UNDERSTANDING QUALITY
Understanding Quality
Definition: Quality management can be defined as a series of systematic policies, procedures and methods which are followed to guarantee that goods and services are produced in such a manner that the levels of quality is high enough to meet or surpass the needs and expectations of the customers. From a study conducted on 86 firm managers in the United States, they defined quality as (Quality Service, 2013).
• Perfection
• Consistency
• Eliminating waste
• Speed of delivery
• Compliance with policies and procedures
• Providing a good usable produce
• Doing it right the first time
• Delighting or pleasing customers and total customer service and satisfaction
From the perspective of service delivery, service quality is defined as consistency in meeting and exceeding the expectations of one’s customers and service delivery system performance criteria throughout all service encounters (Quality Service, 2013) Role:The role of quality control in firms dealing with production of goods and service delivery is of ultimate importance. For instance, quality control helps in removing defects from manufactured goods and increasing the value of both goods and services (Kotler, 2003).Historically, after World War II, the Japanese engaged in rigorous quality control of their products which enabled them to penetrate the Western market after just 20 years. The quality of their products had exceeded that of the Western manufacturers. Successful quality control ensures reliability, promptness in service delivery and distribution of goods, trust between the customers and the firm. It also provides a sense of security to the customers and gives the firm an upper hand in a competitive environment (Kotler, 2003). Applicability: Being a service delivery company, The Walt Disney Company fully understands the importance of offering quality service delivery to its customers. Following its founder’s edict: “Give the public everything you can give them” (Quality Service, 2013), every employee at Disney endeavors to surpass customer’s expectation on a daily basis. To ensure that Disney remains at its best in service delivery, more attention should be placed on the employees since they are the face of the company. This can be done through developing an organizational culture, which supports consistency in service delivery. Ensure that each employee meets the specifications that Disney employees by evaluating the Disney approach to business and understanding it and designing a quality service standards and procedures in order to raise the level of customer satisfaction (Quality Service, 2013).The careful consideration of the needs, wants, perceptions and expectations of the customers also help in determining the direction of growth. In order to achieve this, Disney world creates a model of quality service throughout the company of trying to exceed customer’s expectations by paying close attention to the details. Disney also studies and differentiates the clients’ demographics with an aim to further improve the quality of service delivery and hence improving the customer experience. Additionally, Disney World has managed to create and develop a service tool which recognizes the needs of customers, their stereotypes and emotions. By doing so, they can tailor their service delivery to specifically meet the needs of all of their customers (Quality Service, 2013). At Disney World, the management understands that there is no good to be able to exceed customer expectations if such service delivery cannot be availed consistently and throughout the entire organization. For this reason, consistency at Disney World is maintained through the application of procedures that help employees to adhere to the specified quality standards. Lastly, is the ability of employees to define and prioritize the Disney quality principles at all times and delivers this service in a safe, courteous, entertaining and efficient manner.For more than 80 years, this outstanding pursuit of distinction in providing consistent quality service has helped in making Disney a world-renowned organization and a lasting business success (Quality Service, 2013).
ISO 9000:2000
Definition: There was a need to standardize the quality requirements for European countries within the Common Market and other countries who wished to engage in business with these countries. To achieve this, a specialized organization for standardization, namely; the International Organization for Standardization (ISO), was founded in 1946. It consisted of agents from the national standard bodies of 91 countries who agreed and adopted a series of written quality standards to be adhered to in 1987.These conditions were revised 7 years, later in 1994 and another significant revision was done in the year 2000. The most recent version of these standards is called the ISO 9000:2000 family of standards. These standards were implemented in the US by the American National Standards Institute around is recognized by more than 100 countries internationally and applies to all types of businesses (Kotler, 2003). Role: The ISO 9000 is important to all the states that have adopted it since it defines the quality system standards based on the idea that some management practices can be standardized globally. It also supports the premise that a properly designed and implemented quality system will result into products/outputs that meet the needs and requirements of international customers. The ISO 9000 also provides a framework of good elementary practices for setting up a basic quality management system especially for companies that lack a formal quality assurance program. It also helps set a baseline for new companies to be able to have a set of quality management system before they develop the capacity for improvement. Applicability: Since Disney World is a company registered in the United States and with operations in various countries, it must comply with and/or surpass the ISO 9000 quality management guidelines, both for customer satisfaction and in order to do business globally. Achieving competitive ability in the arid conditions of a global market is quite a complex process. It requires meticulous planning and coordination of all the business functions of a firm and a great effort in its financial and marketing strategy (Quality Service, 2013). The unwavering focus at Disney World, to ensure the highest quality of service is provided for each customer has made it easy for it to meet the ISO 9000 standards. The management understands the need to exceed customer expectations and such service delivery is availed consistently and throughout the entire organization whether in the United States or internationally. Service delivery consistency is maintained through the application of procedures that help employees adhere to the specified quality standards.According to Kotler (2003), corporations that are among the most revered internationally keep to the rule of serving people’s interests first, and not own interests. Some of the leading companies as of 2001 include; Disney World, Johnson & Johanson, Microsoft, General Electric, Coca-Cola, IBM, Intel, Sony, HP, Fedex, Dell, P&G and UPS. These companies meet the ISO 9000 standard and are recognized for their outstanding products and services. They are also known for their philanthropy in the areas they are established. These are among the companies that attained reliability and reputation for the making long-standing struggles to attain customer fulfillment, which consequently resulted into financial effects and leading market position (Kotler, 2003).
