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In their article on internal service quality, Mary Azzolini and James Shillaber assert that companies can­not win without superior internal customer service. They developed a customer service matrix (Figure 3) to cat­egorize companies into four different types of organi­zations, based upon the quality of their internal and external customer service.


Companies that focus on both internal and external customer service (quadrant I) anticipate the changing needs of their customers and have the internal strength, service orientation, and capability to deliver high-qual­ity products and services on time. Wal-Mart, Federal Express, and General Electric can be placed in this quad­rant based upon their actions in the marketplace.


Companies with poor internal and external customer relationships (quadrant IV) are at risk of going out of business unless they change the way they operate. East­ern Airlines and Pan Am are examples of quadrant IV companies.


Companies with good internal but poor external cus­tomer relationships (quadrant II) are on the edge and risk falling off the chart. These tend to be companies that operate in a regulated environment. Because they have a guaranteed customer base, they focus on their internal environments and ignore the external marketplace. With the advent of deregulation, this type of company can find itself on the outside looking in. AT&T once occupied quadrant II and was being outmaneuvered by more ex­ternally customer-focused competitors.

Quadrant III companies, with good external customer service but poor internal customer service, are also on the edge. Nordstrom's is such a company. It is a retail store that offers external customers valet parking and personal shoppers. Internally, though, Nordstrom's is not nearly so focused. It has been the target of Equal Employment Opportunity suits for unfair practices, and problems such as these could prove to be devastating.

Azzolini and Shillaber are quick to point out that internal service quality is not just a feel-good strategy. They quote T. Kerry McCarter of Johnson & Johnson's Quality Institute: "Internal customer service is meeting the expectations and requirements for success of those people inside the company so they can delight custom­ers in the marketplace."

Measuring internal customer service is critical to achieving success in this area. Leaders in this area mea­sure the effectiveness of work processes, corporate struc­ture, internal systems, corporate culture, and corporate capabilities. They do this by assessing internal customer perceptions and expectations as well as benchmarking performance with similar functions in the marketplace.

Some key questions to ask yourself about your company's internal customer satisfaction include the following:

      How well are internal customer needs and expecta­
tions satisfied?

      How well are you satisfying your internal customers
compared to how you take care of outside vendors?

      How loyal are your internal customers? Has your
turnover increased, decreased, or remained the same
as compared to the same time last year? What is the
trend of employee turnover in your company over the
past five years?

      What new internal customer needs are emerging?
How well prepared are you to satisfy them?

      How much training is available to your internal cus­
tomers? Is it available during work hours? Is tuition
reimbursement available? How limited is it?

      Do your internal measurements focus on financials
and exclude balance?

Internal customers are critical to every enterprise. The examples cited by attorney Norman Clark arising from breakdowns in the relationships between internal custom­ers and internal suppliers—such as two people doing the same work on the same matter, meetings having to be rescheduled because someone was not told to prepare, and errors made that could have been avoided by more adequate training—are not unique to a law office. The advantages of improving internal customer care are tan­gible and can be measured in many thousands of dollars. As one of my music instructors used to say, making sure that everyone is on the same page in the hymnbook sure makes it easier to harmonize!

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 13


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