Measuring quality among internal and external
customers KLM Engine Services
“An investigation of the quality perceptions of internal and external customers and the establishment of distinctive factors by which KLM Engine Services self managing teams can be
evaluated.”
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Title:
Measuring quality among internal and external customers KLM Engine Services
Subject:
A study on internal and external customers’ quality perceptions and degree of satisfaction. Additionally, the self managing teams of KLM Engine Services are analyzed.
Author:
S.C. van den Heuvel
Student number:
1423479
Institute:
University Groningen
Faculty of Management and Organization
First Supervisor: Dr. J.E. Wieringa Second Supervisor: Drs. M. Turkensteen Supervisors KLM: Dhr. J. de Graaff Dhr. R. Verschuren
Master thesis Business Administration: Master Marketing Management
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Management Summary
Quality is an important determinant for the success of KLM Engine Services. In the extremely competitive aviation market, the time that an aircraft spends on the ground for maintenance work has to be as short as possible and the work itself must be of the utmost quality. Customers in the maintenance market, moreover, are showing greater interest in outsourcing. More and more airlines are contracting out all their airframe maintenance to a single provider. Additionally, in the engine and component market, the demand for one stop maintenance programs is growing. Customers are more than just customers and users. In the area of business marketing, customers are also collaborators and partners. Customers are co-developers, co-producers, co-managers and co-marketers.
During the empirical study, a sample of those customers that had the most engine repairs done in the study period were approached. The selected customers are called customer Airline A until Airline G.
The customers were interviewed by means of focus groups and, additionally, data was gathered using surveys. The project teams were analyzed with questionnaires so that a comparison could be made between the customers’ perception and the perception of the project teams who represents the customer internally in the organization KLM Engine Services. The amount of respondents among the customers totaled seven. These customers had the largest amounts of engine repairs done by KLM Engine Services. The project teams provided a total of 35 respondents for measuring the quality perception and for measuring the perception of the project team climate.
The Management Decision Problem (MDP) described the reasons for conducting this investigation. The MRP describes what kind of information had to be obtained and which questions should be asked in order to acquire the required information.
For this study, the MDP was as follows:
4 For this study, the MRP was as follows:
What is the difference between the measuring methods of quality for internal customers and for external customers in relation to Engine Services and which distinction can be made among the internal and external customers of Engine Services? What kinds of factors should be considered with respect to the analyses of the quality of the performance? What kinds of factors should be considered when the performance of project teams and the effectiveness of project teams are evaluated?
The first conclusion which can be drawn using the literature is related to the differences between internal and external customer, namely customer Airline A is according to KLM Engine Services an internal customer. According to the literature, customer Airline A is an external customer, as the internal customer is linked to employee satisfaction. The theoretical framework contended that the direct influences of quality are relationship quality, service quality and structural quality.
There are also indirect factors that influence quality. Relationship quality and self managing teams influence service quality. Service quality directly influences the quality perception and the product quality. The direct influences of the satisfaction of quality are factor relationship quality, service quality and structural quality. The empirical study showed that the direct factor product quality negatively influences the quality of the customer Airline A and that the service quality did not have a direct influence.
These quality dimensions for measuring the quality perception of customers or of employees were service quality, product quality and relationship quality. The quality aspect service quality can be expanded with the dimensions technical quality and structural quality.
Product quality was not positively affected for customer Airline D, customer Airline C, customer Airline F, customer Airline G and customer Airline A. Service quality was not positively affected for the customers Airline F and customer Airline A and relationship quality does not positively affect the customers Airline F, customer Airline G, customer Airline C and customer Airline A.
5 For the customers of KLM Engine Services, the following dimensions were the reduced variables resulting from the factor analysis: professionalism, promises and choice, attitude, promise and relationship, promises and updating, advice, dispute, choice, recommend and quality, problems and desired result and the last dimension accessibility.
For the project teams of KLM Engine Services perception, the following dimensions were the reduced variables resulting from the factor analysis: professionalism, changes, technical quality and relationship, promise and maintain relationship, updating and functional quality, functional quality, keep promises, variation in product quality, better than competition, friendliness and high quality work
The type of respondents did not significantly differ from each other. In general, the customer’s perception is more positive than the project team’s perception.
The value strategy customer intimacy should be visible and approachable for every employee of KLM Engine Services. So that the core business of KLM Engine Services is focused on serving the wishes and demands of the customers.
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Preface
This thesis is written at the behest of completing my study Business Administration at the University of Groningen’s faculty of Management and Organization, in which I specialized in Marketing Management and Marketing Research. This thesis presented the results of a study I carried out during my traineeship at KLM Engine Services department from March until August 2006.
The aim of this study was to attain insight in about performance and to increase the transparency of performance for a project on self-managing teams at KLM Engine Services. Furthermore, the aim of this study was to analyze how quality is perceived by both internal customers and external customers. Similarities and differences were analyzed. Distinctive factors for evaluation were also determined. The aim of this master thesis was to contribute the quality of KLM services by providing insight on how to improve the market position of Engine Services.
I would like to thank both the organization KLM in general and KLM Engine Serves in particular for their high level of cooperation. This contributed significant to the completion of the project and my master thesis. KLM involved me directly in the team and thus provided me with numerous opportunities to learn. In particular, I want to thank my supervisors at KLM, Jan de Graaff and Ron Verschuren, for their critical and valuable feedback and also for helping me during my traineeship. I want to thank Jaap Wieringa for functioning as my supervisor at university, for providing clear recommendations and critical feedback. I also want to thank Marcel Turkensteen for his critical marginal comments as second supervisor of this thesis.
