SERVICE PROCESS KAIZEN: ADOPTING PROCESS STABILIZATION METHODS TO CONTROL SERVICE
WORK FLOW AND TO IMPROVE CUSTOMER SERVICE
A Thesis
Presented
to the Faculty of
California State University Dominguez Hills
In Partial Fulfillment
Trang 2Copyright 2004 by Yu, Peter Kwok-Wai
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Trang 3AUTHOR:
SERVICE PROCESS KAIZEN: ADOPTING PROCESS
STABILIZATION METHODS TO CONTROL SERVICE WORK FLOW AND TO IMPROVE CUSTOMER SERVICE
PETER K YU
APPROVED:
Eugene Watson, Ph.D ~ =/
Thesis Gémmittee Chair
tA) HH NA
William Trappen, P.E., MSQA
Committee Member
Choe tA6 _
Trang 4TABLE OF CONTENTS
PAGE
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1 INTRODUCTION TO THE STUDY,,,, cscs cc ececeeececeeeeeseeeeecteeneeeenees 1
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Statement of the Problem . .QQSnSnn ng nh Hs va 7 Purpose of the S†Udy .- HH HH nh nh kh 9
Theoretical Bases and Organizafion - .c.-cs.e 17
Limitation of the Sfud|y - nh HH HH HH nh nu 19 Definition N9 K- ›y daaaaaaaiaadaaaiidŸÝ 21 2 REVIEW OF RELATED LITERATURE - -22. -22 24
San 99959 CÀ 28
Design of the lnvesfigafion . -ccnn nn nnnnHn HH ng nh kh 28 Service Customer History Data cào à nà 30
Treatmeni -.-cQQQn nn nn nnn HT nọ TT KH KT HT KH nh mm ky 30
Data Analysis Procedures . - ch nhe 60 4 RESULTS AND DISCUSSION 2 G7 5 SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS 69
Continuous lImprovemert lnitiaftives .- 70
Trang 5PAGE 1 Toyota Production System HH “HH nh nh nh kh kg 6
2 Seven Step Process Responsibility Matrix - cà ŸằŸằằ 32
3 Reception Process Job FOW .- ung ng nà nướ 33
4 Monthly Service Unit Hisfory -. nọ HH nh HH kh se 35
5 Weekly Appointment Tracking Summary .- -. cccŸẰ cà 36
6 Weekly Appointment Charf -.-. - SH» nh ren 37 7 Reception Tracking Summary .-.-. nàng 38 8 Reception Lead Time Charf -.-.-.- SH nen hy 39 9 Reception Average & Longest Wait Time Chatt .-.-.-. 40
0m4 208i 0n ằằ 41
11 Hourly Parking Capacity Charf nen 42 12 Delivery Tracking Summary -.- nha 43
E9 09 a9 ằắẮ 44
14 Delivery Average & Longest Wait Time -.-.- cà nen neằ 45 15 Process Control Board - c1 HS SH nà vi 48 16 Vehicle Status Control Data Summary - ààcằŸsằ 52 17 Lead Time Survey Charf cọ Q ng nh se 54 18 Daily Periodic Maintenance Lead Time Tracking Summary 55
Trang 620 Gentani (Accumulation of Work) Tracking - << nen 57 21 Gentani (Motion Study) Results Chart .cccceeee eee eee eee eter eee eeees 59 22 Daily PM Tracking - . Ăn nh kh eee nh ho khi th 61 23 Daily Periodic Maintenance Unifs by Group -nàằ nàn 62 24 Number of Daily General Repair Order -. << hen 63
25 Average Daily Capacity Requiremenl - -. . {Ăn eằ 65
Trang 7This paper explores the issues facing automotive dealership service
departments in improving customer service It examines conducting service
process Kaizen to improve customer service by adopting process stabilization
methods to control workflow In designing the time aspect of service, customers’ viewpoints of elapsed time or service lead-time were taken into consideration Time compression is identified as a way to squeeze out waste from the supply
chain by process integration and statistical data approach is employed to identify workflow interruptions and confirming root cause interruptions Methodologies
applied include examining Toyota Production System concepts applications in
stabilizing service demand through establishing lead-time standards and managing and controlling customer service appointments to synchronize with
Trang 8CHAPTER 1
INTRODUCTION TO THE STUDY
Customer satisfaction is an ever-changing process The market evolves,
demographics shift, and customers are getting more informed and educated
because of the availability of mass communication mediums such as the Internet
Service customers are more demanding and expect more out of the service providers such as providing shorter waiting time for their service
In carrying out its mission, the automotive service department caters
directly to the customer These direct sales bring the service department into numerous contacts with great numbers of customers One excellent feature of
these direct contacts with the customer is the opportunity for better feedback
Bob Hayes (1997, p 2) wrote that organizations with accurate information
about customer's perceptions about the quality of the services and products
could make better decisions to better serve their customers
The extensive personal contact also sets up certain situations that are apparently unacceptable for the customer For example, a customer brings the car to the dealer for services and leaves it in the care of the service advisor with
a promised delivery time The service department holds the vehicle, and a delay
