ISO 9004.2:
How to Raise the Standard of Service Delivery
Presented at: Interdepartmental Quality Network (IQN) Open House - Ottawa, ON June 18, 1996
Presented by:
John F. Young, P. Eng.J.F. YOUNG INTERNATIONAL INC.
Abstract - Introduction - Service Quality Loop - Service Provision
MotivationTraining and Development - Communication - Material Resources
Standards and Metrics - Assessment of Service Quality - Conclusion
Abstract:
When an ISO 9000 quality system is implemented using ISO 9004.2 as a guidance document, service providers can realize major improvements. ISO 9004.2 is the guidance document for service providers. Once appropriate standards and a realistic measurement system are developed, a service organization can benchmark for improvement. The implications and benefits for a service provider and program implementation are discussed. Some commonly asked questions are answered.
Introduction:
Quality assurance is an often discussed topic these days. Current wisdom indicates that TQM (Total Quality Management) can become a means of defining and improving a quality system. In 1987, ISO 9000, a series of internationally ratified and recognized quality system standards were introduced. The popularity and increased reliance on these ISO 9000 standards that companies are requiring of their suppliers clearly indicate that this system is reaching an undeniably high level of popularity. But, does an organization achieve ISO 9000 registration as the means to an end or does it use the ISO registration as a springboard to further improvement? The latter will lead to the savings and customer satisfaction as promised by ISO 9000. ISO 9000 is all about prevention. Major activities such as marketing, purchasing, planning, training and many others have prevention as a focus.
How do TQM and ISO 9000 fit together? In my opinion, ISO 9000 is one cornerstone of a successful TQM program. Its major advantage over TQM is that ISO 9000 requires an annual independent third-party audit of the system. It also requires internal quality auditing but does not rely on this self-assessment completely. Therefore, the organization must keep maintaining and improving its quality system. If not, they stand a chance of losing their registration. With a TQM system, this independent system audit is not necessarily completed.
One of the other two cornerstones of a successful TQM program is a corporate culture that encourages improvement both in the organization - but also at an individual level. As well, a program of continuous improvement through continual learning is the third cornerstone. Both of these fundamentals are required of an ISO 9000 program.
A manufacturing organization can easily determine how the twenty elements in ISO 9001 lend themselves to the types of systems that they must have in place to produce consistent widgets. It is not as clear in a service organization how the ISO 9000 standard can be worked into their service delivery. It is most important that service providers realize that ISO 9004.2 is the guidance document that they should use for program implementation. The significance of this statement cannot be underestimated. Some organizations spend many a fruitless month in program development by not using this document. Please be sure to note that your organization can only be registered to ISO 9001 or 9002 - and not to 9004.2. This is for guidance only.
Service Quality Loop:
The 9004.2 standard recommends that the service organization defines a service quality loop with all of the processes and sub-processes aligned in chronological order - with appropriate feedback. This is pictorially demonstrated in APPENDIX D. The operation should start with the customer needs and work through the service design phase, specification definition and delivery. This will result in provision of the service.
Once the assessment of effectiveness have been made, these results feed back through analysis to produce any design revisions that may be necessary. All steps must be documented with procedures and quality records that will reflect the effectiveness of the quality controls.
Service Provision:
Why is the raising the standard of service provision so important? Let us slip into the role of a consumerfor the next section. When we purchase either goods or services, is it important that we receive good courteous service at the same time. Quality, delivery, reliability and price drive the location of our personal purchases. When we purchase a service - such as having our vehicle serviced at the dealer, do we not want effective, timely and courteous service? Of course, we do!
Think about this facet of your personal experience. Does your dealer deliver the car back with the appropriate repairs at the estimated cost and at the promised time? A car dealership must deal with the following items in order to complete this to our satisfaction. Can ISO 9000 and 9004.2 help in this process? In the first place, the dealer must determine the cause of your problem. This is accomplished by employing experienced and well-trained personnel at the service desk.
Recently, their training has been expanded from the expected technical upgrading to cover such customer-related items as crisis management, listening and other interpersonal communication skills, computer skills and time management techniques. By constantly improving and upgrading this training, the process of estimation is becoming more accurate. You may ask why this training for these staff members is so important? In service provision, the first contact and the first impression are what people remember. The very best service department can be subverted by unfriendly, misleading or incorrect information.
