libraries as customers: achieving continuous improvement through strategic business partnerships

LIBRARIES AS CUSTOMERS: ACHIEVING CONTINUOUSIMPROVEMENT THROUGH STRATEGIC BUSINESS

PARTNERSHIPS

MARILU GOODYEAR

Associate Dean of Libraries

502 Watson Library

University of Kansas

Lawrence, Kansas 66043

Internet: [email protected]

ADRIAN W. ALEXANDER

Senior Manager, Strategic Development

The Faxon Company, Inc.

4801 Normandy Park

Lawrence, Kansas 66049

Internet: [email protected]

Abstract—There is no more important relationship than the one between the libraryand its suppliers. It affects much more than the library department with which thesupplier deals directly and it should, therefore, be considered a critical link in thelibrary’s ability to deliver quality service to its users. This article discusses the use ofbusiness partnering as a means to develop relationships between acquisition librariansand their vendors. An outline of service quality dimensions is presented and comparedto criteria normally utilized to evaluate vendors. Librarians and vendors who arecommitted to providing quality service to their respective customers can begin theprocess of business partnering by discussing service quality dimensions and agreeingupon a plan to continuously improve service quality within both organizations.© 1998 Elsevier Science Ltd

INTRODUCTION

Academic libraries today face an increasingly challenging environment. The traditional modelof the library is being challenged by escalating costs of materials and decreasing funds from

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Library Acquisitions: Practice & Theory, Vol. 22, No. 1, pp. 5–14, 1998Copyright © 1998 Elsevier Science LtdPrinted in the USA. All rights reserved

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universities. The library is also challenged by the advent of electronic information, a resourcewhich has produced opportunities that never existed before. The marriage of electronic storage anda vast telecommunications network has produced an environment in which the rapid movement ofinformation is possible. This transition is no less dramatic than the invention of printing in its effecton the institution called “libraries.” The challenge strikes at the very definition of what a library is.Are we a building or are we a service? Are we a collection or are we an access point? Right now,it appears that the library is both building/collection and service/access point. Yet production ofscholarly information in print format continues to expand, so academic libraries will live in bothworlds for some time to come.

In addition to the technological changes, we face increased accountability from institutionaldecision-makers, political decision-makers, and those who pay the bills (students, parents, andcitizens). Questions of our contribution to student learning challenge us to think about our servicesand our role in teaching students information seeking and evaluating skills. The contribution thatmaintaining and accessing the scholarly record makes to the research enterprise has long beenassumed, but can it truly be demonstrated? Can the library contribution to the educational enterprisebe specifically defined and justified? Demonstrating our value is becoming a necessity in the newenvironment of accountability.

In the midst of these environmental changes, library managers are exploring new ways ofmanaging and leading our organizations. There is a recognition that our management systems neednot just to allow for organizational change, but have the capability of integrating substantial changeon a continuing basis. Management systems are needed that provide us the data that documents ourcontributions to the scholarly process. Systems are needed that provide such significant contribu-tions to student and faculty research that they become not only loyal users but also strong politicalsupporters. The authors believe that the concepts introduced by W. Edwards Deming provide justsuch a system [1]. The basic concepts of Total Quality Management or Continuous Improvementprovide a solid basis on which change can be continuous and successful. They provide a means toimprove library systems and at the same time provide documentation for our contribution to theeducation of individuals and the growth of scholarly knowledge. Support of key decision makersis the significant outgrowth of the delivery of quality service that makes a positive impact on theuser’s intellectual life. A continuing and comprehensive commitment to the use of Total QualityManagement can provide for any library the opportunity to transform itself into a serviceorganization with this kind of impact.