Design for Reliability
Definition: Reliability is simply the likelihood that a processed good, a piece of equipment or a designed system will execute its intended purpose for a specified period of time and under definite operating conditions. Reliability, therefore, applies to both services as well as manufacturing. For instance, a system could define a service procedure in which each stage of service delivery is analogous to a constituent part in a processed good (Quality Service, 2013). Since reliability is a probability, it can be quantified into a value between 0 and 1. For example, a reliability of 0.9 means that, on average; 9 out of 10 times the item in question will accomplish its function for the specified period of time and under the specified conditions of operations. Reliability can be improved by use of better materials in making the item or by adding redundant materials. Both of these result in an increase in cost hence trade-offs are a necessity. Role: The ability calculate the reliability of an item or a system is very crucial since it helps in minimizing losses, predict rate of failure and therefore help the designers of the system or item in question to make the necessary improvements and thereby increasing customer satisfaction. Many manufactured items are made up of several components, which are arranged in series. This means a failure in one component will result to the failure to perform. If the individual reliability (P) for each component (J) is known then the total reliability (R) of a N-component system can be calculated mathematically, using the formula: R= (P1)(P2)…(PN). when a design is composed of parallel components which function independently of each other, failure in one system does not mean failure in the whole system, this means that for the entire system to fail, all the components have to be faulty (Haley & Sidky, 2006). Applicability: Disney World adheres to a technique called the Design failure-mode-and-effects analysis (DFMEA). This technique is mainly used for identifying, during the design process, how a product is likely to fail. It also ventures to establish the effect that failure may have on the customer, its seriousness/significance, likelihood of occurrence and the ability to detect any potential failures before they happen, the cause of the failure and how it can be rectified through the improvement of design. However, on July 2009, two monorail trains collided at Walt Disney World in Orlando producing catastrophic results including the death of a young conductor of one of the trains. This occurred even with the institution of many safety measures which include:
• A moving block light system called MAPO, installed in the top center of the train, which were designed to halt trains automatically in case trains move too close together. The MAPO system is equipped with a push button for ‘override’ and three signaling lights; green, indicating the train is 1500 feet to the nearest train, yellow, showing that the nearest train is between 1500 and 500 feet. When the light turns red, the on-board computer brakes the train automatically
• Various inspections and system checks carried out daily by engineers to ensure everything is working normally.
These scenarios raised questions whether some of the standard practices employed in the reliability and safety community could have managed to prevent in managing the calamity or it was just an unavoidable accident. After careful investigation, it was concluded that the calamity was caused by a misstep by an operator. The operator thought that he had set the back-up switch but he had not, hence letting the second train move forward not knowing that the tracks had not been switched. The MAPO system had also been switched off so as to allow the trains to reverse. These shows that the Orland calamity was a one-in-a-million type of scenario and can be handled in future (US Infrastructure Reliability: Other monorail trains such as the Mark IV trains accomplished nearly 67,500 miles each year with a reliability of 99.9% in 18-hour-a-day operations.
The Product Process Matrix
Definition: The product-process matrix is a model that was first brought forward by Hayes and Wheelwright. This model describes the alignment of process choice with the features of the manufactured item. According to this model, the most suitable balance between the type of manufactured good and the type of process followed occurs along the diagonal in the product-process matrix. When one moves downwards along the diagonal, the focus on both the product and process also shifts from high flexibility and low volume towards high volumes and an increased level of standardization. In a scenario where the characteristics of the process do not match well with the characteristics of the product, the competitive priorities that the firm had set out to achieve cannot be met (Haley & Sidky, 2006).