In ISO 9000, it states in section 18, Training, that the organization must identify its training needs and "provide for the training of all personnel performing activities affecting quality". It is also the responsibility of the organization to determine their staff's qualification based upon education, experience and/or training. Training records must be kept. It is clear that ISO 9000 views training as a strategic part of the overall business plan. ISO 9004.2, section 5.3, Personnel and material resources, gives guidance for a service provider under the following headings: motivation, training and development, communication and material resources. We will deal with each of these items in ISO 9004.2 in the next sections.
Motivation:
ISO 9004.2 recognizes that a most important resource are their individual staff members. Their individual behaviour may directly affect the quality of service provision. It recommends that management - when planning for staff appointments, training and scheduling consider the following:
- personnel selection based upon capability
- provision of a positive work environment, providing security and fostering excellence
- development of systems that promote creativity and individual involvement
- ensure that all personnel have defined, written tasks; training must include how the individual task and person fits into the overall system
- follow-up to ensure that staff understand their specific role in customer service
- encourage excellence by reward and recognition for service achievement
- review the system for effectiveness by internal auditing
- implement a system of career planning and staff development, with recorded skill updating in such areas as communication and technical skills
Training and Development:
Staff training improves awareness of changes in culture that are happening with the introduction of the ISO9000 system. This training should include the following:
- training in quality management, including cost of quality and internal auditing
- training of all personnel
- education regarding the organization's quality policy and concepts of customer satisfaction
- a quality-awareness program with periodic effective refreshers
- training in process control, metrics and corrective action, team relationships and communications
- procedures that record the staff training and its effectiveness based upon individual and team performance evaluation
Communication:
All service staff must possess adequate communication skills, be able to co-operate in natural work teams and be able to provide timely and smooth service delivery. There must be regular communication within the organization using the following techniques:
-management briefings
-information exchanges
-documented information and technology facilities
Material Resources:
The organization should provide the following, as appropriate;
-equipment for efficient service provision, including information systems
-quality assessment tools such as auditing and other metrics of service provision
-operational and technical information required for the service
It is clear from this section of ISO 9004.2 that training in the traditional sense goes much further to include the most important skills of interpersonal communications. We have been using an example of an automobile dealership; it could have as easily been a bank or a department store. If you think about how your encounters in these organizations have changed in the past few years, it is a positive improvement stemming from the introduction of quality planning. Continuous staff training is essential for success in this endeavour.
Standards and Metrics:
To return to the example of the auto dealer, the service provider has promised a price and a time for completion of the service. A work order has been issued and you, as the customer, have signed the approval to go ahead. This process is covered under ISO 9001, element 4.3 Contract review and section 5.5.2 in ISO 9004.2 Communication with customers . In this section, ISO 9004.2 discusses the importance of the quality of service perceived by the customer. Section 5.5.2 in ISO 9004.2 includes listening to customers (both external and internal) - particularly if there is a problem - and then resolving them. In particular, the document requires that the following be considered in the communication with the customer:
-description of the service and availability
-a cost for the service
-an explanation of how any problems will be resolved
-making a customer aware of their role in the service quality
-providing proper and effective communication - not condescending and yet not too technical
-comparing the service offered and the customer's real need
-other factors to be considered here are:
-proper documentation
-organizational capability (or sub-contractor, as required)
-any legal or regulatory requirements
In essence, ISO 9000 requires the organization to record a consistent method of taking the customer's requirement and translating that into a work order, parts list and work schedule that will result in the customer's needs being filled in an efficient manner. Again proper communication skills and potential conflict resolution are key elements in this process. In order to make the time and price meaningful, it is necessary that they be related to standards. How these standards are developed varies with the organization. Once ISO 9000 is adopted as the working quality standard, then ISO 9004.2 talks about these matters in section 6.2.4.1 and 6.4.2.2 Service delivery specification and procedures.
The requirements for defining what the service delivery specification should contain are summarized below:
-a clear description of the service delivery characteristics either that may or may not be observable by the customer but that may directly affect service
-performance: i.e. waiting time, safety, reliability, courtesy, etc.
