Work Study

TQM in the service sector

R.P. Mohanty A.K. Behera
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R.P. Mohanty A.K. Behera, (1996),"TQM in the service sector", Work Study, Vol. 45 Iss 3 pp. 13 - 17
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 Introduction
TQM in the service The total quality management (TQM) move-
sector ment started in the manufacturing sector of
industry. This is because, in part, the move-
ment was centred on the measurement of
quality performance and this is easier to
define and calibrate with “ hard” products.
R.P. Mohanty and However, the aim and philosophy of TQM is
not the measurement of quality performance
A.K. Behera as an end in itself, but the continuing and
continual improvement of quality through a
process of cultural and organizational change.
It is people driven and results are evidenced in
terms of improved teamwork, company
morale and organizational climate – resulting
in improved productivity and profitability.
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The authors TQM has an important role to play in non-

R.P. Mohanty is General Manager, Human Resources manufacturing organizations – competing
Division, The Associated Cement Cos Ltd, Bombay, India.
more effectively has become an overwhelming
A.K. Behera is Managing Director, Orissa Small Industries
concern for virtually all organizations today in
Corporation Ltd, Orissa, India.
the interdependent global economy.
Service organizations cover a broad spec-
Abstract
trum such as public utility services; educa-
Underlines the dominance of the service sector in the
tional institutions; hospitals; banks and insur-
future global economy and explains the characteristic
ance companies; travel and tourist agencies;
features and elements of a service organization. Explains
that with the growing maturity of society with respect to
public information bureaux; police and fire
education, culture and standards of living, the user services; hotels; restaurants; transportation
expectations and demands for improved quality of service companies, etc. Such organizations often
are increasing. This is part of the pressure causing service interact directly with large numbers of cus-
organizations to explore total quality management (TQM) tomers. The multiple, varying needs and
as a means of driving quality improvement into all their conflicting priorities of such customers have
activities. Outlines a framework for implementing TQM to be recognized and dealt with. As a society
within the service sector. becomes more progressive and educationally
advanced, the societal demands for quality of
services increase. Therefore, today, we
observe a large number of service organiza-
tions are taking strategic initiatives to imple-
ment TQM. To implement TQM effectively
in service organizations requires an under-
standing of the:
• unique characteristics of service opera-
tions;
• roles of service providers and service
clients;
• application of appropriate quality control
concepts, tools and techniques.

It is dangerous to assume that the approach to

implementing TQM can be modelled directly
on the approach used within a manufacturing
organization. The application of TQM to
production systems is a relatively mature
Work Study
Volume 45 · Number 3 · 1996 · pp. 13–17 process; few attempts have been made to
© MCB University Press · ISSN 0043-8022 apply TQM to service systems.
13
 TQM in the service sector Work Study
R.P. Mohanty and A.K. Behera Volume 45 · Number 3 · 1996 · 13–17

What is TQM? customer-variant and has multiple dimen-

sions.
Quality can be defined as, “the totality of
• Quality is determined by human factors,
features and characteristics of a product or
such as responsiveness, competence, cour-
service that bears on its ability to satisfy given
tesy, helpfulness, etc.
needs”. TQM has been defined and repre-
sented in a variety of ways; a search for excel-
lence, creating a “ right first time” attitude, The trend towards service provision
zero defects, delighting the customer, etc. The following are the major trends which
Essentially, it is an organization-wide process, account for an increasing emphasis on the
where employees are motivated and empow- provision of services:
ered to do the right things, right first time and • The implementation of a high level of
every time, to reflect on what they do and to mechanization and automation within
improve what they do. This results in cus- manufacturing industry has made society
tomer satisfaction, employee satisfaction, both look towards other avenues for
product quality, continuous improvement and employment and create a set of services to
innovation. Lakhe and Mohanty[1] explain
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fulfil leisure needs.

the evolution, concepts, acceptability and • Ironically, the improving health of people
various applications. in developed countries has led to the
increasing development of health-care
What is a service system? systems, partly because there is a growing
elderly population.
A service system is like any other general • The increasing involvement of the private
system, which takes a range of inputs and sector and non-governmental agencies in
transforms them through a value-adding service industries.
process to desired outputs, which have utility
to the users. Naturally, the complete attribut-
The problem of defining quality of
es of any particular system depend on the
service
nature of input, process and output.
A service system often has the following Kaneko[2] finds that it is difficult to define
characteristics: objectively quality of service, particularly for
• The system delivers services direct to the hotels, because of the following features:
users. • work itself is the “commodity”;
• In carrying out its mission, the system • work is evaluated directly by guests;
establishes multiple contacts with its users. • work as a commodity is supplied and con-
Each of these contacts provides an oppor- sumed at the same place at the same time;
tunity for either good or bad quality of • work is required to “rise to the occasion”;
service and also gives rise to a large number • work performance is greatly dependent on
of discrete transactions. each employee.
• The system has to be responsive and reli- Jessome[3] identifies the problems associated
able enough to provide its outputs to satisfy with the application of total quality to service
variable user demand rates. Timely avail- system as:
ability of the service is often regarded as a • Service, by its very nature, has less control
prime element of quality. over the factors which affect the quality.
• The system has to complete its assignment • Because service outputs cannot be stored
within the period desired by the customer, for later use, and because of participation
for which it must have credibility and by the customer in the process, there is a
competence. much higher level of external uncertainty
• Service outputs are not storable or trans- than in manufacturing processes.
portable. • The intangibility of services makes it diffi-
• Rarely does the customer prepare a formal cult to set standards, to conform to them
specification of the quality of the service and to measure them.
required. • Good service is an expectation of individ-
• Measuring the quality of service output is ual customers, and this expectation is
difficult as the quality of service itself is generally unstated and unknown.
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 TQM in the service sector Work Study
R.P. Mohanty and A.K. Behera Volume 45 · Number 3 · 1996 · 13–17

