Solution to enhance service quaility at akzonobel powder coatings viet nam company

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Dang Thi Ngoc Xuan SOLUTIONS TO ENHANCE SERVICE QUALITY AT AKZONOBEL POWDER COATINGS VIET NAM COMPANY ID: 22120083 MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PGS TS Tran Ha Minh Quan Ho Chi Minh City – Year 2015 Abstract The “servitization of business” (Vander Merwe and Rada, 1988) is movement even in manufacturing industry So AkzoNobel Powder Coatings who is a leading manufacturer in Viet Nam powder coatings industry focus on customers, products and service commitments continuously Delivering an efficient and effective customer service is their primary objective They deliver activities to promote business through the provision of technical support, problem solving and other services for customers They serve a wide and diverse group of manufactures including architecture, automotive and other products Moreover, through previous reports on yearly customer satisfaction survey, AkzoNobel Powder Coatings recognize that their customers‟ satisfaction and loyalty are decreasing currently due to low service quality measured through SERVQUAL (Parasuraman et al., 1985) It is essential to design the improving customer service plan for AkzoNobel to maintain and develop the business performance This lead to the purpose of this thesis: The first objective is to investigate the real cause of service quality problem influencing on business performance, focusing on quality dimensions Particularly, this study aims to investigate the service quality gap that is defined as the real cause of difference between customer expectations and perceptions of service through the Gap model (Bergman & Klefjo, 1994) Importantly, the final objective is to build the improving action plan, especially for complaint handling to enhance the customer service process at AkzoNobel Powder Coatings Viet Nam To achieve the research objectives, the empirical study and literature study undertaken Quality dimensions, service quality gaps and quality measures in manufacturing company were the three areas that are reviewed in the literature review study AkzoNobel Powder Coatings Viet Nam has a wide service portfolio with different types of services, which can be classified as product oriented and relationship based Through survey, interviews and secondary data analysis, quality measures and gaps relevant for service quality problems were identified, and the purpose could be fulfilled Keywords: powder coatings, service quality, customer satisfaction, complaint, solutions Nomenclature ANPCVN AkzoNobel Powder Coatings Viet Nam CMO Color Matching Optimization CCS Customer Complaint Service CSat Yearly Customer Satisfaction Survey CTS Customer Technical Service ICT Information and Communications Technology KAM Key Account Manager KPI Key Performance Indicator MS Managed Services HR Human Resource OTIF On-Time-In-Full QA Quality Assurance TC Technical Consulting SDM Service Delivery Manager List of Figure and Table Table Service portfolio at ANPCVN‟s service portfolio Table Cost and Benefit Comparison between alternative solutions Table Strategy Evaluation Table Customer Service Action Plan Template Table Comparison of sales performance in 2014 and 2015 Table The comparison of sales volume between actual sales and budget sales in 2015 Table The comparison of complaint volume in 2014 and 2015 Table The overall average of product quality in 2015 Table The overall average of service quality in 2015 Table 10 The Customer‟s evaluation of complaint service quality in 2015 Table 11 List of Interviewees Table 12 List of quality measures Overview of different measures mentioned by different researchers Table 13 Definitions of the five quality dimensions proposed by Parasuraman et al (1988) Figure The cause-and-effect of ANPCVN‟s service quality problem Figure The technical meeting procedure Figure The suggested customer complaint handling process Figure Connection between service quality, customer satisfaction, loyalty, and repurchase intention inspired by Oh (1999) Figure Model of service quality gap by Parasuraman et al (1985) Contents Abstract Nomenclature 3 Problem Identification 1.1 Powder Coatings 1.2 AkzoNobel Powder