DESIGN AND PROCESS SELECTION OF SERVICES

Prof. Kaushik Paul

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Nature of Services (Generalizations)

Classification of services

The service Triangle

Applying behavioural science to service encounters

Service Strategy: Focus & Advantage

OBJECTIVES

3

Service-System Design Matrix

Service Blueprinting

Service Fail-Safing (Poka Yokes)

The three contrasting service designs

Characteristics of a Well-Designed Service Delivery System

OBJECTIVES

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NATURE OF SERVICES (GENERALIZATIONS)

1. Everyone is an expert on services (Good deal of experience with services)

2. Services are idiosyncratic (Lunch at Jack-in-the-Box vis-à-vis an expensive French Restaurant)

3. Quality of work is not quality of service (Auto dealership does good work on your car, but takes weeks to deliver)

4. Most services contain a mix of tangible and intangible attributes (service package)

5. High-contact services are experienced, whereas goods are consumed

6. Effective management of services requires an understanding of marketing and personnel, as well as operations

7. Services often take the form of cycles of encounters involving face-to-face, phone, Internet, electromechanical, and/or mail interactions

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CLASSIFICATION OF SERVICES

Facilities-based services: Where the customer must go to the service facility

Field-based services: Where the production and consumption of the service takes place in the customer’s environment

A service business is the management of organizations whose primary business requires interaction with the customer to produce the service

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INTERNAL SERVICES

Internal Supplier

Internal Supplier

InternalCustomer

ExternalCustomer

Internal services is the management of services required to support the activities of the larger organization. Services including data processing, accounting, etc

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THE SERVICE TRIANGLE

TheCustomer

The ServiceStrategy

ThePeople

TheSystems

A philosophical view that suggests the organization exists to serve the customer, and the systems and the employees exist to facilitate the process of service.

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APPLYING BEHAVIOURAL SCIENCE TO SERVICE ENCOUNTERS

1. The front-end and back-end of the encounter are not created equal (Malaysian Airlines lavishes attention on arrival baggage collection and ground transportation)

2. Segment the pleasure, combine the pain (Two 90 second rides at Disney Land is preferred to a single 3 minute ride)

3. Let the customer control the process (Allowing blood donors to choose which arm the blood sample is to be drawn from reduces perceived pain of the procedure)

4. Pay attention to norms and rituals (Consulting firms make presentations to the client top boss irrespective of his actual involvement in the project)

5. People are easier to blame than systems (The gate agent is often blamed for not allowing a late arrival on the plane)

6. Let the punishment fit the crime in service recovery (A botched task calls for material compensation while poor treatment from a server calls for an apology)

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SERVICE STRATEGY: FOCUS AND ADVANTAGE

Service strategy begins by selecting the operating focus- the performance priorities -by which the service competes. These include:

Treatment of the customer (friendliness and helpfulness)

Speed and convenience of service delivery (e.g. McDonalds or Dominos Pizza)

Price Variety (one-stop shopping philosophy)

Quality of the tangible goods central to the service (A “World-class” corned beef sandwich or an understandable insurance policy)

Unique skills that constitute the service offering (Hair styling, brain surgery or piano lessons)

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SERVICE-SYSTEM DESIGN MATRIX

Mail contact

Face-to-faceloose specs

Face-to-facetight specs

PhoneContact

Face-to-facetotal

customization

Buffered core (none)

Permeable system (some)

Reactivesystem (much)

High

LowHigh

Low

Degree of customer/server contact

Internet & on-site

technology

SalesOpportunity

ProductionEfficiency

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EXAMPLE OF SERVICE BLUEPRINTING

Brushshoes

Applypolish

Failpoint

BuffCollect

payment

Cleanshoes Materials

(e.g., polish, cloth)

Select andpurchasesupplies

Standardexecution time

2 minutes

Total acceptableexecution time

5 minutes

30secs

30secs

45secs

15secs

Wrongcolor wax

Seen bycustomer 45

secs

Line ofvisibility

Not seen bycustomer butnecessary toperformance

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SERVICE FAIL-SAFING POKA-YOKES (A PROACTIVE APPROACH)

Poka Yokes in Japanese means “Avoid Mistakes”. It is about keeping a mistake from becoming a service defect

1. Height bars at amusement parks

2. Indented trays used by surgeons to that ensure no instrument are left in the patient

3. Beepers on ATM machines to warn people to take out their cards

How can we fail-safe the three Ts?

Task

TangiblesTreatment

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Have we compromised one

of the 3 Ts?

1. Task2. Treatment3. Tangible

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THREE CONTRASTING SERVICE DESIGNS

The production line approach (ex. McDonald’s)

The self-service approach (ex. automatic teller machines)

The personal attention approach (ex. Ritz-Carlton Hotel Company)

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CHARACTERISTICS OF A WELL-DESIGNED SERVICE SYSTEM

1. Each element of the service system is consistent with the operating focus of the firm (When focus is on speed, each step should foster speed)

2. It is user-friendly (Good signage, understandable forms, logical steps in process etc.)

3. It is robust (Cope effectively with variations in demand and resource availability)

4. It is structured so that consistent performance by its people and systems is easily maintained (Tasks are doable, supporting technologies are truly supporting and reliable)

5. It provides effective links between the back office and the front office so that nothing falls between the cracks

6. It manages the evidence of service quality in such a way that customers see the value of the service provided

7. It is cost-effective (Minimum waste of time and resources)

Reference: Operations Management for Competitive AdvantageBy Chase, Jacobs & Aquilano, 10e

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