The basic concepts of Total Quality Management have been accepted by many libraries. Aconference sponsored by the Association for Research Libraries in the spring of 1994 showed agreat deal of activity in academic libraries centered on Total Quality Management principles [2].It was evident from the presentations at this conference that academic libraries have utilized TotalQuality Management concepts and techniques in several ways. First, the use of teams to addressproblems is widespread. There is much evidence to indicate that many libraries have successfullyused the team concept to make service improvements and to build cooperative organizationalenvironments. Secondly, the restructuring of libraries with Total Quality Management concepts inmind appears to be a popular focus of many libraries. The flattening of the organizational structurein these libraries recognizes the ability of library staff to more fully manage themselves. Thirdly,libraries have begun conversations with their users in more formal ways. Surveys and a number ofdifferent feedback mechanisms are beginning to be used to measure thequality, not just thequantity of library services. Fourthly, libraries have begun to struggle with the meaning ofcontinuous improvement concepts and individual reward structures.

As libraries begin to address specific issues surrounding service quality we will be required tolook beyond our own organizations. As the library integrates the new technologies of electronic

6 M. GOODYEAR and A. W. ALEXANDER

information and moves to increased access means of delivering information we will become moredependent on our suppliers. The systems that are used to deliver library services depend not onlyon our performance but also on our suppliers. Libraries have customers, but libraries are alsocustomers themselves. A library’s ability to acquire, catalog, and circulate material depends on avendor community that provides the systems by which these activities are accomplished. Likewise,the provision of reference services in libraries depends heavily on equipment and services offeredby library vendors. And now, the delivery of information often depends on vendors who supply theactual article.

Libraries are customers of the for-profit company, the non-profit network, government agenciesat all levels, and university services. Library services are delivered in an open system whichinteracts on a daily basis with these suppliers. The ability to deliver quality services depends on ourability to manage effectively our relationships with these suppliers. Many of our most difficultproblems occur at that point where our own staff’s responsibilities end and the supplier’s begins.The process is only as good as the ability of the entire system to function; not just the part of thesystem managed by the library. The success of library services depends on a number of othersuppliers that assist us in serving our users. Most libraries maintain relationships with jobbers thatsupply monographs and serials, electronic information services from for-profit companies andlibrary networks, and binders that assist in preserving our collections. Many libraries receive mail,custodial, computer, and copying services from other units within their organization. In someorganizations, libraries are dependent upon the parent organization’s human resources, planning,and accounting services.

All these organizations play a significant part in the library’s ability to offer quality service. Thelibrary’s effectiveness in managing its relationship with these suppliers will, to a great extent,determine its ability to provide quality service. It is this relationship that is the focus of this paper.One of the most common customer/supplier relationships will be used as an example: the library’srelationship with the serial vendor.

THE TRADITIONAL SUPPLIER RELATIONSHIP

The relationship between libraries and their suppliers has been based on a normal businessmodel. This model has existed in the business world for many years and is accepted practice forlibraries. This model places the supplier in an adversarial relationship with the organization, basedprincipally on negotiations which are focused on price [3]. The organization’s focus is on gettingthe lowest price, the supplier’s on getting the highest. In this model of customer/supplier relation-ships, there is an assumption that separate worlds exist for each. The organization is seeking thebest possible “deal” and the supplier seeking the greatest profit. A bid process from multiplesuppliers is assumed to deliver the highest effectiveness through “capitalistic” competition. Whileprice is paramount, it is not the single topic of negotiation. The parties also negotiate for positionsof greater strength on issues of what products are needed, delivery terms, and quantity [4]. Qualityservice might also be an expressed need of the customer, although often expressed only after itsabsence is noted. In this model, the strength of the opposing partners is a focus of the relationship;trust is low and positional bargaining is the accepted practice [5]. Communication tends to be onedimension between the supplier representative and the organization’s employee with managementon both sides approving final offers and counter offers.

The “traditional” model reflects the relationship most libraries have with their materials vendors,because most libraries still function in competitive bid environments which encourage primaryfocus on price factors. Vendors are compared on criteria which start with the discount rate on

7Libraries as Customers

monographs or the service charge on serials. Issues of service delivery are discussed within thecontext of comparing the abilities of each vendor; their systems, and their ability to deliver thedesired piece of material. The ability to deliver goods quickly has increased in importance aslibraries have become more service oriented. The system has served us reasonably well and steadyimprovements have been made in terms of service quality, particularly through the use ofautomation. However, the overall model has remained pretty much the same.