Coating Viet Nam 1.3 Problem Justification 1.4 Causes Justification 15 Alternative Solutions 20 2.1 The overall service delivery strategy 20 2.2 Developing the Account Managers‟ competency program 21 2.3 Cost and Benefit Comparison 22 Selected Solution 24 3.1 Justification Solution 24 3.2 Action Plan 25 Supporting Information 27 4.1 Company Data 27 4.2 Customer Satisfaction Survey 28 4.3 In-depth Interviews 31 4.3.1 Customers Interviews 31 4.3.2 Employees Interviews 33 4.4 Literature study 36 4.4.1 Customer Satisfaction 36 4.4.2 Service Quality 39 References 46 Appendix Items for Measurement of Internal, External Service Quality and Consequence of Organizational Service Quality in manufacturing Supply Chain Measurement on fivepoint Likert Scale 50 Appendix Interpon Customer Satisfaction Survey 2015 51 Appendix Definition of quality dimensions 55 Appendix Customer Complaint Form 56 Problem Identification In this chapter, the background to the research is presented followed by an introduction of AkzoNobel Powder Coatings Viet Nam with the service portfolio Furthermore, the service quality problem that is developed cause-and-effect tree is also justified 1.1 Powder Coatings Powder coating which is a dry finishing process that has become extremely popular since its introduction in North America over 40 years ago Representing over 15% of the total industrial finishing market, powder is used on a wide array of products More and more companies specify powder coatings for a high quality, durable finish, allowing for maximized production, improved efficiencies, and simplified environmental compliance Used as functional and decorative finishes, powder coatings are available in an almost limitless range of colors and textures, and technological advancements Powder coatings are based on polymer resin systems, combined with curatives, pigments, leveling agents, flow modifiers, and other additives These ingredients are melting mixed, cooled, and ground into a uniform powder similar to baking flour A process called electrostatic spray deposition is typically used to achieve the application of the powder coating to a metal substrate This application method uses a spray gun, which applies an electrostatic charge to the powder particles, which are then attracted to the grounded part After application of the powder coating, the parts enter a curing oven where, with the addition of heat, the coating chemically reacts to produce long molecular chains, resulting in high cross-link density These molecular chains are very resistant to breakdown Powder coatings can also be applied to nonmetallic substrates such as plastics and medium density fiberboard 1.2 AkzoNobel Powder Coating Viet Nam AkzoNobel Powder Coatings is truly global business, with around 4,000 dedicated employees spread throughout five continents, head office in Sassenheim, The Netherlands They have around 30 manufacturing plants in 20 countries and have sales offices and representatives in more than 40 countries around the world They serve the market with two global brands are Interpon and Resistcoat to supply to key market sectors – ACE, Appliance, Architectural, Automotive, Functional, Furniture, General industry, IT and Trade coaters They coat everything from window framing, building facades and curtain walls to furniture, office equipment, radiators, and computers, cars, plastic and even wood Their core principles are safety, integrity and sustainability These work in harmony with the values – Customer focused, Deliver on commitments, Passion for excellence and Winning together In Viet Nam, AkzoNobel Powder Coatings has achieved several significant milestones: - 2001: Join Venture between AkzoNobel Coatings International BV (50 percentages) and Chang Cheng Securities HongKong (50 percentages) - 2002: Start operation at factory in Dong Nai Province, Viet Nam - 2010: Chang Cheng acquisition, 100 percentages owned by AkzoNobel Powder Coatings Name of Company: AkzoNobel Powder Coatings (Viet Nam) Limited Company Factory: Road 2, Nhon Trach Industrial Park, Dong Nai Province, Viet Nam Office: Flemington Tower, 182 Le Dai Hanh Street, District 11, Ho Chi Minh City Telephone: + 84 61 3650730 Fax: + 84 61 3650740 Tax Code: 3600505495 Registered investment capital: $4.0 millions