Question

Please 300 word no copy and paste

QFD in a Managed Care Organization38 Managed care was introduced in the United States nearly two decades ago as a means to maintain qual- ity while managing costs. A managed care organiza- tion (MCO) contracts with physicians, hospitals, medical equipment companies, and home health agencies to provide services to its members (patients). The MCO markets its services and actively enrolls people. Once enrolled, members receive a handbook that explains how they can access the services offered by the MCO and its affiliated providers. The member handbook has become a main source of information regarding an Each session was facilitated by an independent researcher unaffiliated with the MCO, and each participant was provided lunch as a reward for participating in the study. The six focus groups all followed these steps: 1. Determine customer requirements. 2. Measure the importance of the customer requirements. 3. Rate customer satisfaction with the company’s current member handbook. 4. Rate satisfaction with the competitor’s member handbook. 5. Develop a list of characteristics that are within the control of the company and could poten- tially improve the handbook. These character- istics are referred to as substitute quality characteristics. The QFD process begins by capturing the voice of the customer or the customer requirements. The key customer requirements identified were ease of use, accuracy, timeliness, clarity, and consciousness. The technical requirements that describe how the organi- zation will respond to each of the customer require- ments were identified as follows: • Font size • Up-to-date information • Use of pictures or illustrations • Use of colors • Glossary of terms • Answers to frequently asked questions • Expanded table of contents • Offering the handbook in more than one language After gathering the customer and technical requirements, the MCO determined there was a strong correlation between the substitute quality char- acteristic (technical requirement) of ease of use and the customer requirements of expanding the glossary of terms and the table of contents. Similarly, the fol- lowing substitute quality characteristics had a moder- ate correlation with ease of use: • Font size • Use of pictures or illustrations • Use of colors • A question and answer section • More language friendly Providing updates had a weak correlation with ease of use. The results of the MCO’s QFD study resulted in the House of Quality shown in Figure 7.26. The numbers in the Rate of Importance column indicate the relative importance customers assigned to each requirement. The importance rating uses a numerical scale from 1 to 5, with 1 being low and 5 being high. Members were asked to use such a rating scale during the focus group sessions. Two customer requirements—ease of use and accuracy—were assigned high importance ratings of 4.5 and 5, respectively. The other three customer requirements—clarity, timeliness, and conciseness—received importance ratings of 3.8, 3.2, and 2.5, respectively. The entries in the Company Now column indicate how customers rate the organization’s performance with respect to their stated requirements. This rating is based on a numerical scale from 1 to 5, with 1 being poor and 5 being excellent. The entries in Com- petitor X column represent how the customers rate the chief competitor X with respect to their stated requirements. As is the case in the Company Now col- umn, these ratings are based on a numerical scale from 1 to 5, with 1 being poor and 5 being excellent. According to this study, the chief competitor’s hand- book is outperforming the MCO’s handbook in ease of use, accuracy, and clarity, as perceived by its custo- mers. The Plan column indicates where the company wishes to be with respect to each of the quality requirements stated by its customers. The plan for each requirement is determined by examining the MCO’s position in relation to its competitor(s) and its customers’ rate of importance. It is also based on the organization’s strategic plan. After taking all things into account, the MCO’s QFD team set a goal of achieving a performance rat- ing of 4.5 for ease of use, 4.6 for accuracy, 3.8 for timeliness, 3.9 for clarity, and 4.1 for conciseness. The MCO expects to achieve these levels of perfor- mance the next time its customers are surveyed. The Rate of Improvement column contains the ratio of the company’s goal compared to where the company is today. It is determined by dividing the value in the Plan column by the value in the Company Now col- umn for each requirement. The Absolute Quality Weight is determined by multiplying the rate of importance by the rate of improvement. It is an attempt to assign a weighted rate to what theincreasingly complex array of benefits offered by the thousands of MCOs. Designing the handbook and creating its content are, therefore, important components of any MCO’s business strat- egy. Unfortunately, a member satisfaction survey indi- cated that members have a poor understanding of their benefits. When members are unable to under- stand their benefits, the MCOs’ member services switchboards are inundated with calls, resulting in frustration and anger and further delaying patient access to the MCOs’ services. The MCO receives an average of 3,000 calls per day, with each call lasting an average of 3.2 minutes. Approximately 50 percent of these calls involve issues discussed in the member handbook. The MCO also spends more than $250,000 per year in providing supplemental materials to its members as a result of inadequacies in the member handbook. To improve the handbook and member satisfac- tion, QFD was used to redesign it. The input for the QFD process was obtained through a series of focus groups. A total of 131 MCO customers participated in six focus group sessions. Participants were selected based on two criteria: 1. They had to have been members of a competing MCO—whose member handbook was used for comparison—for at least two years prior to join- ing the MCO being studied. 2. They had to have been members of the MCO being studied for at least two consecutive years. The focus group process was then administered in two stages: Stage 1. Participants were provided with a copy of the company’s member handbook and the competitor’s member handbook. Even though the participants had all used the competitor’s member handbook, it was necessary to provide them with copies to ensure a fair comparison. They were allowed to take both handbooks home for one week to look them over. Stage 2. The groups were brought together for a follow-up session that focused on data collection.customer considers to be important and the goal (value established in the Plan column). The Percentage of Importance was determined by transforming each absolute weight value into a percentage of the total absolute weight value (25.1). After thoroughly looking at what is important to the MCO’s customers, the company’s current perfor- mance, its chief competitor’s current position, and the goal, the MCO determined that accuracy is the most important requirement driving customer satisfaction, with nearly 30 percent of the demanded weight. The figures in the Importance of the Hows row rep- resent the sum of the products of each column symbol value and the corresponding demanded weight. The two most important technical requirements were glossary of terms and updates, with totals of 460 and 427.9, respectively. Each entry in the Percentage of Importance of the Hows row is divided by the sum of all the entries in that row and multiplied by 100 to convert it into a percentage. The Company Now row gives the values of the measurable technical requirements. The QFD team

