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Since each consumer has a unique taste, background, and beliefs, the value of a good or service will have a different meaning to various consumers. Only the party that receives the good or service can appraise the true value of the good or service.
Maxx-Air Vent Corporation (MA) is a plastic vent manufacturer located in Tampa Florida. MA’s largest customer base is found in the recreational vehicles (RV) industry. MA manufacturers the air vents found atop of most RVs throughout the nation. MA is held to the highest quality standards by their RV customer base. The vents must meet critical visual and dimensional criteria in order to be accepted by RV. Domestic competition continually enforces the quality expected for the prices paid by RV. MA explored foreign manufacturers and suppliers but the quality would not meet RV’s expectations. MA experimented with foreign manufacturing in a cost cutting measure to manufacture foreign and add a mark up. The vents were sent back to MA and full refunds were expected because the products did not meet RV’s expectations. MA was forced to eat millions of dollars in bad product or else lose RV as a customer. MA moved all manufacturing operations back to Tampa and instituted a new quality standard. The new quality standard was devised by an outside firm and was expensive to introduce, however, MA was able to repair their relationship with RV and procure future sales opportunities because of their newly found quality standards. MA was able to repair poor quality and customer satisfaction issues with an enhanced and directed quality policy. MA took the necessary actions to meet RV’s customer satisfaction needs.
The definition of quality varies based upon the industry defining the quality. In manufacturing quality is the foundation upon which customers are kept and acquired. Quality in a manufacturing setting can be measure and monitored because the quality is physical. The quality of the product separates competing organizations in the industry. Manufacturing is different from the service industry because both provide a product/service. Customers pay for the product/service and expect quality. Non-profit organizations typically provide the best quality possible with funds and resources available. Manufacturing and non-profit quality standards are different because of the expectations. Government function is not concerned with quality because the expectation does not demand quality.
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In a manufacturing setting quality is everything to the sale of a product. MA is driven by the quality of their product and their quality standard. MA is a prime example of customer driven quality because MA changed the entire quality function and process to keep RVs business. If RV was not such an important customer the new quality standard might have been as important. MA’s quality actions were customer driven because without the action the customer relationship and satisfaction would not exist.
Advanced Benefits Consulting (ABC) is a service company that provides third party administration for retirement plans. The company’s main focus is to help other companies perform the legal testing and tax forms required for their retirement plans. ABC also provides counseling for their clients on proper implementation and run their plans. Unfortunately, this sometimes requires ABC to correct a client’s processes to make sure they are acting in compliance with the law. In this case, the cliché that the client is always right does not apply. Customers are not always happy to be told how to run their business. For this reason ABC must focus on education and customer service to prevent problems from occurring, which may save hard feelings later.
ABC employees must strive to build strong trust relationships with their clients so if a correction must be made, it can be handled professionally and without client resistance. In order to accomplish this, ABC employees must participate in continuing education about new and changing laws, as well as new interpretations of old laws. Education and communication together are the most important tools ABC has to provide quality service to clients. A quality mistake on information-only tax forms can be easily corrected, but a mistake in discrimination testing could cause a funding shortage that is not easily rectified. Government imposed deadlines require plan funding to be fair, accurate, and contributed by a specific deadline. A mistake by ABC could cause fines and penalties for a client.
Management participates in quality at ABC several ways. Before any year-end reports are mailed to clients, the manager reviews them for accuracy and consulting opportunities. If the client’s employee demographics have changed, it may make sense to change the plan design for the following year. In this case, managers may consult directly with a business owner to inform them about these opportunities. Although ABC employees have personal relationships with their own clients, management must also know the clientele and help respond to non-standard issues, difficult client situations and questions. Managers must be just as knowledgeable about the laws as each employee.