Legal capital: $2.5 millions Total leased land: 10,000 m2, last for 46 years at the fee of USD $8.2 thousands/year, currently occupied 100 percentages Their product is leading in the market with many advantages, including: - Environmentally friendly with no Volatile Organic Compounds - Contains no toxic heavy metals such as lead or chromium - Single Coating, therefore uses less energy during application - Overspray can be reclaimed and reprocessed resulting in almost ZERO waste - Produces less hazardous waste during production and low carbon footprint - 1st Coatings company to achieve a SMaRT certification AkzoNobel Powder Coatings Viet Nam (ANPCVN) who is today leading supplier powder coatings for more than 300 buying customers in Viet Nam, is one of the many companies that have been going through the service transition They offer different services including pre-sales, during-sales and after-sales services, such as color matching, line trial, and benchmarking as well as complaint services for their customers A brief presentation of the seven different categories in the service portfolio can be seen in Table Table Service portfolio at ANPCVN’s service portfolio ANPCVN’s service portfolio Color Matching Optimization (CMO) On-time-in-full (OTIF) Technical Consulting (TS) Matching color for customer‟s specific specification needs with free sample powder within days Delivery service on time for customers without any delaying ANPCVN gives the consulting for customer about product and application technique Customer Technical Services (CTS) Oven checking, line audit, benchmark the customer‟s production line Complaint Services (CS) Proactive and reactive solve the problems for customer with 48 hours Managed Services (MS) ANPCVN takes responsibility for customer operations when using its powder 1.3 Problem Justification The ANPCVN‟s sales performance in 2015 decrease percentages compared to previous year which board of management pay attention to while the market growth is evaluated 13 percentages Meanwhile, the number of complaint increase rapidly from 87 to 148 issues (the justified problem is less than) Interviewing the Sales Manager and Key Account Managers, they concern about the product quality, customers‟ feedback and Account Managers Team‟s competency Personally, Sales Manager believes to evaluate the product quality of ANPCVN is very good and negative, then dissatisfaction occurs, otherwise, the Service Quality is achieved This equation is usually called gap analysis (Zahari et al., 2008), but as it was emphasized, this approach only measures gap Another potential indicator of poor quality is customer complaints Complaints can be used for identifying “satisfiers” (attributes or performance leading to satisfaction) and “dissatisfiers” (attributes or performance causing dissatisfaction) (Edvardsson & Friman, 2003) The distinction between satisfiers and dissatisfiers is important in order to understand in what way dimensions affects customer satisfaction For instance, increased reliability might not lead to increased satisfaction whereas lower reliability might lead to dissatisfaction (Johnston, 1995) However, research suggests caution in using complaints as a measure of quality since it has shown to be a weak predictor of loyalty and repurchase intention (Edvardsson & Roos, 2003) and the fact that only a few dissatisfied customers actually complain makes it a weak predictor of satisfaction as well (Bergman & Klefsjö, 2010) A product‟s quality can more or less be objectively measured and compared to other similar products Service quality, on the other hand, cannot be measured by only studying the outcome of the service process because the experience during the service delivery also has an influence on the perceived service quality (Parasuraman et al., 1988) Swartz and Brown (1989) clarified this by making a distinction on “what” is delivered and “how” it is delivered 43 Table 12 List of quality measures Overview of different measures mentioned by different researchers Parasuraman et al (1985) Cronin & Taylor (1992) Klaus & Maklan (2012) Defeo (2001) Elliot (1993) Edvardsson & Roos (2003) Customer perception (SERVQUAL) Customer perception (SERVPERF) Customer perception (EXQ) Cost of poor quality Absence of