• The customer participates in the process, achievement seeking behaviour and place
to a greater or lesser extent, and therefore stress on training and education.
has an impact on the quality of service. • Staff will resist total quality. To bring the
• Service quality is difficult to measure desired change (especially to introduce
because of its subjective nature. such an essentially participative approach),
it is essential to have the involvement of
The traditional definition of quality as confor-
those involved in the change in the decision
mance to standards is often not applicable to
making. Such involvement will reduce
services, since there are often no specified resistance to change.
standards and even if these are specified, they
are difficult to measure. This lack of standards Thus, many of the myths relating to the
makes it difficult to judge the quality of per- implementation of quality programmes in
formance. service organizations are unfounded.
The factors which govern the satisfaction
of the customer include such attributes as the Implementing TQM in the service sector
speed and courtesy of service, comfort and
cleanliness of the facility, courtesy and help- Some key observations:
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fulness of employees and other behavioural • Service quality is not synonymous with
factors. These factors offer a lot of variation customer service although customer ser-
and are difficult to standardize as they depend vice and customer relations are part of
mainly on customer expectations. As a result, service quality.
• Manufacturing-based models and tech-
mainly service organizations find it difficult to
niques for managing quality may be of
apply total quality concepts in their business.
more hindrance than help, unless a clear
However, Atkinson and Murray[4] exploded
understanding of the particular nature of
certain myths which restrict the application of
the service sector is used to re-focus the
TQM in service sector. These myths and their
model and select an appropriate set or
explanations, as outlined by the authors, are:
sequence of techniques.
• There is difficulty in identifying and pursuing
• The product-centred culture of organiza-
real goals. It is generally argued that
tion needs to be transferred to a customer-
because of the nature of work it is difficult
centred culture.
to set aims and objectives which are quan-
• Significant changes can occur if effective
tifiable and measurable. This poses a con-
education and training is used to spread the
straint on the measurement of an organiza-
“quality message”.
tion’s effectiveness. However, it is observed
that strategic planning is never a rigorous Lawton[5] outlines a six-step process for
process within a service organization. creating a customer-centred culture as:
However, asking questions such as, What is (1) Define service as tangible products.
the organizations’ mission?, Where is it (2) Identify any differentiable customers in
going?, What does it hope to achieve in the terms of their roles, power, special char-
next five years?, would help to set achiev- acteristics and need.
able targets. (3) Determine customer’s prioritized expec-
• Administrative and managerial effectiveness tations related to service product attribut-
cannot be measured. The nature of the work es as performance, perception and out-
in the service sector can make it difficult to come.
assess when someone is working effectively (4) Continuously measure the degree to
and when they are not. However, effective- which expectations are met. Manage the
ness and individual contribution can be customer’s experience by actively solicit-
measured if a goal setting strategy is adopt- ing feedback and acting on it promptly.
(5) Maintain a current description of the
ed through discussion and consensus, and
service creation and delivery process with
organizational goals are linked with indi-
charts, texts and measures.
vidual goals.
(6) Establish and maintain service product
• Old, established practices are difficult to
measures.
change. To facilitate change it is essential to
increase involvement, identify and promote Lakhe and Mohanty[6] have outlined a quali-
latent talent, develop curiosity and ty management implementation process for
15
 TQM in the service sector Work Study
R.P. Mohanty and A.K. Behera Volume 45 · Number 3 · 1996 · 13–17

improving the internal quality of service should start with the top management. The
functions as: chief executive needs to maintain a direct,
• Select the area of quality management highly visible and pervasive involvement in
emphasis. quality. His/her continual involvement can be
• Define the service process or operation. expressed through various means such as
• Analyse the current system/process. persuasion, motivation, direction and direct
• Develop an “ excellence model”. involvement. In developing a strategy for
• Identify key performance areas. continuous improvement it is necessary to
• Develop process control systems. analyse:
• Integrate process control into management • the needs and expectations of the cus-
control. tomers;
• Establish an ongoing improvement • functions and project objectives;
process. • service process and operations;
Mefford[7] has proposed a “total service • measurement and control parameters;
quality” approach, for effective quality and • feedback system and evaluation.
improvement, for service organization. The Based on this analysis the quality improve-
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key elements of this approach are: ment strategy should contain:

• A philosophical base – the belief by every- • a mission statement demonstrating the
one in the organization that quality service company’s vision and philosophy towards
is the cheapest and best way to operate. customers;
• Organizational commitment – demonstrat- • a comprehensive planning framework to
ed continually in the firm’s strategy and support customer service requirements;
operations, in particular in the perfor- • a customer satisfaction feedback pro-
mance evaluation and reward system. gramme designed to measure customer
• Employee empowerment – where employ- perception of service quality;
ees are given primary responsibility for • a set of performance standards against
delivering and improving quality service. which comparisons are to be made.
• Process orientation – an emphasis on
improving the service process to make it Step 2. Analyse service process and
more effective and consistent. define the quality measures
• Continuous improvement emphasis – a The process through which service functions
belief that the service system, no matter operate must be well identified and its quality
how good it is, can always be improved. dimensions defined for proper implementa-
• Feedback loops – programmes are estab- tion and review. This involves:
lished to monitor customer expectation • developing detailed flow process charts for
and satisfaction with service continuously. inputs, process activities and outputs;
• defining the process and identifying cus-
A proposal for TQM implementation in tomer requirements at each stage;
service system • identifying all inputs to the process and
documenting quality requirements for
Initiating and implementing TQM in a ser- these inputs;
vice system is a major task. It requires a thor-
• defining the output of service function and
ough analysis of customer expectations, an
determining how the output quality is
analysis of the current system, process and
measured.
functions, defining the quality parameters,
developing systems of measurement and The quality dimensions in a service system
control and integrating this system with the are:
business. The following steps for implement- • Time dimension. The time required to
ing TQM in a service system are outlined: execute a service determines the quality of
service. The time dimension includes
Step 1. Develop a service quality strategy arrangement time, waiting time, service
Achieving total service quality requires a well- and delay time.
defined purpose, patience and discipline. The • Cost dimension. The cost of service to the
initiative to develop, propagate and imple- satisfaction of the customer, decides the
ment a quality improvement programme value of the service.
16
 TQM in the service sector Work Study
R.P. Mohanty and A.K. Behera Volume 45 · Number 3 · 1996 · 13–17

• Error dimension. The number of errors, • identifying root causes, developing action
their nature and time and cost associated in plans, testing and implementing solutions;
rectifying them decides the quality of • maintaining high management involve-
service. ment and participation throughout the
• Psychological dimension. The service organization.
involves dealing with people and thus the
extent to which they are satisfied with the Concluding remarks
quality of service depends on understand-
ing, courteous and efficient service. This paper is a brief summary of the concepts
and applicability of TQM in the service
In establishing quality measures organizations sector. Since the service sector is growing at
should review existing measures, documenta- an accelerating pace, there is a strong demand
tion and reporting systems and establish new for improvement in the quality of services.
effective measures involving customer satis- This paper suggests a framework for imple-
faction feedback. menting TQM in such systems. The success
or failure of service systems largely depends
Step 3. Establish process control system on the initiative and enthusiasm of the human
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For continuous monitoring of the service beings constituting the service organization.
process, it is essential to establish process To manage a service process with a quality-
controls. For this, it is essential to analyse the focus is a complex affair. Therefore, the man-
existing process to determine key perfor- agers of service systems need to commit
mance areas, collect data and develop a trial themselves to a concept of “management by
control system. The focus should be on quality first” rather than a specific ideology.
understanding what needs to be measured With such a commitment, and a suitable
and controlled to meet customer require- framework to guide implementation, TQM
ments. can be successfully applied to service organi-
zations.
Step 4. Investigate the process to identify
improvement opportunities References
The focus of this step is to identify internal
process problems affecting customer satisfac- 1 Lakhe, R.R. and Mohanty, R.P., “Understanding TQM”,
tion and costs and explore process improve- Production Planning and Control, Vol. 5 No. 5, 1994,
pp. 426-41.
ment opportunities. This can be done
2 Kaneko, N., “TQM promotion in service industries”,
through:
in Chase, R.L. (Ed.), TQM : An IFS Executive Briefing,
• collecting and reviewing data on process IFS Publication, Springer Verlag, London, 1988,
operations; pp.189-94.
• developing cause and effect diagrams to 3 Jessome, P., “The application of total quality control in
identify causes of waste or poor quality; hospital setting”, in Chase, R.L. (Ed.), An IFS Executive
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Verlag, London.
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5 Lawton, R.L., “Creating a customer centred culture”,
Quality Forum, Vol. 17 No. 1, 1991, pp. 5-9.
Step 5. Improve process quality
6 Lakhe, R.R. and Mohanty, R.P. (1995), “Understanding
The goal of the involvement stage is to achieve
TQM in service systems”, International Journal of
and sustain a new level of process perfor- Quality & Reliability Management, Vol. 12 No. 9,
mance. This requires: pp. 139-53.
• regular reviewing of quality improvement 7 Mefford,R.N., “Improving service quality: learning
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17
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