7 Table of contents
Management Summary... 3
Preface ... 6
Chapter 1 Introduction and background ... 10
1.1 Introduction ... 10
1.2 Context of the study ... 10
1.3 Role of project teams at Engine services... 11
1.4 CRM and KLM Engine Services... 11
1.5 Management Decision Problem (MDP) ... 12
1.6 Marketing Study Problem (MRP) ... 13
1.7 Research questions ... 13
1.8 Structure of this report... 14
Chapter 2 Organization KLM... 15 2.1 Introduction ... 15 2.2 History of KLM... 15 2.3 Aviation market... 16 2.3.1 Alliances... 16 2.3 KLM Mission Statement ... 17
2.4 Engineering and Maintenance Business Unit... 17
2.4.1 KLM Engine Services ... 18
2.5 Mission Statement of KLM Engine Services ... 19
2.6 Stage planning ... 19 2.6.1 Stage 0 ... 20 2.6.2 Stage 1 ... 20 2.6.3 Stage 2 ... 21 2.6.4 Stage 3 ... 22 2.6.5 Stage 4 ... 22
2.7 Project teams at Engine Services... 23
2.8 Structures and systems ... 23
2.8.1 Configuration of the organization ... 24
Chapter 3 Theoretical framework ... 26
3.1 Introduction ... 26
3.2 Business Marketing ... 26
3.3 Service processes at KLM Engine Services ... 26
3.4 Value CRM in business to business contexts ... 28
3.5 Value Chain... 31
3.6 Internal and external customers... 33
3.7 Quality in Business markets ... 34
3.7.1 Measuring Service quality... 35
3.7.2 Measuring Relationship quality... 37
3.7.3 Measuring Product quality ... 39
3.8 Relations between service quality, relationship quality and product quality ... 40
3.9 Measuring quality performance self-managing teams... 40
3.10 Relationships between quality dimensions and self managing teams service climate ... 42
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3.12 Hypotheses ... 42
3.13 Conclusion... 43
Chapter 4 Research design ... 44
4.1 Introduction ... 44
4.2 Problem and problem owner ... 44
4.3 Type of research ... 44
4.3.1 Policy-relevant research ... 45
4.3.2 Problem identification research... 45
4.3.3. Exploratory research... 46
4.3.4 Descriptive research ... 46
4.4 Research population ... 47
4.5 Census versus sample... 47
4.5.1 Sample ... 47 4.6 Outline of study ... 48 4.6.1 Secondary data ... 48 4.6.2 Primary data ... 49 4.7 Analysis methods ... 49 4.8 Reliability ... 49
Chapter 5 Analysis and results... 51
5.1 Introduction ... 51
5.2 Data respondents ... 51
5.3 Statements ... 51
5.4 Comparison means customers ... 52
5.5 Comparison means project teams... 54
5.6 Comparison means climate survey project teams ... 54
5.7 Respondent types... 54
5.8 Quality perception ... 55
5.8.1 Customer quality perception of KLM Engine Services... 55
5.8.2 Project team quality perception of KLM Engine Services ... 55
5.9 Perceived contribution of the project teams ... 56
5.10 Study customers of KLM Engine Service ... 56
5.11 Study customers compared to the project teams of KLM Engine Service ... 58
5.12 Study project teams ... 62
5.13 Results Focus groups project teams in general... 62
5.13.1 Results Focus groups per project team... 63
5.14 Relationships qualitative study and quantitative study... 64
5.14.1 Relationship study surveys customers and surveys project teams ... 64
5.14.2 Interrelationships variables customers ... 65
5.14.3 Interrelationships variables project teams ... 67
5.14.4 Interrelationships variables project teams ... 68
5.15 Correlation between quality dimensions ... 69
5.16 Tested hypotheses... 71
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Chapter 6 Conclusions and recommendations ... 73
6.1 Introduction ... 73
6.2 Conclusion measuring quality perception among internal and external customers ... 73
6.3 Conclusions quality dimensions ... 74
6.3.1 Service quality... 75 6.3.2 Relationship quality... 75 6.3.3 Product quality ... 75 6.3.4 Service climate ... 76 6.4.5 Conclusions CRM ... 77 6.5 Recommendations ... 77
6.5.1 Recommendations measuring quality dimensions ... 77
6.5.2 Internal consistency survey ... 78
6.5.3 Recommendations attained from method focus groups ... 78
6.5.4 General recommendations... 79
Bibliography ... 80
Appendices Appendix I Organogram Organization KLM ………84
Appendix II Statements………. .85
Appendix III Output one sample t-test ……….88
Appendix IV Results analysis of variance………94
Appendix V Factor analysis………...101
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Chapter 1 Introduction and background
1.1 Introduction
KLM’s strategy is to achieve profitable growth that contributes to both its own corporate goals and the economic, societal and social development of the Netherlands. This study has been conducted for the KLM Engine Services department. KLM Engine Services is part of one of the core activities of KLM’s engineering and maintenance business. Engine Services is responsible for the maintenance and repair of engine components as well as plane components and accessories.
1.2 Context of the study
The time that an aircraft spends on the ground for maintenance work has to be as short as possible and the work itself must be of the utmost quality. Currently, customers in maintenance markets are showing increasingly greater interest in outsourcing. More and more airlines are outsourcing all of their airframe maintenance, in addition to their engine and component market.
KLM wants to develop a valid method for gaining insight on performance. They also seek a method by which they can measure the performance of project teams at the Workflow and Capacity Management Department of KLM Engine Services. The goal of the project teams is to realize and coordinate the supply and demand of the engine revisions assigned to the project teams. The project teams are responsible for the integral project coordination and for guarding the maintenance of engine revision. Supervision concerning information flows is maintained by project teams in an effort to guarantee data integrity. The project teams and both their activities and responsibilities are further discussed in chapter 1.3 and in chapter 5.1. These sections refer to the project teams and their role in this investigation. Additionally, the ways in which the project teams are related customers is described.
11 In April 2005, KLM Engine Services introduced project teams that control engine revisions for repair and maintenance of engines in order to better meet the desires and needs of their customers. The aim was to realize an optimization of efficiency and effective processes within Engine Services.
A year after implementation of these project teams, KLM wanted to investigate how the quality is being perceived. Additionally, there is now a need to determine the factors on which the project teams should be evaluated.
This is the first time that an investigation that analyzes the performance of project teams and customer perception during first year of operating with these teams has been conducted.
1.3 Role of project teams at Engine services
The project team is responsible for the realization of the engine revision that is determined according to the service level agreements which are made with the customer. Service level agreements are made based on quality, costs and the subjects turn around time (the time needed for the maintenance and/or repair according to the service level agreement). It takes 70 days to realize the revision of the service level agreement for repair and maintenance.
1.4 CRM and KLM Engine Services
Customer relationship management (CRM) is related to value management and to the three value disciplines of Treacey and Wiersema (1993) which are analyzed in chapter 3.5.1.
CRM is according to Kamakura et al. (2005) the process of collecting and analyzing the information of a firm, regarding the customer interactions in order to create value for the firm.
This kind of information aids firms in designing strategies that target customer needs and can thus be exploited. Both loyalty and switching costs are increased by CRM. Information on the preferences of the consumer thus results in a competitive advantage.
12 KLM Engine Services wants to be the market leader and maintain its position in repairing and maintaining engines. Therefore, value management and customer relationship management may be a source by which they can improve and maintain their market position. In chapter 3, the CRM and value management are analyzed in terms of whether or not they are suitable tools for KLM Engine Services, how they can be implemented and if elements of CRM and value management present in the structure and culture of KLM Engine Services already exist.
This quality aspect is the subject of this study. KLM Engine Services asked for an investigation of quality aspects of the performance of the project teams.
