A Performance Evaluation of the After-Sales Service Information Systems provided by the Taiwanese Machine Tool Industry

A Performance Evaluation of the After-Sales Service Information Systems provided by the Taiwanese Machine Tool Industry

Lin, W T

Machine tools are important equipment for basic and precision processing work, and are characterized by long operating life, high unit price, high technology and assembly involving a great number of components and parts. Providing efficient repair service for machinery breakdowns, reinforcing existing service and maintenance systems and enhancing after-sales service are the current goals. As machine tool products are marketed globally and the structure of current after-sales service is incomplete, existing service systems do not always meet customer requirements. Therefore, web-based information management systems must be used properly, and can provide an important tool for interaction between enterprises and clients as well as for strengthening corporate operations and competitiveness. Since emphasis and satisfaction differ while promoting such practice, a performance evaluation of satisfaction, with an emphasis on functional items of related systems introduced, must be performed, and an effective improvement model must be established to effectively obtain specific results regarding the after-sales service information systems in the machine tool industry.

This study used the questionnaire method to collect information on the performance of after-sales service system implementation in the Taiwanese machine tool industry and also statistically defined performance index of emphasis and satisfaction. The performance evaluation matrix was amended to develop a performance evaluation matrix for the standardized system. The management can assess their performance levels and draft strategies to improve service system performance according to the locations of considered items in the performance evaluation matrix of satisfaction and emphasis. As far as costs are concerned, the quality function deployment (QFD) is applied to define critical functional items in the structure of the service system from among items with low emphasis and high satisfaction and items with high emphasis and low satisfaction. This approach can develop the optimum countermeasures, which then can serve a reference for establishing the after-sales service system for the machine tool industry.

Introduction

The machine tool industry is a high added value industry. Abnormal operation of machine tools may influence the after-sales service costs, orders, goodwill, quality and delivery dates. Thus, it is critical to ensure smooth production of machine tools and reinforce existing maintenance and after-sales service systems. Presently, since the machine tool industry markets its products globally and the existing after-sales service structure is incomplete, customers are not always satisfied with the current service system established by limited human, material and financial resources. Consequently, proper use of web-based information management systems has become a useful weapon for promoting interaction between enterprises and customers, achieving competitive advantages for companies, and storing and researching various knowledge.

Some scholars have presented relevant information for obtaining effective and excellent service quality information management systems. For example, the results of the 6th World Wide Web User Survey conducted by GVU Center of Georgia Institute of Technology [1] showed the existence of four crucial factors that consumers consider WWW service providers should possess, namely: (1) security, (2) reliability, (3) quality of information provided and (4) timely delivery. Additionally, Xie M., H. Wang and T.N. GoIi [14] applied PZ13 to present a refined service quality model and assess search engines in 1991. Following amendment, Xie M., H. Wang and T.N. Gob, proposed five dimensions for the service quality of search engines, namely: (1) tangibility, (2) reliability, (3) responsiveness, (4) assurance and (5) empathy. Users considered reliability and assurance the most important dimensions, while tangibility, responsiveness and empathy were also significant.

Colletti ( 1987) [ 11 indicated that service quality described the effectiveness of the service provided by an enterprise in satisfying customer requirements and expectations. Accordingly, the emphasis of considered items in a service system and the satisfaction level in an industry must be assessed to ensure the after-sales service system is effective. The significance of the items involved in the service system will differ because they are introduced in different times and places by different industries. Additionally, the satisfaction of each item considered in the service system varies during evaluation since companies are characterized using different properties, backgrounds and technologies.

The applications of information systems in the machine tool industry currently focus on the management of manufacturing, orders and purchase; however, companies merely use these applications internally instead of applying them for online transactions and after-sales service via the Internet. Globally, real time and low cost network features should be utilized during the current phase to strengthen the external operation of the companies and enable informative after-sales service to be provided for machine tools. Thus, this study conducts an in-depth exploration of the service quality of machine tools after-sales service information.

First, a performance evaluation of the after-sales service information system in machine tool industry is defined based on the emphasis and satisfaction index of customer service performance evaluation conducted by Hung and Huang et al (2003). Next, the performance evaluation matrix designed by Lambert and Sharma (1990) [5] is amended to establish a performance evaluation matrix suitable for after-sales online service of the machine tool industry. Generally, high importance and satisfaction indicates good performance in introducing the system. Meanwhile, service items with high importance and low satisfaction indicate that [the performance of that system is that system performs poorly. Consequently, performance levels can be assessed based on the locations of emphasis and satisfaction indicators in the evaluation matrix. Additionally, factors of cost and timeliness must be considered while evaluating machine tool service system performance. Consequently, the priority of functional items in the structure of the critical service system should be determined using emphasis and satisfaction levels before presenting improvement strategies for correcting the evaluation matrix.