Every non-profit organization has a cause that his or her members and volunteers believe in. Those who volunteer, and manage non-profit organizations have a self-appointed commitment to see that their organizational goals are met with the most efficient methods possible. For many, the volunteer work is a labor of love, or commitment to a greater cause than making a profit. An example is those who help with the American Red Cross. They have desire to help others in times of disasters. Those who help at rescue humane shelters for animals do so for the love of animals. The quality or value of goods or services from a non-profit organization is measured differently from those received from a commercial enterprise. The pancakes from the local Veterans of Foreign Wars fund raising breakfast may not match the quality of pancakes from the International House of Pancakes. The customer driven quality is not in the taste of the pancakes, but the simple joy of supporting a local cause. The quality is not in the physical goods received, but the idea behind the reason for work done by the non-profit organization. Satisfaction lies in thinking that the purchases made from a non-profit organization are benefiting others in a special way.
One well-known non-profit organization is the Knights of Columbus, which was formed to render financial aid to members and their families. Mutual aid and assistance is offered to the sick, disabled, needy members, and their families. Social and intellectual fellowship is promoted among members and their families through educational, charitable, religious, social welfare, war relief and public relief works. The local Chesterfield Knights are known for fish fries and tootsie roll drives to raise money for helping the mentally handicapped.
One special project that the Chesterfield Knights support is a dance for young adults (18 to 25 years old), who have mental disabilities and would not be comfortable to go out to public social events. These dance events add a special social quality of life to young people who may not have a chance to enjoy these types of events without the help of the Knights. The Knights serve food, handout prizes, and assist the young people in their dance moves. Young dancers and the volunteers who host the events experience value. Both customer and provider receive value as the young dancers have an opportunity to enjoy an experience they normally would not get to have, and the Knights receive the satisfaction of helping others.
This type of value is almost impossible to measure, as money cannot buy the quality of happiness received. The customer-driven quality is the special care and effort given by volunteers try and make the dance as enjoyable as possible for mentally handicapped dancers. Traditional quality rating measures like, on time performance, value of goods compared to cost, warranty, and workmanship do not apply to non-profit organizations in the same way as business. Enjoyable experiences and self-satisfaction become the measuring devices for rating quality.
The License Bureau of the Missouri Department of Revenue (more commonly known as the DMV) is a government organization, which is responsible for collecting the fees associated with purchasing, titling, licensing, and operating motor vehicles in the state. They are responsible for collecting sales tax, title fees, and licensing fees on motor vehicles. In addition, they have the responsibility of testing and licensing new motor vehicle operators and renewing current operator licenses. Unlike manufacturing, service, and non-profit organizations, the DMV, like many government organizations, has little or no free-enterprise competition. In other words, people do not have alternatives as to how and where they renew their license plates or driver licenses. The lack of competition leads to the problem we now face, an organization management system with little concern for customer satisfaction.
While every aspect of society seems to be implementing digital advances and technology to make our lives easier, that does not appear to be a concern at the DMV. The DMV appears to be using an outdated paper-based system for most processes. Another growing trend in customer-driven quality is ease of use and timely responsiveness to customer concerns and problems. The management system within the DMV has a remarkably low value of quality in relationship to customer satisfaction. While most businesses are implementing longer hours, expanded services and 24/7 websites to meet customer needs, the DMV seems more concerned with organizational priorities rather than customer-driven changes. For most processes, no website or 24 hour telephone transactions are possible, and all operations are conducted only at local offices, Monday through Friday, during normal business hours with limited hours on Saturday mornings. A new license plate renewal system (MORE) to make the system both electronic and more convenient is touted on their website; however, the system is full of restrictions for use and additional fees. The little marketed and little known system has many drawbacks. The system is only available in certain counties of the state, and while some people will meet the qualifications to use the system, they still have to wait 10 more days to receive their stickers through the mail (Missouri Department of Revenue website, 2008). Beginning in 2009, Missouri will be issuing a new license plate, which will require all customers to once again show up at offices in person to pickup their new plates, relegating the new system useless.
While there at least appears to be some current effort being made to address customer concerns within the organization, the DMV has had a long history of poor customer-driven management. As a result, they face an enormous task in changing the entire organizational focus to better meet customer’ needs.
Missouri Department of Revenue website (2008). Retrieved February 8, 2008 from http://dor.mo.gov/mvdl/motorv/