BUSINESS PARTNERING—A NEW MODEL FOR SUPPLIER RELATIONSHIPS

Deming suggests a new model of relationship between the continuously improving organizationand its suppliers. This new model builds upon the core value of Total Quality Management orContinuous Improvement. He describes this value as a “constancy of purpose” [6]. This constancyis focused on the improvement of product and service—improvement that comes of focusedthinking and analysis of the way we do things. Deming’s philosophy is based on the concept ofdelivering aquality product or service. He believes that the systems which managers create aremost often at fault when quality standards are not met; the solution rests with the analysis of thesystem and the reduction of errors before they occur. This approach requires that the entire systembe analyzed for possible contribution to the errors made. No part of the system can lay outside ofthis process. Given Deming’s philosophy, it is clear that suppliers are just as critical in the analysisof systems as are parts of the process which take place within the organization. Deming suggeststhat suppliers be made part of the organization and thus be taken into the total quality managementprocess. Such close cooperation with the supplier ensures that the entire process is being analyzedfor contribution to error rates.

The traditional model of customer/supplier relationships does not lend itself to this new type ofrelationship. A focus on price as the major factor in selecting suppliers causes buyers to jump fromvendor to vendor as they “price compete.” It is difficult in this situation to enhance reliability andquality since the supplier has little incentive to improve on these criteria. Deming argues that pricehas no meaning without a measure of the quality being purchased. His point number four deals withthe customer/supplier relationship. He states: “End the practice of awarding business on price tagalone. Instead,minimize cost. Move toward a single supplier for any one item, on a long-termrelationship based on loyalty and trust” [7].

Business partnering can be defined as “the creation of cooperative business alliances betweenan organization and its constituent parts . . . it occurs through a pooling of resources in a trustingatmosphere focused on continuous mutual improvement that allows the involved parties toestablish and sustain a competitive advantage over similar entities” [8]. In this model, organizationschoose one supplier to work cooperatively with over a period of time. Each organization makes acommitment to the partnership based on product and service quality, delivery standards, and price.A vendor is chosen on the basis of all these criteria, not just price alone. Each organization opensits books and processes to the other; sharing data on performance standards and on fiscal health.Communication between the two organizations takes place not just between two individuals, butbetween all relevant employees from each organization. Together, the organizations search forinnovations and improvements in products/service quality and in cost effectiveness. The existenceof the long-term relationship enables the supplier to guarantee certain product enhancements andprice levels. The partners work together to eliminate unnecessary costs, creating an advantage forboth of them. Each partner thinks long-term, investing in capacity over short-term cost advantage.

Joseph Juran, one of the most respected advocates of quality theory, also suggests this approachto partnering. Successful organizations “shrink their supplier base by about two-thirds or more and


require the surviving suppliers to take steps toward attaining world-class quality. They shareinformation, and participate in planning improvement projects” [9]. Peter Grieco proposes thatsuppliers “must be thought of as an extension, department, or related function within yourorganization” [10]. He suggests that suppliers be included in training within the organization onquality and be involved in discussions concerning organizational values.

This concept of business partnering is fairly new to American business, despite its use for morethan 20 years in Japan [11]. However, many of this country’s best companies now have formalprograms of business partnering. The objective that Xerox states in this regard is to “buildlong-term relationships with the best vendors and to involve them in the earliest phases of productdevelopment . . . Xerox treats the vendors as part of the extended family” [12]. 3M Corporationmaintains an extensive system of working with suppliers. The business partnership developsthrough a categorization system which begins with an “acceptable” category rising through“qualified” and “certified” to the most comprehensive level—“strategic alliance” supplier. Thestrategic alliance supplier is one “who shares knowledge, resources, and ideas, with managementcommitment to the relationship, based on continuous measurable improvement and mutual trust”[13]. Ritz-Carlton, a Baldridge Award winner for quality, has developed an extensive supplierassessment system. This system provides to their suppliers data on quality according to the opinionof Ritz-Carlton employees as well as hotel guests [14]. These corporations have found that abusiness partnering process with their suppliers has improved their ability to deliver quality service.

