Quality Function Deployment

1. Quality Function Deployment
QFD Implementation in Service Industry
Development of a service package in an
airline company, Alitalia

2. What is quality?
“Quality” is the price of entry and in others a major source of competitive
advantage
The attainment of high quality is dependent on the ability to:
• Identify accurately the attributes required by customers
• Assure that identified requirements appear in the service package
Service quality is a measure of how well the total service package meets the
customers expectations

3. What is a service package? (1)
In service organizations quality is majorly assured by Service Packages which
are introduced to meet the customers’ expectations
Service Package encompasses ‘Service Offering’ and ‘Service Delivery Process’
It is important to identify and understand the salient features of the service
package.These are:

4. What is a service package? (2)
• Intangibility: Standards are often judgemental and based on personal
experience, preferences, and moods
• Heterogeneity: Many services are labour intensive and customers come into
direct or indirect contact with the service organization’s personnel
• Inseperability: Service package is perishable and cannot be transferred from
place to place or from one time to another.Therefore, service organizations
often need to locate close to their customer base

5. What is QFD? (1)
A systematic technique for designing products or services that are based on
customers’ requirements.
Helps transform customer needs into engineering characteristics (and
appropriate test methods) for a product or service, prioritizing each product or
service characteristic while simultaneously setting development targets for
product or service

6. QFD appears to provide a means to resolve two of the key problems:
• Gaining a better understanding of customers’ requirements &
• Translating these requirements into appropriate technical specifications for
the “delivery of service” and the “service offering”
What is QFD? (2)

7. To apply the QFD technique successfully the service organization should:
• Be market driven
• Customer oriented
• Rely on teamwork
• Eliminate bureaucracy
• Develop a cultere aimed at delighting the customer
• Internalize the QFD technique
What is QFD? (3)

8. The use of QFD by Alitalia
It is important to identify what customers want and expect from the service
package.
To this end, 47 identified requirements were systematically represented on a
“needs tree”, classified into three groups:
• quality of flight attendants
• quality of in-flight products offered
• quality of cabin environment
Step 1: Identification of Customers’ Requirements

9. 3.000 customers were asked to rate the importance of the service features
identified and to compareAlitalia’s performance with that of their “ideal
airline”
QualityTarget Levels for each requirement have been determined with the
help of the “Customer RatingsTable”
Step 2: Obtaining Customer Importance Ratings

10. Customer RatingsTable
Absolute weight of “fresh ingredients” = columnA * column D * column E
“Fresh ingredients” = 4.49 * 1.24 * 1.5 = 8.33

11. Quality elements significantly influence the acceptability of the service
package and its perceived quality
A cross-functional team examined each requirement in turn, and identified no
less than 87 quality elements
Step 3: Identification of Quality Elements

12. Identified quality elements addressing the customers’ requirements?This can
systematically be attained using a correlation matrix
47 customers’ requirements on the vertical axis and the 87 quality elements on
the horizontal axis was constructed
The strengths of the correlations between “requirements” and “quality
elements” determined which is represented by a numerical system:
①: Weak Correlation ③: Average Correlation ⑨: Strong Correlation
Step 4: Construction of a Correlation Matrix

13. Aim of this phase was to identify the features of the service package that
could be realistically improved, given a set of constraints
The constraints considered fell under three broad categories:
• Technical
• Cost
• Reliability
A “Quality elements significance/difficulty” table was developed to identify
features systematically which could be improved cost effectively
Step 5: Feasiblity Study

14. Once the desired improvements were identified, it became necessary
to plan and implement the necessary changes
Four harmonious cross-functional teams were set up, each responsible for
planning and implementing a specific facet of the new service
Main areas of improvement were seat pitch, seat access, seat comfort, seat
design, interior design, food and the duty free range
Step 6: Quality Planning and Implementation

15. There was a high degree of correlation between requirements
However, a number of new ones also emerged.There were two possible
reasons for this:
First, customers’ requirements are context and time dependent, which means
that they are also dynamic. So that, it is important they are continuously
monitored and the service should be modified to meet the new requirements
Evaluating the New Business Class Service (1)

16. In a service environment, continuous improvement of the service package is a
key to the successful management of quality, and change often needs to be
incremental rather than revolutionary
Second, the initial procedure used to identify the customers’ requirements
solely relied on the perception of managers. However, quality is a function of
customers’ perception.
Evaluating the New Business Class Service (2)

17. The qualitative data gathered was used to design a structured questionnaire. It
was distributed among 300 business class passengers on the intercontinental
North American route.The average rating for each requirement obtained prior
to the change was compared with average values after the change – and in
most cases the new service was superior:
• The new service was meeting customers’ expectations
• Performance in key areas had substantially improved
• The gap between Alitalia’s performance and customers’ expectations of an
ideal airline had narrowed and in some areas completely closed
Evaluating the New Business Class Service (3)