UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------- Dang Thi Ngoc Xuan SOLUTIONS TO ENHANCE SERVICE QUALITY AT AKZONOBEL POWDER COATINGS VIET NAM COMPANY ID: 22120083 MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PGS. Tran Ha Minh Quan Ho Chi Minh City – Year 2015 123doc Abstract The “servitization of business” (Vander Merwe and Rada, 1988) is movement even in manufacturing industry. So AkzoNobel Powder Coatings who is a leading manufacturer in Viet Nam powder coatings industry focus on customers, products and service commitments continuously. Delivering an efficient and effective customer service is their primary objective.
They deliver activities to promote business through the provision of technical support, problem solving and other services for customers. They serve a wide and diverse group of manufactures including architecture, automotive and other products. Moreover, through previous reports on yearly customer satisfaction survey, AkzoNobel Powder Coatings recognize that their customers‟ satisfaction and loyalty are decreasing currently due to low service quality measured through SERVQUAL (Parasuraman et al. It is essential to design the improving customer service plan for AkzoNobel to maintain and develop the business performance.
This lead to the purpose of this thesis: The first objective is to investigate the real cause of service quality problem influencing on business performance, focusing on quality dimensions. Particularly, this study aims to investigate the service quality gap that is defined as the real cause of difference between customer expectations and perceptions of service through the Gap model (Bergman & Klefjo, 1994). 1 123doc Importantly, the final objective is to build the improving action plan, especially for complaint handling to enhance the customer service process at AkzoNobel Powder Coatings Viet Nam. To achieve the research objectives, the empirical study and literature study undertaken.
Quality dimensions, service quality gaps and quality measures in manufacturing company were the three areas that are reviewed in the literature review study. AkzoNobel Powder Coatings Viet Nam has a wide service portfolio with different types of services, which can be classified as product oriented and relationship based. Through survey, interviews and secondary data analysis, quality measures and gaps relevant for service quality problems were identified, and the purpose could be fulfilled. Keywords: powder coatings, service quality, customer satisfaction, complaint, solutions 2 123doc Nomenclature ANPCVN AkzoNobel Powder Coatings Viet Nam CMO Color Matching Optimization CCS Customer Complaint Service CSat Yearly Customer Satisfaction Survey CTS Customer Technical Service ICT Information and Communications Technology KAM Key Account Manager KPI Key Performance Indicator MS Managed Services HR Human Resource OTIF On-Time-In-Full QA Quality Assurance TC Technical Consulting SDM Service Delivery Manager 3 123doc List of Figure and Table Table 1 Service portfolio at ANPCVN‟s service portfolio Table 2 Cost and Benefit Comparison between alternative solutions Table 3 Strategy Evaluation Table 4 Customer Service Action Plan Template Table 5 Comparison of sales performance in 2014 and 2015 Table 6 The comparison of sales volume between actual sales and budget sales in 2015 Table 7 The comparison of complaint volume in 2014 and 2015 Table 8 The overall average of product quality in 2015 Table 9 The overall average of service quality in 2015 Table 10 The Customer‟s evaluation of complaint service quality in 2015 Table 11 List of Interviewees Table 12 List of quality measures Overview of different measures mentioned by different researchers Table 13 Definitions of the five quality dimensions proposed by Parasuraman et al.
(1988) Figure 1 The cause-and-effect of ANPCVN‟s service quality problem Figure 2 The technical meeting procedure Figure 3 The suggested customer complaint handling process Figure 4 Connection between service quality, customer satisfaction, loyalty, and repurchase intention inspired by Oh (1999) Figure 5 Model of service quality gap by Parasuraman et al. (1985) 4 123doc Contents Abstract .2 AkzoNobel Powder Coating Viet Nam .1 The overall service delivery strategy .2 Developing the Account Managers‟ competency program .3 Cost and Benefit Comparison .2 Customer Satisfaction Survey .3 In-depth Interviews. 46 Appendix 1 Items for Measurement of Internal, External Service Quality and Consequence of Organizational Service Quality in manufacturing Supply Chain. Measurement on five- point Likert Scale.