Finally, for those critical commands with low emphasis and high satisfaction and high emphasis and low satisfaction, the approach presented by Xiao-Xiang Shen et al. (2001) [131 is applied to define critical product functional items using QFD, and the optimum countermeasures for promoting satisfaction with the introduced functional items in the structure of the critical service system are sought to reduce the introduction cost. Additionally, the study also can serve as recommendations and suggestions for the machine tool industry to improve the performance of after-sales online services.

The importance and the complete range of after-sales service for the enterprises can be integrated through documentary reviews and performance evaluations of present aftersales service information systems in the machine tool industry. Enterprises are expected to be able to apply information technologies to deal with after-sales service problems. Specifically, the anticipated results of this study are as follows:

* Online after-sales service system performance in the machine tool industry is induced and generalized by collecting documentary information, opinions of scholars, interviews with machine tool manufacturers and questionnaire surveys.

* Emphasis and satisfaction index of the after-sales service system and the performance evaluation matrix are assessed and analyzed using statistical software.

* Customer satisfaction is analyzed by locating critical items with great emphasis and low satisfaction and less emphasis and high satisfaction. Moreover, the QFD approach is utilized to clarify the functions of individual departments.

* A prototype structure of the after-sales service information system is established to provide a reference for the future development of the machine tool industry.

Performance Evaluation Model Introduced by After-sales Service Information System

The service satisfaction evaluation matrix presented by Hung and Huang et al. (2003) will be used in this research as the performance evaluation model of emphasis and satisfaction of the after-sales service information system in machine tool industry. Scoring of satisfaction/emphasis of each service item in the questionnaire evaluation form ranges from O to 1. “1.00” means 100% satisfaction/emphasis,”0.00″ refers to completely unsatisfactory /unemphatic and “0.50” shows medium satisfaction/emphasis. Thus, respondents should give a score in percentage (two digits after the decimal point) in accordance with personal satisfaction/emphasis level for a certain service item. Hung and Huang et al. (2003) claimed customer satisfaction/emphasis is a Beta distribution with dependent parameters (α,β) and Pu – Pr {X > 1/2} means a higher customer probability than medium satisfaction/emphasis. Likewise, P^sub L^ = P^sub r^{X

(1) α = β = 5, means the customer ratio is higher than medium satisfaction/emphasis and lower than medium satisfaction/emphasis accounts for 50% respectively (P^sub u^ = P^sub L^)

(2) α > β (α = 7, β- 3), indicates the customer ratio of more satisfaction/emphasis is higher than that of less satisfaction/emphasis; i.e., over half of the customers feel satisfactory/emphatic (P^sub u^ > P^sub L^).

(3) α

According to the research conducted by Hung and Huang et al. (2003), the indicators U^sub S^ and U^sub E^. are expectations in Beta curve, which stand for the average satisfaction and the average emphasis for the service items in the after-sales service information system respectively. There are 23 service items in the after-sales service information system questionnaire in this study (Refer to Appendix 1.) and each service item is designed to score customer satisfaction and emphasis. Based on the study of Hung and Huang et al. (2003), calculation of the scores for satisfaction and emphasis indicators of 23 service items in the after-sales service information system is shown in table 1.

Next, the estimated values of emphasis and satisfaction indicators in the after-sales service information system will be calculated in accordance with the approach presented by Hung and Huang et al. (2003). So that, an after-sales service performance evaluation matrix in the machine tool industry may be established (shown as Fig. 1) to analyze and improve the performance of the after-sales service information system. Practically, the documents of Hung and Huang et al. (2003) will be referred to divide the service performance evaluation matrix of the after-sales service information system into three quality zones T^sub 1^, T and T^sub 2^. T^sub 1^ refers to the quality zone that requires improvement the most, T stands for the quality zone of medium satisfaction and T^sub 2^ means the quality zone that is suggested for improvement. Items for amendment and improvement are recommended based on enterprise service quality strategies. The ultimate quality functional items are located through the improvement weighted index presented in this study and the quality function deployment (QFD) approach to be served as a basic tool to improve the performance of the after-sales service information system.