Business partnering is not easy to achieve. Building the relationship takes time, effort, andpatience. Time is needed to show improvements in quality and price levels [15]. Time is neededfor the library and the supplier to forge the relationship. Communicating with the supplier will takea much greater degree of effort. Patience will be needed in order to see quality and price benefits.In addition, many libraries will need to overcome the traditional outlook of the managers andpurchasing units of their parent organizations. Despite these drawbacks, it is clear that businesspartnering has much to offer the library in improvement of service quality.

ACHIEVING STRATEGIC BUSINESS PARTNERSHIPS

Business partnering offers a model to libraries on which to base a more effective relationshipwith suppliers. The use of this model should begin by identifying suppliers who are best able toform such a partnership with libraries. Grieco outlines seven characteristics of world-class suppliers[16]. A management attitude of customer satisfaction and a vision of the future which fits with yourorganization is essential. Also critical are state-of-the-art production technologies and a willingnessto participate in the design of new technologies. Such a supplier must be able to deliver qualityconsistently, and such quality should be present throughout the supply chain. The supplier shouldknow and control all of the cost elements in the operation and be willing to base price on cost, noton market standards. Suppliers should show flexibility in delivery mechanisms. Company historyshould demonstrate stability, experience, and expertise as well as an ethical reputation. Financialstrength should be evident by their position in the industry and their vision in investing resourcesin long-term quality improvements. These characteristics provide a beginning point with which toevaluate potential suppliers.

A supplier who meets these criteria should be more able to provide quality service to the library,but a joint understanding of what is meant by quality service is a critical step in business partnering.The supplier must understand the library’s expectations for service in a very detailed and concreteway. A clearly understood definition of service quality is needed in order to evaluate the results ofthe partnership. Parasuraman, Berry, and Zeithaml provide an outline of service quality “dimen-


sions” which can be used to assess customer service from a supplier [17]. They have formulateda list of ten such dimensions through extensive study of customer expectations for service qualityin the private sector:

● Tangibles● Reliability● Responsiveness● Competence● Courtesy● Credibility● Security● Access● Communication● Understanding the Customer

Each of these service dimensions is defined by Parasuraman et al. in Appendix I of this paper.These researchers found thatreliability, which is defined here as “the ability to perform thepromised service dependably,” was the most important criterion in meeting customer expectations.But the more concrete dimensions, such asresponsiveness, courtesy, andcommunication, can makethe difference in exceeding customer expectations. They provide the little “extra something” thatcan distinguish one supplier from another.

The authors believe that these quality dimensions can be put to productive use by acquisitionlibrarians in crafting their relationships with vendors. To test our proposition, we examined theliterature on vendor evaluation. Five articles were chosen for analysis. Alessi published a study in1992 based on focus group data with community college librarians [18]. In 1990, Reid provided astudy that summarized the criteria for evaluating the work of vendors [19]. Results of a survey ofacademic libraries was reported by Shirk and Miller in 1989 which provided the opinions ofuniversity and research librarians [20]. Richards provides an outline of the “ideal” relationshipbetween acquisitions librarians and vendors [21]. Finally, Ivins identified critical factors in serialsvendor performance studies in a workshop given at the annual conference of the North AmericanSerials Interest Group (NASIG) [22].

Appendix II shows the vendor evaluation criteria listed in these articles correlated with theservice quality dimensions. An additional service dimension,cost, was added because it was acommon factor in each of the studies examined here. We can see from this table that the suggestedevaluation criteria included in the literature relate to many of the service quality dimensions utilizedby Parasuraman, et al. It is also clear that some dimensions from Appendix I are not suggested inthe literature as evaluation criteria. Four dimensions in particular (courtesy, security, understand-ing, andtangibles) are completely missing from this matrix.Courtesyandtangibles, however, aredimensions which relate more to a service operation where the customer is served in the physicalpresence of the service provider. Butcourtesywould also apply to service delivered over all typesof remote communication mechanisms such as phone calls and electronic mail messages.

