Quiz 5: The Voice of the Customer

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?

One of the problems encountered by universities is developing reliable and valid course evaluation survey instruments. Choose a class you took last semester. For that class, identify two dimensions relative to course delivery. Now, develop five valid survey items for each of your two dimensions. Defend why you think these items are valid.

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?

For the class you chose in Problem 1, develop five valid critical-incident survey items for each dimension. Defend why you believe your items are valid.

How can a supplier avoid settling into a reactive customer-driven quality (RCDQ) mode?

A manager for the Golden Bear publishing company found out that you are taking quality management. The manager desires to improve her supply chain performance by employing you as a consultant to provide quality improvement training to the supply chain employees. As a result, you now have to create a survey instrument to gauge the effectiveness of your training sessions. Choose four dimensions relative to your quality management training and develop five valid survey items for each dimension. Defend why you feel your survey items are valid.

What industries pose the greatest challenge for suppliers in terms of anticipating customer needs and requirements? What are the distinctive characteristics of these industries?

For your performance dimensions in Problem, develop five critical-incident survey items for each dimension. Explain how you would demonstrate that these items are reliable. Problem A manager for the Golden Bear publishing company found out that you are taking quality management. The manager desires to improve her supply chain performance by employing you as a consultant to provide quality improvement training to the supply chain employees. As a result, you now have to create a survey instrument to gauge the effectiveness of your training sessions. Choose four dimensions relative to your quality management training and develop five valid survey items for each dimension. Defend why you feel your survey items are valid.

When was the last time you purchased a product and were asked to provide the seller or manufacturer of the merchandise information about yourself, such as your name, address, and telephone number? Did the request for information seem intrusive to you? Did you have any idea why you were being asked for the additional information?

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?

Can you think of an example of an experience 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?

Describe the basic concept behind strategic alliances. In what ways can strategic alliances facilitate a firm's quest for quality?

Describe some great service experiences and some horror stories you have experienced. What were the variables that in your mind differentiated between the great and the horrible companies?

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?

Describe the basic idea behind a focus group. Are focus groups an effective way of gathering data about customer preferences and tastes?

Should focus group settings be formal and highly structured? Explain the rationale for your answer.

How can firms gain an overall understanding of the market segments they serve? Make your answer as substantive as possible.

Why is it important that the facilitator of a focus group not bias the discussion in any manner? How could the results of a focus group analysis be tainted if the facilitator biased the discussion?

Describe a situation in which the use of an Internet customer response might be appropriate.

Describe the difference between actively solicited customer feedback and passively solicited customer feedback. Which type of feedback results in a lower rating of quality? Explain why.

Describe the difference between hard data and soft data. What are the unique advantages of each type of data in terms of obtaining information about customer perceptions?

Are customer surveys better suited for accessing customer perceptions in services or manufacturing? Explain your answer.

Explain the concepts of reliability and validity. Why is it important that survey instruments be both reliable and valid?

Why is it important to have open-ended questions in survey instruments?

Customer Quality Feedback at Apple Computer Apple Computer Homepage: www.apple.com In the fast-paced personal computer industry, it would be very tempting for a computer company to rush a new product to market without taking the time to solicit customer input and feedback during the product development cycle. To avoid this temptation and to highlight its commitment to customer satisfaction, Apple Computer has developed a program called Customer Quality Feedback (CQF). CQF is a hands-on program providing Apple engineers with the ability to communicate with potential end users during the entire development cycle of an Apple product. The program integrates many of the features of a focus group but is sustained on an ongoing basis. It is also a very substantive and useful tool for Apple because it keeps the company attuned to the needs, preferences, and desires of its end users. For people interested in participating in the program, Apple has posted an application form on its Web site. The application form is fairly comprehensive and outlines the terms and conditions of participation. Although the program is open to anyone, it is clear that Apple wants well-informed participants who will stick with the program. Participants are selected based on their interest, ability to provide timely information, commitment to working with Apple personnel, and the suitability of their computing environment as it relates to Apple's current needs. Once selected, the participants become an integral part of the development process for the products they are evaluating. They are provided early prototypes of Apple products and are asked to provide feedback pertaining to the product's features, interaction with employees, ease of use, performance, compatibility with third-party software, and other topics. The participants are also asked to provide suggestions as the product development cycle matures. The information provided by the participants is fed directly to the Apple engineers who are developing and testing the products. The overriding objective of the program is to incorporate customer input into the development of Apple products before they are shipped, rather than waiting for customers to react to the company's products after they are made available for sale. Prior to a product launch, the CQF participants involved with the product are asked to write testimonials about their input into the product's final design. These testimonials are used by Apple to demonstrate to other potential end users how Apple incorporates user feedback into the design and development of its products. Apple's CQF program is a good example of a proactive approach to satisfying customer needs. It is also evidence of the company's willingness to "listen to the voice of the customer" in its product development and design. These are important steps in the development of a customer-driven approach to quality. Explain how Apple's Customer Quality Feedback program helps the firm hear the voice of the customer.

