regarding the customer needs and requirements are to be communicated with commitment to design and manufacturing crews are an essential part of a customer satisfaction. First of all product developers should understand the customer needs, requirements in design stage, then only they can fully satisfy the customer. The companies, whose motto is towards customer satisfaction, they treat the customer as the most important person than any body, they listen to the customer carefully, they never treat the customer as interruption of their work. They says that customer is not dependent on them; they are the dependent on him. A customer is a person or company who brings us his or their needs a wants. It is our job to handle them profitably to him or them and to ourselves. The companies should understand the various types of customer needs, such as: Basic needs or Basic quality Expected needs or Expected quality Excitement needs or Attractive quality and fulfilling their needs with the products or services will get the added value to their customers. Who is the customer? In a business process any mutual interaction takes place between any two persons and the persons are the mutual customer. There are two different types of customers, internal customers and external customers. There are also known as employee customer base and organization (manufactures) customer base. We must be able to under stand, who is and who are our internal and external customers. How they become our customers and when they become our customers can be understood. By considering employee customer base, suppose the management puts the targets of production with quality levels in front of an employee. Therefore the management has become a customer to an employee. The employee must fulfill his targets of production with required quality levels. This is also identified as internal customer satisfaction. Communication takes place between employees regarding job improvement, personnel problems, sharing information and knowledge, mutual job descriptions, mutual learning aspects are all known as internal customer base. By considering external customer base, the OEM firms must know that to whom we ship our products and to whom we provide our services are our ultimate customers. In turn, the customers who purchases products and services either directly or indirectly from our company must be pleased by what we provide. This concept of an expanded customer base helps us to understand what we have broad responsibility to maintain total customer satisfaction as our primary goal.

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Methodology
A framework for customer satisfaction through best practices of TQM In the literature it is observed that there were more number of best practices of TQM tools and techniques available, are applied and applying for assessing the customer satisfaction to reach the nearness to the customer satisfaction index (CSI) according to the needs of different customers. The frame for customer satisfaction through best practices of TQM is shown in the figure 1 below:
Customer Orientation/ Customer Understanding 2. Customer Focus and Satisfaction 3. Commitment to customers 4. Customer-Supplier relationships 5. Effective Market Research 6. Traditional Quantitative Questionnaire survey 7. Customer Panel Discussions 8. Customer Phone Interviews 9. Customer Complaints 10. Customer Data 11. Audit Tool 12. Customer Service Manual 1.

TQM best Practices

Improved Customer Satisfaction Delighted Customers Improved Customer Loyalty Improved Number of Customers Increased Customer Satisfaction Index Reached Nearness to the CSI

Figure 1: A framework of TQM best practices.

All the above mentioned tools and techniques should learned by the people of organization, who are involving in the process of customer satisfaction. According to the TQM principle all the employees should be trained to improve the quality of products, processes, services to delight the customers. Customers are important persons who increase the organizations financial performances. Customers feel happy when they get the required materials, required services at required time with affordable cost. Customers are the kings who express their views in front of their friends, colleagues and neighbors positively when they satisfied. It will increase the image of your products infinitely without any efforts. The philosophy of TQM is only that produce the right products and service at first time. It is achieved only by best practicing TQM tools and techniques continuously where ever, when ever required. The concept of TQM suggests that every body in the organization should be involved to improve their skills, knowledge and perfection to satisfy their immediate customers or internal customers. In this customer satisfaction chain, links should become strong and robust by satisfying each internal customer and finally the ultimate customer.

Research findings and practices


Customer Orientation/ Customer Understanding Companies are becoming successful, showing financial improvements, performing

