OM case no 6 30 PGDM Quality Problems at the Tech Bookstores Tech is a major state university located in a small, rural college

ge town. Tech Services is an incorporated university entity that operates two bookstores, one on campus and one off campus at a nearby mall. The on-campus store sells school supplies, text books, and school-licenced apparel and gifts and it has a large computer department. The off-campus store sells text books, school supplies, and licenced apparel and gifts and it has a large trade book department. The on-campus store has very limited parking, but it is within easy walking distance of the down town area, all dormitories, and the foot ball stadium and basket ball arena. The off-campus store has plenty of parking, but it is not within walking distance of the campus, although it is on the own bus line. Both stores compete with several other independent and national chain college book stores in the own plus several school supply stores, apparel stores, computer stores, and trade book stores. The town and the university have been growing steadily over the past decade, and the foot ball team has been highly ranked and gone to a bowl for eight straight seasons. The Tech book stores have a long standing policy of selling text books with a very small mark up (just above cost), which causes competing stores to follow suit. However, because text books are so very expensive anyway most students believe that the Tech book stores gouge them on text book prices. In order to offset the lack of profit on text books, the Tech book stores sell all other products at a relatively high price. All profits from the stores are used to fund student related projects such as new athletic fields and student centre enhancements. Tech Services Board of Directors made of faculty, administrators and students. The executive director, Mr David Watson, reports to the BoD and oversees the operation of the book stores (plus all on-campus vending and athletic event vending). His office is in the on-campus store. Both book stores have a store manager and an assistant store manager. There is one text book manager for both stores, a trade book manager, a single school supplies and apparel manager, and a computer department manager, as well as a number of staff people, including a computer director and staff, a marketing director, a finance staff, a personnel director, a ware house manager and secretaries. Almost all of the floor employees including cash register operators, sales clerks, stock people, delivery truck drivers, and ware house workers, are part time Tech students. Hiring Tech students has been a long standing university policy in order to provide students with employment opportunities. The book stores have a high rate of turnover among the student employees, as would be expected. Several incidents have occurred at the off-campus store that has caused the Tech Services Board of Directors concern. In one incident a student employee was arrested for drug possession. In another incident a faculty customer and student employee got into a shouting match when the employee could not locate a well known book on the book store computer system and the faculty member got frustrated over the time it was taking. In still another incident an alumnus who had visited the store after foot ball game sent a letter to the university president indicating that a student employee had been rude to him when he asked a question about he return policy of an apparel item he had purchased on the book stores website. When the student did not know the return policy, he told the customer in a condescending manner to come back later. The last incident was an off hand remark made by a local town resident to a Board member at a party about he difficulty she had completing the purchase at the mall store because registers were unmanned, although she could see several employees talking together in the store. Although sales and profits at the book store have been satisfactory and steady over the past few years, the Board of Directors is extremely sensitive to criticism about anything that might have the potential to embarrass the university. The Board of Directors suggested to Mr Watson that he might consider some type of assessment of the service at the book store to see if there was a problem. Mr Watson initially attempted to make random, surprise visits to the book stores to see if he could detect any problems; however, there seemed to be a jungle telegraph system that alerted his employees whenever he entered a store, so he abandoned the idea. Next he decided to try two other things. First he conducted a customer survey during a two week period in the middle of

the semester at both stores. As customers left the stores, he had employees ask them to respond to a brief questionnaire. Second, he hired several graduate students to pose as customers and make purchases and ask specific questions of sales clerks, and report on their experiences. The selected results from the customer survey are on the table below ---Campus store Student Nonstudent Yes No Yes No 572 93 286 147 522 569 74 81 602 385 335 143 96 591 584 63 280 330 231 278 200 203 371 398 52 212 165 243 240 72 45 391 Off-campus store Student Nonstudent Yes No Yes No 341 114 172 156 350 322 51 72 407 275 262 105 133 404 383 48 180 193 135 180 150 147 296 301 17 193 148 178 181 32 27 311

Questions Were employees courteous and friendly? Were employees knowledgeable and helpful? Was the overall service good? Did you have to wait long for service? Did you have to wait long to check out? Was the item you wanted available? Was the cost of your purchase(s) reasonable? Have you visited the stores website?

The only consistent responses from the graduate students posing as customers were that the student employees were sometimes not that familiar with store policies, how to operate the store computer system,, what products were available, and where products were located in the stores. When they did not know something they sometimes got defensive. A few also said that students sometimes appeared lackadaisical and bored. Using observations of the operation of your own college book stores to assist you, answer the following questions. a) Why do you think Mr Watson organised the customer survey the way he did? What other things do you think he might have done to analyse the stores quality problems? b) Develop Pareto charts to help analyse the survey results. c) How would you define quality at the book stores? d) Discuss what you believe are the quality problems the book stores have? e) What is the book stores cost of poor quality? f) What actions or programmes would you propose to improve quality at the book stores? g) What obstacles do you perceive might exist to hinder changes at the book stores and quality improvement? h) What benefits do you think result from quality improvement at the book stores?

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