Trang 9According to J M Juran (1973), one of the most important features of the service industries is the time required to provide service is regarded as an
element of quality Also of importance is action time This is commonly defined as
the interval between taking the customer's order and providing him or her with
the service requested
In designing the time aspect of service, it is important to stress the
customer's viewpoint of elapsed time or service lead-time To an automotive
service department, the emphasis on service lead-time is from the moment the customer drives into the service reception until he or she takes delivery and drives off the service lot The customer will make his or her decisions whether to wait or drop off for service based on how soon the vehicle can be repaired and ready for delivery
A second major reason for the critical importance of service time is the
cumulative effect of delays A byproduct of organizing the different job processes
needed to repair the vehicle is that when one of these processes fails, many
other service related activities are disrupted or thrown out of sequence
Toyota's service process Kaizen pilot activities in Thailand, Indonesia, and Australia to promote continuous improvement have yielded some significant findings in service process stabilization Service appointment scheduling and production dispatching areas improved noticeably after they have implemented production based visual control methods The most challenging areas are those
Trang 10Process improvement activities in the service sector are similar to those in manufacturing However, customer expectations of a shorter service time
influence the way most service organizations design the process
Daniel Jones (2001) wrote about getting closer to customers and cutting out non-value adding activities and the net results becoming radically changed for the better He pointed out that every part of the way the product is produced,
handled, stored, delivered and displayed should be observed to eliminate non-
value creating steps and to compress lead-time Time compression is the only way to squeeze out waste from the supply chain for good The more integrated it
is, the more obvious are any interruptions to the flow The root causes of
interruptions can then be investigated and dealt with so they do not recur
In the case of automotive service, shorter lead-time can only be obtained
through setting up demand standards to control appointment scheduling At an
assembly plant, production demands are scheduled ahead of time based on orders submitted through the sales branches Consequently, the key factor in stabilizing service demand is through setting up lead-time standards and
managing and controlling customer service appointments to synchronize with the
production capacity of the service workshop
J.M Juran (1973) wrote that as a corollary of the critical nature of service time, the service industries should:
Trang 11find out just where the time is being consumed
Thus, changing or meeting the customers’ repair time expectations is the major factor in stabilizing service processes It is up to the service department to develop methodologies from analyzing statistical data, to predicting customer service demand patterns as well as influencing their habits and lead-time expectations
Background
In a production environment, the Toyota Production System is “pulled” by controllable leveraged demands based on Takt time and Cycle time calculations Takt time is the theoretical time it takes to produce a piece of product ordered by the customer However, in a retail environment, customer demands or
appointments are usually unreliable and sometimes seem uncontrollable Toyota Motor Corporation’s Kaizen Promotion Department reported that the Kaizen pilot
dealer customer surveys in Thailand in 2001 indicated that only 17% of their
service customers are appointment customers In addition, over 24% of the
appointment customers showed up at least an hour late for their scheduled
appointments This result was confirmed by another survey conducted in
Indonesia in 2002 with only 21% appointment customers and over 50% showing
up at least an hour late
In Gemba Kaizen, Masaaki Imai (1997) pointed out that abnormalities of
Trang 125
(workplace) Either the process is under control, or it is out of control The former situation means smooth operation; the latter spells trouble The practice of visual
management involves the clear display of gembutsu, charts lists, and records of
performance, so that both management and workers are continuously reminded of all the elements that make quality, cost and delivery (QCD) successful Thus, visual management constitutes an integral part of the foundation of the house of Gemba