50 Appendix 2 Interpon Customer Satisfaction Survey 2015. 51 Appendix 3 Definition of quality dimensions. 55 Appendix 4 Customer Complaint Form. Problem Identification In this chapter, the background to the research is presented followed by an introduction of AkzoNobel Powder Coatings Viet Nam with the service portfolio.
Furthermore, the service quality problem that is developed cause-and-effect tree is also justified.1 Powder Coatings Powder coating which is a dry finishing process that has become extremely popular since its introduction in North America over 40 years ago. Representing over 15% of the total industrial finishing market, powder is used on a wide array of products. More and more companies specify powder coatings for a high quality, durable finish, allowing for maximized production, improved efficiencies, and simplified environmental compliance. Used as functional and decorative finishes, powder coatings are available in an almost limitless range of colors and textures, and technological advancements.
Powder coatings are based on polymer resin systems, combined with curatives, pigments, leveling agents, flow modifiers, and other additives. These ingredients are melting mixed, cooled, and ground into a uniform powder similar to baking flour. A process called electrostatic spray deposition is typically used to achieve the application of the powder coating to a metal substrate. This application method uses a spray gun, which applies an electrostatic charge to the powder particles, which are then attracted to the grounded part.
After application of the powder coating, the parts enter a curing oven where, with the addition of heat, the coating chemically reacts to 6 123doc produce long molecular chains, resulting in high cross-link density. These molecular chains are very resistant to breakdown. Powder coatings can also be applied to non- metallic substrates such as plastics and medium density fiberboard.2 AkzoNobel Powder Coating Viet Nam AkzoNobel Powder Coatings is truly global business, with around 4,000 dedicated employees spread throughout five continents, head office in Sassenheim, The Netherlands. They have around 30 manufacturing plants in 20 countries and have sales offices and representatives in more than 40 countries around the world.
They serve the market with two global brands are Interpon and Resistcoat to supply to 9 key market sectors – ACE, Appliance, Architectural, Automotive, Functional, Furniture, General industry, IT and Trade coaters. They coat everything from window framing, building facades and curtain walls to furniture, office equipment, radiators, and computers, cars, plastic and even wood. Their core principles are safety, integrity and sustainability. These work in harmony with the values – Customer focused, Deliver on commitments, Passion for excellence and Winning together.
In Viet Nam, AkzoNobel Powder Coatings has achieved several significant milestones: - 2001: Join Venture between AkzoNobel Coatings International BV (50 percentages) and Chang Cheng Securities HongKong (50 percentages) - 2002: Start operation at factory in Dong Nai Province, Viet Nam 7 123doc - 2010: Chang Cheng acquisition, 100 percentages owned by AkzoNobel Powder Coatings Name of Company: AkzoNobel Powder Coatings (Viet Nam) Limited Company Factory: Road 2, Nhon Trach 1 Industrial Park, Dong Nai Province, Viet Nam Office: Flemington Tower, 182 Le Dai Hanh Street, District 11, Ho Chi Minh City Telephone: + 84 61 3650730 Fax: + 84 61 3650740 Tax Code: 3600505495 Registered investment capital: $4.0 millions Legal capital: $2.5 millions Total leased land: 10,000 m2, last for 46 years at the fee of USD $8.2 thousands/year, currently occupied 100 percentages. Their product is leading in the market with many advantages, including: - Environmentally friendly with no Volatile Organic Compounds - Contains no toxic heavy metals such as lead or chromium - Single Coating, therefore uses less energy during application - Overspray can be reclaimed and reprocessed resulting in almost ZERO waste - Produces less hazardous waste during production and low carbon footprint - 1st Coatings company to achieve a SMaRT certification AkzoNobel Powder Coatings Viet Nam (ANPCVN) who is today leading supplier powder coatings for more than 300 buying customers in Viet Nam, is one of the many companies that have been going through the service transition. They offer 8 123doc different services including pre-sales, during-sales and after-sales services, such as color matching, line trial, and benchmarking as well as complaint services for their customers. A brief presentation of the seven different categories in the service portfolio can be seen in Table 1.