-a standard of acceptability for each characteristic
-the required resources including any special equipment
-the number and skills of the staff required for the contract
-any sub-contracted work that is required
These specifications should be supported by work instructions for the individual work phases. Some typical work phases are:
-providing information regarding available services
-setting up the contract and getting approval
-setting the service delivery parameters
-billing and collecting the service charges
When the process is defined in this manner, the metrics or measurements can be easily determined. One of the standards with which the auto repair shop work are the specific costs that have been developed for each task: such as changing the oil or adjusting the transmission.
Another metric is the time that these tasks should take. If there are no records of times that have been charged to specific tasks, this time calculation can only be done by estimation from generally unsubstantiated experience. ISO 9000 takes management decisions such as this one from the realm of "guestimation" to that of management by statistics and standards. Constant "calibration" or comparison of these standards to the actual times taken results in the fine tuning of these standards. This, in turn, allows a more accurate estimate to the customer, improved profitability for the dealer and an elevated level of satisfaction for the employees. Clearly, a properly designed ISO 9000 program will allow easier data collection, tracking and analysis. Meaningful standards can be set and performances - of individual, teams, departments and the organization itself can be more easily measured. This standard setting, resetting and measurement against a standard is the backbone of a successful ISO 9000 program. The metrics can be presented statistically, if so desired.
Assessment of Service Quality:
A key quality control function is to assess or audit the quality system. This covered under sections 6.3.2 Supplier's assessment of service quality and 6.3.3 Customer's assessment of service quality. It should be noted that even though the service provider has an internal audit system and a set of internal measures in place, the "voice of the customer" must be heard as well. In fact, ISO 9004.2 indicates that the customer's assessment is the ultimate measure of service quality. We shall now discuss the ISO 9004.2 requirements in this area. The supplier's own assessment should contain the following:
-a system of measurement of the key process activities including a reaction plan to correct undesirable trends and any customer dissatisfaction
-self inspection of the service delivery as part of the process measurement
-a final assessment with the customer to provide a supplier perspective of the service delivered, at that point
The customer's assessment requires a careful set of measures - probably by survey. Both positive and negative feedback is required. The design and implementation of the survey must be user friendly and give a proper, unbiased set of answers. The results of these surveys must be analysed and compared to the organization's assessment. Differences here could mean inadequate specifications, processes or measures. This analysis should lead to appropriate corrective and preventive actions. In turn, this information goes to the Management Review Meeting for upper level discussion and change approval.
The analysis process itself must be unbiased. In order to ensure that the data is valid, there should be some questions that require answers based upon customer perception. In many cases, the dissatisfied customer will not return. This comment assumes that the consumer has a choice. If there is no choice, then an even more unsatisfactory relationship will evolve. This will lead to resentment on both sides, a reduction of service quality and a possible slowing down of the payment for the service.
Conclusion:
In this paper, I have indicated how important the development of measures and standards are for the implementation, maintenance and growth of a successful quality system. By the careful use of ISO 9004.2, a service provider can develop a quality system that is self policing and listens to and analyses the customer's comments. The specific ISO 9001 elements covered in this paper included: training, contract review, process control and system testing. They are expanded by the following topics from ISO 9004.2 respectively: motivation, communications, training and development, communication with customers, service delivery specifications, supplier's assessment of service quality and customer's assessment of service quality.
By using the guidance document, ISO 9004.2, a service provider can provide the framework of an effective quality system. By constantly monitoring the self developed standards, service delivery efficiency and customer satisfaction will both rise. This will result in a more cost-effective, happier workplace with an increasingly comfortable customer base. If this is what we want and expect from our service providers, should we not be delivering the same level of quality to our customers? ISO 9004.2 can help us achieve our goal of standard improvement.
John F. Young, P.Eng. 04/06/96
PERSONNEL TRAINING POLICY
-selection based on capability
-a positive work environment
-promotion of creativity and individual involvement
-based on written procedures
-follow-up to ensure understanding
-encourage excellence
-review for effectiveness
-implement career planning & staff development
-technical and communication skills
TRAINING PLAN ELEMENTS
-quality management - cost of quality
-all personnel
-quality policy & customer satisfaction
-process control, metrics, corrective action
-team relationships & communications
-records of training effectiveness
CUSTOMER COMMUNICATION
-description of service & availability
-cost of service
-problem resolution mechanism
-customer awareness of their role
-proper and effective communication
-comparison to customer's real need
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