In a service environment, customers are only exposed to the visible control areas of a business The customer is rarely exposed to the behind the
scene activities In the automotive service business, customers view the dealer's
quality service experience by the completed repair, cleanliness of their car after service, and how they are treated during the service reception and delivery process However, the efficiency of how the technicians repaired their vehicles is
usually invisible to them
Patrick Townsend (1990) wrote about quality in perception It is the subjective quality as the customer sees it A product or service achieves quality
Trang 13Before moving on to discussing the challenges of leveling demand, a short
review of the Toyota Production System is warranted to illustrate how manufacturing concepts can be adapted to service operations
Toyota Production System
The Toyota Production System emphasizes the rationalization of
production and is based on the concept of the complete elimination of waste According to the Toyota Motor Corporation’s Toyota Production System Manual
(2000), lean production comprises of two principle ideas: Sakichi Toyoda’s
concept of jidoka for producing quality products at lower cost, and Kiichiro
Toyoda’s just-in-time system
Highest Quality
Lowest Cost / Shortest Lead Time
| Just-In-Time | Jidoka |
sContinuous Flow *Stop and notify of problems *Takt Time
«Separate man’s work & machine’s *Pull System work
Standardized
se Kai
Heijunka Work aizen
Stability
Respect for Humanity Customer First |} Continuous Improvement Genba First
Figure 1 Toyota Production System Foundation from Toyota Motor Corporation’s
Trang 14TPS is an integrated System of Tools, Management and Guiding Principles supporting Human Development It is designed to reduce costs by
eliminating waste The objectives are: e Reduce waste and cut costs
e Reduce lead-time
e Improve quality e Reduce inventory
e Create a “visual” workplace
e Easier to manage shop floor
e More able to identify waste
According to the Toyota Production System Manual (2000), Kaizen or
continuous improvement is the most important guiding principle for improving the
job process flow by discovering and eliminating waste, and empowering team
members to take part in managing and improving their own jobs The philosophy of there is always more to improve approach promotes the proactive versus
reactive approach to improve processes and to prevent problems Statement of the Problem
Most automotive dealerships currently do not have a standardized process based on statistical approach to stabilize the demand and to provide visual
Trang 15In a poorly managed automotive service department, customers have no
confidence in making appointments because when they arrive for their appointments, they have to wait for the service advisors to handle drive-in customers When a customer brings a car in for services, the car is whisked away until the delivery process In between, the customer can only guess what is taking place After dispatching the car to the service workshop, the service
advisor can only hope that the car will be completed on time for customer delivery Any customer inquiry on the status of the service process will require the service advisor to contact the technician If the repair is completed, the
service advisor may have to contact the car wash and the porter to inquire about
the progress of the car
As in the airline industry, the customer only sees the visible check in counter, the departure gate, the flight cabin and the luggage pick up area The behind the scene flight operations of ground support, luggage handling, in flight service support are all invisible components that support a pleasant and on time
arrival of the customer However, the airlines have implemented management and control systems to provide customers with real time information of their flight
Status They also use statistical data to schedule the best flight time to
accommodate most customers During flight, customers are now provided with
Trang 169
arrive at their destination on time For automotive repair customers, the number
one expectation is delivery on time
The approach to the above challenge is to implement a service Kaizen process to improve the entire customer experience, and the required support
elements: process flow, customer service and shop productivity
Dr W Edwards Deming (1993, p 37) addressed the importance of
businesses to improve quality in all areas by saying "Somehow the theory for
transformation has been applied mostly on the shop floor This is important, but
the shop floor is only a small part of the total Anyone could be 100 percent successful with the 3 per cent, and find himself out of business."