Improvement Weighted Index and Quality Function Deployment (QFD)

To facilitate the enterprises to evaluate the performance of machine tool After-sales service information system and conduct a systematic assessment of functional items to be considered for improvement, a set of simple evaluation procedures are presented here, including five major steps as follows:

* Step 1 : Conduct a questionnaire survey of emphasis and satisfaction index concerning critical items of machine tools. Scholars will judge the index of emphasis, and a certain machine tool company will evaluate the index of satisfaction. Calculate I^sub E^ and I^sub S^ by the emphasis index and satisfaction index defined in this article.

* Step 2: Mark the emphasis index I^sub E^ and the satisfaction index I^sub S^ of each item into the system introduction performance matrix defined in this article.

* Step 3: Use the formula provided in this article to calculate the improvement weighted index V. in compliance with the coordinate locations of index I^sub E^ and I^sub S^ in the system introduction performance matrix. If V^sub i^ ≠ 0, it belongs to an abnormal directive item.

* Step 4: Fill the improved weighted index V^sub i^ of system functional items to be considered into the QFD table and discuss to establish the weighted W^sub ij^ for each product function item through QFD development. Add improved weighted index V^sub I^ and weighted W^sub ij^ values of all product functional items after multiplying, which results in the total weighted T^sub j^ of individual system structural function item. If T^sub j^ ≠ 0, it belongs to a critical functional item.

* Step 5: Improvement priority will be determined by the total weighted T^sub j^ values of critical functional items in the system structure. When the negative value is smaller or the positive value is bigger, its priority is greater. Refer to the suggestions in Table 3 to work out related strategies for improvement. When the total weighted T^sub j^ value is negative, investment in resources has to be decreased for cost reduction and the optimum value T^sub j^ = 0 needs to be achieved. However, when the total weighted T^sub j^ value is positive, investment in resources requires to be increased so that satisfaction might be enhanced and the optimum value T^sub j^ = 0 could be obtained.

Discussion of Actual Example

Headquarters of the machinery industry in Taiwan is located at central regions with machine tools as the major product. Questionnaire items concerning machine tool after-sales service information system are listed in the appendix Table 1.

Based on the data released by the Ministry of Economic Affairs, machine tool manufacturers were selected from machinery equipment manufacturers for the past few years, including machine tool manufacturers and suppliers along with suppliers of component parts. Companies engaged in the manufacture of machine tools are the subjects of this research. The questionnaire was sent by mail with a total number of 345 copies. A total amount of 126 copies were retrieved finally and 114 of them were valid after deducing 12 invalid copies. Evaluation procedures are specified as follows:

* Step 1 : First, calculate index of emphasis and satisfaction IE and IS of directive items. Refer to Table 4 for results.

* Step 2: Mark the emphasis index IE and the satisfaction index IS of each directive item into the system introduction performance matrix and the results are shown in Fig. 2. A6 means immediate improvement for the service items in machine tool after-sales service information system is required. Though A16 meets the requirements for the medium quality zone; however, further observation and followup are required on the edge of the minimum quality requirements. As A16 and A23 are located within T2 quality zone, they have top quality but the cost needs to be considered. It is suggested the quality cost may be adjusted to improve the operating cost for the enterprise.

* Step 3: Calculate the improvement weighted index V^sub i^ in compliance with the coordinate locations of index I^sub E^ and I^sub S^, in the system introduction performance matrix. If V^sub i^ ≠ 0, it belongs to an abnormal system functional item to be considered. In the actual example, there are 6 abnormal system functional items to be considered, including Item 6 of customer analysis and complaint, Item 15 of customer selfservice tracking system, Item 16 of customer area – inquiry of maintenance records, Item 18 of service categorization and Item 23 of product instruction manual download. Then, fill the improved weighted index V^sub i^ into Table 4.

* Step 4: Fill the improved weighted index V^sub i^ of abnormal system items to be considered into the QFD table and experts discuss to establish the weighted W^sub ij^ for each functional item related to the syste structure through QFD development. Add improved weighted index V^sub i^ and weighted W^sub ij^ values of all functional items in the system structure after multiplying, which results in the total weighted T^sub j^ of functional items of individual system structure. If T^sub j^ ≠ 0, it belongs to a critical functional item in the system structure, shown as Table 5.

