(1)

With the aid of cause and effect diagram, suggest and discuss possible causes
for the very many quality problems in repairing car.

(30

marks)

Quality has defines as the total features and characteristics of a product or service
made or performed according to specifications to satisfy customers at the time of
purchase and during use (The American Society for Quality Control, cited in Talha, p.
16).

Service has been defined as a social act which takes place in direct contract between
customer and representatives of the service company (Bhat, 2010, p. 638).

Total Quality Management (TQM) refers to the broad set of management and control
processes designed to focus an entire organisation and all of its employees on
providing products and services that do the best possible job of satisfying the customer
(Talha, 2004, p. 15).

According to Sashkin and Kiser (1993), TQM means that organisations culture is
defined by, and supports, the constant attainment of customer satisfaction through an
integrated system of tools, techniques, and training. This involves the continuous
improvement of organization processes, resulting in high quality products and services.
In Cranston Nissan case, there were multiple factors resulted the customer
dissatisfaction on the service and quality control problems in repair shop.

On the 28th Sam Monahan dropped off his car for repair of rush damage but until
September 13th the car sent by customer has not fully repair from the initial problem and
at the same time other components would be damages while the technicians exercising
their duty. A total of more two weeks times of waiting by him. These have suggested that
Cranston Nissan had a poor supervision and technicians demonstrated low skilled in
repairing the car.

Furthermore, during the waiting period, Sam has been informed that he could pick up
his car anytime on 1st and 13th of September but eventually the car was not ready. Since
that, he was told to return his car to repair shop due to the further problems created and
causes him more trips to shop.

During this period, he has called and met to checks his car condition from repairing
to/with Jim Boyd, Ted Smith (service manager), Larry and Simon. However, none of
them could have given a certain answer. All these have proven that the Cranston Nissan
does not exercise a proper control in handling the car and customer service and lack of
responsibility.

Additionally, there was also a problem of being shortfall of stock when it needed and the
far discrepancy of price from the estimated price. Molding required had to be ordered
because it was no stock in time on September 11th when the molding should have order
on September 8th.

Besides that, the price was verbally estimated by an employee for a total of $110.
Unfortunately, a bill for $126 was presented to customer on top of the $443.17 has been
paid before. It is very disappointed that the itemized list that included speedometer
related cost which customer was told there would be no charges. All these, further
revealed the inefficiency of its management in controlling the quality.

Material

Method
Lack of flow chart
Order of
service

Shortfall

EFFECT
Customer service and
Quality problem in car
repair.

Supervision
Attitude
Training

Manpower

Machine

Cause
Figure 1: Cause and Effect Diagram for Cranston Nissan

With the aid of a cause and effect diagram, one of the seven tools in Total Quality
Management in suggest and discuss the possible causes to quality problems.

In Figure 1, cause and effect diagram of Cranston Nissan. In the respect of method,
Cranston Nissan on handling each car service shows that it did not design a proper flow
chart from upper to lower control limit and the order of car service priority.

On the other hand, material, Cranston Nissan has a problem in management of stock
which results shortfall. It orders its material when stock is required and resulted a further
ideal time in waiting the parts to repair the relevant car.

In the respect of the machine, not information find in the case. This may be a possible
problem as body shop do not observes to have a machine to repair the car.

It is suggests that most of the quality problems in Cranston Nissan may be attributable
to part of the Manpower. Based on the case, there is no evidence shows that Cranston
Nissan has a person who is in charge to supervise the quality of the process for car
repair. This has resulted the neither person has responsible to have records and to
response to each customer repair condition.

In effect, from the discussion above most of the possible causes may due to the
Manpower have lack of experience and training and poor attitude which results the
customer service and quality problems in car repair.

(2)
Discuss, with reasons, the most probable causes.

(20 marks)

There are several probable causes that results the poor customer quality service and
quality problems in Cranston Nissan. These include the poor management control and
lack of management commitment in quality and as per Causes and Effects diagram
above.