defects, failure rate, disconformities Customer complaints Definitions of service quality hold that this is the result of the comparison that customers make between their expectations about a service and their perception of the way the service has been performed (Lehtinen & Lehtinen, 1982; Lewis & Booms, 1983, Gronroos, 1984; Parasuraman et al., 1985; 1988; Caruana, 2002) The definition of service quality was further developed as “the overall evaluation of a specific service firm that results from comparing that firm‟s performance with the customer‟s general expectations of how firms in that industry should perform” (Parasuraman et al., 1988) Frambach et al (1997) proposed a classification that consider if the service is provided pre-sale, during-sale, or after-sale Services prior the purchase decision are services which aid the buyer in the decision process and help with the adoption of the product for instance by demonstrating usage Services directly related to the purchase decision, during-sale services, will support the customer to take the product into use like installation and training Finally, services following the purchase decision, after-sale services, aim to keep the customer satisfied with the purchase by failure handling and maintenance for example Therefore, adding service can be a strategic way for firms to add value to the 44 customer, and grow to their business in a competitive market Moreover, service quality and customer satisfaction were found to be related to customer loyalty through repurchase intentions (Levesque & Mc Dougall, 1996; Newman, 2001; Caruana, 2002) The practice of excellent service quality has been proven that customer satisfaction will significantly lead to customer loyalty (Caruana et al., 2000; Caruana, 2002) Table 13 Definitions of the five quality dimensions proposed by Parasuraman et al (1988) Quality Dimension Reliability Assurance Tangibles Empathy Responsiveness Definition Ability to perform service dependably and accurately Knowledge and courtesy of employees and their ability to inspire trust and confidence Physical facilities, equipment, and appearance of personnel 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manufacturing Supply Chain Measurement on five-point Likert Scale 50 Appendix Interpon Customer Satisfaction Survey 2015 Dear Sir/Madam, This questionnaire is an enquiry for information for us improve product and service quality to you We would highly appreciate if you could share your opinion by filling out the questions below Your feedback is certainly of necessity to our work and our mutual business relationship Thank you very much for your participating Kính gửi Anh/Chị, Bảng khảo sát nhằm hỗ trợ dự án phát triển chất lượng sản phẩm dịch vụ phục vụ khách hàng Công ty Sơn bột tĩnh điện AkzoNobel Chúng mong nhận ý kiến Anh/Chị thông qua việc trả lời câu hỏi bên Việc không nhiều thời gian Anh/Chị lại có ý nghĩa quan trọng trình phát triển chất lượng phục vụ AkzoNobel nhằm hỗ trợ quý khách hàng tăng cường mối hợp tác đôi bên có lợi Chân thành cảm ơn hợp tác tham gia từ Anh/Chị Which kinds of the following powder coating product have you been using? (You can choose more than one answer) Sản phẩm sơn bột tĩnh điện mà Quý Công ty sử dụng? (Anh/Chị chọn nhiều đáp án)  Victory  Interpon  Drylac  Lotus  Sunday  Oxylast  TNP & HD  Jotun  PPG  Others (specify) (Khác ) What percentage of your powder business in Interpon? Interpon chiếm phần trăm tổng sản lượng sơn bột tĩnh điện Quý Công ty sử dụng?  Less than 20%  20 – 50%  51 – 80%  More than 80% In your opinion, price of Interpon powder coating is Theo Anh/Chị, giá bán sơn bột tĩnh điện Interpon:  Low (Thấp)  Reasonable (Hợp lý)  High (Cao)  Too high (Quá cao) Please rate how our product performance meets your following requirements (1: very poor; 2: poor; 3: fair; 4: good; 5: very good) Vui lòng đánh giá mức độ sơn bột tĩnh điện AkzoNobel yêu cầu Quý Công ty (Số điểm tương ứng tăng theo mức độ đánh giá, cụ thể 1: thấp, 2: thấp, 3: trung bình, 4: tốt, 5: tốt) Very poor Very good 51 (Rất thấp) Specification requirements (Yêu cầu kỹ thuật) Processing requirements (Yêu cầu ứng dụng) Quality consistency (Chất lượng ổn định) Overall performance (đánh giá chung) 2 2 3 3 (Rất tốt) 5 5 How likely are you to evaluate