Question 3 What can they do about these dangers and difficulties?
2. Why are such visualizations becoming more important?
First, many projects are getting more complex. Thus, visualization helps to manage such complexity. Second, increasing computer power allows for more sophisticated visualization.
Many of the simulations and visualizations, which are now becoming commonplace in project management, were just not technically feasible until very recently.
C H A P T E R 1 7
Quality planning and control Teaching guide
Introduction
Statistical process control (SPC) and acceptance sampling are both very important techniques but they can be dull. It is therefore useful to try to engage the students in the problems of managing quality and the four steps of quality planning and control to gain 'buy-in' to the need to undertake and understand SPC and acceptance sampling.
The short case at the end of this section, Calling Sue, is a great means of demonstrating the quality gaps.
For the four stages, we find it helpful to begin with defining quality characteristics. Using an example familiar to students, or from their experiences if post-experience students, ask them to define the quality characteristics of a product and a service. Discussion about their measurement, standards and how each should be controlled provides a great deal of rich debate.
Key teaching objectives
• To demonstrate the importance of planning and controlling quality and experience the real problems faced in defining measuring and controlling quality characteristics
• To provide hands-on experience of planning and controlling quality
• To convince students of the importance of SPC and acceptance sampling
• To introduce the four key ideas in the chapter:
• Quality is consistent conformance to customers’ expectations.
• Poor quality as perceived by the customer results from one of or a combination of the four quality gaps.
• Quality planning and control involves defining the quality characteristics, deciding how to measure each characteristic, setting quality standards and controlling against those standards.
• SPC and acceptance sampling are important techniques for controlling quality.
Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual
167
© Nigel Slack, Stuart Chambers & Robert Johnston 2007
Exercises/discussion points
There are several cases in the companion volume to this book (Johnston, R. et al, 3rd edition, ISBN 0273 65531-0) which can be used to support this lesson. The Valley District Council Cleansing case can be used for this topic.
• Exercise – It is particularly important that students come to understand the nature of variation in process performance and how it can affect quality. We have found the best way to do this is to devise games to demonstrate the choices that need to be made when dealing with variability. Fortunately, it is not difficult to devise games of this sort. Here are two options.
• Game 1 – Find some easily available product that contains pieces, supposedly of the same size. We use the small wooden blocks that are used in some children’s building sets and games. Instruct groups of students to measure successive blocks using a micro measuring device (available at specialist and hardware stores). Get them to plot on an SPC chart the variation in the size of the blocks and from that calculate the central and control limits for mean and range.
• Game 2 – Do something similar but select an Internet search site such as one that searches for cheap flights or hotel accommodation. Get the students to time the variance in response time and calculate limits as before. The advantage of this approach is that one can ask students to sample from the same site at different times to check whether the process is getting ‘out of control’.
• Game 3 – Use a short case study (an appropriate one is shown at the end of this section) and ask the students to draw process charts. Then show them new data period by period and ask them to tell you when the process is out of control.
• Teaching tip – Use the Torres and Walkers illustrations to identify quality characteristics.
Ask students to select other products and services and define the characteristics and identify what they think will be the problems in achieving them.
• Teaching tip – After the Surgical Statistics example, ask what other processes have to be 100% effective (but like all processes will never be so) for example nuclear power, surgery and water quality. Discuss how organizations try to minimize errors.
• Teaching tip – Off-air video clips are particularly useful for teaching quality. For example, any short piece of video that simply shows an operation in practice. Retail organizations, hospitals, trucking companies and so on are all shown frequently on air. Alternatively, select a ‘business’ programme that may have more in-depth pieces. Show the video to students and ask them to define what quality would mean for such an operation.
• Teaching tip – Organize a debate between groups of students, some of whom have to defend the proposition that ‘McDonalds is a high-quality organization’. And others who have to defend the proposition that ‘(a convenient local high-class restaurant) is a high- quality organization’. Lead a debate about how the nature of quality differs between these two organizations.
• Exercise – SPC case – AEB Mortgage Services
Try the following case …….
'It is quite difficult to know exactly how long operators should be spending on each call.
Sometimes a client really does need detailed advice or reassurance, at other times the call could be dealt with very quickly indeed. There’s a minimum amount of time just to go through the courtesies. But there’s also an upper limit. No matter how complex the call, our systems should be able to cope with it within a set time limit. My main concern is that we really do not know how much we should expect calls to vary.' (Duncan Hindes, Mortgage Services Manager, AIB) Duncan was speaking in early 1997 just after AIB had made a considerable investment in its new call centre information technology project. The new system had been ‘up and running’ for several weeks now and was generating considerable amounts of data. All of this data was monitored and stored, but Duncan felt that he should be making more use of the information.