KLM Engine Services has different kinds of customers. These are described and analyzed in chapter 5.1. Each customer has its own desires and demands. The different kinds of customers are directed to the appropriate project teams. This study attempts to establish whether it is possible to measure quality with the same methods for all kinds of customers or if quality for different customers should be measured using different methods. At the end of the investigation, a conclusion will be presented as to whether the internal and external customers are satisfied with the quality of the project teams of KLM Engine Services.
1.5 Management Decision Problem (MDP)
The Management Decision Problem (MDP) describes why the investigation was conducted. The MDP is action-oriented. For this study the MDP is as follows:
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1.6 Marketing Study Problem (MRP)
A prerequisite for the Marketing Study Problem (MRP) is that the Management Decision Problem (MDP) is already established. The MRP describes what kind of information should be obtained and which questions should be asked in order to acquire the required information.
For this study, the MRP is as follows:
What is the difference between the measuring methods of quality for internal customers and for external customers in relation to Engine Services and which distinction can be made among the internal and external customers of Engine Services? What kinds of factors should be considered with respect to the analyses of the quality of the performance? What kinds of factors should be considered when the performance of project teams and the effectiveness of project teams are evaluated?
1.7 Research questions
The research (sub-) questions, which can be inferred from the MRP, are composed as follows: 1. Which measuring methods for measuring quality have been proposed in the literature?
2. What parameters, according to the literature, can be used to measure the quality perception of the internal customer of Engine services?
3. What parameters, according to the literature, can be used to measure the quality perception of the external customers of Engine services?
4. To what extent are the internal and external customers of KLM Engine services satisfied with quality of the services delivered?
5. How can improvements that are based on the quality measurements with internal and external customers be implemented in the work processes of project teams?
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1.8 Structure of this report
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Chapter 2 Organization KLM
2.1 Introduction
The KLM group and its partners offer a worldwide network of over 400 destinations in 85 countries on six continents. Since early May, 2004, Air France and KLM Royal Dutch Airlines form the largest European aviation group. This is one group with two airline companies and three businesses. Both airline companies have preserved their own identity, trade name and brand. The three core businesses are passenger service, cargo transport and engineering and maintenance. Both airline companies develop their own activities from Paris-Charles the Gaulle and Amsterdam-Schiphol. The two airline companies together have more than 106,000 employees.
2.2 History of KLM
KLM was founded on October 7th, 1919 to serve the Netherlands and its colonies. The first plane departed on the 17th day of May, 1920 and, in that same year, KLM transported 345 passengers, 22 barrels of freight and 3 barrels of post. Important milestones in its recent history include forming an alliance with Northwest Airlines in 1989 and the participating in Kenya Airways in 1996. In June, 2000, Air France and Delta Airlines joined forces with Aeroméxico and Korean Air to introduce the Sky Team alliance.
In September, 2004, KLM joined forces with Northwest Airlines and Continental Airlines and also joined the Sky Team alliance. The KLM Group consists of: KLM UK/Cityhopper (100%), Transavia Airlines (100%), Martinair the Netherlands (50%), and Kenya Airways (26%). In 2004 and 2005, KLM transported 20 million passengers and over 6,000,000 barrels of freight. Additionally, the KLM Group conducted maintenance for more than 20 airline companies. Appendix I illustrates the structure of KLM Group for a general insight regarding into the organization KLM.
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2.3 Aviation market
The aviation sector is characterized by opposing economic and social developments. Globalization and holiday markets stimulate an increase in mobility, especially with respect to air transport. However, the current security measures restrict infrastructure in the air and on the ground. Political developments and international law related to aviation also continue to significantly impact the market. Consequently, government policy that supports the consistent and coherent distribution, logistics and transport in aviation is imperative.
2.3.1 Alliances
The future of aviation is marked by close cooperation between airline companies. The long-term cooperation between KLM and Northwest Airlines has demonstrated that the output of this kind of alliance is highly profitable, even in light of strong competition and the current declining economy. Today, there are three strong cooperation alliances in aviation, namely: a) One World with, among others, British Airways; b) Sky Team with, among others, Air France; and c) Star Alliance with, among others, Lufthansa.
In 2004, KLM and Air France reached an agreement regarding their merger. This close cooperation reflects a new unique aviation combination and was thus expected to play a leading role in Europe. In September, 2004, KLM, Northwest Airlines and Continental Airlines formed the Sky Team alliance, which is one of the three global alliances. With ten members, namely Aeroflot, Aéromexico, Air France, Alitalia, CSA Czech Airlines, Continental Airlines, Delta Airlines, KLM, Korean Air and Northwest Airlines, Sky Team is the second largest alliance according to market share. KLM is thus a key player in a strong global alliance.
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2.3 KLM Mission Statement
By managing an excellent airline company and by taking part in the most successful aviation alliance in the world, KLM wants to create value for customers, employees and shareholders.
2.4 Engineering and Maintenance Business Unit
The Engineering and Maintenance business unit was established in 1921. Engineering and Maintenance offers services to their partners and other airline companies. With approximately 5500 employees, Engineering and Maintenance has become one of the largest company components within the KLM-group. KLM’s Engineering and Maintenance business offers a complete package of airframe, engine and component maintenance services. Its strategic focus is to grow in the engine and component market. Figure 2.1 reflects the relationship between KLM Engine Services and the three main activities, namely passage, freight and engineering and maintenance. KLM Engine Services is part of Engineering and Maintenance and is, obviously, responsible for the maintenance and repair of engines. This study concentrates on KLM Engine Services and how the quality of these engine revisions can be measured. It also investigates the role of project teams in relation to performance and perceptions of quality.
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2.4.1 KLM Engine Services
In March, 1921, KLM started doing maintenance on airplanes. Given its long history, Engineering and Maintenance has acquired a good reputation with approximately 85 years of experience in the world of plane maintenance. Engineering and Maintenance provides jobs to approximately 4,600 employees and operates from Schiphol, where they offer worldwide technical support in the field of plane, engine and components and in the field of adaptations, trainings and consultancy for not only KLM but also for other airline companies.
Engine Services is part of the Engineering Maintenance business unit. This study concentrates on this particular department. Engine Services maintains KLM engines and engines of third parties. This includes large gas turbine engines from General Electric, such as CFt-50, CF6-80A and the CF6-80 serials as well as the CFMI and the CFM56-7. In addition, Engine Services also conducts repairs for engine components, plane components and accessories.
In Figure 2.2, the organogram of Engine Services with its associated elements is displayed.
This study concentrates on the department Workflow & Capacity management. At this department the project teams are active and this department is responsible for coordination of the shopvisits. A shopvisit is the period of time that an engine is at KLM Engine Services for repair or maintenance.
