Customers and Customer’s Expectations

Customers and Customer’s Expectations Learning Objectives of Topic To distinguish the difference between internal and external customers; between customers and stakeholders. To understand the concept of quality chains and its importance to achieving quality To discuss with examples the relationship between customer needs, preferences and satisfaction. To know how to apply the table of customer expectations to assess and decide on product feasibility. TOPIC 4

Customers and Customer’s Expectations Customers and Stakeholders No specific definition for customers, stakeholders and clients (interchangeable?) Understanding Customer & their influence fundamental to success of QM. TOPIC 4

Customers and Customer’s Expectations Some examples of “customer” definition “Recipient of a product provided by the supplier” and “the customer can be either internal or external to the organization” * internal refers tofunctionallevels of the org vs. individuals (AS/NZS ISO 8402:1994,p2) – GENERIC definition “ The term (customer) applies in both the internal and external sense and means the recipient of an item or service” (Stebbing 1990: 172) – GENERIC definition “Any person or enterprise who has valid expectations about the final outcomes of a building or construction project such as the building owner, building manager,tenants,.” (CIDA 1993:172) CONSTRUCTION definition TOPIC 4

Customers and Customer’s Expectations Some examples of “customer” contd… 4. “The customer may be: (project management definition) -the sponsor, or owner of the facility -the operators of the facility, or users of the services it provides -the consumers of the eventual product it produces -the media, or local community, or politicians” (Turner : 151) Other views: Customer as ultimate consumer, user beneficiary or purchases links the ISO definition to the previous 3 and this wider view of customers is similar to the concept of stakeholders TOPIC 4

Customers and Customer’s Expectations Stakeholders Definition “An individual or group of individuals with a common interest in the performance of the supplier organization and the environment in which it operates” (ISO 10006:1997,p2 guidelines) Stakeholders may include: Customers, recipients of the project product Consumer, such as a user of project product Owner, org originating the project Partner, as in JV Funder, such as financial institution Sub-contractor Society Inter-personal, members of project org TOPIC 4

Customers and Customer’s Expectations ABC Construction (Pte) Ltd Corporate Quality Policy is : 'To provide Professional Building Construction and Civil Engineering Services and to deliver quality constructed products/projects to our clients on time, within budget and to the required standards'. This includes providing quality services and products to our clients which conform to all specified requirements, the existing relevant statutory requirements and building regulations. To achieve our Corporate Quality Policy, ABC Construction Pte Ltd has developed and documented formal Quality and Procedures Manuals to facilitate an effective implementation of a Quality Management System which comply with ISO 9002 standard. TOPIC 4

Customers and Customer’s Expectations ABC Construction (Pte) Ltd Corporate Quality Policy is : contd… The effective operation of our Quality Management System is the responsibility of all management staff and employees. The assurance of quality is fundamental to all the work carried out by the Company. Every staff shall be made to understand the company's commitment to quality as well as the requirements of the Quality Management System through appropriate training. TOPIC 4

Customers and Customer’s Expectations Stakeholders Definition Other definitions (Ireland 1992:II-1): Apparent customers : stakeholders with economic interests Invisible customers: meeting own vested interests? TOPIC 4

Customers and Customer’s Expectations Suppliers Definition What can you discuss about the relationship between suppliers and customers in your organization? “Organization that provides a product to the customer” NZS ISO 8402:1994 (p2) Supplier as producer, distributor, importer,assembler or service organization. Note the standard also refer to the supplier can be internal or external to the organization that is referring to functional areas rather than individual employees TOPIC 4

Customers and Customer’s Expectations Quality Chains Core of total quality c/o concept of internal and external supplier (Oakland & Sohal:1996, p7) Differences in ISO definition: AS/NZS 3906:1994 states that external customers are those for whom the org designs and provides a service, internal customers are org own employee’s who participate in the design and delivery of service. AS/NZS 8402:1994 considers internal customers as functional levels or sections in the org rather than individuals. TOPIC 4

Customers and Customer’s Expectations Quality Chains Both Oakland & Sohal (1996:7) Scholtes (1998: 2-6) advocates that Quality must be managed, everyone is involved in the processes as applied throughout the organization. Scholtes (1998: 2-6) advocates “the quality of what comes out of a process is determined by the quality of what goes in and what happens at every step along the way” Ensuring quality output of each worker to meet needs and expectations of next person is crucial (Built-in Process quality) Simply saying: Rubbish in, Rubbish out TOPIC 4