Purpose of the Study
The objective is to design and document a standardized customer service
improvement process for automotive dealerships worldwide to improve efficiency and customer satisfaction by adopting proven process methodologies from
manufacturing The project's key objective is to improve the following areas: e Service Lead Time
e Productivity Improvement
e Shop Flow
The standardized service process gathers customer demand statistical
data to map out process flows and to create gentani charts (accumulation of
work) to identify motion waste The results are then used to develop a Kaizen
Trang 17project includes the application of control boards to provide visual process control for workers and managers to help manage the workflow
Making Problems Visible
Problems should be made visible under the Toyota Production System A
visible problem will be detected and controlled more easily Therefore, the first principle of visual management is to identify problems (Imai, 1997) In a service
workshop, dispatching work with no knowledge of the scheduled lead-time, for example, 5K maintenance services may create disruption and confusion at the next workstations, which are the car wash and the staging area for customer pick up However, if the service advisor or dispatcher uses a visual process control
board to post the jobs by using visible cycle time (production) indicators, he or she can easily see the number of cars that will be completed at a given time and
will require a car wash The dispatcher can re-dispatch jobs with different cycle time (shop production) like balancing 5K services with 30K and 40K services,
which have different lead-times (reception to delivery) to reduce the number of cars requiring car wash at the same time This visual lead-time indicator
functions like Jidoka devices, helping to reveal potential production problems
The Toyota Production System Manual (2000) states that in work place visual management, the Five M factors must be managed They are as follows:
° Manpower
° Machines
Trang 18° Methods
° Measurement
Any abnormalities related to these Five M factors must be displayed
visually However, applying these manufacturing based principles to service operation require modification, where most productivity improvement articles and researches are written In manufacturing, the environment is usually controlled
and stable, where workers and supervisors can easily visualize the progress
through checking real time status on the lighted signal board in the assembly line
and the flow of kanban cards to control raw material inventories Conversely, the
automotive service industry environment is a conglomerate of repair stalls, workstations and reception desks scattered in different locations with no direct
visual workflow For example, a car scheduled for a 15K maintenance service
was moved from the reception area to the waiting area for repair staging The workflow was interrupted when the porter could not locate a parking space The car ended up parked in a customer parking area The key was not recorded and tagged in the service vehicle staging area key control box because there is no
provision for controlling customer-parking area The porter went to lunch without
Trang 19able to visually control the Five M factors The fundamentals and the impact of
visual control in the service work place are as follows:
Visual Management of Manpower - Operations
Do we know the workers’ schedules? What is the staffing level? Do we know if there are enough service advisors assisting customers at the reception area? Do we know their skill level? Are the technicians certified? Are we
dispatching work to the right people with the right skills? Do we know who needs
additional training?
How would we know the people assigned to the job are doing their job well? Are there any visual measurement worksheets to track their progress? Are
there any standards developed and displayed?
Visual Management of Machines - Facilities
Do we know if the facilities are sufficient to service all repair orders at a
given day? Do we know if we have enough service stalls to handle the service
volume? How would we know if the workshop has the proper equipment? Are
there visual devices (poka-yoke) to signal the operators of equipment failure? Visual Management of Materials
How would we know if we have enough fluid? How would we know if we have the right parts for the job? Do we have enough parts in stock? Are we
Trang 20Visual Management of Methods
Does the service manager know if the service advisors, team leaders and
technicians are performing their jobs right? Are there standard process
worksheets developed for each work cycle? Visual Management of Measurements
How do we check if a car is on schedule to meet promised delivery time?
Do we know the status of the repair? Do we know if we are meeting planned targets? How would we know if we have enough appointments to fill the service workshop?