* Step 5 : Improvement priority and strategies will be determined by the total weighted T^sub I^ values of critical system structural function items. When the negative value is smaller or the positive value is bigger, its priority is greater. Next, locate critical system structural function items for improvement. When the total weighted value is positive, investment in resources has to be increased to enhance satisfaction and the optimum value T^sub I^ = O needs to be achieved. Improvement priority is sorted and based on the maximum, which is Item 2 (efficient arrangement and storage of technical documents through the system). Item 8 (customer only area), and Item 10 (categorization of customer complaints). Besides, when the total weighted value is negative, investment in resources requires to be decreased so that costs of introducing the system might be reduced and the optimum value T^sub I^ = O could be obtained. Improvement priority is sorted based on the minimum, which is Item 1 (promotion of customer service quality and efficiency), Item 15 (maintenance order system), Item 19 (long database setup duration), and Item 22 (reduction of human mistakes and enhancement of correct information). Finally, improvement strategies against abnormal improvement weighted index T^sub I^ are summarized in Table 6. A systematic evaluation and improvement on the assessment model can be conducted.

Conclusion

Machine tools are important equipment for basic and precision processing work. Machine tools are closely related to production and processing in the defense, automobile and electronics industries. According to data released by the Statistics Department of the Ministry of Economic Affairs, major investments in the machine tool industry in Taiwan in 2002 total US$ 125.34 hundred million [9], As machine tool products are marketed globally and the structure of current after-sales service is incomplete, customer requirements are not always met through existing service systems established with human, material and financial resources. Therefore, web-based information management systems must be used properly, and can provide an important tool for interaction between enterprises and clients, as well as for providing companies with an operational and competitive advantage. Since emphasis and satisfaction differ when promoting such practice, performance evaluation of the online after-sales service information system in the machine tool industry is conducted via questionnaire survey, document gathering and on the spot interviews. The emphasis and satisfaction of introducing the after-sales service information system can be obtained by analyzing the integral expected results, which are applied to the performance evaluation matrix for assessing the performance of items to be considered in the related after-sales service information system. Finally, the considered items in the service system with low emphasis and high satisfaction and with high emphasis and low satisfaction are developed using the QFD approach to define critical functional items in the service system structure. This approach allows the prototype framework of the after-sales service information system in the machine tool industry to be established and provide a reference for future development.

As mentioned above, this study used a questionnaire survey to collect the information on the performance of implementing the after-sales service system in machine tool industry in Taiwan. First, means of emphasis on the items considered in the system and those of satisfaction with implementation are calculated. Next, the emphasis and satisfaction index are marked in the system introduction performance matrix and the improvement-weighted index Vi is calculated in compliance with its corresponding location in the coordinate. When Vi ≠ 0, it can be considered to belong to an abnormal system item. Based on the performance evaluation conducted on the actual example in this study, five abnormal system items must be considered, including : Item 6 of customer complaint analysis, Item 15 of the customer self-service tracking system, Item 16 of the customer only area (repair record inquiry), Item 18 of categorization and disposition of service items and Item 23 of product instruction manual (download). Next, Vi values of abnormal system items being considered are developed using QFD and the total weighted Tj of each system structural function item is obtained. When Tj does not equal O, it belongs to a critical system structural function item. Finally, improvement priority and strategy are determined by the total weighted Tj values of critical system structural function items. When the total weighted value is positive, investment in resources must be increased to promote satisfaction of implementation until the optimum Tj=O is reached. The improvement order is sorted based on the maximum, which is eight points for Item 2 of efficient arrangement and storage of technical documents by the use of the system, six points for Item 8 of customer only area and five points for Item 10 of categorization of customer complaints, respectively. Meanwhile, if the total weighted value is negative, investment m resources must be decreased to reduce system introduction costs until to achieve the optimum Tj=O. The improvement order is sorted based on the Tj value minimum: which is -11 points for Item 1, promoting customer service quality and efficiency; -9 points for Item 15, maintenance order system; -8 points for Item 19, long database setup time required for the after-sales service system, and -5 points for Item 22, reducing human error and increasing data correctness. Critical functions in the structure of the service system can be located through such evaluation method and QFD to enable systematic evaluation and improvement of the after-sales service information system in the machine tool industry, which can be provide a reference for establishing a web-based after-sales service system for the machine tool industry in the future.

Acknowledgement

The authors would like to thank the anonymous referees for their careful reading of the paper and for several suggestions that improved the paper. The authors would also like to thank the Ministry of Education in Taiwan, R.O.C. for financially supporting this research in 2001-2003.

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W.T. Lin

National Chi-Yi Institute of Technology, Taiwan

Y.H.Hung

National Chi-Yi Institute of Technology, Taiwan

C.T. Huang

National Chi-Yi Institute of Technology, Taiwan

C.C. Wu

Tax Administration of Chang-Hua County, Taiwan

Copyright International Journal of Management Mar 2005

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