Figure 2.2: Organogram KLM Engine Services KLM Engine Services Powerplant Engineering Engine Purchasing, Sales Operations Secretary Business
Strategy & Org. Develop Organisation Support External department Engine Services
Stage 0 Stage 1 Stage 2 Stage 3 Stage 4
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2.5 Mission Statement of KLM Engine Services
A mission statement indicates what an organization wants to achieve and what the meaning of an organization should be for its customers. The mission statement for KLM Engine Services is as follows:
“We want to grow in the field of Engine Services in several market segments and, in this field, we want to be a trendsetter.” “We want to combine operational and design knowledge.”
“We offer a scale of services up to and including total engine care and generate, as a result, an added value for our customers.” “Our professional employees are proud of their work which expresses quality and reliability.”
“We, as a component of KLM Engineering and Maintenance, with our own responsibility for results, participate in the worldwide GE-network with an own identity.”
2.6 Stage planning
The process of Engine Services is divided into five stages. The stages proceed from stage zero through to stage four. Each stage can be subdivided into separate objectives and final results. In the figure below, the different stages in the maintenance and repair processes of Engine Services are illustrated.
2-5 Days 15 Days 42 Days 13 Days 30 Days Figure 2.3: Stage planning from stage 0 till stage 4
The physical process takes place within the stages 1, 2 and 3. Stage 1 is responsible for dismantling the engine. Stage 2 carries out the repair process and, in stage 3, the engine is reassembled. In stage 0, the work required is appraised and the activities that must be conducted in the subsequent stages are defined. Stage 4 is comprised of the documentation flow. In Figure 2.4, the cooperation bonds for Engine Services are reflected to provide insight on the way in which cooperation occurs.
Stage 0 Stage 1 Stage 2 Stage 3 Stage 4 Order
20 Figure 2.4: Mutual cooperation related to the different stages
2.6.1 Stage 0
Stage 0 is part of the primary process. It begins when the order is ready, when all the relevant data are available and when the engine is delivered. Stage 0 ends when the initial work scope and time scope, with a dated plan for the required activities, is approved by the customer.
The department stage 0 is supervised by the manager of Operations. Stage 0 produces the output for the subsequent stages. It also establishes contacts so that the coordination between Workflow and Capacity management is harmonized. Further, Stage 0 is responsible for the realization of the desired output within the agreed turn around time and determined capacity.
2.6.2 Stage 1
In stage 1, engines are assembled, modulated and/or dismantled, according to the requests of the customer and the specifications related to the agreed turn around time. Stage 1 is also responsible for maintenance and adaptation of resources, in addition to the human resources, skills and surrounding circumstances that are linked to the production and/or realization of relevant aspects in their special fields of interest.
Stage 1 also coordinates mutual production on the capacities of P&D departments, customer requests and possible production eruptions. Additionally, stage 1 is responsible for dismantling the engine. The engine is firstly dismantled in modules. If the activities of this module are planned, the modules are dismantled in
Stage 2 Stage 3 Stage 4
Workscope approval Order date Parts Date Engine Dispatch Project closing Stage 0 Stage 1
Workflow & Capacity Management Projectmanagement
21 assemblies. This continues into the next phase, in which serviceable parts and parts that can be used in stage 3 are stored. In the figure below the primary process of stage 1 is shown in more detail.
Figure 2.5: Primary process stage 1
2.6.3 Stage 2
In stage 2, the implementation of repairing tasks is conducted for engine revisions of KLM-engines and external customer engines. Stage 2 is thus responsible for repairing the components (parts). If a component cannot be repaired internally, then this component is sent to a supplier for repair and later returned to Engine Services. In the figure below, the primary process of stage 2 is shown in more detail.
Figure 2.6: Primary process stage 2
A
Engine Motor-dismantle line
Modules Modules Modules A A A A = Assemblies Module-dismantle line MD-line Module-dismantle line P P P P P P P P P P P P P P P P P P P P P P P P = Parts A A A A A A Assydemontageline APREP S tage 1 Æ S tag e 2 Stage 2 Æ stage 3 Storage Expedition & external
parts arrival Interne Repair
departments
Servicable Parts,
Servicable parts, Servicable parts, Servicable parts,
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2.6.4 Stage 3
The objectives of stage 3 include building and conducting a trial run of the assemblies, modules and engines according to the requests of the customer and the specifications of agreed upon turn around times. Stage 3 is responsible for engine assembly. The components are assembled into modules and the modules are then assembled into a serviceable engine. The assembled engine is then tested in stage 3 on the test bank. If this test is successful and the repairs are approved by the customer, the engine is then ready to be used. In the figure below, the primary process of stage 3 is shown in more detail.
Figure 2.7: Primary process stage 3
2.6.5 Stage 4
Stage 4 is the last step in the primary process. This stage includes all administrative tasks that cannot be realized within the agreed upon turn around time. The activities categorized in stage 4 can, however, start at earlier stages. The results shown above must be realized within the agreements made with the customer.
Engine Modul A A = Assy’s P P P P P P P P P P P P P P P P P P P P P P P P = Parts A A A A A Modul Modul A P REP Assy- Module- Motor-Test bank Check + certification Storage
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2.7 Project teams at Engine Services
The project teams are grouped around the customers of KLM Engine Services, such as KLM and Royal Jordanian. The project team consists of a chairman, a stage 4 representative, a stage 2 representative, an engineering representative and a project manager.
The chairman functions as the head of the team and acts as a central contact with respect to progress/delay and escalation of the several projects and/or components. The chairman thus functions as a workflow and capacity manager. The project team reports to the project manager so that the project manager can inform the customer accordingly.
The stage managers are responsible for the policy and structural solutions within the stages. The project teams are responsible for the daily implementation in the shop and the project managers are responsible for the commercial and relational contacts between the shop and the customer.
2.8 Structures and systems
According to Mintzberg (1991: 12), five coordination mechanisms can explain the fundamental ways in which organizations coordinate their activities. These ways are mutual adjustment, direct supervision, standardization of employee skills, standardization of work processes, and standardization of outputs. These mechanisms are the most basic elements of a structure and are reflected in figure 2.8.
Figure 2.8: Basic parts of an organization
24 According to Mintzberg (1991: 13), standardization is mostly carried out in the executive core. In doing this, activities can be protected against external errors. The heart of each organization is formed by the executive core. At KLM Engine Services, stages zero up to and including stage three are the executive core. Stage zero is responsible for the preparation of executive repairing activities and stage four is responsible to completing the administration of the repair process.