our product compared to other powder manufacturers? (1: very poor; 2: poor; 3: fair; 4: good; 5: very good) Anh Chị so sánh chất lượng sơn bột tĩnh điện AkzoNobel so với nhà sản xuất khác? (Số điểm tương ứng tăng theo mức độ đánh giá, cụ thể 1: thấp hơn, 2: thấp hơn, 3: trung bình, 4: cao hơn, 5: cao nhiều) Very poor Very good (Rất thấp hơn) (Rất cao hơn) Specification requirements (Yêu cầu kỹ thuật) Processing requirements (Yêu cầu ứng dụng) Quality consistency (Chất lượng ổn định) Overall performance (đánh giá chung) Please rate the delivery quality of AkzoNobel Anh/Chị vui lòng đánh giá chất lượng giao hàng AkzoNobel Very poor (Rất kém) On time (Đúng tiến độ) Good condition (Điều kiện hàng hóa) Product‟s label correctly with invoice documents accurate and complete(Thông tin nhãn với hóa đơn) Overall performance (đánh giá chung) 4 Very good (Rất tốt) 5 4 5 How you evaluate the Sales Representative/Account Manager of AkzoNobel? Anh/Chị đánh Đại diện kinh doanh AkzoNobel? Very poor Very good (Rất kém) (Rất tốt) Accessibility and availability (Hòa đồng nhiệt tình) Frequency and quality sales call (Liên lạc thường xuyên hiệu quả) Knowledge of product (Am hiểu sản phẩm) Understanding and Responsiveness to your business needs (Am hiểu sẵn sàng hỗ trợ nhu cầu) Responsiveness and follow-up on problem situations (Có trách nhiệm theo dõi vấn đề phát sinh) 5 5 How you evaluate the Technical Service and Support of AkzoNobel? Anh/Chị đánh Hỗ trợ kỹ thuật AkzoNobel? Very poor (Rất kém) 52 Very good (Rất tốt) Accessibility and availability (Hòa đồng nhiệt tình) Timeless (Hỗ trợ lúc nào) Effectiveness of problem identification and resolution (Nhận định giải cố hiệu quả) Knowledge of your products and process needs (Am hiểu sản phẩm yêu cầu quy trình) Performance compared to other powder manufacturers (Thể so với nhà cung cấp khác) 1 2 3 4 5 5 How you evaluate the Marketing Service of AkzoNobel? Anh/Chị đánh dịch vụ Marketing AkzoNobel? Very poor (Rất kém) Relevance of the AkzoNobel brand name (Phù hợp với thương hiệu AkzoNobel) Availability and relevance of current product literature (Có giá trị phù hợp với sản phẩm tại) Very good (Rất tốt) 5 10 What type of difficulties have you had? (You can have more than one choice) Những vấn đề chất lượng Quý Công ty gặp phải gì? (Anh/Chị chọn nhiều đáp án)  Fluidization (Sự hóa lỏng)  Powder Coverage (Độ bao phủ bột sơn)  Lumping (Vón cục)  Poor Charging (Bột sơn tĩnh điện kém)  Contamination (Bột sơn bị nhiễm bẩn)  Color Difference (Khác màu)  Packing (Đóng gói)  Others (specify) (Khác ) 11 If you had difficulties, how much you agree with the following statements about AkzoNobel‟s complaint handling capability? Anh Chị đánh nhận định sau trình giải cố AkzoNobel? Strongly disagree Strong agree (Hoàn toàn không đồng ý) (Hoàn toàn đồng ý) Reasonable solving time (Thời gian xử lý phù hợp) Satisfied solution (Phương án giải tốt) Efficiency communication (Thông tin hiệu quả) 1 2 12 In general, how is your satisfaction level for service of AkzoNobel? Mức độ hài lòng Quý Công ty dịch vụ AkzoNobel?  Very low (Rất thấp)  Low (Thấp)  Fairly (Bình thường)  High (Tốt)  Very high (Rất tốt) 53 3 4 5 13 Please comment on what your company has enjoyed or disliked about the products and services of AkzoNobel Vui lòng cho biết điều Quý Công ty thích chưa thích sản phẩm dịch vụ AkzoNobel 14 What can AkzoNobel to improve our offer to you? AkzoNobel cần cải thiện để phục vụ tốt cho Quý Công ty? 15 Your department: Vui lòng cho biết phòng ban Anh/Chị làm việc:  Procurement (Thu mua)  R&D (Nghiên cứu phát triển)  Management (Quản lý)  Production (Sản xuất)  Planning (Kế hoạch)  Others (specify) (Khác ) 16 How long have you been working your company? Vui lòng cho biết thời gian Anh/Chị làm việc Công ty mình:  < years (< năm)  – 10 years (3 – 10 năm)  > 10 years (> 10 năm) 17 Your company name is Vui lòng cho biết Tên Công ty Anh Chị ……………………………………………………………… Thanks for your kind support so much 54 Appendix Definition of quality dimensions Researcher Parasuraman et al (1988) Quality dimension Reliability Assurance Tangibles Empathy Responsiveness Carman (1990) Tangibles Reliability Responsiveness Knowledge and courtesy of employees and their ability to inspire trust and confidence Physical facilities, equipment, and