The most probable cause may be due to not implementing the Total Quality
Management (TQM) by Cranston Nissan. The objective of TQM is stresses a
commitment by management to have a continuing, companywide drive toward
excellence in all aspects of products and services that are important to the customer.

In Cranston Nissan, it does not meeting the objective from the perspective of TQM.
These can be explained by using Taguchi concepts, one of the seven concepts of TQM.

Taguchi concepts refer to engineering and experimental design methods to improve

product and process design.
In Cranston Nissan Case, it is clear that the management does not design a method to
improve product and process design.

From the first day that customer had dropped his car off for repair, but the body shop did
not return the customers car after a two weeks waiting and it was not in fully working
condition plus more components would be broken during repairing the original rust
damage areas. All these shows that the body shop failed to identify key component and
process variables affecting product and service variation.

Furthermore, there were discrepancies between whether customer should pay for the
repair to the speedometer and eventually the amount he had paid for is much difference
from the estimated price. Thus, quality loss function shows that costs increase as the
product moves away from what the customer wants.

Employee empowerment, one of the concepts in TQM, on the other hand, shows that
Cranston Nissan has lack of quality circles. Obviously, from the Sams case it shows
that body shop does not train their employees in planning, problem solving. A group of
employees had involved in the repair work. However, none of them has meet to solve
problems. This may be due to company does not have a person to monitoring, control
and communicate with from employees to customers which often led by a facilitator.

Besides that, based on the case lack of continuous improvement was found in Cranston
Nissan. If body shop has at first, developed a culture represents continual improvement

of all processes, which involves all operations and work centers from people,
equipment, materials and procedures in place.

In conclusion, the most probable cause may be due to incapability of management to

design and determine which steps are needed to resolve to car repair and customer
service. Consequently, these appear to be most of the activities involved in car repair
has seemed to be missing control in quality service. This has result no employee to
have a responsible from every service as the problem getting seriously.

(3)
What should the General Manager do to address the problems?

(20

marks)

In Cranston Nissan case, the General Manager, Mr. Jackson, should take specific
actions immediately to rectification the urgent problems before customer spread to other
potential customers which further jeopardize Cranston Nissan name. Besides that,
several process changes should also be exercised to achieve better car service in longterm future.

Firstly, as a general manager, he should call direct to Sam, the customer immediately to
apologize for the bad experienced he had with the body shop and assure a better
service. Personally investigation to the errors and poor shop service would be done to
identify the problems and a refund to the customer for any unnecessary charges which

should have no charge on it. There should be some types of compensation to Sam for
any further damage components during the repairing work.

Secondly, a meeting with the department managers involved in the case should be
conducted in body shop to have a better understanding to Sams case before
investigation. Furthermore, he should dedicate a day in body shop to understand the
current performances towards the service and identify any deficiency in the process of
care repair.

Thirdly, an arrangement according to the time of Sam to send over his car to repair the
damage components should have done. A face to face meeting with Sam, to
explanation to work done on the car and a feedback should receive from Sam for the
purpose future consideration. A discount voucher, if any, can give to customer for any
future maintenance on the car.

Lastly, after all, a meeting with all the department managers includes staffs in each
department to have discussion the experience from Sams case. An explanation from
the peoples involved in the case should be collected to identify to major problems.
Proper investigation has to be done; some sort of disciplinary actions should take to the
peoples who involved in the case to ensure avoidable errors and poor services.

(4)
Suggest actions, by applying TQM principles, to prevent to prevent to recurrence
of such quality problems and bring the organization to a higher level of service in
car maintenance.

(30

marks)

Although some immediate actions has been taken by Mr. Jackson to rectify the Sams
case. It is clear that, there are many deficiency found in operation management of
Cranston Nissan. From the lesson learn from Sams case, to ensure a long-term better
quality service control in car repair. It is advice to redesign its operation management to
achieve this long-term goal.

To prevent the recurrence of such quality problem and brings Cranston Nissan to a
higher level service in car maintenance. Mr. Jackson can achieve goals by applying
TQM principle to improve its operational management.