The other two “missing” dimensions clearly relate to the librarian/vendor relationship, however.Securityin this context can be interpreted to mean that your vendor has financial strength. As such,it should be a criterion for vendor evaluation. Certainly, it was an issue in recent years during TheFaxon Company’s change of ownership in 1994. Furthermore, it can be argued that the demise ofthe Richard Abel Company in the 1970s has been a major factor in decisions by acquisitionslibrarians since then to use multiple vendors and thus avoid “putting all their eggs in one basket.”

Understandingthe library’s needs and desires also is an important part of a continuing


relationship. Combined withcompetence, this dimension provides a basis for meeting the needs ofthe customer now and in the future. Vendor employees who know library operations, goals, andissues as well as their own company’s service capabilities can be an important asset for the library.Hiring employees who have library degrees or library experience is one way for vendors to providethis service dimension.

Given this analysis, it is possible to provide an outline of points for discussion betweenlibrarians and vendors. Appendix I provides a beginning list of the types of issues which could bediscussed, organized according to the quality dimensions. The authors suggest that service qualitydimensions be utilized as a beginning point for discussions between libraries and their vendors toimprove the quality of service delivered to the ultimate customer: the library user.

CONCLUSION

There is no more important relationship than the one between the library and its suppliers. Itaffects much more than the library department with which the supplier deals directly and it should,therefore, be considered a critical link in the library’s ability to deliver quality service to its users.Managing the library/supplier relationship should be a part of any system designed to provideincreased effectiveness of the library. The business partnering model described here provides a newapproach for managing this relationship by focusing on the following points:

● continuous improvement,● long-term relationships based on overall value rather than just the base price of the service,

and● mutual goals which ultimately benefit the library’s customer most of all.

Librarians and vendors who are committed to providing quality service to their respectivecustomers can begin the process of business partnering by discussing the service dimensionsidentified by Parasuraman et al. and agreeing upon a plan to continuously improve service qualitywithin both organizations. Many issues must be addressed in this process and agreement will notalways be easy. The issue of price, for example, presents an immediate problem in this context. Itis identified as a critical factor in each of the vendor evaluation articles examined, but one of thefoundations of the new model for supplier relationships prescribed here is to avoid doing businesson the basis of price tagalone. The goal should be a mutually beneficial relationship that minimizesoverall costs for both parties. If this challenge can be met, however, then it will lead to significantlyimproved service delivery to the library user.

REFERENCES

1. Deming, W. E. (1982).Out of the Crisis. Cambridge, Mass.: MIT Press.2. Rounds, L. & Matthews, M. (Eds.) (1995). Total quality management in academic libraries: Initial implementation

efforts. Proceedings of the 1st International Conference on TQM and Academic Libraries. Washington, D.C.:Association of Research Libraries.

3. Poirier, C. C. & Houser, W. F. (1993).Business Partnering for Continuous Improvement: How to Forge EnduringAlliances Among Employees, Suppliers and Customers. San Francisco, California: Berrett-Koehler Publishers, p. 57,180.

4. Poirier, p. 57.5. Fisher, R. & Ury, W. (1981).Getting to Yes: Negotiating Agreement Without Giving In. New York: Penguin Books.


6. Deming, p. 26.7. Ibid., p. 23.8. Poirier, p. 56.9. Juran, J. (1995). How top executives improve performance,Executive Excellence, 12, 6.

10. Grieco, Jr., P. L. (1995). Supplier partnering.Executive Excellence, 12, 14.11. Poirier, p. 181.12. Xerox Corporation. (1990).Leadership Through Quality. Xerox Corporation, 1990, p. 11. (quoted inCredibility).13. 3M Corporation. (1994).Supplier Categorization. Handout. Austin, Texas, 3M Corporation.14. Partlow, C. G. (1993). How Ritz-Carlton applies “TQM”.The Cornell H.R.A. Quarterly, 33, 16–24.15. Zemke, R. & Zemke, S. (1994). Partnering: A new slant on serving the internal customer,Training, 31, 37–43.16. Grieco, p. 14.17. Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of service quality and its implications

for future research.Journal of Marketing, 49, 41–50.18. Alessi, D. (1992). Vendor selection, vendor collection, or vendor defection,Journal of Library Administration, 16,

