Page 3: Managing quality
Quality can be managed in several ways. It can be measured at the end of a process to make sure that any sub-standard products do not reach customers. This is known as quality control (QC).
This procedure is most often used in product manufacturing. The process involves testing a sample of the product as it comes off the production line. Putting things right at the end of a process is often costly. In a manufacturing environment, extra items must be made to replace the faulty products. There will also be costs in terms of the staff time needed to put things right and other resources. For example, it may not be possible to recover or reuse the materials from faulty products.
In a service industry, a quality control approach is rarely enough to maintain standards. This is because many aspects of a service are only realised as they are delivered to customers. For example, an insurance company can only deal with a claim on a policy when the customer makes a claim. This is why many businesses use other ways of managing quality.
One approach is quality assurance (QA). Quality is not simply considered at the end of a process but at every stage. Processes or procedures can be measured against set standards or ‘best practice’ benchmarks within the industry.
Total quality management (TQM) is an approach that seeks to ensure that all parts of a process are ‘right first time’. The aim is for ‘zero defects’. A TQM approach requires every employee to take responsibility for delivering quality. TQM looks at improving both the people and processes involved in the business through continuous improvement.
Zurich’s approach to managing quality uses a combination of the methods above. Firstly, it uses iQUALITY to embody the principles of TQM, helping to bring this to life in the minds of its employees so they apply it to the customer care experience every day. Secondly, Zurich carries out regular quality sampling of the customer care it provides and the outputs it produces, e.g. letters and benefit statements. The amount of quality sampling carried out depends on the level of the employee's experience and the complexity of the task. For example, work produced by a new recruit may initially be subject to QA whereas, for an experienced employee, quality sampling will normally be carried out as a percentage of the work they complete. If the quality sampling for the experienced employee identifies a trend of errors, the percentage of quality sampling may be increased.
In practice, it is difficult to remove errors completely from a business process. To drive continuous improvement, what an organisation can do is identify errors and put them right. Zurich uses a process known as ‘root cause analysis’. This is a way to find out why something went wrong and to find ways to stop it from happening again. Zurich applies the ‘five whys’ approach to root cause analysis. Staff involved in quality management look at the 'trigger' that brings attention to the problem and then repeatedly ask 'why', probing deeper, until the true root cause is discovered. Once this is identified, Zurich can devise a suitable solution to stop it happening again and then monitor outcomes to make sure that the solution is addressing the problem.
For example, one issue facing Zurich was that it was receiving a number of similar complaints from customers about not receiving payments promptly when their savings policies matured (came to an end). The complaints were the ‘trigger’ in this case.
Using the ‘five whys’ approach, Zurich found the root cause was that the manual process for issuing claim packs and sending payments for these policies was causing delays. Zurich changed the process so that packs are now sent out earlier and the payments are sent out automatically 10 days before a policy matures. This ensures customers receive payment promptly. There has since been a 78% fall in complaints related to this issue.