Please 300 word no copy and paste

1. Although this example of QFD involved the design of tangible items, why is it more difficult to implement in a service context as opposed to a pure manufacturing context? 2. Verify the calculations in the Importance of the Hows row and Percentage of Importance of the Hows row by showing the detailed calculations used to arrive at these figures. 3. What lessons can be learned and applied to other service organizations that se

Answer 1

(1.) The above mentioned QFD study of the MCO's handbook characteristics involved only the tangible factors for ex - table of content, accuracy, glossary, ease of use, clarity, conciseness, timeliness etc but did not put an overall emphasis upon the intangible factors of the services by the MCO companies to their registered members through the company's affiliated service providers associated with it.

- In the service context to design or to rate the intangible factors is very complicated process as the tangible factors are those which can be easily measured, analysed & rated hence can elaborately be explained in the member handbook against the member requirements, also quantization of these manufacturing or tangible items in different rows & columns against or in relationship with each other is easily feasible process, but this is not always & that easily applicable in the case of its service or intangible counterpart.

- The most important reason behind the more difficulty in application of QFD in service context is because the data cannot be collected through secondary research or other business analytics tools, also no physical or quantitative comparison is possible in the case of intangible items since they are mostly related to the customer's emotions, his perceptions, ethics, trust, goodwill & employees customer service oriented behaviour etc.

- The intangible items I.e - emotions, perceptions, ones approach, ethics, goodwill also the company's positive word of mouth ( WOM ) etc are very difficult to be scaled with respect to the customer requirements.

- Also, this is not rehabitsble to do primary research every time to gather data regarding the intangible items from the registered nembers , the result obtained from this is not always concise or accurate because the intangible items are not specific to a person, they continuously changes with different constraints like a customer perception or interest regarding a particular company product or service is not necessarily always remain the same due to the changing habits, traits, technologies, features etc.

* One most important lesson I learned from the above case is that the customer mostly prefers the ease of use, wide table of contents & accuracy of the contents given in the member handbook over that of the attractive & colorful designs, fonts, easy language, clarity etc, that doesn't mean the laters are not important but these are secondary items not the primary ones.