Role: This model enables firms, mostly those involved in production of goods and also in service delivery, to choose a perfect balance between production process and the charactersitics of the output. For example, a company that produces a small variety of product at high volumes and with low customization, a flow shop process would be the best match between the features of the products and production process. If the firm decides to increase their range of products, perhaps due to a shift in customer preference, it will result in a wider range of products each with a lower volume and increased customization (Haley & Sidky, 2006). The firm will be forced into the lower left-hand corner of the matrix as shown in the diagram above. This model also helps firms to differentiate themselves from their competitors by deliberately positioning a business entity off the diagonal of this model (Kotler, 2003). Applicability: Disney World, positioned is therefore positioned at the right of the product-process matrix since it produces relatively little goods and a highly customized service to its customers. Since Disney World is mostly a service delivery company, they are guided by a ‘service theme’, which says; “We create happiness by providing the finest in entertainment for people of all ages, everywhere.” The service theme defines and guides the whole operation and purpose of the company and has played a major role in the creation of the company’s image. The next in this process of Disney’s service delivery is the Service Standards. Also called “service values”, these are basically guidelines that define how the service theme will be achieved. Disney has four service standards, that is (Quality Service, 2013);
• Safety: Taking care for the wellbeing and peace of minds of the customers.
• Courtesy: all guests must be afforded VIP treatment.
• Show: all customers must be given seamless and outstanding entertainment and lastly,
• Efficiency: all the operations in the parks and resorts must run smoothly.
With the service theme and service standards in place, Disney World has a service delivery system which provides safety, courtesy, show and efficiency and it consists of the following:
• Cast: This is Disney’s most important asset and also most diverse. It is a global team comprised of thousands of people delivering quality service as dictated by the service theme and service standard’
• Setting: this can either be physical or virtual. This is the environment in which Disney delivers their outstanding service to its customers. The setting conveys the message that Disney wants the customers to get about the organization’s standards and values and also to influence their moods and experience positively.
• Process: this refers to a series of actions and functions that are combined to produce a specific result. Disney works to align their global and local processes in order to maintain a specific standard of customer satisfaction (Quality Service, 2013).
Therefore, each portion of Disney World consists of an integration matrix that expresses how quality service standards are delivered to the customers by the cast, setting, and processes.
Concept 5 Economies and Diseconomies of scale
Definition: Economies of scale refers to a state that is achieved when the average unit cost of producing a good or service decreases as the capacity and/or of throughput increases over time On the other hand, diseconomies of scale are observed when the average unit cost of producing a good or service starts to increase as the capacity and/or volume of throughput increases over time. . For example, the cost for designing and constructing a room in a hotel decreases with the increase in the total number of rooms since the fixed cost is spread over more rooms resulting in a lower cost per each unit. However, as the number of rooms surpasses a specific point, the average cost per unit also begins to increase thereby increasing the cost per each unit. Role: Economies and diseconomies of scale dictate the way companies; especially big multinationals do their business. As described above, there exists an optimal point of production where costs are at a minimum and over which costs start to mount up. When a single firm adds more and more goods and/or services to its portfolio, it reaches a point where it gets too large and its goals become out-of-focus, the diseconomies of scale will therefore arise and increase the unit costs (Kotler, 2003). This will force the management to separate any dissimilar product lines, processes, people skills and technology which may exist in the same facility causing the inefficiencies. Moreover, in the struggle to manage a firm with too many missions and aims, key competitive issues which should be given priority such as prompt delivery and high quality may be disregarded. Applicability: Disney World is a multinational operating in the United States, Canada, South America and even Africa. Such a large corporation faces major management complexities but Disney World has managed to stay profitable and enjoy economies of scale. Disney World has achieved this through a number of management strategies including (Business Excellence, 2013).For over 8 decades, Disney World has maintained a comfortable and long-lasting position as a market leader due to the unwavering commitment to its core values. These values include innovativeness/creativity, leadership, excellence in service delivery, quality service, brand loyalty and selection, training and engagement. When Disney grew in size up to a certain point, the management decided to open new and different parks and resorts so as to enjoy economies of scale and avoid diseconomies of scale. The newly opened firms were also managed with the same efficiency and determination so as to maintain a global brand name and reputation. During the merger between Pixar and Disney, there were dangers of diseconomies of scale arising but a number of good management strategies ensured that this did not happen. The Disney-Pixar case seems to be a good example of a successful merger in (Haley & Sidky, 2006). This is demonstrated very clearly by recent box office successes such as Academy Award winners Ratatouille, WALL-E, and the movie hit UP. The factors, as put forth by Haley and Sidky (2006), include:
• The existence of transformational leadership which helped maintain the cultures of the two companies with a vision for the future.
• The creation of a new shared strategic vision so as to get the managements of the two firms to work together and lastly;
• The development of learning teams and organizational learning to help everyone involved to learn and understand the culture and value of the other company
References
Business Excellence. (2013, 3 6). Retrieved from Disney Institute: http://disneyinstitute.com/topics/business_excellence.aspx
Quality Service. (2013, 3 6). Retrieved from Disney Institute: http://disneyinstitute.com/topics/quality_service.aspx.
Kotler, P. (2003). Marketing from A to Z, Adizes, Novi Sad, p. 80.
Haley, J. M., & Sidky, M. H. (2006). Making Disney Pixar Into A Learning Organization.