As TQM suggests, improved quality achieves lower warranty costs, lower repair costs,
higher efficiency and higher customer satisfaction, which in turn provides repeat
business and increased profits (Heyl, 2011, p. 2-60). His long-term goals should be to
enforce these procedures far enough in advance that way quality will always stay at
highest. He should try to avoid customer dissatisfaction by fixing flaws in quality.

A Flowchart (Process Diagram): A chart that describes the steps in a process (Heyl,
2011, p. 2-90). One of the seven tools in TQM should be design in Cranston Nissan
because in Sams case it revealed there are no flowcharts in place to identify and repair
car.

The following are the flow charts can be use by Cranston Nissan:

Source: adopted from Krajewski & Ritzman, 2002, Operational Management: Strategy and Analysis, p. 351.

By using the proper flow chart, it enables body shop to have a track record for each
individual customer from diagnosis the part to be repair until collect payment. These will
eliminated the discrepancy when collect payment from the customer as body shop have
discuss needed work with customer and checking parts availability before the work start
will allows body shop to estimates repair time for customer to avoid any unnecessary
waiting period. These may create customer satisfaction on the work done, as customer
can ready to money within the repair time.

On the other hand, a stock-out was found in body shop when it needed. A stock-out will
eventually increase the cost of the repair. Therefore, Just in Time (JIT) may be use to

improve and cutting cost in derives better quality in repair car. Better quality means less
inventory level and better product quality can be supply.

This can be easier achieving only when body shop employs JIT system. JIT suggests
that a pull system of production scheduling including supply management so that
component will be supply immediately when it needed and this allow body shop to
maintain its inventory at a minimum level which in turn reduce cost and better quality.

Besides that, the long-term goals should include proper training to employees and
educating them on customer service and engage a supervisor to monitor the process of
quality. Body shop can implement employee empowerment by getting employees
involved in product and process improvements.

To implement this, body shop must firstly build communication networks that include
employees by develop open network with supportive supervisors and move some
responsibility to employees. Teamwork was created and employees value themselves
as team rather an individual worker and a high-morale was build in organisation.

In conclusion, in the long-term process strategy, Cranston Nissan should include

continuous process improvement in this body shop. It represents continual improvement
of all processes by involves all operations and work centers including people, material,
supplier, customer and procedures into plan.

It is necessary because if cars keep changing resulting in more advanced technology,

then the suppliers should be notice and continue to supply the latest components. As to

the employees, they have to keep up to date with training and being educated on the
new car parts.

In the case of Sam, there evident showing that body shop have any equipment to
diagnosis the problem of the car before repair. It was suggest the Cranston Nissan
should bring in a new machine, in order to identify each car problems before repair.

Shewharts PDCA Model

Sources: Power point presentation to accompany Heizer and Render, 2011, Operational management,
Principle of Operations Management, p. 2-71.

To ensure effective continuous improvement, Cranston Nissan should adopt Shewharts

PDCA Model. This model suggests that organisation continuous improvement is going
through four steps as in Shewharts PDCA Model.
Overall, TQM have suggests many ways to better management. By adopt TQM to
insure that resources are transformed into an end product or service that performs
effectively and efficiently.

List of References:
Bhat, K. S. (2010) Total Quality Management, Global Media, Mumbai, IND

Heyl, J. (2011), Presentation of Power Point Accompany Heizer and Render,

Operational Management (10th ed), Principles of Operations Management (8 th ed),
Prentice Hall, Inc., Pearson Education.

Krajewski & Ritzman (2002) Operational Management: Strategy and Analysis (6 th ed.),
Prentice Hall, Inc., Upper Saddle River, New Jersey 074548, U.S.A.

Talha, M. (2004) Total Quality Management (TQM): an overview, The Bottom Line:
Managing Library Finances, Vol. 17, No. 1, pp. 15 16.

Sashkin, M. & Kiser, K. J. (1993), Putting Total Quality Management to Work: What
TQM Means, How to use It Over the Long Run, Berrett-Koehler, San Francisco, CA