The average length of phone calls was a particular concern to him. He had a suspicion that the calls were varying too much and that operators should be able to control even the longer calls.
He also felt that it should be possible, at the same level of service quality, to get the average call time down under two-and-a-half minutes (it was a little above this at the moment).
'If operators spend too little time with clients we can lose both valuable opportunities to collect important information from them, make them feel ‘dismissed’, and sometimes waste an opportunity to sell them further services. On the other hand if operators spend too much time we are obviously reducing the effective capacity of our unit and wasting valuable operator time.' (Duncan Hindes)
Duncan decided that he could exploit the data monitoring system in the call centre to chart the average call length, and its variability, over time. As a first attempt to do this, he used the system to sample six conversations at random every hour. He then requested the system to calculate the average length of call for the sample and the range of call lengths (the difference between the longest and the shortest call in the sample) for each sample. This data is shown in Exhibit 1.
'I’m not sure what this tells us. Certainly there is more variation in the length of call than I would have expected, but I am not sure what we can do to reduce this.' (Duncan Hindes)
Duncan was convinced that he could take actions that would both speed up the process and reduce the variability of the length of calls. Several options were open to him. He could easily get the new IT system to reinforce the idea of the ‘target call length’ in the operators’ minds by putting reminders on the screen when the calls exceeded a certain length of time. He could even reinforce the bonus system to put greater emphasis on the number of calls handled by each cell per week (currently, the payment system gave a small bonus related to both productivity and quality). More controversially, he could put pressure on the operators to make better use of the new IT system. Although the new system was much more sophisticated than the old, operators often reverted to using the old system (which was still online) because they were familiar with it and made fewer mistakes. Finally, he could increase the emphasis on the degree of monitoring carried out by the supervisors. The new system could allow supervisors to sample average call lengths for each operator and flash up warning messages when average call times got above a certain level.
'I guess what we should do now is change some of these parameters to try and reduce the variability of calls. Personally, I am in favour of using all four options. In particular we could easily get the system to flash up messages to the operators if their calls exceed a certain time. At the same time, it is important that we move them quickly on to the new IT system. We can do this
Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual
169
© Nigel Slack, Stuart Chambers & Robert Johnston 2007
easily simply by accelerating our existing programme of decommissioning the old system. As it is gradually taken off line, the operators will be obliged to move on to the new system.' (Duncan Hindes)
EXHIBIT 1
Call length sampling results – 6 calls per sample
Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Average call length
2.5 5
1.4 7
2.4 9
3.1 5
2.5 7
2.5 8
2.1 8
2.1 2.3 4
2.3 6
2.4 1
2.1 6
3.2 4
2.3 9
2.0 6 Range
of call
lengths* 3.4 9 3.1
3 5.3 3 5.4
7 5.3 7 6.1
8 3.3 7 5.2
3 3.2 1 3.1
4 3.1 9 5.1
7 5.4 8 5.2
1 2.5 2
*Range = longest call time in sample – shortest call time in sample.
Short case – Calling Sue
The idea of having a Personal Banking Consultant (PBC) seemed a great one at the time it was suggested. For a modest annual fee we would get a differentiated range of ‘relationship’
financial services designed for busy business people like us. These were listed in an attractive glossy ‘membership’ brochure and included a larger overdraft facility with preferential interest rates, free annual travel insurance, a rewards point scheme, a ‘gold’ credit card with no credit limit and our own PBC (Sue) and her personal assistant (Richard), who would be there to help whenever we needed them. Every other aspect would be as before, but our accounts would have to be transferred from our old branch in the south (where we lived until six years ago, but never bothered to move our accounts) to the north, where we now work. Having a remote bank branch had not been a problem until recently. If we needed anything done with any account, we simply had to ring the Assistant Manager in the south and he arranged it. But recently, a Southern West Region Office was established, and all phone calls were handled remotely, so it had become more difficult to maintain this personal relationship. Moreover, separate people at different offices, using different telephone numbers, handled our business and private accounts. We were ready for a change.
Despite the attractions of the package described, we were hesitant to accept this generous offer. Changing all the cheque books, credit cards, standing orders, direct debit instructions and anything else we had forgotten, including our personal and business accounts, seemed rather complex and time consuming. We raised these concerns with the advisor who had been sent to sell us the idea, one dark December Monday.