In addition to the Five M factors in visual management, good house
keeping is setting a basic standard in the way we operate and make
abnormalities visible, so problems can be corrected According to the Toyota Production System Manual (2000), the Five S disciplines should be followed Visual Management of Seiri (sorting)
This method makes certain that only needed equipment is available for the
job Any unnecessary equipment should not be present This allows the worker
and the supervisor to concentrate on what needs to be monitored Any extra piece of equipment is a distraction to the process, the worker is engaged in
Visual Management of Seito (sifting)
Trang 21drainer is placed next to the oil drum; the tire rack is located next to the tire
changer If any piece of equipment is missing or out of place, it will be easily noticed and spotted
Visual Management of Sieso (sanitized)
All equipment should be clean and orderly If the work place is clean,
equipment that leaks or misplaced items will be visible In service operation, this
may mean an organized key control stand, a clean and dry driveway, and clean
hand tools If the driveway has oil spots under a car, the service advisor can visually spot the oil leaks and notify the customer
Visual Management of Seiketsu (safety)
Workers must wear required safety equipment to perform their work in the workshop Unsafe working condition may prevent workers from safely visualizing the work dangers around them By not wearing safety glasses, workers may not
have full visibility of the moving lifts and hanging equipment around the work stall
Visual Management of Shitsuke (self-discipline)
All workers must be trained on the Five S disciplines Standards must be developed, posted and followed Following these five disciplines in workshop
Trang 2215
Posting Standards
Unless workers know what the standards are, the processes will not be in place Each workstation should display the standards Any deviations from the standards will be visible since the posted standards provide visual management of the process Service workshop standard examples are as follows:
e Number of appointments per day e Average shop production time
e Average lead-time from reception to delivery e On time delivery
e Parts to service fill rate
e Technician productivity
e Shop productivity e Labor utilization
In a manufacturing environment, we could actually see a product being assembled, transported, handled and physically registered as a finished product with a vehicle identification number (VIN) or product serial number Whereas in a
service environment, a 10K maintenance service may involve manual inspection of the brakes, fluids, tires etc Granted, some of the items in the service
Trang 23steps For example, an apprentice may be skipping steps when completing an
eight-minute safety standard check operation in just five minutes
Setting Targets and Visual Monitoring
Meeting targets consistently is raising the standards If the workers are
meeting standards but frequently missed achieving the targets, then the process will have to be reevaluated Keeping track of key performance indicators will
provide visual monitoring of the improvements The key performance indicator
board should be displayed prominently for all workers to see Production level indicators displayed in every station of a Toyota assembly line inform workers the real time status of the entire line’s current production level against the day’s
planned production units At any time of the day, workers are aware if the line is achieving the day’s planned production If the production falls below 95% (vary
by plant and line), supervisors will initiate immediate actions to identify the causes and deploy resources to the needed sections to bring production back to the acceptable range Without this real time visual information tool, supervisors and workers will be unaware about their production level against the daily
Trang 2417 Theoretical Bases and Organization
In order to support the hypothesis that adopting statistical approach and deploying of visual control and management methods can stabilize demand and improve customer satisfaction, the Masaki Imai (1997) case study documenting the Kaizen process at Infotec Corporation in Italy is used as a reference Data
collection plays a key role at Infotec in managing the behaviors of employees in
the business of distributing copier and fax equipment, and supplying consumable technical services While the company already had measures in place to check
the performance of its service representatives before 1993, it was not until that
year that management became serious about collecting and analyzing data on
the company’s servicing activities as a basis for improvement
As part of their Kaizen action plan, Infotec headquarters in Milan developed several control points as major criteria to check the quality of its service:
1 Number of service calls
2 Number of callbacks 3 Number of return to fix 4 Response time
5 Productivity
After implementing the Kaizen process, Infotec was able to obtain various
Trang 25graphs and bar graphs to help improve workers’ understanding of the business conditions
One of the lessons learned from the Kaizen activities within Infotec was
the value of collecting and making good use of data They learned that merely
storing and computing data were not enough, and that they had to analyze and
put data to use However, data must be converted into visual forms; other wise,
not everyone can understand them by merely looking at the numbers The
challenge was to make the data as visible as possible Their solution was to request their Electronic Data Processing people to submit data in graphs as much as possible
Since implementing the kaizen approach, Infotec obtained the ISO 9000 certification in July 1995 Now, Infotec management believes that they need the three elements — the Kaizen way of thinking, the statistical approach and the constant external pressure — to review the standards The above case study supports the hypothesis that statistical approach and visual control and
management in a service environment will provide workers and managers with user friendly data to help stabilize demand and improve customer service in the following areas:
e Service Lead Time
e Productivity Improvement
Trang 2619 Limitations of the Study
This investigation is restricted by many human factors and local market
conditions To successfully implement global Kaizen activities, local customs and
cultural factors must be taken in consideration For instance, in Thailand, customers expect a warm welcome and relaxed conversation during the
reception process They do not like to be rushed into making decisions nor being
high-pressured for additional work For that reason, considerations must be taken to ensure the human factors are included in service process Kaizen
implementation planning The success of Toyota in implementing Toyota Production System globally is through localization of the concept to meet local market conditions
Human factors are key considerations for localization Different cultures and markets have their own way of interpreting job responsibilities In Japan, for
instance, the technician also acts in the capacity of a customer relation specialist It is normal practice for a technician to personally pick up and deliver a
customer’s car for routine periodic maintenance In other markets, this may be considered a waste of productivity, but in Japan, this practice is considered a customer retention activity For that reason, the Toyota Motor Corporation’s Toyota Service Marketing Manual (2000) conveys that job responsibilities within
Trang 27The methodology of the investigation of this study is limited to automotive dealer service environments However, the Kaizen concept may be applicable to
other service industries The concept of applying statistical data to stabilizing demands and adopting visual control to manage the service process in
automotive dealerships is widely practiced by the Toyota dealers in Japan James P Womack, Daniel T Jones, & Daniel Roos, (1990 p.169) wrote
that the last stop in the lean logistics journey takes us to the real reason for the production effort: the consumer They emphasized to look at how the production
system knows what the customer wants, and how he or she goes about buying and maintaining an automobile
Trang 28Definition of Terms
Cycle time: The actual time taken by an operator to process a piece of product Delivery: When used in the concept of QCD, the word delivery refers to meeting
both the delivery as well as the volume requirements of the customer Five S’s: A checklist for good housekeeping to achieve greater orders, efficiency
and discipline in the workplace It is derived from the Japanese words
Seiri, Seiton, Seiso, Seiketsu and Shituke and adapted to the English equivalents of sort, straighten, scrub, systematize and standardize
Five M’s: A method for managing resources in gemba — specifically those known
as “5M” — manpower, machine, material, method, and measurement
Flow production: One of the basic pillars of just-in-time production system In the
flow production, machines are arranged in the order of processing so that
the work piece flows between processes without interruptions and
stagnation
Gembutsu: The tangible objects found at gemba such as work pieces, rejects, jigs, and tools, and machines In automotive dealer service workshops, it
refers to shop supplies, stalls, equipments and tools
Gentani: Japanese word meaning unit ratio in the “accumulation of work.” It is
used to record the time and steps within a cycle time
Trang 29document the quality system elements to be implemented to ensure the conformance of a product to specification
Jidoka: A device that stops a machine whenever a defective product is produced
This device is essential in introducing JIT
JIT: Just in time A system designed to achieve the best possibly quality, cost,
and delivery of products and services by eliminating all kinds of muda in a
company’s internal processes and deliver products just in time to meet customer’s requirements Originally developed by Toyota, it is also called
by such names as Toyota Production System, lean production system and kanban system
Kaizen: Continuous improvement
Kanban: A communication tool in the just-in-time system whenever a batch of
Muda:
production is involved A kanban, which means a signboard in Japanese, is attached to a given number of parts or products in the production line,
instructing the delivery of a given quantity When the parts have all been
used, the kanban is returned to its origin when it becomes an order to produce more
The Japanese word meaning, “waste” which, when applied to
management of the workplace, refers to a wide range of non-value adding
Trang 3023
motion, processing, waiting transport, and time Muda elimination
epitomizes the low-cost commonsense approach to improvement
Poka-yoke: A fail-safe device in quality assurance
Pull production: One of the basic requirements of a just-in-time production system The previous process produces only as many products as are consumed by the following process In service, this may mean express maintenance service
QCD: Quality, Cost & Delivery
Takt time: The theoretical time it takes to produce a piece of product ordered by the customer — as determined by dividing the production time by the
number of units to be produced In service, it is referred as the average
lead-time
TPS: Toyota Production System VIN: Vehicle identification number
Visual Management: An effective management method to provide information and gembutsu in a clearly visible manner to both workers and managers so that everybody understands the current state of operations and the
Trang 31CHAPTER 2
REVIEW OF THE LITERATURE
The following are articles providing evidence supporting the historical, theoretical and research background for the study
Automotive News reported that American Honda Motor Co Inc and
Toyota Motor Sales, U.S.A are rolling out dealer customer service improvement programs While rank highly in J.D Power and Associates and the NADA polls on dealer attitude toward the factory, both are challenged with improving
customer satisfaction at the dealership level As a response, Honda is rolling out
the Excell initiative, a training program for managers at Honda dealerships Charlton Holmes, chairman of the Honda dealer council said that the initiative aims to improve dealership communications and other areas that affect