Customer Quality Feedback at Apple Computer Apple Computer Homepage: www.apple.com In the fast-paced personal computer industry, it would be very tempting for a computer company to rush a new product to market without taking the time to solicit customer input and feedback during the product development cycle. To avoid this temptation and to highlight its commitment to customer satisfaction, Apple Computer has developed a program called Customer Quality Feedback (CQF). CQF is a hands-on program providing Apple engineers with the ability to communicate with potential end users during the entire development cycle of an Apple product. The program integrates many of the features of a focus group but is sustained on an ongoing basis. It is also a very substantive and useful tool for Apple because it keeps the company attuned to the needs, preferences, and desires of its end users. For people interested in participating in the program, Apple has posted an application form on its Web site. The application form is fairly comprehensive and outlines the terms and conditions of participation. Although the program is open to anyone, it is clear that Apple wants well-informed participants who will stick with the program. Participants are selected based on their interest, ability to provide timely information, commitment to working with Apple personnel, and the suitability of their computing environment as it relates to Apple's current needs. Once selected, the participants become an integral part of the development process for the products they are evaluating. They are provided early prototypes of Apple products and are asked to provide feedback pertaining to the product's features, interaction with employees, ease of use, performance, compatibility with third-party software, and other topics. The participants are also asked to provide suggestions as the product development cycle matures. The information provided by the participants is fed directly to the Apple engineers who are developing and testing the products. The overriding objective of the program is to incorporate customer input into the development of Apple products before they are shipped, rather than waiting for customers to react to the company's products after they are made available for sale. Prior to a product launch, the CQF participants involved with the product are asked to write testimonials about their input into the product's final design. These testimonials are used by Apple to demonstrate to other potential end users how Apple incorporates user feedback into the design and development of its products. Apple's CQF program is a good example of a proactive approach to satisfying customer needs. It is also evidence of the company's willingness to "listen to the voice of the customer" in its product development and design. These are important steps in the development of a customer-driven approach to quality. In your opinion, what are the most important aspects of Apple's program? Would you make any changes or modifications?

Customer Quality Feedback at Apple Computer Apple Computer Homepage: www.apple.com In the fast-paced personal computer industry, it would be very tempting for a computer company to rush a new product to market without taking the time to solicit customer input and feedback during the product development cycle. To avoid this temptation and to highlight its commitment to customer satisfaction, Apple Computer has developed a program called Customer Quality Feedback (CQF). CQF is a hands-on program providing Apple engineers with the ability to communicate with potential end users during the entire development cycle of an Apple product. The program integrates many of the features of a focus group but is sustained on an ongoing basis. It is also a very substantive and useful tool for Apple because it keeps the company attuned to the needs, preferences, and desires of its end users. For people interested in participating in the program, Apple has posted an application form on its Web site. The application form is fairly comprehensive and outlines the terms and conditions of participation. Although the program is open to anyone, it is clear that Apple wants well-informed participants who will stick with the program. Participants are selected based on their interest, ability to provide timely information, commitment to working with Apple personnel, and the suitability of their computing environment as it relates to Apple's current needs. Once selected, the participants become an integral part of the development process for the products they are evaluating. They are provided early prototypes of Apple products and are asked to provide feedback pertaining to the product's features, interaction with employees, ease of use, performance, compatibility with third-party software, and other topics. The participants are also asked to provide suggestions as the product development cycle matures. The information provided by the participants is fed directly to the Apple engineers who are developing and testing the products. The overriding objective of the program is to incorporate customer input into the development of Apple products before they are shipped, rather than waiting for customers to react to the company's products after they are made available for sale. Prior to a product launch, the CQF participants involved with the product are asked to write testimonials about their input into the product's final design. These testimonials are used by Apple to demonstrate to other potential end users how Apple incorporates user feedback into the design and development of its products. Apple's CQF program is a good example of a proactive approach to satisfying customer needs. It is also evidence of the company's willingness to "listen to the voice of the customer" in its product development and design. These are important steps in the development of a customer-driven approach to quality. If you were an Apple user, would you enjoy participating in the Customer Quality Feedback program? Why or why not?