117–130.19. Reid, M. T. (1990). Evaluating the work of a vendor.Understanding the Business of Library Acquisitions, Schmidt,

K. A. (Ed.) Chicago: American Library Association.20. Shirk, G. M. & Miller, A. L. (1989). Academic library survey, Fall 1988 results.Library Acquisitions: Practice &

Theory, 13, 335–342.21. Richards, D. T. (1992). The library/dealer relationship: Reflections on the ideal.Journal of Library Administration, 16,

45–55.22. McDonough, J. D. (1991). Planning, conducting and analyzing serials vendor performance studies.The Serials

Librarian, 19, 221–223.

APPENDIX I—QUALITY SERVICE DIMENSIONS

Reliability—The ability to perform the promised service dependably

● Accuracy● Correct titles are delivered to the library.● Error-free records are kept.

● Dependability● Titles are delivered within specified time frames.● Serial titles are claimed promptly.

Responsiveness—The willingness to help customers and to provide prompt service

● Communications (phone, e-mail, etc.) are responded to promptly.● Changes in customer profile are processed quickly.● Changes in order requests are processed quickly.● Customers are provided with regular progress reports on outstanding service issues.

Competence—Possession of the required skills and knowledge to perform the service

● Order fulfillment rates are among the highest in the industry.● Claim resolution rates are among the highest in the industry.● Company representatives are knowledgeable about:

● their firm’s services and systems● the library profession, including current trends and issues● customer’s local library issues and problems.


Courtesy—Politeness, respect, consideration

● Supplier staff deal with all customers in a professional manner.

Credibility—Trustworthiness, believability, honesty

● The supplier has a solid reputation for upright business practices.● The supplier provides accurate and up-to-date pricing and price projection data.

Security—Freedom from danger, risk, or doubt

● Financial health of the supplier is secure and verifiable.

Access—Approachability and ease of contact

● Supplier staff and/or databases are available at hours convenient to the library’s staff.● The supplier provides a variety of ways in which service and sales staff can be contacted

(phone, fax, e-mail, etc.).

Communication—Keeping customers informed in language they can understand

● Supplier representatives contact customers on a regular basis to discuss outstanding serviceissues, service enhancements, new products, etc.

● The supplier provides comprehensive and useful management reports on demand.

Understanding the Customer—Making the effort to know the customers and their needs

● Supplier representatives contact customers on a regular basis to become more familiar withtheir plans, operations, and problems.

Tangibles—The appearance of physical facilities, equipment and personnel

● Online systems provide efficient and effective support for ordering materials.● Online systems are easy to use, menus are attractive and well-organized.● Printed manuals are attractive, easy-to-use, and well-indexed.


APPENDIX II

ServiceDimensions Alessi Reid Shirk/Miller Richards Ivins

Reliability Accuracy Accuracy Accuracy Accuracy No. ofclaims

No. of claims Vendor error No. of claimsNo. of problems Attention to title

changesResponsivenessCustomer service Time between recpt.

of item and recpt.of invoice

“Service” Acceptance ofreturns

Speed of delivery Speed offulfillment

Speed

Size of inventory No. of days requiredfor receipt?

Competence Fill rate Titles ordered/titlesrecvd. ratio

Vendorspecialization

Order fulfillment Orderfulfillment

Full service No. of days fromorder placement toshipment

Variety of pub-lishers handled

Knowledgeablesales rep

CourtesyCredibility Vendor’s reputationSecurityAccess Receive orders

electronicallyVendor

automationservices

Ability to interfacewith automatedsystems

Communica-tion

Ease of communi-cation

Invoice information Vendor contact Invoicingpractices

Invoicing

Status reports/statistics

No. of mgmt. reports

UnderstandingTangiblesCost Discount List price Discount Economics Pricing

Freight charges Discount Shippingcharges

Effective discountCost per volume


libraries as customers: achieving continuous improvement through strategic business partnerships

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