customers: Improving those processes means greater customer satisfaction and greater customer loyalty and it is a very important program for Honda and the dealers He further stressed that unlike programs tried by the Big 3, the Excell initiative lets dealers dictate how their dealerships are run and Honda is not looking to mandate certain processes in dealerships so much as it is trying to identify the best processes Holmes’ own dealership, Holmes Honda of
Trang 3225 The Honda process improvement program focuses on customer
expectations area, while this investigation also focuses on productivity
improvement and shop flow
Kristin Anderson and Rom Zemke (1998) talked about organizational commitments and how organizations make direct promises to customers through advertising and marketing materials, in company correspondence and contracts,
and in service guarantees and policies published for everyone to see In addition to these, customers will hold the company to indirect commitments — promises
that customers believe are implied in the way the company talks about itself, its products and its services Alternatively, customers may hold organizations to commitments they believe are standard for the industry
To substantiate the above, most automotive customers purchase their
vehicles based on brand loyalty and perceived quality The latter is particularly
pertinent for Japanese and German makes Customers have built in expectations
that these vehicles are better defect free and any repair required during the warranty period apart from periodic maintenance is a disappointment to their
brand expectations For that reason, it is crucial for these automotive
manufacturers and dealers to meet or exceed customers’ expectations during the warranty service period and especially during service deliveries Data would have
to be collected and analyzed to confirm if dealers are indeed meeting or
Trang 33In similar investigation, the May 14, 1997 J.D Powers report showed, how
the on time delivery issue is important in the airline industry for customer satisfaction Respondents evaluated a comprehensive list of attributes that encompassed virtually every aspect of the air travel experience As in past studies, on-time performance continues to be the most important factor
(contributing 22%) in achieving the highest levels of customer satisfaction Other
factors driving satisfaction, based on their percent contribution to overall
passenger satisfaction with the flight are: schedule and flight accommodations (15%), airport check-in (15%), seating comfort (12%), gate location (9%), aircraft interior (7%), flight attendants (6%), food service (5%), post-flight services (5%), and frequent flyer programs (4%)
Most of the automotive customer service process improvement programs
initiated by major automotive manufacturers are mainly designed for process
improvement and customer satisfaction in the customer expectations area This investigation differs from other studies in the field by investigating how to apply
demand stabilization methods from manufacturing environment to the automotive service industry After all, the consumer is the one that initiates the demand for the entire supply chain The automotive industry currently depends on customer research companies such as J.D Power & Associates to provide statistical data
Trang 3427
this does not provide the dealership with sufficient data to stabilize the demand such as improving stall capacity, extending work hours and adjusting work schedule What the dealers need is a 360 degree assessment of the current
performance and capability This investigation together with customer surveys
such as J.D Powers, customer interviews and employee interviews, will form the basis for the statistical approach to implement the service Kaizen process
Stewart Anderson (2002) wrote in the ASQ Publication that few quality managers examine the problems with data vs information, and how Information Technology systems are not being used properly to obtain information for
ISO9000 certification requirements Anderson also presents an approach to
move from raw data toward intelligence information, and be able to foresee the impact of potential actions and to make effective business decisions
Edward C Johnson Ill (1997), Chairman and CEO of Fidelity Investments
wrote in the foreword of Gemba Kaizen that Kaizen, which had worked so well in
manufacturing environment, might have applications for assisting mutual fund shareholders He brought the concept back to the office and started introducing it
to some of the senior management personnel in the company The timing was right, because on October 1987, the United States stock market took a severe downturn, and they began to focus instead on improving their service to build customer loyalty Kaizen laid the foundation, they needed to work as a team in
setting and reaching service standards It also helped them successfully weather
Trang 35CHAPTER 3 METHODOLOGY Design of the Investigation
The statistical data approach investigation is a dealership survey process covering the following areas:
e Shop Flow
e Customer Expectations e Productivity Improvement
In the Shop Flow, the following area is surveyed:
e Customer Impact Step One: Seven-Step Service Process Mapping In Customer Expectation, the following areas are surveyed:
e Customer Impact Step Two: Leveling Appointment Demand e Customer impact Step Three: Leveling Reception Demand e Customer Impact Step Four: Improving On Time Delivery
In productivity improvement, the following areas are surveyed: e Process Control Methodology
e Process Control Electronic Monitoring
e Process Control Manual Process Control Board Process Control - Electronic Sensors & LCD Display Screen
e Control Standards
Trang 3629 Gentani — Accumulation of Work Standard Working Procedure
Training is the number one challenge in implementing this Kaizen survey The following implementation steps are based on results from early pilot dealer
Kaizen projects
The “How to Conduct Pre-Kaizen Survey’ training should consist of two
days of classroom training with all key dealer Kaizen team members All areas of
the survey should be covered and the following steps should be implemented: Why data is needed?