Gerdau Long Steel North America: Achieving High Quality through a Commitment to Both External and Internal Customers Gerdau Long Steel, North America is the parent company of steel minimills producing a variety of steel products by recycling scrap steel. The company sells to a diverse group of industries, including construction, railroad, defense, mobile homes, and appliances. Gerdau has received a great deal of attention in the media and among business leaders because it has been relatively successful in an industry beset by a multitude of problems. Much of the company's success can be attributed to a focus on customer service and product quality through a commitment to both its external customers and internal customers. To ensure that external customers are satisfied, Gerdau routinely conducts customer surveys, sends employees on site visits, and listens carefully to customer comments and suggestions. In addition, the company practices a number of quality-minded manufacturing techniques to reduce defect rates and prevent problems from occurring. Gerdau is very efficient, and new ideas and manufacturing techniques are transferred very quickly to the factory floor. As a result, the company remains on the leading edge of steel manufacturing technology and can adapt as customer requirements change. The company continues to improve its products and operations by benchmarking against world-class producers and giving employees paid sabbaticals, during which they learn about new work practices and technologies from academic institutions and industry leaders. Although these efforts are commendable, the company's commitment to its internal customers is equally important. At any one time, approximately 85% of Gerdau's employees are enrolled in some type of class, ranging from electronics to Spanish. If the training is off-site, the company reimburses employees for their tuition costs. In the plant, the majority of the employees are cross-trained, which enhances their individual job skills. The company benefits through consistency in operations because one employee can step in and perform the job of another employee if the need arises. In many instances, Gerdau's commitment to its employees directly contributes to its employees' ability to contribute to company objectives of customer service and product quality. All of Gerdau's employees, from the CEO to the maintenance crew, have business cards they can give to customers to promote interaction. Frontline employees are periodically sent on customer site visits to answer questions, observe the customer's manufacturing process, or simply see how Gerdau products perform. Every employee is salaried, and merit increases are tied to a variety of factors, including individual performance, versatility of skills, and training credits earned through the company's continuing education program. All these practices serve the dual purpose of increasing quality while at the same time enriching the jobs of the employees. Through its commitment to its internal customers, Gerdau has obtained some remarkable results. For example, a group of Gerdau employees recently developed a proprietary system for manufacturing wide-flange steel beams resulting in a substantial cost savings for the company. Gerdau credits its training program, along with individual effort on the part of its employees, for this accomplishment. Overall, Gerdau's commitment to both its internal and external customers has produced impressive results, particularly as they relate to firm productivity and product quality. The company's daily absentee rate is less than 1%, and the average yearly turnover rate is only 5%. These rates are far lower than industry averages. These low rates provide for operations continuity. Partially as a result of this continuity, Gerdau produces steel at a lower cost per ton than its rivals. At Gerdau, it takes 1.4 hours to produce a ton of steel, ascompared with an average of 2.4 hours per ton at other steel minimills. Gerdau was awarded the Japanese Industrial Standard Certification on its general structuralsteel products, becoming the only steel company outside Japan given that recognition. Similarly, Gerdau is the only steel company of its type to be certified by the American Institute of Mining, Metallurgical, and Petroleum Engineers to manufacture its products for nuclear applications. For a company like Gerdau Steel, why is a commitment to both its internal and external customers necessary?

Gerdau Long Steel North America: Achieving High Quality through a Commitment to Both External and Internal Customers Gerdau Long Steel, North America is the parent company of steel minimills producing a variety of steel products by recycling scrap steel. The company sells to a diverse group of industries, including construction, railroad, defense, mobile homes, and appliances. Gerdau has received a great deal of attention in the media and among business leaders because it has been relatively successful in an industry beset by a multitude of problems. Much of the company's success can be attributed to a focus on customer service and product quality through a commitment to both its external customers and internal customers. To ensure that external customers are satisfied, Gerdau routinely conducts customer surveys, sends employees on site visits, and listens carefully to customer comments and suggestions. In addition, the company practices a number of quality-minded manufacturing techniques to reduce defect rates and prevent problems from occurring. Gerdau is very efficient, and new ideas and manufacturing techniques are transferred very quickly to the factory floor. As a result, the company remains on the leading edge of steel manufacturing technology and can adapt as customer requirements change. The company continues to improve its products and operations by benchmarking against world-class producers and giving employees paid sabbaticals, during which they learn about new work practices and technologies from academic institutions and industry leaders. Although these efforts are commendable, the company's commitment to its internal customers is equally important. At any one time, approximately 85% of Gerdau's employees are enrolled in some type of class, ranging from electronics to Spanish. If the training is off-site, the company reimburses employees for their tuition costs. In the plant, the majority of the employees are cross-trained, which enhances their individual job skills. The company benefits through consistency in operations because one employee can step in and perform the job of another employee if the need arises. In many instances, Gerdau's commitment to its employees directly contributes to its employees' ability to contribute to company objectives of customer service and product quality. All of Gerdau's employees, from the CEO to the maintenance crew, have business cards they can give to customers to promote interaction. Frontline employees are periodically sent on customer site visits to answer questions, observe the customer's manufacturing process, or simply see how Gerdau products perform. Every employee is salaried, and merit increases are tied to a variety of factors, including individual performance, versatility of skills, and training credits earned through the company's continuing education program. All these practices serve the dual purpose of increasing quality while at the same time enriching the jobs of the employees. Through its commitment to its internal customers, Gerdau has obtained some remarkable results. For example, a group of Gerdau employees recently developed a proprietary system for manufacturing wide-flange steel beams resulting in a substantial cost savings for the company. Gerdau credits its training program, along with individual effort on the part of its employees, for this accomplishment. Overall, Gerdau's commitment to both its internal and external customers has produced impressive results, particularly as they relate to firm productivity and product quality. The company's daily absentee rate is less than 1%, and the average yearly turnover rate is only 5%. These rates are far lower than industry averages. These low rates provide for operations continuity. Partially as a result of this continuity, Gerdau produces steel at a lower cost per ton than its rivals. At Gerdau, it takes 1.4 hours to produce a ton of steel, ascompared with an average of 2.4 hours per ton at other steel minimills. Gerdau was awarded the Japanese Industrial Standard Certification on its general structuralsteel products, becoming the only steel company outside Japan given that recognition. Similarly, Gerdau is the only steel company of its type to be certified by the American Institute of Mining, Metallurgical, and Petroleum Engineers to manufacture its products for nuclear applications. As mentioned in the case, Gerdau periodically sends frontline employees on trips to visit the manufacturing sites of the company's customers. In your opinion, is this a justifiable expense? Why or why not?