The strategic top is given the overall responsibility for the organization. The staff services are also part of this strategic top. The task of the strategic top is to ensure that the organization carries out its mission effectively and to guarantee that the needs of the organization power are satisfied.
The strategic top at Engine Services is represented by the secretary, by Business Strategy and Organization Development and by Organization Support.
The middle line at Engine Services consists of Powerplant engineering, Engine Purchasing Sales, and Operations. The middle line is the link between the strategic top and the executive core.
The techno-structure is represented by analysts who are responsible for standardization processes in the organization. Analysts adapt, coordinate, and control the organization.
Supporting services are present in every organization. These services are different and do not directly support the primary process. Supporting services provide indirect support for the basic objectives.
2.8.1 Configuration of the organization
25 The six basic parts of the organization with related configurations and coordinating mechanisms are displayed in table 2.1:
Configuration Coordination Main part of the organization
Simple structure Direct supervision Strategic apex
Machine bureaucracy Standardization of work processes Techno structure Professional organization Standardization of skills Operating core Division organization Standardization of work output Middenkader
Ad-hocracy Mutual Adjustment Support staff
Table 2.1: Basic configurations and their characteristics
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Chapter 3 Theoretical framework 3.1 Introduction
The basis of each scientific study lies in the study of recent literature that is related to the subject of study. In this part of the study, a theoretical framework is developed and a conceptual model designed. This conceptual model serves as the basis for this study.
3.2 Business Marketing
Business marketing has been defined by Vitale and Giglierano (2002: 511) as “the process of matching and combining the capabilities of the supplier with the desired outcomes of the customer to create value for the customer’s customer and, hence, for both organizations.”
Business marketing contributes to the success of one’s customers by creating value for customers. This in turn helps them to increase their value offering. Business marketing uses the same basic concepts as consumer marketing but, in doing so, applies marketing concepts and theories differently. In addition, business marketing emphasizes other marketing concepts and theories. It is important that this is taken into account in this study as KLM Engine Services is embedded in a real business marketing environment. KLM Engine Services realizes repairs and maintenance on engines of airplanes. These kinds of repairs and maintenance are conducted for KLM customers. All customers are business to business clients.
3.3 Service processes at KLM Engine Services
27 Figure 3.1: Classification types of services processes
– Information processing
Information processing refers to intangible actions, addressed to possessions of a customer. Little direct involvement with the customer is necessary once the request for service has been initiated. Examples of information processing are set up in figure 3.1.
– People processing
People processing refers to tangible actions. This means that customers have to be physically present during the delivery of the service in order to experience the desired advantages of these services.
Examples of people processing are set up in figure 3.1. – Mental stimulus processing
Mental stimulus processing interacts with people’s minds. It has the power to shape attitudes and influence behavior. Basic information is the core content of all services of mental stimulus processing. Services can easily be provided through telecommunication links so that physical attendance is not required. However, it is important that customers be mentally present. Examples of mental processing are set up in figure 3.1.
– Possession processing
Possession processing includes tangible actions with respect to goods and other physical possessions that belong to the customer. The object that requires processing should be present but the customer does not
Who or what is the direct recipient of the service?
What is the nature of the Service Act?
Tangible actions
Intangible actions
People Possessions
People processing: Airlines, hospitals, hotels, fitness centers
Possession processing: Repair, cleaning, retailing, recycling
Mental stimulus processing: Broadcasting, consulting, education
28 have to be present. With pssession processing, the addition of value to activities is accomplished during the processing lifespan of the object. Examples of possession processing are set up in figure 3.1.
Using the categories established by Lovelock and Wirtz (2004:14), we can contend that KLM Engine Services fits into the category possession processing. The classification of Lovelock and Wirtz, which is presented in figure 3.1, contains a classification of the direct service recipient and the nature of the service act. Examples of the different types of processes are also given in figure 3.1
3.4 Value CRM in business to business contexts
Customers are more than just customers and users. In the area of business marketing, customers are also collaborators and partners. Customers are co-developers, co-producers, co-managers and co-marketers. Therefore, it is important for KLM Engine Services to investigate whether customer relationship management is appropriate for improving relationships with the customer.
A study conducted by Ulaga and Eggert (2006) investigated what is needed for a vendor to gain the key supplier status. In both the short and the long run, KLM Engine Services wants to be the key supplier for customers who want to outsource the repair and maintenance of the engines. The results of Ulaga and Eggert’s (2006) study were thus that identified product quality and delivery performance display a moderate potential to help a firm gain and maintain key supplier status. Price shows the weakest potential for differentiation. Product and price become, according to Ulaga and Eggert (2006), less important when suppliers search for new ways to differentiate themselves in a buyer-seller relationship. Relationship benefits display a stronger potential for differentiation in key supplier relationships than cost considerations. Ulaga and Eggert (2006) also identify service support and personal interaction as core differentiators, followed by a supplier’s know-how and its ability to improve a customer’s time to market.
The current study addresses the importance of analyzing the dimensions that are crucial to value creation in business to business contexts so that KLM Engine Services will be able to gain insight on their status as a supplier. With these results, the efficiency and effectiveness of the processes can be improved.
29 • Operational excellence
Value is provided by reliable products with minimum efforts. Processes are given form in the most efficient way possible. Partial chains in the organization are reduced or even eliminated. Customers desire freedom, quality and price.
• Customer intimacy
The markets are characterized well so that the different needs of the customers can be satisfied. These customers desire tailor-made results. This is strongly linked to flexibility. With this value strategy the goal is to build a relationship with the customer to have a solid relationship and with purpose to create customer loyalty.
• Product leadership
Innovations continue on the basis of creativity and the quick pace at which new ideas are being commercialized. Customers seek new and unusual products. They are thus the first to be interested in trends. These kinds of customers are called early-adapters.
30 In table 3.1, an overview of the value strategies and their characteristics is given.
Characteristics Operational Excellent CRM Customer Intimate CRM Tactical CRM Value Discipline Operational Excellence Customer Intimacy Not Applicable Strategic
Orientation Process Customer
Product /Sales Organization
Structure Process teams
Customer teams Functional Organization Culture Market-oriented Customer-Oriented Transaction-oriented Top management
commitment High High Low
CRM-level Strategic Strategic Tactical
CRM-focus
Repeated
Transactions Relationships Selling
CRM-objectives
Cost Reduction and Quality Interaction Process Relationship maintenance and development Marketing Efficiency and selling
Table 3.1: Overview CRM approaches Langerak and Verhoef
By strategic CRM, Langerak and Verhoef mean that the organization strategy determines what kind of CRM program will be implemented and how this process will be conducted. For tactical CRM, this same does not apply. This approach focuses more on operations and on selling products and services more efficiently. By means of this study, KLM Engine Services wishes to investigate whether CRM can be implemented and in which way the current organization strategy can be evaluated.
