ENGM 620
Fall 2010
Session Four Homework Solutions
Many of these questions do not have a universal answer. Therefore, the answers are written to elicit a range of potential answers based on differing perspectives. When this is true, it is particularly important for the student to concentrate on justifying their selected perspective.
Chapter Five Discussion Questions
1. Describe the difference between the internal and the external customers of a business organization. Why is it important to distinguish between internal and external customers?
On page 137, the text defines internal customers as: ... employees receiving goods or services from within the same firm. External customers are described as: … the ultimate people we are trying to satisfy with our work. If we have satisfied external customers, chances are we will continue to prosper, grow, and fulfill the objectives of the firm.
The external customer, or end user, makes the ultimate decision as to whether the company will survive. The internal customer is integral to the quality of the end product. From a business perspective, the internal customer is carried overhead, while the end user is a source of income.
2. Describe some of the potential pitfalls of customer-driven quality. Can you think of any ways to avoid or lessen the impact of these potential pitfalls?
The text contrasts customer-driven quality with reactive customer-driven quality. The ongoing theme of the text, Long Term Planning, is the key. Figure 5-1 presents a model of reactive customer-driven quality. This model shows that when quality is reactive, rather than planned, customer expectations increase at a faster rate than supplier performance. At the point where these trends cross, customer dissatisfaction increases.
6. Reflect on the last time that you complained to the manager of a store, restaurant, or other business about something that dissatisfied you. Was the complaint resolved to your satisfaction? Did the complaint-resolution process tell you something about the quality of the organization that you were dealing with?
7. Can you think of an example of an experience that you have had with a firm in which the difference between the espoused and the actual level of service provided was great in either a positive or negative way? If so, did this experience influence your perception of the business? Has this experience affected your willingness to do business with this company again?
The types of experiences elicited in questions 6 and 7 are fairly common. I think every student can come up with an example of a situation and discuss it. Sometimes, the experiences for the two questions may even be the same.
10. Suppose that the marketing department of a large manufacturing firm decided to adopt the motto, “We will build a product to suit any buyer’s needs.” What type of difficulties could this philosophy impose on the operations department? Through what process could the marketing department and the operations department determine which customers add the greatest advantage and profits over time?
There is a balancing act here: On one side is the demand for customer satisfaction, however, on the other hand is the fact that a degree of control must be made on the expectations of the customer. A business exists to make a profit. A goal of the business is to satisfy the customer’s needs, but what happens when satisfying the needs expressed by the customer will result in diminished profit? This is obviously a management decision. At what point is management willing to invest on product improvement? What will the cost be? What will that cost do to the marketplace?
Chapter Six Discussion Questions
1. Describe the concept of benchmarking. Provide an example of how a restaurant that you are familiar with could use benchmarking to improve its performance.
Benchmarking is the process of finding a company that is very good at a particular activity, studying what it does, and gathering ideas for improving your own operation in this area.
The second part of this question provides your students the opportunity to apply a personal experience to a textbook concept. For example, a restaurant that I am familiar with has great food and a great atmosphere, but does a clumsy job of seating people when it is particularly busy. This place should find another restaurant that does an excellent job of seating people when it is busy, study how they do it, and improve its own operations.
The text describes benchmarking types in table 6-1. Proper benchmarking allows the firm to evaluate the entire corporate process.
8. Compare and contrast process benchmarking, product benchmarking, and strategic benchmarking.
Process Benchmarking compares process between the initiator and target firms. These processes might include: process flows, operating systems, process technologies.
Product Benchmarking looks at the product itself not the process. This form of benchmarking allows the initiating firm to analyze the strengths and weaknesses of the product against the opposing product. Reverse engineering is a tool that is often used to dismantle the target firm’s product and analyze the detail differences.
The focus of this type of benchmarking is to identify the mix of strategies that makes these firms successful competitors. Such benchmarking can be very time-consuming and costly.
Strategic Benchmarking cuts across boundaries and looks at the entire firm’s processes. Strategic benchmarking can be non-industry specific. This allows the initiator to look at the inter-relationship between the various systems. Frequently, the target firm has won major awards such as the Baldrige award or the Deming prize.
All three are types of benchmarking the firm should consider for potential use as part of their overall voice of the market strategy.
9. When benchmarking, what is the primary hazard in comparing measures across companies to gauge performance differences?
Different firms will have different methods of doing business, different goals, and strategies. This can make the comparisons invalid. If done incorrectly, benchmarking can be illegal. Insure that you are conducting the benchmark ethically. Benchmarking can be very expensive as well.