Page 73 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes Service quality is all about the responsiveness of an organization to meet the customer’s
expectations. The service performance is measured by the perceived service quality. The quality
of a service has two components:
 Technical quality: This is the end result of the service operations process.
 Functional quality: This is about the process, especially concerning the interaction between
the customer and service provider.
These two factors inject a heavy dose of subjectivity into the service process.
Any service organization would be desirous of closing the gap between what is expected and
what the customer has received. To them, this would be absolutely necessary to build a long-
term relationship with the customer, to retain him. But in order to close the Customer Gap,
another type of gap has to be closed: the Provider Gap.
The Provider Gap: There are four provider gaps and these in sum total are the cause of the
Customer Gap. They are the shortfalls within the service firm. To close the customer gap, the
provider gap (or, as also known, Company Gap) has to be bridged. The four provider gaps are:
Gap-1: Customer expectation – management perception gap.
It is the inability of top management to perceive what the customer wants, and is the main
reason why a firm cannot meet a customer’s expectations. The company is blinded by a perceptual
veil of ignorance, arrogance or criminal neglect.

Some of the reasons why Gap-1 can occur are:
 Inadequate marketing research;
 Lack of upward communication in the organization;

 Insufficient focus on relationship building (‘don’t care’ attitude), etc.
Gap-2: Management perception – service quality expectation gap.
This gap is created in the design process of the service product and laying down of specifications
for service quality during service transactions. In the design process, this gap arises during the
translation of management’s perception of customer-expectation into design specifications.
Managers would set specifications for service quality on the basis of what they believe the
customer requires – a very dangerous presumption. The implications of this gap are that even if
the firm has crystal-clear knowledge and understanding of the customer’s expectations, there
would be scope for misunderstanding this, leading to setting the wrong specifications, service
designs and standards.

Example: A bank would believe that customer friendly interaction is what the customers
prefer but the standard would be set on computerization – which is impersonal and neutral.
There is no human contact to support the concept of ‘friendliness’.
Some reasons for Gap-2 to occur are:

 Failure to connect service design to service positioning
 Unsystematic new-service development process
 Lack of customer-defined service standards

 Absence of a formal process of setting service quality goals etc.

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