31 Within the project teams, several roles and several value strategies can be distinguished. The customer representatives (also called the project managers) use the value strategy of customer intimacy. The project managers ensure the interest of the customer and the representation of the customer’s wishes and needs. These are fulfilled and taken into consideration in the whole of the process. The projects have customers with specific demands and wishes. The project manager looks after these demands and wishes and thus represents the customer in the participant team.
The representatives of the departments, the so-called stage representatives, are responsible for achieving efficient and effective processes through the realization and coordination of mutual cooperation links within the project team. In doing this, they can guarantee comfort, quality and a good market position. In the project team, the stage representatives are process-oriented and the customer representatives are customer-oriented.
The management of customer relationships within the project teams at KLM Engine services is characterized as a combination of operational excellence and customer intimacy. The customer plays a large role concerning the turn around time of a project. A customer can contribute to the distribution of material by, for example, providing spare parts during the repair process which can either accelerate or delay the repair process. The customer wants to be active in the process either through the supply of materials or from a financial point of view.
3.5 Value Chain
The service profit chain is a framework for linking service operations, employee assessments and customer assessments to a company’s profitability. The service profit chain in figure 3.2 provides an integrative framework for understanding how a firm’s operational investments in services are related to customer perceptions and behaviors, as well as how they can be made profitable, according to Kamakura, Mittal and others (2002). KLM Engine Services is an operational business unit at KLM. This study focuses on the operational inputs to and attributes of performance perceptions. When insight is gathered on these subjects, the remainder of the chain can be analyzed.
32 This need to focus internally on employees as well as externally on customers is determined by Kotler (1994). Kotler proposed a services marketing triangle, which represents a triad of markaeting relationships on which service managers should focus their attention. The first relationship of the services marketing triangle is between the customer and the company (external marketing), for KLM Engine Services is this during this study the relationship between KLM Engine Services and KLM, KLM Engine Services and Pakistan International Airlines, KLM Engine Services and Royal Jordanian, KLM Engine Services and Zoom, KLM Engine Services and Atlanta, KLM Engine Services and Virgin and at final KLM Engine Services and Kenya. The relationship between the customer and the employees is according to Kotler (1994, p. 170) interactive marketing and for KLM Engine Services this can be interpreted as the relationship between the project manager of the project team of KLM Engine Services and the customer. The relationship between the company and employees, the internal marketing, can be interpreted for KLM Engine Services as the relationships among KLM Engine Servives the operating project teams. These relationships can be linked with customer relationship management (CRM ) which is earlier discussed in chapter 3.4.
Figure 3.2: Value chain Mittal
33 Figure 3.3: Representation of internal and external success chain of customer orientation
Figure 3.3 (Bruhn, 2003) represents internal and external success chain of customer orientation. Satisfaction is thought to be an immediate antecedent to quality judgments and then to retention. It is thus interesting to analyze the quality perceptions of the KLM Engine Services’ customers and then, in further studies, the customer satisfaction and customer retention.
This corresponds with the results of Hennig-Thurau and Klee (1997) and the study of Bruhn (2003) further implies that investigation of quality perceptions should be conducted separately from research on customer satisfaction and retention. Using the insights on quality perceptions, further analyses can be realized.
3.6 Internal and external customers
Finn et al. (1996) have found that a successful internal customer service system is important for most quality improvement programs. This study contends that an organization is a chain of individual functional units. For KLM Engine Services, these functional units can be interpreted as the stages 0 to 4 (see figure 2.3). These stages are linked together for the purpose of satisfying external customers. For KLM Engine Services is the purpose to realize an engine revision which satisfies the customer’s perception and meets the standard norms.
34 The KLM Engine Services internal customer (KLM) as mentioned in this study has the characteristics of an external customer according to Eraqi (2006). All the customers who are part of this investigation can be characterized as an external customer. Consequently, no distinction can be made in measuring the quality perception of an internal customer or an external customer for KLM Engine Services. Nonetheless, if KLM shows differences in perception regarding quality, the results are relevant given the large amount of revisions by KLM in the period of April 2005 to 2006. These comparisons are conducted and analyzed in chapter 5.
3.7 Quality in Business markets
The complexity and globalization of today’s competitive business environments have, according to Eragi (2006), made quality one of the most important sources of competitive advantage. It is no longer sufficient just to maintain a business. Rather, if a business wants to achieve a sustainable future, it must move forward. For business to be successful, the motivation to develop and implement a quality management system must be based on a clear business aims and objectives. This thesis concentrates on the subject of quality and, in particular, how the quality of the engine repair service is perceived by a selected number of customers, who are mentioned in chapter 4.5.1. The perception of the project teams at KLM Engine Services is also measured and analyzed. KLM Engine Services is responsible for delivering the repaired engines at a service level which is then accepted by the customer. It is therefore necessary to investigate whether or not the output of the project teams is approved by the customers.
Quality is a determinant for the success of KLM Engine services. In the current extremely competitive aviation market, the time that an aircraft spends on the ground for maintenance work has to be as short as possible and the work itself must be of the utmost quality. Customers in the maintenance market, moreover, are showing greater interest in outsourcing. More and more airlines are contracting out all their airframe maintenance to a single provider.
35 As a result, it is important that role of quality in the international industrial environment within KLM Engine Services be appraised. Therefore, a study on the perceptions of quality is important. In measuring and analyzing quality, insights can be generated so that KLM can develop additional value for the customer and thereby maintain or increase their market position. The term quality is comprised of several elements and these elements are analyzed in this study.
3.7.1 Measuring Service quality
Grönroos (1984) divided service quality in two more specific dimensions, namely technical quality (what is provided) and functional quality (how the services are provided). These factors are analyzed in the qualitative and quantitative study conducted and described in chapter 5. Furthermore, Parasuraman et al. (1988) proposed a measurement of service quality named Servqual. The servqual measurement consists of five components, namely reliability, responsiveness, assurance, empathy and tangibles. These dimensions are measured by questionnaires. These are instruments for both qualitative and quantitative research. Reliability defined as the ability to perform the promised services in a consistent and accurate fashion. Responsiveness is the willingness to help customers and provide immediate services. According to the questionnaire, service quality is measured by statements. These servqual dimensions are part of the questionnaire. The third servqual dimension is assurance, which includes the knowledge and courtesy of employees in addition to their ability to convey trust and confidence. The role of empathy is individualized attention from the organization to the customer. The last dimension is tangible. This is the degree of satisfaction with physical facilities, equipment and the appearance of personnel. This study aims to inform KLM Engine Services about dimensions on which their customers are satisfied.