‘Oh, there will be absolutely no problem ... we can deal with all that. All you and your wife will have to do today is to sign a few forms authorizing us to transfer the accounts, and one to agree to the new arrangements. Then leave the rest to us. There will be no problems, it’s easy with all the technology we have today. You should get the new cheque books within seven days, and all balances will be transferred automatically by the computer’.
We signed up immediately – it looked a good scheme, and even the value of the free insurance alone would more than compensate for the annual membership fee.
The four cheque books for the two accounts arrived separately, over a three-day period, the last arriving on the Tuesday, nine days after the agreement. The business account cheques had an incorrectly spelt business name, and the current account cheques had my wife’s initials reversed. At the same time, we received (from Sue) a personalized welcoming pack and a professionally presented loose-leaf folder of information concerning the account and PBC services, which confirmed that the accounts were in operation. All this correspondence was correctly addressed and written in a friendly style, using our first names. I decided to call Sue about the spelling.
‘I’m awfully sorry, sir, I’ll order some new ones, and I will ask them to send them to you quickly. I know they’ve had a backlog due to computer problems at the card centre, but they can prioritize any PBC’s cards. In the meantime, you can use your existing accounts, since they are linked to your new ones. I’ll call you to confirm when this has been done. Again, may I apologize for any inconvenience you have experienced.’
One hour later she rang as promised, confirming her actions.
On the tenth day our credit cards arrived, correctly embossed with our names. However, these could not be used for cash withdrawals without personal identification numbers (PINs) and the cheques could not be used in UK retail outlets without cheque guarantee cards. The cheque guarantee card doubled as a cash card, for use at ATMs with another PIN number.
Neither PIN number had arrived by the second Friday after our signing-up (11 days). I decided to call Sue, to see what was happening.
‘Don’t worry,’ she said, confidently, ‘The PINs always come a day or two after the cards, for security reasons, and you should get the guarantee cards about the same time.’
By the following Friday lunchtime, returning from a week’s business trip, we were getting concerned. Although our new cheque guarantee cards had arrived and were correct, our names on the envelope were again incorrect, which seemed odd and slightly disconcerting. We still had not received the new PIN numbers. I decided to call Sue, who apologized again, politely expressing her amazement at our dilemma, and asked me to hold while she checked the system.
‘They have certainly been correctly issued on Monday’, she said confidently, ‘and have been sent ... perhaps they have been lost in the post. I’ll check with the card centre what we should do, and I’ll call you back.’
‘You will have to be quick,’ I retorted, ‘We’re just about to leave for a long weekend vacation, but you could call me on the mobile ...’
Sue phoned two hours later and confirmed that because the PIN numbers had been mislaid, it would be necessary to re-issue the cards for security reasons. ‘You should receive the replacement cards and PIN numbers within three days,’ she stated confidently. ‘You should carry on using your original account’s cards until then.’
Her suggestion seemed okay at the time, but proved to be rather more of a problem than we had anticipated. On checking out of the hotel on Monday evening, we discovered that the existing credit card had expired, and the bill came to more than our existing cheque guarantee card limit. We settled the account with a combination of cheques and most of our remaining cash – an embarrassing end to a pleasant weekend.
In the post on Tuesday morning, we were surprised to receive two sets of PIN numbers, along with further cheque guarantee cards and credit cards. We went to the ATM with our new
Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual
171
© Nigel Slack, Stuart Chambers & Robert Johnston 2007
cards to draw out much needed cash, but the PINs were not accepted. Careful examination of the packaging revealed that the PINs related to the original cards, not the replacements! We borrowed cash from a friend and called Sue!
By Friday, everything was working and we had received a correctly addressed letter of apology from the card-issuing centre in Glasgow. An excellent bouquet of flowers was delivered that afternoon and Sue phoned to check we were now happy. She even called in to see us a week later, bringing some leather holders for cards and cheque books. We have had no more problems and generally the service is excellent. Sue has, however, confided that such problems are quite common (they apparently use a lot of agency staff in the processing centres, and mistakes are common).
But we can always call Sue.
Questions
1 What were the gaps between the customers’ expectations and perceptions in the process described?
2 How were the customers’ expectations influenced from the outset?
3 What aspects of the bank’s service quality specification have been revealed to the customer? Are these reasonable for such an account?
4 Evaluate Sue’s reaction to the problems at every stage. Was the bank’s service recovery successful?
5 What costs have been created by these problems, and how do they compare with the underlying costs at the root cause of the problem?
Calling Sue