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HBOK 1-587

Title How to Fine-Tune Your Business Processes
Author(s) Michael Epelman, Derek Brimley, Dan Maher, and, Daniel O’Brien
Source Quality Progress
Topic Listening to Customers

Work Process Management

Abstract Two tools for eliminating waste and managing handoffs between internal providers and customers are service-level agreements (SLAs) and internal service guarantees (ISGs).  SLAs cover the delivery of support resources or services.  The provider and customer first agree on the purpose of the process that underlies their relationship.  This leads to objectives, activities, practices, targets, and ongoing protocols for process improvement.  In some SLAs, the customer’s major contribution is limited to target setting.  This occurs, for example, in corporate office supply services.  In other SLAs, the customer’s involvement may be more extensive, as in the underwriting process within insurance companies.  ISGs cover handoffs in which the supplier guarantees customer satisfaction.  In turn, the customer promises to invoke the guarantee as needed.  ISGs are appropriate for processes shared by the provider and customer.  To implement an ISG, customers state their expectations.  Then both parties establish a method for invoking the guarantees when expectations are not met.  ISGs require a constructive rather than blameful approach to errors.  Impediments to SLA and ISG implementation include inappropriate focus, punishment approaches, and inadequate measurement and improvement programs.  SLAs and ISGs are inappropriate in situations having internal dysfunctions or unreliable external support.  SLAs and ISGs may be combined or used as precursors to each other in certain processes.  This article provides case studies of an SLA between the London Operations and Motor Transport Department of British Airways World Cargo and an ISG between the sales and production staffs of Creative Professional Services.
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Reference Code 1-587

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