36 The importance of realizing a high level of service quality is confirmed by Homburg et al. (2005). They contend that service quality is a prerequisite for establishing a business relationship. Venetis and Ghauri (2004) confirm this importance by claiming that service quality is regarded as one of the few means for service differentiation and competitive advantage which attracts new customers and contributes to the market share. Service quality is viewed as a means for customer retention. Studies have demonstrated that service quality has a strong effect on the potential start of a relationship and can generate a positive effect on the repurchase (loyalty) which is, in turn, advantageous for the amount of interactions and transactions. Bruhn (2003) confirms the importance of service quality by determing a relationship between the internal performance and the external service quality. The study of Bruhn (2003) concludes that the external service quality can be attained only after internal performance prerequisites have been investigated and optimazed. For KLM Engine Services this means that only when the project teams functions optimal the external service quality can be attained.
According to Venetis and Ghauri (2004), service quality provides a strong basis for customers’ affective commitment. Furthermore, service quality can directly contribute to clients’ relationships intentions, regardless of their desire or perceived need to stay in the relationship. This means that the motive for maintaining a buyer-seller relationship is the delivered service quality. Service quality and trustworthiness are thus main factors that bear the largest effectiveness on the commitment decision.
Homburg and Garbe (1999) investigated quality dimensions and their impact on buyer-seller relationships. They set up a triangular model of industrial service quality. This too is relevant for KLM Engine Services. The core business of KLM Engine Services in the segment industry consists of engine revision and maintenance of airplane engines. Figure 3.4 illustrates the components of structural quality.
37 An example of structural quality is the technical competence of service technicians. Process-related quality is, for instance, the friendliness of the personnel, namely delivering maintenance services. An example of outcome-related quality is the proper functioning of a previously defective machine.
These quality components are part of the conceptual model which is discussed in chapter 3.8. These components are measurable in the project teams because the services are characterized as being a technical service. Therefore, competence is required to provide the desired service. The process-structural quality is also measured as this was one of the purposes behind the project team initiative. By developing multidisciplinary teams, the service process was expected to be more efficient and effective than before the introduction of the teams in April, 2005.
3.7.2 Measuring Relationship quality
Woo (2004) has found that relationship quality correlates with service quality. Even a direct and positive influence on service quality is caused by relationship quality. In chapter 5 statistical analysis are carried out to determine if these assumed relationship can also be statistically determined.
Other conclusions of this study regarding the concept of relationship quality are that there no direct links between relationship quality and the concepts of “customer satisfaction” and “behavioral intention” exist. Venetis and Ghauri (2004) agree with this statement and confirm this with their findings. They demonstrated that, although satisfaction is positively related to a party’s relationship commitment, its relative contribution, compared to the other antecedents, is very small or even non-significant. Figure 3.3 illustrates the role of relationship quality in service quality and its relationship with customer satisfaction.
Figure 3.5: Conceptual model Relationship quality
38 Commitment of the supplier (in this case, KLM Engine Services) refers to the supplier’s desire and effort to investigate a relationship with the buyer which can be characterized as valuable. According to Homburg et al. (2005), commitment can have a positive effect on relationship quality and thus benefits the customer. Ulaga and Eggert (2006) claim that the main components of relationship quality are satisfaction, commitment and trust. Roberts (2003) confirmed these components by establishing trust, satisfaction and commitment as dimensions of relationship quality. Ulaga and Eggert agree with Homburg that commitment has a positive effect on relationship quality. Ulaga and Eggert (2006) also demonstrated that value represents an antecedent of commitment, satisfaction and trust in buyer-seller relationships. The result of the investigation of the correlation between relationship value and relationship quality is that there is a positive correlation between these elements. Ulaga and Eggert (2006) contend that relationship quality is crucial in managing the propensity to leave a purchase relationship. Relationship value does not have a favorable impact unless it translates into increased relationship quality which, in turn, decreases the propensity for ending the relationship. Satisfaction with the supplier only translates into commitment if there is trust in the relationship. This is a supplement to figure 3.3. It should be noted that trust is a pivotal constituent of relationship quality, although, according by Ulaga and Eggert (2006), it does not have a direct impact on the studied behavioral outcomes.
According to Hennig-Thurau and, Klee (1997), product or service quality-related quality perception is a component of relationship quality, which is embedded in trust and commitment. In the present study, quality dimensions generated by the theoretical framework and are then spread out in order to attain more complete and detailed insight.
39 Relationships, the cornerstone of relationship marketing, can thus be best described as bonds between the firm and the consumer (Berry, 1995 et al). The elements of bonds are social bonds (social support), knowledge bonds (expertise-based support), psychological bonds (reputation-related assurance) and ideological bonds (ethical compatibility).
Venetis and Ghauri’s (2004) study shows similarities. They demonstrate that, even if customers do not feel affective commitment, they will still be inclined to stay if their agency produces results which satisfy quality standards.
3.7.3 Measuring Product quality
According to Homburg et al. (2005), the product characteristics offered to customers consist of product quality and service quality. Product quality is defined as ‘the customers perception about the relative superiority of a supplier’s offering along relevant product dimensions’. Homburg et al. (2005) indicate that a certain level of product quality is a relevant prerequisite for establishing successful business relationships. Product quality is a core benefit for the customer.
Lin and Germain (2003) have found a relationship between product quality orientation and performance. They claim that a positive impact on performance is caused by product quality orientation.
40
3.8 Relations between service quality, relationship quality and product quality
According to Hennig-Thurau and, Klee (1997), product- or service quality-related quality perception as conceptualized is interpreted as a component of relationship quality. During the study to the quality perception of KLM Engine Services the quality dimensions found by the theoretical framework are spread out for a more complete and detailed insight.
Satisfaction and overall quality are not the only dimensions which influence the customer’s perception, according to Hennig-Thurau (1997). The customer’s evaluation of the relationship with the company is also a factor which influences the customer retention. Therefore it is important to know the meaning of the term relationship quality. Relationship quality can be seen the degree of appropriateness of relationship to fulfill the needs of the customer associated with that relationship. When the relationship quality is perceived with an absolutely indispensable condition it is, according to Hennig-Thurau and, Klee (1997), the product or service meets the customer’s needs. Eventually that is the wishes of every seller that its customer perceives the product or service positively.
There are indirect factors which influence the perception of quality; relationship quality and self managing teams influence service quality. Service quality influences directly the quality perception as well as the product quality. The direct influences of the perception of quality are found in the factor relationship quality, service quality and structural quality. Relationship quality directly influences the service quality. Perceived employee satisfaction and perceived employee commitment confirmed by Vilares and Coelho (2003) are explanatory for perceived quality, for product quality and service quality.