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well by managing their internal and external customers. Developing customer orientation strategies at all the levels, throughout the supplier-manufacturer-customer supply chain processes. Giving importance at each point of operation to the customers helps in providing the goods and services up to the mark. Customer orientation process helps the companies to know the idea about the various customers changing needs, updating the customer data, competitors strategies and actual needs at the particular point of time etc;. So that the companies can update their processes, products, processes and services according to the changing needs of the different customers. Which help the companies to gain the competitive edge and also helps in meeting the competitive challenges? According to Stefan Lagroson (2001) TQM, has become well established as a system for improving the performance of the companies and satisfaction of customers. In the literature on TQM philosophy stressed more on customer satisfaction and its effectiveness on the company performances. Customer Focus and Satisfaction It is the reality of the companies to assess their performance by increasing their customer base year after year. Increasing index of customer base or number of customers itself indicates the performance level of the companies at that particular year. Mohammed Zairi (2000) states that customer focus means creating new systems, procedures and guidelines and adhering to the theme of servicing customers. It means that, any organization wants to improve their competitive strategy, which should aware about their customer changing needs and requirements in advance, so that the companies can implement the new systems, quality policies, new technologies to satisfy the customers. Satisfying customers is not only the aim of the companies; it tries to delight the customers with developing innovative products and services. Norman E. Rickard (1996) expresses, his views that delighted customers remain loyal, permitting retentions of the customer base and repurchases of products and services. Customers also delighted and very much satisfied, by inviting the customers for the companies new launch of products and services, for implementing quality tools and techniques in their manufacturing systems etc;. By inviting the customers for innovative programmes like above may encourage them to give orders for purchases of products and service. Commitment to Customers By implementing and best practice of the TQM enablers, such as customer satisfaction surveys, understanding the customer requirements and producing the goods and services to the customer requirements, not just some time, but every time. Collecting data about the customers products processes etc; by visiting the customer plants frequently will improves the companys interests towards customer satisfaction process and commitment to customers. Companies may develop team approach by developing customer service group, customer survey group and quality improvement teams to identify and solve the problems arrived in the customer satisfaction process. All these teams can works towards the commitment to customers by solving the problems raised, then and there with out any delay. These teams continuously seek improvement opportunities by surveying about the customers. Commitment to

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customer objective is only achieved by the manufacturers by producing and servicing to customer specifications. Manufacturers need to adopt flexibility of producing products according to the changing demand fluctuations of the customers. According to Gregory M. Bounds (1996) commitment to customers is to identify their needs, measure their perceptions and initiate actions to create value and satisfaction. Customer Supplier Relationships Customer supplier relationships are also effect the customer satisfaction level. If the customer supplier relationships are positive and effective, leads to increase the customer satisfaction level. So it is better to develop the positive relationships by mutual understanding, cooperation, sharing information, knowledge and technology. According to TQM philosophy, the quality tools, systems, and techniques may be implemented simultaneously in both the organizations by mutual understanding and cooperation. It reduces the cost involved in quality training programmes, quality manual preparation, understanding of quality principles by both the partners at a time. So the understanding ness in both partnering companies will similar and the variance of understanding will be reduced. TQM suggests that maintaining strong relationships leads to develop the ultimate quality of final products and services to delight the customers. TQM also suggests that by improved information and technology sharing will improve the logistical delivery timings and reduce the intermittent defect flows. Effective Market Research Marketing research is an effective tool of managers to take the constructive and meaningful decisions. A meaningful decision leads to the improvement of their product sales and customer satisfaction. Through effective marketing research the managers are able to collect constructive data about the customer needs, common customers, segmentation of customers, customer processes, customers of their customers data, new trends of products, processes, taste of new customers, market share of the product, demand of the product, products modifications requirements, customer service requirements etc;. Clear and perfect definition of the problem leads to correct research design, collects data through various methods, uses various instruments, collects data through field works and analysis data through available software and statistical tools, finally presents the two or three decision out comes. Further the manager takes any one decision after analyzing the above results, which is suitable for the company growth and financial improvements and finally to satisfy the customers of the different markets. Traditional Quantitative Questionnaire Survey It is a questionnaire survey to get the feedback from the customer about their needs and requirements. It is conducted by marketing managers or industrial engineers to gain the knowledge about the customer processes and products. It also gives the feedback about the company products and service satisfaction levels. The comprehensive questionnaire prepared by the marketing managers will be sent to each and every customer and ask them to rate the factors on five point scale and also to write about the suggestions if any. Questionnaire mainly comprises of minimum 30