Gerdau Long Steel North America: Achieving High Quality through a Commitment to Both External and Internal Customers Gerdau Long Steel, North America is the parent company of steel minimills producing a variety of steel products by recycling scrap steel. The company sells to a diverse group of industries, including construction, railroad, defense, mobile homes, and appliances. Gerdau has received a great deal of attention in the media and among business leaders because it has been relatively successful in an industry beset by a multitude of problems. Much of the company's success can be attributed to a focus on customer service and product quality through a commitment to both its external customers and internal customers. To ensure that external customers are satisfied, Gerdau routinely conducts customer surveys, sends employees on site visits, and listens carefully to customer comments and suggestions. In addition, the company practices a number of quality-minded manufacturing techniques to reduce defect rates and prevent problems from occurring. Gerdau is very efficient, and new ideas and manufacturing techniques are transferred very quickly to the factory floor. As a result, the company remains on the leading edge of steel manufacturing technology and can adapt as customer requirements change. The company continues to improve its products and operations by benchmarking against world-class producers and giving employees paid sabbaticals, during which they learn about new work practices and technologies from academic institutions and industry leaders. Although these efforts are commendable, the company's commitment to its internal customers is equally important. At any one time, approximately 85% of Gerdau's employees are enrolled in some type of class, ranging from electronics to Spanish. If the training is off-site, the company reimburses employees for their tuition costs. In the plant, the majority of the employees are cross-trained, which enhances their individual job skills. The company benefits through consistency in operations because one employee can step in and perform the job of another employee if the need arises. In many instances, Gerdau's commitment to its employees directly contributes to its employees' ability to contribute to company objectives of customer service and product quality. All of Gerdau's employees, from the CEO to the maintenance crew, have business cards they can give to customers to promote interaction. Frontline employees are periodically sent on customer site visits to answer questions, observe the customer's manufacturing process, or simply see how Gerdau products perform. Every employee is salaried, and merit increases are tied to a variety of factors, including individual performance, versatility of skills, and training credits earned through the company's continuing education program. All these practices serve the dual purpose of increasing quality while at the same time enriching the jobs of the employees. Through its commitment to its internal customers, Gerdau has obtained some remarkable results. For example, a group of Gerdau employees recently developed a proprietary system for manufacturing wide-flange steel beams resulting in a substantial cost savings for the company. Gerdau credits its training program, along with individual effort on the part of its employees, for this accomplishment. Overall, Gerdau's commitment to both its internal and external customers has produced impressive results, particularly as they relate to firm productivity and product quality. The company's daily absentee rate is less than 1%, and the average yearly turnover rate is only 5%. These rates are far lower than industry averages. These low rates provide for operations continuity. Partially as a result of this continuity, Gerdau produces steel at a lower cost per ton than its rivals. At Gerdau, it takes 1.4 hours to produce a ton of steel, ascompared with an average of 2.4 hours per ton at other steel minimills. Gerdau was awarded the Japanese Industrial Standard Certification on its general structuralsteel products, becoming the only steel company outside Japan given that recognition. Similarly, Gerdau is the only steel company of its type to be certified by the American Institute of Mining, Metallurgical, and Petroleum Engineers to manufacture its products for nuclear applications. Compare Gerdau's employee commitment to your current employer or a recent employer.