3.9 Measuring quality performance self-managing teams
41 Context team interface means for KLM Engine Services the relationships among the 4 project teams and the team employee interface is influenced by the atmosphere within the project team.
These antecedents influence the self managing teams service climate and this influences the customer perceived service quality and service productivity. The antecedents regarding to figure 3.6 are elements of the survey and with these results the self managing teams and service climate are analyzed in chapter 5. According to Kerr and Tindale (2004), single basic processes in groups can lead to both good or poor performance, depending on the context in which that processes is enabled. This confirmation of a study by de Jong, de Ruyter and Lemmink addresses the importance of investigating the element of self managing teams in an organization. Another study by Kerr and Tindale (2004) showed that basic group processes can result in performance that meets or exceeds expectations.
Ilgen et al. (2005) view that teams are complex, adaptive, dynamic systems that they are embedded in organizations, contexts and are performing tasks over time. The project teams which were established in 2005 can be characterized by elements found by Ilgen et al. (2005). The project teams at KLM Engine Services are set up with representatives of several parts of the engine process for conducting the repair of an engine. Therefore, it is imperative that KLM Engine Services investigate how project teams within KLM Engine Services can function as a positive tool for the optimization of the repair process.
Antecedents Consequences
Figure 3.6: Relationships between self-managing team and customer perceived service quality
Context-team interface: • Tolerance-of-self-management • Inter-team communication Team-employee interface • Team norms • Team goal setting
42
3.10 Relationships between quality dimensions and self managing teams service climate
Regarding to figure 3.6 it may be said according to the literature that there are relationships are assumed between self managing teams and customer perceived service quality. It is said that basic group processes can result in performance that meets or exceeds expectations.
3.11 Conceptual model
This conceptual model shown in figure 3.6 embodies the first four study questions which were discussed in chapter 1.7. The focus in this study is based on their importance. By testing the concepts belonging to this conceptual model, the MDP and MRP were discussed, respectively, in chapter 1.5 and chapter 1.6.
Figure 3.7: Conceptual model thesis
3.12 Hypotheses
The theoretical framework has revealed numerous factors which can influence the quality perception of services. Hypotheses are formulated and measured to test if these factors actually do influence the perceived quality as delivered by KLM Engine Services. Chapter 6 provides the results of the measurements of the hypotheses. The hypotheses are formulated as null hypotheses.
Service quality dimensions: • Triangular model of service quality • Responsiveness • Reliability • Assurance • Empathy • Tangibles Quality perception of KLM Engine Services Relationship quality: • Cooperation • Adaptation • Atmosphere • Commitment • Satisfaction
• Trust Self Managing Teams service climate
Product Quality
Triangular model industrial service quality Structural quality
43 The hypotheses are as follows:
H1: The customer’s perception of KLM Engine Services is positively affected by the relationship quality. H2: The customer’s perception of KLM Engine Services is positively affected by the service quality. H3: The customer’s perception of KLM Engine Services is positively affected by the product quality. H4: The customer’s perception of KLM Engine Services is positively affected by the self managing team’s service climate.
3.13 Conclusion
The theoretical framework results in that there are several quality dimensions which influence the quality perception of the customers and the project teams of KLM Engine Services: structural quality, theoretical quality, service quality, relationship quality and product quality.
Customers are more than just customers and users. In the area of business marketing, customers are also collaborators and partners. Customers are co-developers, co-producers, co-managers and co-marketers. The theoretical framework has shown that the value strategy customer intimacy is conducted by KLM Engine Services, to develop and maintain sustainable relationships with the customers it is needed to produce high quality work. This is shown by the theoretical framework. When the quality perception is positive this will have a positive effect on the customer satisfaction and will result in customer retention. Regarding to the quality aspect, quality interaction should be an elemenent in the value strategy customer intimacy to have positive effects of the quality perception on the customers perception regarding KLM Engine Services. Research in services has recognized the need for managers to focus internally on employees ass well as externally on customers, so this recommendation of earlier study should KLM Engine Services value.
44
Chapter 4 Research design
4.1 Introduction
This chapter provides insight on the design of the investigation conducted for this study. The problem and problem owner are discussed. The type of study, the outline of study and the methodology used in this study are also discussed.
4.2 Problem and problem owner
Since April 2005, KLM Engine Services has used project teams to realize the motor projects in the KLM organization. KLM Engine Services has different customers in its portfolio.
There are no differences between the customers of KLM Engine Services. The customer with the largest amount of engine repairs is KLM itself. The total amount of the customers of KLM Engine Services transacted during April 2005 and April 2006 is 157 engines. Table 4.1 illustrates the proportion over the several customers of the engine repair during April 2005 till April 2006.
According to Jonker (2000:5), problems are related to people. The problem owner is the person to whom the problem can be ascribed. The problem can be defined as the interpretation, empirical foundation and labeling of a situation which is experienced as problematic. This necessitates an investigation of the problem in order to find solutions. In this investigation, the ‘owner’ of the problem is the Workflow and Capacity manager at KLM Engine Services, J. de Graaff. The indirect ‘owners’ of the problem are the team leaders and the project managers, who function as representatives of the customers in the project team. The team leaders of the project teams are responsible for the overall process and results realized by the project teams.
4.3 Type of research
45 The data collecting sources were secondary data analyses. These were compiled by studying recent academic literature and by conducting a desk study and surveys with representatives. Additionally, surveys for analyzing the customer’s perception on the delivered and perceived quality of KLM Engine Services were included.
4.3.1 Policy-relevant research
The problem investigated in this study is of a scientific nature as a gap between the reality and the desired situation may exist. According to Mintzberg (2001:75), this kind of study is relevant. A policy-relevant study is applicable when there is a practical problem and when the clients are assignable. The customers in this study were the customers who outsourced the repair of their engine(s) to KLM Engine Services. They perceived the quality of the engine shop at KLM Engine Services. The practical problem was the study question, namely: Is the perceived quality equal to the expected quality and does the quality meet the standards of the customer? In fact, this study is the first attempt to measure quality aspects of Engine Services following the implementation of the project teams.
4.3.2 Problem identification research
Malhotra (2004:8) distinguishes two types of marketing study, namely problem identification study and problem solving study. A problem or opportunity cannot yet be solved when a problem identification study is incomplete. There may be a problem which is unknown at the start of the study that may reveal itself in the process of problem identification.
A problem solving approach is applicable when the problem or opportunity has already been identified. The goal of releasing a problem in a problem-solving study way is to achieve a solution. In this thesis, a problem identification study was conducted as this had not yet been done.
