Managerial Practice-Quality at Verizon Wireless
Anyone who owns a cell phone knows the agony of a dropped call. Did you know that the reason for the dropped call may be the phone itself and not the strength of the signal? With annual revenues of $81 billion and 74,000 employees in 2013, Verizon Wireless serves more than 105 million retail connections in the United States. Along with the other major carriers, it knows that if the phone does not work, the company, and not the manufacturer, will likely take the blame from the customer. With major investments in its technologically advanced 4G-LTE networks in the United States, Verizon touts the reliability of its services and can ill afford the failure of cell phones due to the quality of manufacture. Verizon expects manufacturers such as Motorola, Apple, Samsung, and LG Electronics to provide defect-free phones; however, experience has indicated that extensive testing by Verizon employees is also needed.
A baseline technician for Verizon Wireless checks boxes of cell phones wired to his computer used to check reception in different areas and also competition’s reception and signal as he drives about Sacramento territory.
In addition to a tear-down analysis that looks for weaknesses in a phone’s hardware and components, the device is tested for its ability to withstand temperature extremes, vibration, and stress. Beyond these physical tests, Verizon uses two approaches to assess a phone’s capability to receive cellular signals and clearly communicate to the caller. First, Verizon hires 98 test personnel who drive $300,000 specially equipped vans more than 1 million miles a year to measure network performance using prospective new cell phones. They make more than 3 million voice call attempts and 16 million data tests annually. The tests check the coverage of the network as well as the capability of the cell phones to pick up the signals and clearly communicate to the caller. Second, Verizon uses Mr. Head, a robotic mannequin, who has a recorded voice and is electronically equipped with a rubber ear that evaluates how well the phone’s mouthpiece transmits certain phonetics. Mr. Head utters what sounds like gibberish; however, it actually covers the range of sounds in normal speech patterns. Other systems monitor the tests and summarize results. Some phones spend so much time in the test phase that ultimately they never make it to the market. Clearly, in those cases, the cost of poor quality to the manufacturer is very high.
Along with testing the quality of its hardware and wireless service, Verizon also provides extensive training to its customer service representatives. Quality checks are done through company executives visiting retail stores and each of its 34 customer service center operations. With its focus on quality in operations, products, services, and technology, it is not surprising that Verizon Wireless has built a great reputation with its customer base and has also been recognized through several best wireless service awards.
Managerial Practice: “Quality at Verizon Wireless” [MO2.5, MO2.6]
a. What are some potential impacts of the costs of quality related to Verizon’s extensive testing procedures, including impacts on manufacturers whose phones are not selected by Verizon to be sold to its customers?
b. How can Verizon use Six Sigma, statistical process control, and acceptance sampling in determining which cell phones are selected to be sold? Present diagrams for these processes.
c. Would utilizing X-charts, R-charts, assignable causes of variation, and common causes of variation be useful tools for qualifying the cell phones for adoption by Verizon? Why or why not? Share your rationale for each process.