Table 1 Service portfolio at ANPCVN’s service portfolio ANPCVN’s service portfolio Color Matching Optimization Matching color for customer‟s specific specification (CMO) needs with free sample powder within 3 days Delivery service on time for customers without any On-time-in-full (OTIF) delaying ANPCVN gives the consulting for customer about Technical Consulting (TS) product and application technique Customer Technical Services Oven checking, line audit, benchmark the customer‟s (CTS) production line Proactive and reactive solve the problems for customer Complaint Services (CS) with 48 hours ANPCVN takes responsibility for customer operations Managed Services (MS) when using its powder 1.3 Problem Justification The ANPCVN‟s sales performance in 2015 decrease 8 percentages compared to previous year which board of management pay attention to while the market growth is evaluated 13 percentages. Meanwhile, the number of complaint increase rapidly from 87 to 148 issues (the justified problem is less than). Interviewing the Sales Manager and Key Account Managers, they concern about the product quality, customers‟ feedback and Account Managers Team‟s competency. Personally, Sales Manager believes to evaluate the product quality of ANPCVN is very good and 9 123doc competitive in the market.
He judges that the problem comes from the low customers‟ satisfaction. A variety of studies emphasize customer satisfaction as a necessary condition for customer retention and loyalty (Fornell 1992, Bolton 1998, Morgan and Strati 2000), that can help secure future revenues (Rust and Zahorik1993, Scheuing, 1995; Reichheld, 1996; Helgesen, 2006,). Through delivering a high level of satisfaction, firms can decrease the costs of future transactions (Reichheld and Sasser 1990, Shneider 2000), decrease price sensitivity (Anderson 1996, Shneider 2000) and complaint behavior (Fornell 1992, Bolton 1998, Barlow and Moller 1996). The literature also presents multiple positive effects of customer satisfaction on improvement of brand image (Lawson and Glowa 2000), company reputation and positive recommendations (Anderson and Sullivan 1993, Zairi 2000, Anderson, Fornell and Mazvancheryl 2004), employee motivation (Muffatto and Panizzolo, 1995, Naumann and Hoisington 2001) and identification of improvement areas (Pasquier and Fastnacht, 2001).
Otherwise, customer satisfaction is an erratic element; one certain product or service may satisfy a customer may not satisfy another customer. Therefore, in order to increase the customer‟s satisfaction the maximum, the factors which may influence customer‟s satisfaction must be understood properly. The customers need to be satisfied with the products or services that they have experienced first. Therefore, in order to make customers satisfied and accordingly to be loyal, the service or product quality needs to be improved.
10 123doc The customer satisfaction survey which is according to items for Measurement of Internal, External Service Quality and Consequence of Organizational Service Quality in manufacturing Supply Chain shown in Appendix 1, valuate both expectation and performance using a seven point Likert scale ranging from 1 to 5. The overall weighted average of customer satisfaction in 2015 is 3.91 that is less than previous year, 4.02 shown in Chapter 4. Particularly, customers evaluate the product quality is higher and consistent with new technical specifications and they accept the high price compared with other suppliers. However, they require the good guideline application and prompt action in order to avoid and solve the production problem issues.
Meanwhile, ANPCVN develop the new procedure, facilities to control and improve the quality of new high technology products. In general, the customers are satisfied with product quality with high evaluated number 4. Otherwise, due to the communication and transferred technique between Account Managers and customers is not enough while customers‟ production conditions are different each other, the production problems happen in the customers‟ production line increasingly. However, when receive the complaints from customers; the Account Managers give the feedback and solution in longer time than commitment as well as customers‟ expectation.