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questions in the areas of company profile, product and process information. Questionnaire survey methodology is used to find out the needs and expectations of the customers in advance. So that the, companies can mould their strategies to improve the quality of goods and satisfy the customers. Customer Panel Discussions Customer panel discussions are conducted weekly or monthly at company by inviting all the customer executives, company executives and company CEO to discuss about customer needs, requirements, problems, bottlenecks and improvements if any. The suggestions will be taken from the customer groups. Customers of each and every product will be given chance to speak about their requirements and about their future plans. In panel discussions data will be gathered, analyzed and minutes along with solutions are served to the executives of the responsible departments to implement the suggestions and the modifications to satisfy the customers. Customer Phone in Interviews Phone in interviews will be conducted by the marketing managers or industrial engineers by taking prior time with the executives of the customer departments. A structured limited questionnaire is prepared and interview will be conducted in a limited time. In this interview the questions asked are mainly about the performance of the product and services provided by the companies. The new product development requirements also collected in the interview method. Customers are asked to provide their benchmark standards and their competitors information. Customer Complaints The companies should provide their customer complaint box at their plants, service stations, website and email facilities, so that anybody can easily sent the complaints. Therefore customers are encouraged to provide their complaints, when ever the problem occurs with the products and services. Next the companies should develop a system to track each individual complaint and send acknowledgements to the customers about received complaint and the service personnel will reach you with in one hour. What ever may be the problem service personnel should and must attend the customer for their service. Which boost the customer morale and loyalty towards our services? If it is rectifiable by service personnel, it should be repaired then and there. If it is design, process or the materials defect the information should be passed on to all the departments concerned. Therefore the corrective actions process is implemented. Customer complaints managing manager only feels happy, when he receives a service satisfaction acknowledgement from the complained customer. Each and every complaint is recorded and analyzed in the customer complaint resolution meetings conducted in weekly and the minutes are circulated among the concerned responsible departments. According to Gregory M. Bounds (1996) action plan and schedules should be informed to the customers and progress against schedule is tracked. Scheduled material deliveries are achieved by proper planning and tracking of logistical services. Effective logistical services are also essential for customer satisfaction and complaints handlings.

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Customer Data Customer data is collected through questionnaire survey, sales persons directly contact with customers and take feedback, executive survey, third party survey, weekly survey, yearly survey and through CEO meetings with customers etc;. The data is collected documented and analyzed to get the solution for each and every customer needs and requirements. This customer data is sent to design, manufacturing and quality departments for developing new products and right products at first time. Customer data or information is very much essential to assess or measure the standards of their processes and products. Utilization of customer data effectively may increase level understanding about the customer needs and expectations. Utilization of computers and software engineers to develop software for analysis of customer data to predict the behavior of customers. Customer data is also utilized to find of out the behavior of customer satisfaction index. Having highest customer satisfaction index gives an added advantage to the companies. Customer Satisfaction Audit Tool Auditing is an essential monitoring and control tool in all the industrial processes, including finance & accounts, inventory of materials, information and data. Customer satisfaction audit tool also similar to the above, but here it audits customer data in frequent intervals to measure and update the data. Auditing takes place to monitor the customer data to get the accurate customer satisfaction index. Auditing of customer data takes place in frequent time intervals by an internal auditor or external experts having the expertise in auditing the customer data. The results of customer data auditing provides the precise data of customers, which is useful in satisfying the customers. Customer Service Manual It is nothing but developing and maintaining the service standards. The service standards are bench marked with the competitor standards or with the partnering industry standards. Standards in the sense responsiveness, effectiveness, performance and commitment etc; all the standards are developed and incorporated in to service manual, which is used by the company. It is reviewed every year to update the standards.

Advantages of Customer Satisfaction


After best practicing the TQM tools and techniques for improvement of customer satisfaction, the benefits have been observed. (i) Gain in market share (ii) Customer retention (iii) Quality improvement (iv) Reducing defects and errors (v) Elimination of causes of dissatisfaction (vi) Improved customer supplier relations.

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Finally the paper gives idea about the importance of TQM best practices to improve the customer satisfaction and customer retention.

Conclusions
In this paper we have discussed about various aspects of customer satisfaction and its effectiveness of the companies. Customer satisfaction is one of the TQM enabler to improve the organizational performance. Different TQM tools and techniques are discussed at a length and their effectiveness on the customer satisfaction are also elaborated. Customer satisfaction plays a vital role in improving the sales turnover, improves the retention of customers, reduce the defects flows in the customer chain. A delighted and loyal customer may purchase second time and multiple times, they also indirectly improve the sale by telling to their friends and colleagues etc. This paper also explained the necessity of best practices of TQM tools and technique to improve the level of customer satisfaction.

References
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