Customers and Customer’s Expectations Quality Chains Each link /output must meet the need and expectations of the next person in the process What are Quality chains? The relationship of suppliers and customers forms a continuous chain and includes external suppliers to the org and internal arrangements amongst the parties involved in the processes Quality chains avoid incorrectly assembled components and poor workmanship (Ireland 1991:I-5) “Each worker…is a customer of preceding workers and each has customers…” concept of satisfying several customers. (Scholtes: 1988) TOPIC 4

Outside Organization C customer S Customers and Customer’s Expectations C supplier C S S C Quality Chains S TOPIC 4

Customers and Customer’s Expectations Quality Chains AS/NZS 3906; 1994 ‘ as suppliers, all employees need to identifying their internal and external customers, their specific needs and suitable measures of satisfaction.” Why? – most employees no direct contact with external customers. Reviews are conducted “ ensure requirements of ext. customer are understood at each step in the service design and delivery process. Factual evidence or feedback on customer satisfaction is essential. TOPIC 4

Customers and Customer’s Expectations Quality Chains Need for factual/feedback as shown in results of 1985 USA study Average business will not hear from 96% of unhappy customers- will not realize that customers have changes to another suppliers For every complaint- avg company has 26 customers with problems and 6 with serious problems. Of Customers who register a compliant, bet 56% and 70% will continue business with the organization if their complaint is resolved ( 95% if resolved promptly) TOPIC 4

Customers and Customer’s Expectations Customer Expectations: Customer satisfaction linked to meeting customer expectations. AS/NZS 3906:1994 (p5) ‘ the quality of a service can be defined as the totality of the features and characteristics that bear on its ability to satisfy customer needs” CIDA (1993:1972), customers expectations is “ a combination of customer needs and preferences for opportunities to be realised, problems to be solved and good feelings to be created. TOPIC 4

Customers and Customer’s Expectations PMI (1996;84) defines customer ssatisfaction on projects as “understand, managing and influencing needs so that cusstomer expectations are met or exceeded” Kubal (1994:65) believes “ complete satisfaction has never been a goal in the construction industry for designers, construction managers, subcontractors and material suppliers…the true method of assuring customer satisfaction probably will never be a reality inn the industry- bu9ildinds that can be “refused or retuned” if not satisfactory. TOPIC 4

Customers and Customer’s Expectations Customers may not have thought thoughly, or consciously, about the expectations they have of a product or service ( including construction) In As/NZS 3906 :1994 (p5-6) customers expectations “are rarely well defined and may well evolve as the transaction progressess. Standard identifies 16 points (a to p) that customers may include in forming their expectations, some evolve as needs and some evolve as preferences. TOPIC 4

Customers and Customer’s Expectations Standard 16 points Table 1- Customer Expectations(AS/NSZ 3906:1994, p5-6) TOPIC 4

Customers and Customer’s Expectations Table 1-Customer Expectations TOPIC 4

Customers and Customer’s Expectations Table 2 - Garvin’s dimensions related to construction(McGeorge & Palmer 1997:161-162; Garvin 1987) TOPIC 4

Customers and Customer’s Expectations Garvin’s dimensions related to construction(McGeorge & Palmer 1997:161-162; Garvin 1987) TOPIC 4

Customers and Customer’s Expectations Customer needs and Preferences CIDA(1993:172) defines needs as “those essential requirement of customers which must be satisfied by the goods and service response” defines preferences as “those non-essential requirements which customers desire to e satisfied…” Satisfaction vs. Preferences Product/services must satisfy customer needs ahead of preferences Unmet needs are more important than unmet preferences in terms of causing negative reaction Satisfying customer preferences may lead to more competitive market advantage and delight customer TOPIC 4

Customer Satisfaction/Delight Model (Ehresman 1995) Customer comments Customer emotions I never knew I needed it How did I ever do without it Delight Excites Customers and Customer’s Expectations I would like to have it Satisfaction Desires I must have it Basic Expectations Biase Model advocates that customer are likely to be satisfied if both their needs and desires are met. However, in order to delight customer features like innovation, excitement (intangible value propositions vs. tangible preferences) are to be offered. TOPIC 4

Customers and Customer’s Expectations SELF ASSESSMENT QUESTIONS Explain the difference between internal and external customers. Determine the difference between the terms “customers” and “stakeholders” and construct and defend your own definition for each. Summarize the concept of quality chains and explain its importance to the concept of achieving quality. Discuss the relationship between customer preferences and customer satisfaction. Select a product and use the table of customer expectations to review the product features features and decide on its ability to satisfy your needs and preferences. TOPIC 4

Customers and Customer’s Expectations