How to proceed? What to survey?
When to survey?
Where to find the data? Who is responsible?
In the “Why the data is needed area”, the followings should be explained: To conduct a gap analysis of what customers want and what we currently provide
To get a clear 360 degree assessment of the current performance
and capability
To develop a business process Kaizen plan, and to improve customer convenience, retention and profitability
After the pre-Kaizen survey training, the distributor Kaizen leader should spend the next two weeks guiding the dealer Kaizen team to conduct the survey,
Trang 37processes Furthermore, the Kaizen leader should also guide the dealer on the Kaizen team to design a management system to visually control and manage the
new process
Service Customer History Data
The data should cover all service customers within a specific period for the particular survey Customer unit data must come from actual data taken from
repair order history Time and motion study survey must be recorded and
reported by the average, the shortest or longest duration, depending on the survey requirement
The customer expectation area sample should consist of data from at least the three busiest days of the week Shop capacity surveys are taken from the highest sales volume month of the year Care should be given to identify
special events that may skew the data The data requirement and survey forms
to be used are detailed in the Treatment section to follow
Treatment
Customer Impact Step One: Seven-Step Service Process Mapping
Excellent customer service in an automotive dealership service department depends on how the staff can orchestrate the many steps and
processes required to repair the customers’ car right the first time, deliver it at the
promised time and at the agreed price This complex web of tasks and processes
Trang 3831
production line capable of assembling various different models on the same production line Except in this case, different models require different types of service Following is a matrix depicting the seven-step service process, the people involved, and their areas of responsibilities This is the blue print for the design of the service control processes in an automobile dealership The seven- step process is as follows:
1 2
7
Appointment (visible to the customer)
Reception (visible to the customer) Dispatch (invisible to the customer) Production (invisible to the customer)
Quality Control (invisible to the customer) Delivery (visible to the customer)
Follow Up (visible to the customer)
When workers can visually see where they belong in the process, the invisible service assembly line becomes visible and manageable for the service
Trang 39The following is a job responsibility matrix example showing the key duties of the workers in the seven-step process:
ec
nu | Dispatch — - | Production’ | Inspection’ °.|- Delivery Follow-Up
Prepare RO Notify Close ticket for | Call customer : and forward to | customer of delivery for follow-up
Appointment for dispatcher status 24 Customers
Move car to Move car to service parking drive for
delivery Process RO
and dispatch work/notify parts
Locate car for Complete Complete processing repair inspection
_ 4 Order Special Pre-pull parts Deliver
Order Parts parts/pull & : deliver
: optional parts t— + xẻ p P
-Foreman/ Monitor Road test &
Syne oS progress QC
Figure 2 Seven-Step Process Responsibility Matrix
The next step is to map out the individual process such as Appointment
All the key members involved in the Appointment process must know why
appointments are needed, what the appointment process is and how to schedule
an appointment for a customer The key element is workers’ understanding of
their role in the entire service process and the ability for them to visualize how
they fit into the big picture The workers acceptance of the seven-step process is the beginning journey for the dealership to adopt TPS concepts in their operation
Harber, Burgess and Barclay (1993, p.10) wrote, “Integrating TQM
Trang 40effects Besides, quality improvement programs without a linkage to cultural
changes are doomed to failure.”
The following is an example of a simple work flow chart with corresponding job responsibilities for each team members
Customer Service Advisor Foreman Workshop Controller Technician Car Wash Parts [ Calis for ws ` Check vehicle/customer file in computer system Provides information Get additonal ir from Yes In file No Explains service/repair required
Enter information into} Confirm appointment computer system availalibiity
Check parts PA Yes availibility available, 4 Schedule diagnostic time if required `
Check EPC for part numbers/avaltablity
Order special order parts
Figure 3 Reception Process Job Flow
Customer Impact Step Two: Leveling Appointment Demand
33
Most customer appointments are generated by retention activities, mainly through maintenance reminder mailers In automotive service operations, the