appearance of personnel Caring, individualized attention the firm provides its customers Willingness to help customers and to provide prompt services Include the physical evidence of a service like the physical facilities and appearance of the personnel Perform the service right the first time and honor the promises Willingness to help customer‟s and provide prompt service Absence of danger, risk and doubt Courtesy Politeness, respect, consideration, and friendliness of contact personnel Reliability Empathy Tangibility Approachability Consistency Flexibility Ganguli and Roy (2010) Ability to perform service dependably and accurately Security Personal attention Access/Conveni ence Johansson & Witell (2013) Definition Staff competence The customer is getting personal attention Approachability and ease of contact The extent to which the solution can be relied on to provide what is needed at the right time How keen a firm‟s employees are to paying attention to and helping each individual customer and, thereby, building a long-term relationship The extent to which the physical resource lives up to what the manufacturing firm promised for its solution and how well the solution works How easily a customer can contact the manufacturing firm and how quickly the firm repairs anything that is broken or that has gone wrong How well informed and knowledgeable firm employees are of the entire solution and how well they know what content of the solution the firm is able to deliver The extent to which the solution meets the initial needs stated by the customer and changes the customer‟s changing needs The expertise and nature of employees 55 Reputation Price Tangibles Ease of subscription Technology security and information quality Technology convenience Technology usage easiness and reliability Image of the service provider through different actions and options Easy to understand, reasonable and competitive pricing Physical facilities, materials and appearance of employees Convenience and ease of subscribing to a service Safety in using technology, proper handling of information and quality of information Convenience of using technology over the employees as well as speed and time of using technology How reliable and easy to use the technology is Appendix Customer Complaint Form CUSTOMER COMPLAINT FORM SECTION A CUSTOMER Originator Salesman Customer Complaint No: Date of complaint Grade Batch No Produce date Number of Box Quantity Date of dispatch NATURE OF COMPLAINT ………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………… ……………………Done by SECTION B B1 IMMEDIATE ACTION …………………………………………………………………………………………………… …………………………………………………………………………………………………… …………………………………………………………………………………………………… ……………………………… Done by SECTION C C1.INVESTIGATION SUMMARY …………………………………………………………………………………………………… 56 …………………………………………………………………………………………………… …………………… Attach report or findings of investigation if necessary Signature JUSTIFIED NOT JUSTIFIED PROACSTIVE Department that gives rise to complaint Supply Chain Sales Quality Production Technical Others (please specify) SECTION C C2 CORRECTIVE ACTIONS (Action taken to prevent recurrence) …………………………………………………………………………………………………… …………………………………………………………………………………………………… …………………… Signature C3 RESOLUSION WITH CUSTOMER …………………………………………………………………………………………………… …………………………………………………………………………………………………… …………………… Signature SECTION D D1 COST INCURRED IN RESOLUTION …………………………………………………………………………………………………… …………………………………………………………………………………………………… …………………………………………………………………………………………………… ……………………………… Signature QA Manager HODs responsible for investigation of complaint ( Technical, Production, Supply Chain, Quality) Date Date 57 ... Keywords: powder coatings, service quality, customer satisfaction, complaint, solutions Nomenclature ANPCVN AkzoNobel Powder Coatings Viet Nam CMO Color Matching Optimization CCS Customer Complaint Service. .. by AkzoNobel Powder Coatings Name of Company: AkzoNobel Powder Coatings (Viet Nam) Limited Company Factory: Road 2, Nhon Trach Industrial Park, Dong Nai Province, Viet Nam Office: Flemington Tower,... 1st Coatings company to achieve a SMaRT certification AkzoNobel Powder Coatings Viet Nam (ANPCVN) who is today leading supplier powder coatings for more than 300 buying customers in Viet Nam,